The Consumer Financial Protection Bureau (CFPB) has ordered Apple and Goldman Sachs to pay a combined $89 million in penalties over issues related to the handling of Apple Card disputes.
The regulatory agency cited “customer service breakdowns and misrepresentations” in their findings, which impacted thousands of Apple Card users.
Violations and Misrepresentations
According to the CFPB, Apple failed to report tens of thousands of Apple Card disputes to Goldman Sachs, its banking partner.
In cases where disputes were submitted, Goldman reportedly did not adhere to federal regulations for investigating complaints.
This mishandling resulted in long delays for customers seeking refunds and, in some cases, led to incorrect negative entries on their credit reports.
The CFPB also pointed to misleading practices around interest-free payments.
Some consumers believed they were eligible for interest-free financing on Apple devices when using the card but were instead charged interest. Goldman also allegedly misled customers about their refund applications.
Penalties and Restrictions
As part of the resolution, Apple and Goldman Sachs must pay significant fines and refunds to affected customers.
The CFPB has imposed a $25 million penalty on Apple and a $45 million penalty on Goldman Sachs, with an additional $19.8 million in redress ordered for impacted customers.
The agency has also barred Goldman from launching new credit card products unless it can demonstrate compliance with federal regulations.
CFPB Director Rohit Chopra highlighted the serious nature of these failures, saying:
“These failures are not mere technicalities.
“They resulted in real harm to real people.”
Chopra emphasized large companies, including Big Tech and Wall Street firms, should not act as if they are exempt from federal laws.
Need Career Advice? Get employment skills advice at all levels of your career
Reactions from Apple and Goldman Sachs
Both Apple and Goldman Sachs disputed the CFPB’s characterization of their actions but acknowledged the issues.
The tech giant stated it became aware of “inadvertent issues” years ago and worked alongside Goldman to address them.
A Goldman spokesperson echoed this sentiment, noting that the bank was proud of its partnership with Apple and pleased to have resolved.
Challenges for Goldman’s Consumer Banking
The penalties come as Goldman Sachs faces broader struggles within its consumer banking division.
Recently, the firm ended its credit card partnership with General Motors, with Barclays taking over as its replacement.
This latest regulatory setback adds further pressure on the bank’s efforts to grow its consumer finance offerings.
