American Express Caught Deceiving Customers

The FDIC and the Consumer Financial Protection Bureau (CFPB) have announced a settlement with American Express Centurion Bank of Salt Lake City concerning deceptive debt collection and credit card marketing practices. American Express will pay restitution $85 million to over 250,000 consumers and pay penalties of $27 million. The authorities found American Express engaged in the following outrageous practices: 1. Misrepresented that if consumers entered into an agreement to settle old debt (that was no longer being reported to consumer reporting agencies), such settlement would be reported to consumer reporting agencies and thereby improve the consumers’ credit scores. In fact,...

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Inquiries & their Effect on Your Credit Score

When a consumer seeks credit, the lender will report an inquiry on the consumer’s credit reports. When a bank sends out a pre-approved loan application or makes an account review, the bank reports that event as an inquiry. The former inquiries are known as hard inquiries and the latter as soft inquiries. Consumers reading their reports worry the inquiries are reducing their credit scores. However, the soft inquiries do not affect credit scores at all and the hard inquiries lower credit scores but not very much. For most people, one additional hard inquiry will takes less than five points off...

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