Taking charge of your credit card debt usually means paying off the entire balance of your credit card. For some people, doing this is difficult under the best of circumstances. When the credit card company begins charging improper fees or for add-on services, the difficulty of paying off the card balance likely increases. Illinois residents might like to learn about a recent order stating that American Express has to pay more than $75 million to settle claims.
In total, more than 335,000 customers will receive refunds totaling $59.5 million. The credit card company also has to pay a $9.6 million penalty to the Consumer Financial Protection Bureau. These refunds and penalty come as part of a crackdown by the government against credit card companies charging hidden fees and penalties.
One of the problems with American Express was that a product marketed as a way to wipe out the minimum monthly payment in the event of disability or job loss actually only covered 2.5 percent of the outstanding balance on the card with a limit of $500.
Another problem for American Express was the identity fraud protection service the company offered. The bureau claims that approximately 85 percent of people who paid for the service received all the stated benefits. In some cases, the company didn't even have authorization to monitor the credit account of the cardholder.
The credit card company was also accused of charging fees and interest unfairly, which caused people to go over the credit limit of the card and incur additional fees.
American Express claims to have corrected the problems. The company states checks will be issued to people who don't have accounts with the company. Refunds will be given to those who still have accounts.
If you are having difficulty making your credit card payments, you may have legal options to help you reduce your credit card debt. Contacting an experienced Illinois bankruptcy attorney can help you to explore those options.
Source: New York Times, "American Express to Pay $75 Million Over Credit-Card Practices" Rachel Abrams, Dec. 24, 2013