Apple and Goldman Sachs will pay over $89 million in combined fines and refunds because of failures stemming from the companies’ Apple Card partnership, according to U.S. regulators Wednesday, which temporarily blocked Goldman from issuing new credit cards.
Key Facts
- The Consumer Financial Protection Bureau ordered Apple to pay $25 million and Goldman to pay $45 million in fines, while Goldman is also required to pay at least $19.8 million in refunds and discounts for customers.
- Apple failed to send tens of thousands of consumer disputes of Apple Card transactions to Goldman, which then failed to follow “numerous federal requirements” for investigating them, the agency said.
- Both companies also misled customers about interest-free payment plans for Apple products—including iPhones—when using Apple Cards, as many cardholders were “unknowingly charged” interest because they were not automatically enrolled in the plans, according to the CFPB.
- The CFPB banned Goldman from launching a new credit card until the bank “can provide a credible plan that the product will actually comply with the law.”
- Apple said in a statement to Forbes it disagreed with the CFPB’s claims, saying the company learned about the “inadvertent issues years ago” and worked with Goldman to “quickly address them and help impacted customers.”
- Goldman told Forbes the bank had “worked diligently” to address challenges surrounding the Apple Card and both companies had “already handled them.”
Tangent
Apple’s shares fell nearly 1% on Wednesday to just below $233.50. Last week, the company’s stock rose to a new intraday record of $237.49 as Apple hit a market valuation of $3.61 million, the highest valuation ever recorded by a public company.
Key Background
Apple launched its Apple Card credit card through Goldman in August 2019, and the bank reportedly lent out about $10 billion in credit to Apple customers within a month of its release. Apple announced discounts on its products for customers using the card, including discounts up to 6% during the holiday season. Those discounts would be applied to customers who purchased Apple products in monthly installments, which the company said would be interest-free. In 2023, Apple announced it would offer Apple Card holders a 4.15% high-yield savings account with Goldman. Goldman disclosed an investigation by the CFPB into the bank’s “credit card account management practices,” like handling refunds and billing disputes, in a 2022 SEC filing.
This article was originally published on forbes.com and all figures are in USD.
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