American Express Co. will pay about$ 230 million to resolve a long-running investigation into some of the firm’s prior sales practices which officials said misled small-business entrepreneurs.
Amex reached partnerships with federal prosecutors and the Federal Reserve to live the allegations, according to comments from the parties involved.
The wrongdoing stems from a process where Amex workers offered products — including its Premium Wire company — as a system to reduce taxes and receive credit-card points. Amex discontinued the Premium Wire giving and selling techniques in 2021 and fired employees over the wrongdoing.
“ When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system, ” Principal Deputy Assistant Attorney General Brian M. Boynton said in a speech. “Today’s negotiation makes clear that the department may hold accountable those who violate the trust placed in them to follow the rules governing our financial institutions and to be candid about their business practices. ”
“We cooperated heavily with these companies and our officials and took significant deliberate action to address these issues, ” a spokesperson for Amex said in a statement. As well as discontinuing the materials and administrative activity, the corporation undertook an internal evaluation and boosted guidelines, compliance and education programs, it said.
The$ 230 million penalty comprises$ 138 million for the Eastern District of New York and the Justice Department, according to the federal prosecution. Amex will even pay a percentage to the Fed after striking an agreement-in-principal to remain finalized in the coming months. The expenses were mostly reserved for in earlier intervals and don’t affect the organization ’s 2024 assistance, according to Amex.
Amex has faced a slew of governmental satellites over the problem for ages. It began responding to studies by the Office of the Comptroller of the Currency and the Justice Department in 2020, and received a grand jury subpoena from the U. S. Attorney’s Office for the Eastern District of New York in 2021. In October, Amex said the New York Department of Financial Services and the Fed were even looking into the matter.
In 2023, Amex paid$ 15 million in civil penalties to settle with the OCC. The Consumer Financial Protection Bureau also looked into the techniques but closed its investigation without levying a monetary penalties in 2023.
___
© 2025 Bloomberg L. P
Distributed by Tribune Content Agency, LLC.
