American Express (AmEx) is said to be cooperating with the investigation by the U.S. Department of Justice (DoJ) into its business card sales practices, according to a Wall Street Journal report.
A regulatory filing on Friday (Feb. 12) indicated that AmEx said that it received a grand jury subpoena in January from the U.S. Attorney’s Office for the Eastern District of New York over its sales practices for its small business credit cards. The filing also indicated that AmEx got a Civil Investigative Demand (CID) from the Consumer Financial Protection Bureau (CFPB) asking for sales practices’ data relating to consumers.
According to the regulatory filing, American Express first responded in May to a regulatory review led by the Office of the Comptroller of the Currency and the DOJ’s civil division. It said the review was associated with “historical sales practices relating to certain small business card sales.”
Federal investigators from the Treasury Department, Federal Deposit Insurance Corp. and Federal Reserve are all probing AmEx card sales as to whether the company extended “aggressive and misleading sales tactics” to advance cards to business owners, the WSJ reported.
According to the report, AmEx said it had “conducted an internal review of certain sales from 2015 and 2016” and had “taken appropriate disciplinary and remedial actions, including voluntarily providing remediation to certain current and former customers.”
The company also said in the filing that the company was “cooperating with all of these inquiries and have continued to enhance our controls related to our sales practices. We do not believe this matter will have a material adverse impact on our business or results of operations.”
Small- to medium-sized businesses (SMBs) were misled by AmEx salespeople who reportedly misrepresented card rewards.
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