AmEx says the analysis is linked to ‘historical sales practices related to certain small business card sales’.
Photograph:
Mike Blake / Reuters
American Express Co.
AXP 1.02%
acknowledged Friday that government agencies, including the Justice Department, reviewed the company’s sales practices in relation to small business cards.
The company said in a regulatory filing that in May it began to respond to a regulatory review led by the Currency Controlling Office and the DOJ civil division. AmEx AXP 1.02%
said the review was linked to “historical sales practices related to certain small business card sales”.
The Wall Street Journal reported last month that federal investigators, including the Treasury Department inspector general offices, Federal Deposit Insurance Corp. and Federal Reserve, were investigating sales of AmEx cards. Investigators were investigating whether the company used aggressive and deceptive sales tactics to sell cards to business owners and whether customers were harmed, the Journal reported.
The Justice Department is working with these offices, according to people familiar with the matter.
The newspaper also reported last month that the OCC was investigating the company’s business card sales practices.
More than a dozen current and former AmEx employees previously told the Journal that some salespeople heavily armed or tricked small business owners to apply for cards to increase sales numbers. Some vendors misrepresented the card’s rewards and fees or issued cards that customers had not sought, they said. AmEx said earlier that it encountered only a very small number of problems that were resolved “promptly and appropriately”, including through disciplinary action.
AmEx said on Friday that it “conducted an internal review of certain sales in 2015 and 2016” and “took appropriate disciplinary and corrective action, including voluntary remediation for certain current and former customers”.
AmEx also said in its regulatory filing on Friday that it received a subpoena from the grand jury last month from the US attorney’s office for the New York East District regarding card sales to small businesses. He also said he received a civil investigation request from the Department of Consumer Financial Protection “seeking information on sales practices related to consumers”.
The company said in the process: “We are cooperating with all of these inquiries and continue to improve our controls related to our sales practices. We do not believe that this matter will have a material adverse impact on our business or results of operations. ”
Write to AnnaMaria Andriotis at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Published in the February 13, 2021 print edition as ‘AmEx Says DOJ, Others Reviewing Card Sales’.