Apple, Goldman Sachs to pay $89 mn for misleading customers, dispute mishandling

Goldman Sachs Group Inc. and Apple Inc. will pay more than $89 million to resolve a long-running investigation into their credit-card joint venture after the top US consumer watchdog said the pair misled customers and mishandled disputes.
The Consumer Financial Protection Bureau said customer service breakdowns and misrepresentations affected hundreds of thousands of Apple Card users. The companies also misled consumers about interest-free payment plans for Apple devices, it said in a statement.
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The agency ordered Goldman to pay at least $19.8 million in redress and a $45 million penalty while fining Apple $25 million. The CFPB also banned Goldman from launching a new credit card, unless it provides a “credible plan” that the product will comply with the law, it said.
“Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers,” CFPB Director Rohit Chopra said in the statement. “Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law.”
Goldman has addressed “certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers,” a spokesperson for the bank said. “We are pleased to have reached a resolution with the CFPB.”
Apple worked closely with Goldman to address the issues and help impacted customers, according to a spokesperson for the company.
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“While we strongly disagree with the CFPB’s characterization of Apple’s conduct, we have aligned with them on an agreement,” the Apple spokesperson said in an emailed statement.
Goldman is trying to extricate itself from the Apple partnership, which has been beset by problems since its launch in 2019. The bank has faced accusations of bias over computer models that determined who gets the card. In 2022, it disclosed the CFPB had been looking into the company’s credit-card practices, including how it resolves incorrect bills and processes refunds. Last year, Goldman said that investigations into that business had expanded beyond the CFPB to include other government agencies.
According to the CFPB, Apple failed to send tens of thousands of customer disputes of Apple Card transactions to Goldman Sachs. And when the technology giant did send disputes to the bank, Goldman didn’t adhere to federal requirements for investigating the disputes, the CFPB said.
The CFPB also found that the companies misled consumers about interest-free payment plans for Apple devices. Many customers expected to automatically get interest-free monthly payments on those purchases, only to find they were charged interest.
“The execution was a mess,” Chopra said on a call with reporters Wednesday, adding that key systems related to the Apple card weren’t ready before the card roll-out. The card launched despite warnings from third-parties to Goldman about technological issues affecting its disputes system, according to the CFPB.
The CFPB will “closely police” Goldman Sachs if it makes another attempt to enter the credit card market to avoid similar issues, it said.
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