CFPB Fines Apple, Goldman Sachs Over Apple Card ‘Failures’


Regulators today ordered Apple and investment banking giant Goldman Sachs to pay almost $90 million in penalties and customer redress over what it termed “Apple Card failures.”

The Consumer Financial Protection Bureau (CFPB) cited “customer service breakdowns and misrepresentations” that affected hundreds of thousands of Apple Card customers. Chief among the issues cited: the failure of Apple to send “tens of thousands” of disputed transactions to Goldman Sachs for resolution. When Apple did send disputes, the CFPB says, Goldman Sachs failed to follow federal rules for investigating the disputes.

The Apple Card was introduced in August 2019, with Goldman Sachs aboard to extend credit and handle account servicing. Both companies had limited experience in the consumer credit market prior to launching the card. There were 12 million Apple Card holders as of January this year, according to Apple.

How the CFPB penalties break down

  • Apple was ordered to pay a $25 million civil penalty.

  • Goldman Sachs was ordered to pay a $45 million civil penalty and $19.8 million in customer redress.

  • Goldman Sachs was also banned from launching any new credit card “unless it can provide a credible plan that the product will actually comply with the law.”

What the CFPB found in its investigation

  • The handling of disputed transactions was central. The CFPB charges that the card was launched despite third-party warnings that there were technological issues with the card’s disputes system. According to the CFPB, this led to long waits for customers looking to resolve disputed charges and, for some, “incorrect negative information” added to their credit reports.

  • The CFPB also found that the companies “misled consumers about interest-free payment plans for Apple devices,” and that Goldman Sachs “misled customers about the application of some refunds.” 

What’s next for affected consumers

Many consumers who are eligible for redress have already received payment, according to an email statement from the CFPB. Any remaining eligible consumers will be contacted by Goldman Sachs.

Company reaction

Goldman Sachs first revealed in a 2022 SEC filing that it was cooperating with the CFPB in its yearslong investigation. In statements to the media, both companies defended the Apple Card, saying the issues under investigation had been resolved.

“Upon learning about these inadvertent issues years ago, Apple worked closely with Goldman Sachs to quickly address them and help impacted customers,” Apple said in a statement, according to CNN.

Goldman Sachs started a foray into consumer banking in 2016 with the introduction of its Marcus brand. It has been rolling back or reshuffling some of those efforts to focus on its core business; earlier this year, it stopped issuing new personal loans.

Co-branded credit cards — issued in partnership between a major brand and a bank — have a spotty track record in recent years, often due to a mismatch between the partners.



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