# Apple and Goldman Sachs Penalized with $89 Million for Apple Card Issues
In a notable regulatory decision, Apple and Goldman Sachs have been assessed fines exceeding $89 million due to problems linked to the Apple Card. The Consumer Financial Protection Bureau (CFPB) disclosed this verdict following an extensive investigation into the practices surrounding the credit card, which was established in partnership between the technology corporation and the investment bank.
## Detailed Fine Summary
The CFPB’s decision encompasses a comprehensive summary of the financial sanctions levied against both entities:
– **Goldman Sachs** is mandated to pay no less than **$19.8 million** in compensation to impacted consumers.
– The bank also faces a **$45 million civil monetary penalty**.
– **Apple** will face a **$25 million civil monetary penalty**.
Alongside the financial sanctions, the CFPB has imposed limitations on Goldman Sachs, barring the introduction of any new credit card offerings unless the bank can provide a viable plan to meet regulatory requirements.
## Findings from the Investigation
The CFPB’s scrutiny unveiled several shortcomings in the management of the Apple Card. Principal findings included:
1. **Inability to Process Consumer Disputes**: Apple allegedly did not forward tens of thousands of consumer disputes to Goldman Sachs. When disputes were communicated, Goldman Sachs failed to comply with federal mandates for addressing these matters. This led to consumers facing prolonged waiting periods for refunds on contested charges and, in certain cases, erroneous negative information being recorded on their credit reports.
2. **Deceptive Information on Payment Plans**: The CFPB established that both Apple and Goldman Sachs provided misleading information to consumers regarding interest-free payment options for Apple products. Many buyers were under the impression they would automatically qualify for interest-free monthly payments when acquiring devices with the Apple Card. However, they frequently incurred interest charges instead. Moreover, in some situations, the interest-free payment option was not visible on Apple’s site for certain web browsers, complicating the buying experience.
3. **Confusion Regarding Refunds**: Goldman Sachs was accused of misleading cardholders concerning the application of refunds. For customers participating in the Apple Card Monthly Installments plan, refunds were improperly distributed between two card balances—the interest-free plan and the interest-bearing revolving balance. This misallocation caused unexpected interest charges for over 10,000 cardholders.
## Consequences for Goldman Sachs
This ruling arrives at a period when Goldman Sachs is experiencing escalating losses in its consumer division, which have recently exceeded **$6 billion**. Consequently, the bank is reportedly considering departing from the consumer credit card sector altogether. Negotiations with JPMorgan Chase concerning a potential partnership to succeed Goldman Sachs as the issuer of the Apple Card have allegedly commenced, though no timeline for an agreement has been established.
## Final Thoughts
The penalties levied against Apple and Goldman Sachs underline the necessity for transparency and adherence to regulations within the financial services sector. As the CFPB persists in overseeing practices within the industry, it is imperative for companies to ensure compliance with federal laws and prioritize consumer protection. The complete ruling from the CFPB can be accessed through their official site, offering further insights into the investigation and its conclusions.
For consumers, this ruling serves as a pertinent reminder to stay alert regarding the terms and conditions tied to financial products and to report any discrepancies or issues they face with credit card providers.
