Apple, Goldman Sachs Ordered to Pay $89M Over Apple Card Failures

The Consumer Financial Protection Bureau (CFPB) has ordered Apple and Goldman Sachs to pay a combined fine of more than $89 million for alleged violations of consumer protection laws related to the Apple Card. The CFPB found that the companies engaged in discriminatory practices and failed to provide adequate customer service.

The CFPB’s investigation revealed that Apple Card customers were subjected to discriminatory lending practices based on gender. Despite having comparable credit histories, women were more likely to be offered lower credit limits than men with similar financial profiles. This discriminatory treatment was attributed to an algorithm used by Goldman Sachs, which was found to be biased against women.

In addition to the discriminatory lending practices, the CFPB found that Apple and Goldman Sachs failed to provide adequate customer service to cardholders. Customers faced difficulties disputing charges, accessing their credit reports, and resolving other issues. The CFPB determined that these failures violated the Fair Credit Reporting Act.

The $89 million fine is a significant penalty and reflects the seriousness of the violations identified by the CFPB. The agency has emphasized the importance of fair lending practices and consumer protection in the financial services industry.

The fine is also a reminder of the need for companies to carefully review and monitor their algorithms and systems to ensure that they are not perpetuating discrimination. The use of AI and machine learning in financial services can be beneficial, but it is essential to guard against biases that could harm consumers.

The CFPB’s action against Apple and Goldman Sachs strongly conveys to the financial industry that discriminatory practices will not be tolerated. The agency’s investigation highlights the importance of consumer protection and the need for companies to treat all customers fairly and equitably.