Apple and Goldman Sachs ordered to pay $89 million over Apple Card failures

Goldman Sachs and Apple have agreed to pay $89 million for violations of consumer protection laws tied to their joint Apple credit card business. The U.S. Consumer Financial Protection Bureau announced that the companies mishandled transaction disputes and misled customers regarding interest-free purchases. The violations impacted hundreds of thousands of users. In addition to the financial penalties, Goldman will face restrictions on issuing new credit cards as part of the settlement. This comes as Goldman looks to exit its partnership with Apple for financing iPhone purchases.
Rohit Chopra, the director of the agency, said the alleged misconduct had caused “real harm to real people.”
“This led to wrongful charges, mishandled disputes and damaged credit reports,” he told reporters, noting that the purchase of an Apple device was often a major expense for families.
In a statement, Goldman said it was pleased to have resolved the matter.
“We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers,” the statement said.
Apple said it “strongly” disagreed with how the consumer protection agency described its conduct but had nevertheless reached an agreement.
“Upon learning about these inadvertent issues years ago, Apple worked closely with Goldman Sachs to quickly address them and help impacted customers,” a spokesperson said.
Goldman Sachs is now facing an expensive exit from its 2019 partnership with Apple, which has been deemed risky and unprofitable by other lenders, according to sources. The consumer banking venture, heavily promoted by CEO David Solomon, has incurred significant losses. As a result, Goldman has shifted focus back to its core businesses of investment banking and trading, abandoning the consumer banking strategy that failed to yield expected profits.