American Express (Amex) has agreed to $75.7 million in fines and reimbursements to customers after regulators discovered that its sales staff misled customers about the benefits of many credit card insurance products. An estimated 335,000 cardholders will be compensated under the settlement with the U.S. Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau.
Amex staff repeatedly exaggerated the financial benefits of "account protector" insurance, which they claimed would cover customers' monthly minimum repayments for up to two years in the event of illness, job loss, or another life event. The benefits were often smaller and lasted for less time. Two other products -- "lost wallet protector" and identity theft insurance -- also were involved in the regulatory action, with about 85 percent of customers not properly enrolled and billed anyway for identity theft protection. American Express subsidiaries will pay fines of $16.2 million to the three regulators and at least $59.5 million in customer remediation.