Goldman Sachs faces $50M in fines over Apple Card failures
Goldman Sachs could be forced to pay tens of millions of dollars in fines by the Consumer Financial Protection Bureau, over the way it handled complaints about Apple Card and other credit cards.
Apple Card
Goldman Sachs is keen to get out of its arrangement with Apple for Apple Card, which could cost it millions. But, before it sells off Apple Card to another firm, it faces having to pay out even more money.
The Consumer Financial Protection Bureau is preparing to order Goldman Sachs to pay out penalties for issues with its credit card business, sources of the Wall Street Journal say. While the enforcement is expected this week and the total penalties unknown, it is expected to cost Goldman Sachs in excess of $50 million.
The CFPB had investigated Goldman Sachs over how it dealt with fraud and refunds. One source claimed the probe had a particular focus on the Apple Card partnership.
The probe has been in operation since 2022, when Goldman disclosed the investigation into its "credit card account management practices." This included an examination into the lag time in addressing fraud problems and in issuing refunds, as well as other billing errors.
Goldman executives have apparently privately blamed Apple for the extra regulatory scrutiny, due to Apple's decision to send customers their bill at the beginning of the month. This allegedly made it hard for Goldman's customer service representatives to deal with the repeated monthly flood of queries.
While Goldman wasn't able to convince Apple to alter the billing date, Apple is apparently open to changing this with JPMorgan Chase. It is believed that JPMorgan Chase is in discussions with Apple about taking over the program from Goldman Sachs.
The fines will be hefty, but far from what Goldman has had to deal with in its consumer lending work. Since 2020, it had lost more than $6.5 billion on the consumer business, and it recently disclosed a $415 million pretax loss for the third quarter, due to selling the General Motors credit card program to Barclays.
Goldman faces a potentially bigger loss in handing on Apple Card in the future.
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Comments
I had made a legitimate purchase which never arrived. I forget the details about the mailing but I was able to contact the USPS to track the package which showed that it was returned to sender. The company in question said that it doesn't matter so they wouldn't resend or refund. I then used all this info to let GS know. It took several months and several attempts to finally get my card permanently refunded.
I hope that they've cleaned that up by now.
If cops didn't give out red light tickets, there would be more people driving through red lights, with more accidents and more fatalities (especially pedestrians).
Or a restaurant not storing fresh dairy products at the proper temperature. Or an automobile manufacturer not testing the safety of airbags and seatbelts. And why marathon contestants can't just have an Uber drop them a block away from the finish line.
Difficult to understand?
Punitive fines aren't exclusive to the consumer banking industry. Pretty much everything can/is be regulated. It just comes down to enforcement. Note that Goldman Sucks has a *lot* of consumer customers, probably over a million. The CFPB investigation likely turned up many instances of inadequate response from GS, not just a few oopsies hence the $50 million fine.
Just be grateful that here in the USA we have some fairly strict consumer protection laws, especially when it comes to banking. Most of these have developed and evolved over time as large corporations have taken advantage of the public. It's why you don't get store purchase receipts with the whole credit card numbers printed on them like back the Eighties and Nineties.
Anyhow welcome to AppleInsider's reader forums. Enjoy your time here.
"No refund for you". But I was welcome to buy the product again at $350+ "and if the first one ever shows up of course we'll issue a refund." So I called G-S where I was sent to an Apple Card specialist. I sent a copy of the tracking info and she said they'll talk to the merchant and will get back to me. Three days later I got an email from G-S that a chargeback was authorized. Two days later the merchant sent an email offering a 10% discount on that item and thanked my for my patronage. I sent them a No Thank You. I should have called them at the first pushback from the merchant.
I've contacted G-S for a few minor things and have been impressed with the handling of those as well. I know they don't get a halo, but the AC people are OK buy me. If they get out of the deal, I hope Apple partners with someone who also give stellar service. But I don't feel like that's going to happen.