Federal investigators probe misleading business-card sales tactics at American Express
- Federal Investigators are probing business-card sales tactics at American Express, the Wall Street Journal reported.
- American Express said in a statement that it has been cooperating with a regulatory review since the spring of 2020, and added that "We have robust compliance policies and controls in place, and do not tolerate misconduct."
- American Express stock dropped as much as 4% Thursday before paring its losses to 1%.
Regulators are investigating whether American Express misled businesses to entice them to sign up for credit cards, the Wall Street Journal reported.
Investigators are reviewing whether American Express used deceptive sales tactics to sell cards to business owners and whether customers were harmed, the Wall Street Journal reported, citing people familiar with the matter.
The Wall Street Journal reported that the inspectors general offices of the Treasury Department, Federal Deposit Insurance Corp., and Federal Reserve are investigating the matter, along with Office of the Comptroller of the Currency.
In a statement, the company said it has been cooperating with a regulatory review of small business card sales between 2015 and 2016.
"We have robust compliance policies and controls in place, and do not tolerate misconduct," the statement said. "We have conducted a detailed, independent review of these sales from this time period, and found no evidence of a pattern of misleading sales practices. The commercial acquisition group responsible for these sales represented approximately 0.25 percent of the 65 million total new cards American Express acquired worldwide between 2014 and 2019. We take these matters seriously, and will continue to cooperate with our regulators."
The Federal Reserve, FDIC, and OCC declined to comment, and the Treasury Department did not respond to a request for comment.
Investigators are also probing whether some specific employees contributed to or supported the alleged behavior, the Journal reported. The story said investigations are in the early stages.
Previously, the Journal reported that some former and current employees had said that some AmEx salespeople "strong-armed or misled small-business owners" to get them to sign up for cards.
Shares of American Express dropped as much as 4% earlier in the day but pared its losses to 1% later on.