Apple and Goldman Sachs Face $89 Million Fine for Apple Card
- Interest-free iPhones? Not so much – Apple Card customers are paying the price.
- Apple Card just cost Apple and Goldman Sachs a whopping $89 million in fines. Here's why.
- “These failures are not mere technicalities…” – the CFPB isn’t holding back.
The Consumer Financial Protection Bureau (CFPB) has ordered Apple and Goldman Sachs to pay $89 million in penalties following accusations of consumer protection failures related to the Apple Card.
"These failures are not mere technicalities. They resulted in real harm to real people," said CFPB Director Rohit Chopra. The CFPB’s order attributes widespread “customer service breakdowns and misrepresentations” to Apple and Goldman’s mishandling of Apple Card transaction disputes.
Photo via Apple Inc. // CFPB has ordered Apple and Goldman Sachs to pay a hefty $89 million fine over Apple Card mishandling.
Key Allegations from the CFPB
Delayed Dispute Resolution
Apple allegedly failed to send tens of thousands of Apple Card disputes to Goldman Sachs, and in cases where they were sent, Goldman reportedly neglected federal investigation protocols. The CFPB says the resulting delays caused consumers to wait for extended periods to resolve disputes, with some even facing adverse impacts on their credit reports.
Misleading Interest-Free Claims
The CFPB also found that Apple and Goldman misled customers regarding interest-free financing on Apple devices. Many customers believed they would automatically receive interest-free financing when purchasing iPhones or other Apple products with the Apple Card, only to be charged interest.
Premature Launch Amid Technological Warnings
According to the CFPB, Apple and Goldman launched the Apple Card prematurely, ignoring “third-party warnings” about unresolved technological issues. The CFPB noted that this contributed to the flawed dispute-handling process, which left many customers with unresolved issues and, in some cases, erroneous credit reports.
Financial Penalties
The CFPB has mandated a breakdown of the $89 million penalty as follows:
- Apple: $25 million
- Goldman Sachs: $45 million in penalties and at least $19.8 million in direct consumer redress.
Corporate Responses
In a statement, an Apple spokesperson noted, “Apple Card is one of the most consumer-friendly credit cards available and was specifically designed to support users’ financial health.” Apple added that it learned about the issues “years ago” and promptly worked with Goldman Sachs to resolve them, emphasizing a commitment to customer satisfaction.
Similarly, Goldman Sachs spokesperson Nick Carcaterra voiced pride in the partnership with Apple and satisfaction in reaching a settlement with the CFPB, stating that Goldman had already taken steps to address technological challenges impacting Apple Card customers.
Photo via Apple Inc. // Tim Cook onstage announcing Apple Card.
Apple Card is one of the most consumer-friendly credit cards available and was specifically designed to support users’ financial health.
Future Limitations on Goldman Sachs
Beyond financial penalties, the CFPB has imposed a significant restriction on Goldman Sachs: the bank is barred from launching any new credit card products unless it can present a credible plan that complies with all federal regulations. This prohibition reflects the CFPB’s caution towards Goldman’s role in consumer finance following recent challenges.
The Road to Recovery for Goldman Sachs’ Consumer Division
Goldman Sachs’ pivot into consumer finance has encountered several hurdles. The Apple Card, launched in 2019, was Goldman’s flagship venture into consumer credit in partnership with Apple. Built on the Mastercard network, the Apple Card quickly became popular for its integration with Apple Pay on iPhones and Apple Watches. However, in recent months, Goldman’s foray into the consumer market has shown cracks: the bank recently ended its partnership with General Motors, handing over the credit card contract to Barclays.
As this $89 million fine marks another complication in its consumer banking strategy, Goldman will face significant pressure to reassess its involvement in consumer finance.
Recommended by the editors:
- No More September iPhones? Apple's Strategy Shift Changes Everything
- MacBook Pro M6 OLED Rumors: Release Date, Price, Features, and More
- 2026’s Top 250+ Wallpapers: The Ultimate Collection for iPhone, Android & More
- iPhone 18 Rumors: Apple Reportedly Testing Under Display Face ID
- Intel Could Finally Return to Apple Computers in 2027
Published to Apple Scoop on 27th October, 2024.
