Amex to pay $230M in penalties for deceptive sales practices involving credit cards, wire services to small businesses.

American Express has agreed to pay approximately $230 million in penalties related to deceptive practices in the sale of credit cards and wire services to small businesses.

The settlement breaks down to a $108.7 million civil penalty from the Justice Department and includes a non-prosecution agreement with the Eastern District of New York. This follows a criminal investigation into the company’s practices.

Additionally, American Express has reached a preliminary agreement with the Federal Reserve, which is expected to be finalised soon. The penalty from the Federal Reserve is included in the total $230 million.

Reports by the Wall Street Journal highlighted instances where some Amex salespeople pressured business owners to boost sales for credit cards and other products. This included misrepresenting card rewards and fees, as well as checking credit reports without proper consent.

The Journal also reported on deceptive marketing practices regarding wire products that were misleadingly pitched as ways to avoid tax payments. Furthermore, Amex was accused of entering “dummy” employer identification numbers on small-business credit card accounts to artificially inflate sign-ups.

American Express stated that it has cooperated with regulatory agencies to address these issues, which included staff discipline and changes in training and organisation. The company claims that these problematic practices ended in 2021 or earlier.

US stocks rise as banks report near-record profits; CPI slows, fueling hopes for continued Federal Reserve rate cuts.

US stocks rose sharply following strong earnings reports from four major banks: JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo.

The banks reported their second-most profitable year ever.

JPMorgan achieved a historic milestone by becoming the first US bank to exceed $50 billion in annual profit.

Goldman Sachs saw record revenue from its equities trading division.

Citigroup reported record revenue in three of its five key segments: wealth management, US personal banking, and services.

Wells Fargo, while having the smallest presence on Wall Street, recorded a 62 per cent increase in annual revenue from investment banking.

Bank of America and Morgan Stanley are set to announce their results on Friday AEDT.

In other news, the core Consumer Price Index (CPI) for December rose at a slower rate than anticipated, indicating a potential easing of inflation.

This development has strengthened expectations that Federal Reserve policymakers may have room to continue cutting rates.

Consequently, the yield on the US 10-year bond dropped by 14 basis points to 4.66 per cent.

Similarly, UK yields fell by 16 basis points to 4.73 per cent after services inflation in the UK decreased to 4.4 per cent in December, down from 5 per cent in November, a more significant decline than the 4.8 per cent economists had predicted.

As of January 15, 2025, Bitcoin (BTC) is trading at approximately $97,198, reflecting a 2.17% increase over the past 24 hours. The cryptocurrency’s market capitalisation stands at around $1.93 trillion, with a 24-hour trading volume of about $54.23 billion.

This recent uptick comes as investors anticipate the upcoming U.S. inflation report, which could influence the Federal Reserve’s monetary policy decisions.