CFPB Orders Apple and Goldman Sachs to Pay $89 Million Over Apple Card Failures

The U.S. Consumer Financial Protection Bureau (CFPB) has issued a significant ruling against Apple and Goldman Sachs, requiring the two companies to pay $89 million for mishandling their Apple Card partnership. This decision comes after numerous customer complaints and an investigation revealing significant lapses in how the companies handled disputes and credit reporting.

Mishandled Disputes and Inaccurate Credit Reports

According to the CFPB, Apple failed to forward tens of thousands of Apple Card disputes to Goldman Sachs, leaving many customers in a state of prolonged uncertainty. When Apple did report disputes, the CFPB found that Goldman Sachs violated federal guidelines by not adequately investigating the complaints. Many of these disputes involved customers contesting charges with merchants, such as unauthorized transactions, incorrect billing amounts, or unresolved service issues. Without proper handling, customers were left stuck between the card issuer and the merchant, leading to delays and, in some cases, inaccurate negative marks on their credit reports.

“Apple and Goldman Sachs sidestepped their obligations to consumers, causing many to suffer from incorrect credit reports and delayed resolutions,” said CFPB Director Rohit Chopra. “Big Tech and Wall Street firms are not above the law, and today’s actions reflect that.”

Penalties and Restrictions

Goldman Sachs has been fined $45 million and ordered to pay $20 million in restitution to affected customers. Meanwhile, Apple will pay a $25 million penalty. Additionally, the CFPB has imposed a temporary ban on Goldman Sachs, preventing the investment bank from issuing new credit cards unless it provides a robust plan to ensure compliance with federal consumer protection laws.

The CFPB also revealed that customers were misled about interest-free payment plans on Apple products. While Apple had marketed its card as fee-free with interest-free installment plans for iPhones and other devices, many customers were still charged interest due to confusion about how the plans worked. This added to their financial frustrations. Compounding the issue, some customers who sought refunds or adjustments from merchants faced further delays in resolving their disputes, worsening their financial situation.

Response from Apple and Goldman Sachs

In response to the ruling, Apple emphasized its disagreement with the CFPB’s assessment but acknowledged the resolution of the matter. A spokesperson from Apple stated, “Apple Card was designed to promote financial health for our users. Upon discovering the issues, we worked swiftly with Goldman Sachs to resolve them and support impacted customers.”

Goldman Sachs expressed a similar sentiment. A spokesperson for the bank noted, “We addressed the technological and operational challenges after the Apple Card launch and have already worked with affected customers. We are proud of the innovation behind Apple Card and are pleased to have resolved the matter.”

Looking Ahead

The ruling is a significant blow to the Apple-Goldman partnership, which has been promoted as a consumer-friendly, transparent financial product. The CFPB’s decision underscores the critical importance of regulatory compliance in financial services, even for major tech and financial firms. This ruling reassures consumers that their financial rights are protected. Moving forward, Goldman Sachs will be scrutinized to demonstrate that it can follow the law before launching any new credit card products.

This case serves as a reminder that even high-profile collaborations between leading companies must adhere to strict federal standards to protect consumers, particularly when it comes to managing disputes between cardholders and merchants