Ah finally someone is charging Amex for late fees.

 The AP (10/2, Gordon) reports, “American Express is paying $112.5 million in refunds and fines to settle regulators’ accusations that it charged unlawful late fees and deceived customers to pressure them to pay off old debts or buy extra credit card services.” The company agreed to the settlements announced Monday by four agencies, including the Fed, CFPB, FDIC, and OCC. American Express is refunding $85 million to nearly 250,000 customers and paying $27.5 million in civil fines. The AP continues, “the agencies said American Express violated federal laws prohibiting deceptive practices by using false statements to get customers to settle old debts. The regulators say that included falsely telling customers that if they agreed to settlements to partially pay off their debts, the remaining balance would be forgiven.” Richard Cordray, director of the CFPB, said in a statement that the company violated consumer-protection laws “at all stages of the game – from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt.”

        Bloomberg News (10/2, Dougherty, Hamilton) reports that units of the company “deceived customers who signed up for a particular card, leading them to believe they would get $300 and bonus points, according to the statement. The New York- based firm also charged illegal late fees, discriminated against some older applicants and failed to report consumer disputes to credit-reporting companies, regulators said.” According to the Fed’s consent order, “American Express neither admitted nor denied regulators’ accusations” in the settlement, approved by its board on September 24. Michael O’Neill, an American Express spokesman, said, “Reserves were established in previous quarters for a substantial portion of these fines and the estimated customer refunds. Separately, the company is continuing its own internal reviews and cooperating with regulators in their ongoing regulatory examination of add-on products in accordance with the industrywide review.”

        The New York Times (10/2, Silver-Greenberg, Subscription Publication) reports, “In doling out credit … American Express also discriminated against applicants based on their age. The company also duped consumers into paying off stale credit card debt with the promise of improving their credit score, the investigators said; in fact, regulators found, American Express was not reporting the payments to the credit bureaus at all.” Regulators said customers should expect refunds by March 2013. The Times notes, “So far this year, the newly minted Consumer Financial Protection Bureau has leveled enforcement actions against Capital One and Discover Financial over sales tactics.”

        The Wall Street Journal (10/2, Randall, Johnson, Subscription Publication) reports that O’Neill did not say how the action would affect the company’s reputation but said its “focus is on delivering the best customer experience for all.” O’Neill also said the company is cooperating with regulators on the sale of add-on products, which the CFPB’s earlier actions focused on with Discover and Capital One.

        American Banker (10/2, Adler, Davidson, Subscription Publication) reports that “the fines were broken down in four buckets: American Express must pay $14 million to the CFPB, $9 million to the Fed, $3.9 million to the FDIC and $500,000 to the OCC.” The piece notes that American Express “had foreshadowed the action in a recent securities filing, saying, ‘Various bank regulators have been reviewing the company’s card practices for compliance with certain consumer protection laws and regulations.'” American Banker adds that the move “marked the third enforcement action ever issued by the CFPB since the new consumer protection watchdog was created under the 2010 Dodd-Frank Act.” In a separate article, American Banker (10/2, Adler, Davidson, Subscription Publication) adds that “many believe the CFPB’s third enforcement action is its biggest statement yet,” noting, “the broad reach of the American Express action is clearly intended as a warning to other banks, observers said.” Jaret Seiberg, a financial services policy analyst with Guggenheim Securities, said, “This order is putting everyone on notice that the regulators are looking for any potentially misleading or deceptive practices when it comes to interacting with consumers. No one should have had any doubt beforehand that the regulators were actively investigating every interaction between card companies and consumers. But if you had any doubt, this erases it.” Kent Markus, the CFPB’s director of enforcement, told reporters, “This action is intended as a message to all entities that provide consumer financial products or services that there are consequences for violating the law.”