American Express announced on January 16, 2025, an agreement to pay approximately $230 million to resolve federal wire fraud investigations and civil allegations of deceptive marketing. This settlement addresses claims from the U.S. Justice Department and the U.S. Attorney's Office in Brooklyn, New York.
The total payment includes over $138 million related to allegations that American Express provided 'inaccurate tax advice' for two wire products, Payroll Rewards and Premium Wire, launched in 2018 and 2019. These products were marketed as generating tax savings, which prosecutors stated relied on incorrect tax advice.
Separately, $108.7 million will resolve civil claims concerning deceptive marketing of credit cards to small businesses between 2014 and 2017. These practices allegedly included misrepresenting card rewards or fees, conducting credit checks without consent, and submitting falsified financial information for prospective customers.
An internal investigation into the marketing practices for the wire products in early 2021 led to the termination of about 200 employees, and both products were discontinued by November 2021. American Express also reached an agreement in principle with the Staff of the Board of Governors of the Federal Reserve System, expected to be finalized in the coming weeks.
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