Apple, Goldman Sachs to pay $89M in Apple Card settlement

AppleCard settlement overview:

• Who: The United States Consumer Financial Protection Bureau has reached a settlement with Apple Inc. and Goldman Sachs Bank NA.
• Why: The companies allegedly mishandled consumer disputes, engaged in misleading marketing and imposed wrongful charges on consumers using the AppleCard credit card.
• Where: The settlement was ordered by the U.S. Consumer Financial Protection Bureau.

The United States Consumer Financial Protection Bureau announced it has reached an $89 million AppleCard settlement with Goldman Sachs and Apple over allegations their credit card partnership mishandled customer disputes, engaged in misleading marketing and imposed wrongful charges, Law360 reports.

Goldman Sachs will pay a $45 million fine and will pay nearly $20 million to consumers affected by the alleged misconduct; Apple has reportedly agreed to pay a $25 million fine.

Under the terms of the settlement, the CFPB says Goldman Sachs is prohibited from launching any new credit cards until it implements a “credible” compliance plan.

“Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers,” CFPB Director Rohit Shopra said. “Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law.”

Apple and Goldman Sachs agreed to the settlements without admitting or denying liability.

AppleCard settlement resolves claims that Apple and Goldman Sachs misled consumers

In December 2017, Apple and Goldman Sachs entered into an agreement to offer a credit card integrated with Apple software, the CFPB explains in the consent orders. The AppleCard offers market rate APRs and interest-free financing for qualifying Apple products.

When they introduced the AppleCard in August 2019, the disputes system was reportedly burdened by technological issues. As a result, hundreds of thousands of consumer disputes were met with widespread mistakes such as untimely responses, failure to provide required credits, improper adverse reports about consumers to consumer reporting agencies and failure to properly investigate and resolve the disputes.

The CFPB also alleged that Apple and Goldman Sachs misled consumers into thinking the Apple devices they purchased would automatically be enrolled in the Apple Card Monthly Installments program, allowing them to finance their purchases with interest-free monthly installments.

Apple was recently hit with a class action lawsuit alleging it failed to cancel AppleCare subscriptions when consumers return or trade in their devices.

What do you think about the AppleCard settlement? Tell us about it in the comments.

The AppleCard lawsuits are In the Matter of: Goldman Sachs Bank NA, Case No. 2024-CFPB-0011 and In the Matter of: Apple Inc., Case No. 2024-CFPB-0012, before the U.S. Consumer Financial Protection Bureau.

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