American Specific shares report that federal investigators are investigating the gross sales practices
American Express stocks fell after the Wall Street Journal reported that the investigative arms of three U.S. financial agencies were investigating the card issuer’s sales practices.
The company’s shares fell 1.3% on Thursday after previously falling 5%.
The offices of the Inspector General of the Federal Reserve, the Treasury Department, and the Federal Deposit Insurance Corp are investigating whether AmEx, based in New York, has given its cards to small business customers using misleading tactics and whether customers have been harmed, according to the Journal.
Citing current or former employees of the issuer, the Journal reported in March that in an effort to increase sales, some AmEx employees misrepresented card rewards and fees or issued cards that customers were not looking for.
AmEx said in a statement Thursday that there are “robust compliance policies and controls in place, and [does] Do not tolerate wrongdoing. “The company added that it worked with regulators’ review of small business card practices in 2015 and 2016.
“We conducted a detailed, independent review of these sales from this period and found no evidence of any pattern of misleading sales practices,” said AmEx. “The commercial acquisitions group responsible for these sales represented approximately 0.25 percent of the total of 65 million new cards American Express purchased globally between 2014 and 2019. We take these matters seriously and will continue to work with our regulators.”