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FDIC Announces Settlement With American Express Centurion Bank for Unfair and Deceptive Practices
Today, the Federal Deposit Insurance Corporation (FDIC) announced a settlement with American Express Centurion Bank, Salt Lake City, Utah, (Bank) for unfair and deceptive marketing practices related to credit card "add-on products," in violation of Section 5 of the Federal Trade Commission (FTC) Act.
This action results from a review of the Bank's credit card products by the FDIC and the Consumer Financial Protection Bureau (CFPB). As part of the settlement, the Bank stipulated to the issuance of a Consent Order, Order for Restitution, and Order to Pay Civil Money Penalty (collectively, FDIC Order). The FDIC Order requires the Bank to pay a civil money penalty (CMP) of $3.6 million. The CFPB is also taking a parallel enforcement action against the Bank for the same practices and will assess a separate CMP of $3.6 million. Together, the FDIC and CFPB will require restitution of no less than $40.9 million to harmed consumers.
The Office of the Comptroller of the Currency (OCC) and the CFPB also announced actions against other American Express affiliated institutions for the same unfair and deceptive practices identified in those institutions. Collectively, these actions will result in restitution of approximately $59.5 million to more than 335,000 consumers.
The FDIC determined that the Bank violated federal law prohibiting unfair and deceptive practices by, among other things:
In addition, the Order requires the Bank to take affirmative steps to correct its marketing and billing practices, and to ensure that all of the add-on products offered by the Bank are marketed and administered in compliance with applicable laws.
A copy of the FDIC's Order is available at the FDIC's website at www.fdic.gov.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 6,891 banks and savings associations, and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars—insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-124-2013
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