Goldman, Apple to pay $89 mn following CFPB probe of credit card JV

By Paige Smith 

Goldman Sachs Group Inc. and Apple Inc. will pay more than $89 million following a long-running investigation of their credit-card joint venture, the top consumer watchdog announced Wednesday.   

The Consumer Financial Protection Bureau said the action concerned customer service breakdowns and misrepresentations that affected hundreds of thousands of Apple Card users, according to a statement. The CFPB ordered Goldman to pay at least $19.8 million in redress and a $45 million civil money penalty, while Apple must pay a $25 million civil money penalty, it said. 

 

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

 

“Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers,” CFPB Director Rohit Chopra said in the statement Wednesday. “Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law.”

 

Representatives for Apple and Goldman didn’t immediately respond to requests for comment.

 

According to the CFPB, Apple failed to send tens of thousands of customer disputes of Apple Card transactions to Goldman Sachs. When the technology giant did send disputes to the bank, Goldman didn’t adhere to federal requirements for investigating the disputes. The CFPB also found that the companies misled consumers about interest-free payment plans for Apple devices. 

 

Goldman has been trying to extricate itself from the high profile partnership with Apple after a series of problems.  

 

The bank disclosed in 2022 that the CFPB had been looking into the company’s credit-card practices, including how it resolves incorrect bills and processes refunds. The probe was also examining advertisements and how Goldman credits “nonconforming payments” and reports information to credit bureaus. Last year, Goldman said that investigations and inquiries into that business have expanded beyond the CFPB to include other government agencies.