Apple has landed in hot water alongside Goldman Sachs for negligence and mismanagement of the co-branded Apple Card. Apple initially launched the card in 2019 for American users, promising interest-free, convenient payment plans for prospective buyers looking to buy popular Apple products such as iPhones.
However, the Consumer Financial Protection Bureau (CFPB) has now announced fines totaling $89 million against Apple and Goldman Sachs because both the companies “illegally mishandled transaction disputes and misled iPhone purchasers about interest-free payment options.” This has reportedly affected thousands of Apple card users.
The CFPB, after a two-year investigation, found that Apple failed to send consumer disputes of Apple Card transactions to Goldman Sachs, and when Apple did send disputes, the bank did not follow numerous federal requirements for investigating the disputes. The CFPB also emphasized that many cardholders were unknowingly charged interest because they were misled toward interest-free financing.
The bureau has ordered Apple to pay a $25 million civil money penalty, while Goldman Sachs has been ordered to pay "at least" $19.8 million in redress, along with a $45 million civil money penalty. Both companies are also required to present a credible plan to comply with laws before launching any new credit card product.
In response to these allegations, Goldman Sachs's Nick Carcaterra said, "Apple Card is one of the most consumer-friendly credit cards that has ever been offered." Both companies have also committed to providing its consumers with fair and transparent financial products. However, many reports indicate that Apple may end its partnership with Goldman Sachs for running the Apple Card, and look for a new financial institution.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
