Customers cheated: Apple Card and Goldman Sachs fined millions

"Big tech companies and big Wall Street firms should not behave as if they are exempt from federal law," complains Rohit Chopra, head of the US Consumer Financial Protection Bureau (CFPB). The reason for his anger is misconduct by Apple and its financial partner Goldman Sachs Bank USA, which has cost Apple Card users millions. These companies now have to pay fines: Goldman Sachs 45 million US dollars, Apple 25 million dollars.

The Apple Card is a Mastercard credit card marketed by Apple in the USA since 2019 and issued by Goldman Sachs Bank. The advertising promises include interest-free installment payments for the purchase of iPhones and other Apple products. In reality, however, this benefit is not automatic and must be selected during the ordering process on the Apple website. However, Apple did not display this option if users dared to shop with a web browser other than Apple's own Safari. Such deviants were then surprised by high interest rates.

Complaints about these costs, as well as other unauthorized charges to the account, went unheard in tens of thousands of cases. Apple collected the complaints, but often did not forward them to Goldman Sachs. Even after the bank's explicit instructions, Apple continued to ignore customer complaints. These were not processed, with the result that Apple Card holders were asked to pay for expenses for which they were not responsible.

But even the complaints that got through to Goldman Sachs were not always processed correctly by the bank. US law stipulates that banks must acknowledge complaints within 30 days and investigate the allegations. They must then inform their customers of the results of the investigation within 90 days. Goldman Sachs has "consistently" violated these requirements, according to the CFPB. Worse still, Goldman Sachs has made false, negative entries in customers' credit histories. Even when customers find out about it, it can take an astonishing amount of effort to have false entries corrected.

Refunds booked unfavorably

Goldman Sachs caused additional damage by incorrectly booking chargebacks for more than 10,000 customers. Those affected each had two installment payment plans: One interest-bearing, and one interest-free (after purchasing Apple products). Sometimes these customers received refunds from completely different transactions, for example when they canceled a trip or returned a purchased item. The bank promised that the refunds would be deducted from the interest-bearing debt balance, but in fact they were deducted from the interest-free balance, costing these Apple Card holders additional interest.

Goldman Sachs must now refund at least 19.8 million dollars to those affected. In addition, the company may not issue any new credit cards until it has convinced the authorities with a plan on how it can legally implement such an offer. The latter is probably bearable for Goldman Sachs, as it wants to get out of the Apple Card. Nevertheless, it is embarrassing for one of the world's largest financial institutions to be caught doing such things.

Both Apple and the bank accept their administrative penalties and regulatory requirements. The CFPB's administrative penalty case against Apple is Case No. 2024-CFPB-0012, while the case against Goldman Sachs is Case No. 2024-CFPB-0011.

• Accepted injunction against Goldman Sachs Bank USA
• Accepted injunction against Apple

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