American Express agrees to refund customers nearly $60M

American Express has agreed to refund an estimated $59.5 million to more than 335,000 consumers for illegal credit card practices.

All told, American Express will pay at least $75.7 million, including $16.2 million in fines for unfair billing tactics and deceptive marketing for add-on products such as payment protection and credit monitoring, federal regulators announced Tuesday.

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"We first warned companies last year about using deceptive marketing to sell credit card add-on products, and everyone should be on notice of this issue,” said Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB).

"Today we are refunding thousands of American Express customers who were harmed by these illegal practices. Consumers deserve to be treated fairly and should not pay for services they do not receive."

A investigation found that over the course of 12 years American Express misled consumers into believing that benefits of their payment protection programs would last upward of two years for a qualifying life events, whereas most only had periods of one, two or three months.

Regulators said consumers were also led to believe that if they purchased the payment protection product, their monthly minimum payment would be canceled for job loss, disability or other events.

However, the benefit payment was limited to 2.5 percent of the consumer's outstanding balance, up to $500, which could be less than the minimum monthly payment.

Consumers were not informed during the enrollment process for identity theft products that two steps were necessary to fully utilize credit monitoring and public records monitoring benefits.

The second step was not completed by 85 percent of consumers and most were billed anyway for benefits they didn't receive. 

The settlement ends inquiries by the Federal Deposit Insurance Corporation, the CFPB and the Office of Comptroller of the Currency.