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October 23, 2024 – 8:18 AM PDT
(Reuters) – Corporate giants Goldman Sachs (GS.N) and Apple (AAPL.O) will pay $89 million for violations of consumer protection laws in their joint credit card business, the U.S. Consumer Financial Protection Bureau announced Wednesday.
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In partnership to finance Apple customers’ purchases through the Apple credit card, the two companies mishandled transaction disputes and misled iPhone purchasers about whether their purchases were in fact interest-free, according to the agency.
In addition to penalties and consumer redress, Goldman Sachs will face restrictions on its ability to issue new credit cards, the announcement said.
CFPB Director Rohit Chopra said the misconduct had affected hundreds of thousands of Apple Card users.
“This led to wrongful charges, mishandled disputes and damaged credit reports,” he told reporters, and “resulted in real harm to real people.”
In a statement, Goldman said it was pleased to have resolved 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,” the statement said.
Apple did not immediately respond to a request for comment.
Goldman now faces a costly exit from the Apple partnership that is seen by other lenders as too risky and unprofitable, sources told Reuters in December last year.
After its foray into consumer banking flopped, Goldman has refocused on its traditional mainstays – investment banking and trading. The consumer business that CEO David Solomon championed has lost billions of dollars.
Reporting by Douglas Gillison in Washington; additional reporting by Saeed Azhar and Chris Prentice in New York; Editing by David Gregorio
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