The partnership, which allowed Apple customers to make purchases with Apple credit cards, allegedly involved the two companies’ failure to manage transaction disputes and misled customers who wanted to buy iPhones about whether their purchases were interest-free.
In addition to the fine and consumer compensation, Goldman Sachs will also face restrictions on its ability to issue new credit cards. Goldman, one of the largest U.S. banks, is currently trying to end its partnership with Apple.
According to the news reported by CNN Business:Apple neglected to send tens of thousands of Apple Card disputes to Goldman Sachs, the CFPB said. When Apple did inform Goldman of disputes, “the bank did not follow numerous federal requirements for investigating the disputes,” according to the CFPB.
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The government watchdog said the companies launched their credit card initiative prematurely, even as third parties warned them that the disputes system wasn’t ready for prime time because of tech problems.
“These failures meant that consumers faced long waits to get money back for disputed charges, and some had incorrect negative information added to their credit reports,” the CFPB said in a statement.
An Apple spokesperson, in a statement, said the company strongly disagrees with the CFPB’s characterization of Apple’s conduct but nevertheless aligned with the agency in its order.
“Apple Card is one of the most consumer-friendly credit cards available, and was specifically designed to support users’ financial health,” the spokesperson said. “Upon learning about these inadvertent issues years ago, Apple worked closely with Goldman Sachs to quickly address them and help impacted customers.”
Goldman Sachs, in a statement, said it was pleased to reach a resolution with the CFPB on the matter.
“We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers,” a Goldman Sachs spokesperson said.
Goldman was fined $45 million and will have to pay customers $20 million in redress. Apple was fined $25 million.
The CFPB also banned Goldman Sachs from launching a new credit card, “unless it can provide a credible plan that the product will actually comply with the law.”
