NEW YORK — A federal regulatory agency has mandated that Apple and Goldman Sachs collectively pay $89 million for misleading consumers and mishandling customer transaction disputes related to the Apple Card. The Consumer Finance Protection Bureau (CFPB) highlighted issues including “customer service breakdowns and misrepresentations” stemming from the collaboration between Apple and Goldman Sachs regarding their credit card services.
According to the CFPB, Apple neglected to forward a substantial number of customer disputes to Goldman Sachs. Moreover, when disputes were submitted, Goldman failed to conduct investigations that meet federal standards. This led to consumers experiencing lengthy delays in receiving refunds for disputed transactions and, in certain instances, they suffered from inaccurate negative entries on their credit records.
Further, the CFPB accused both firms of providing misleading information to customers who bought iPhones and other Apple products, particularly concerning interest-free financing options tied to the Apple Card. Many consumers were under the impression that purchasing an Apple device using the Apple Card would guarantee interest-free payments; however, they were charged interest instead. The agency also pointed out that Goldman misrepresented details regarding some refund requests.
In response to these allegations, Apple stated that it became aware of these “inadvertent issues” several years ago and has since worked to resolve them with Goldman Sachs, firmly disagreeing with the CFPB’s assessment of its actions. The tech company emphasized that the Apple Card is a highly consumer-oriented credit card designed to promote users’ financial well-being.
Goldman’s spokesperson, Nick Carcaterra, conveyed a similar viewpoint, expressing pride in the partnership with Apple to create the credit card, and noted that the investment bank was satisfied to reach an agreement with the CFPB. Both companies asserted that they had already taken steps to assist the affected customers.
As a result of the CFPB’s ruling, both Apple and Goldman must issue refunds to consumers and pay penalties. Apple is facing a fine of $25 million, while Goldman Sachs is liable for a $45 million penalty along with a minimum of $19.8 million for restitution. Additionally, the CFPB is preventing Goldman from launching any new credit card without demonstrating that the new product complies with legal standards, given the bank’s ongoing problems with its consumer banking operations.
CFPB Director Rohit Chopra emphasized the significance of these failures, describing them as impactful for real individuals, with hundreds of thousands of Apple Card users being affected. He further stated that large technology companies and major financial institutions should not act as if they are above federal regulations.
The collaboration between Apple and Goldman Sachs, which resulted in the launch of the Apple Card in 2019, was designed to seamlessly integrate with the Mastercard network and is primarily intended for use with devices like the iPhone or Apple Watch. The CFPB’s analysis suggested that the companies may have introduced the Apple Card too hastily, noting that there were prior warnings about technological challenges ahead of its release.
Goldman’s foray into consumer banking has encountered several hurdles. The financial firm recently concluded its credit card partnership with General Motors, which has been taken over by Barclays just last week.