Apple, Goldman Sachs ordered by CFPB to pay $89M related to Apple Card

Investing.com --The Consumer Financial Protection Bureau (CFPB) revealed Wednesday that it has ordered Apple (NASDAQ: AAPL) and Goldman Sachs to pay over $89 million in penalties and restitution for mishandling Apple Card disputes and misleading consumers about interest-free payment options for Apple devices.

The CFPB's said there were customer service breakdowns and misrepresentations that impacted hundreds of thousands of Apple Card users.

"The CFPB found that Apple failed to send tens of thousands of consumer disputes of Apple Card transactions to Goldman Sachs, and when Apple did send disputes to Goldman Sachs, the bank did not follow numerous federal requirements for investigating the disputes," the CFPB said in its press release.

According to the regulator, Goldman Sachs illegally placed damaging information on consumers' credit reports and held cardholders responsible for potentially fraudulent purchases.

The regulatory agency also cited deceptive marketing practices. Many Apple Card users believed they were automatically enrolled in interest-free payment plans when purchasing Apple products, but in many cases, interest was charged unexpectedly.

The CFPB found that this confusion was exacerbated by Apple only showing the payment plan option to customers using its Safari browser.

The enforcement action includes a $25 million civil penalty against Apple, while Goldman Sachs must pay at least $19.8 million in redress and a $45 million civil penalty.

Additionally, the CFPB said that before introducing any new credit card product, Goldman Sachs must give the CFPB a credible plan for how the product will comply with the law.

"Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law," said CFPB Director Rohit Chopra. "The CFPB is banning Goldman Sachs from offering a new consumer credit card unless it can demonstrate that it can actually follow the law."

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