📱 TECH

Tisk-Tisk Says CFPB

The Consumer Financial Protections Bureau (CFPB) is not pleased with how Apple and Goldman Sachs handled customers of their joint Apple Card.

The CFPB claimed the two companies "mishandled disputes and misled iPhone purchasers about interest-free payment options through their Apple Card partnership, delaying refunds for customers on disputed transactions or leaving damaging information in their credit reports," writes the Washington Post. The CFPB claims several hundred thousand customers were impacted by these behaviors.

As a result, the agency fined Apple (which clocked nearly $100 billion in net income last year) a $25 million fine, and Goldman Sachs (which took in more than $8.5 billion in net income last year) was slapped with $19.8 million in redress and a $45 million penalty. Moreover, Goldman Sachs has been banned from launching any new credit cards until provides the CFPB with a "credible plan" to comply with the law, reports Bloomberg Law.

“Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law," Rohit Choprasaid, director of the CFPB, said in a statement.

Both Goldman and Apple have pushed back, with a Goldman spokesperson noting that "we worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers."

Similarly, an Apple spokesperson described how "upon learning about these inadvertent issues years ago, Apple worked closely with Goldman Sachs to quickly address them and help impacted customers."

JP Morgan

This isn't the end of the Apple Card, though. According to CNET, JPMorgan Chase may take over the card from Goldman Sachs.

"I certainly think that there's an opportunity for the product to be revamped," John Cabell of JD Power told CNet. "It does not have the rewards and benefits of some of the most attractive card products out there. That's not its strength, so there's an opportunity to improve in a change like this."

Verdict

For two massive and high-profile companies like Apple and Goldman Sachs to be so blase with their consumer-facing product is baffling. Then again, if the penalty exacted by the CFPB is so miniscule, it really hurts neither corporation to flub again.

🧑⚖️ REGULATION

Canceling Made Easy

In one of its more popular (if simple) rules, the Federal Trade Commission announced earlier this month that companies must now make canceling subscriptions as easy as enrolling in them, and the process must be transparent. The "Click To Cancel" rule clarifies that it should take the same number of clicks to subscribe and unsubscribe to a service or product, and that any in-person enrollment should have a way to unenroll online and over telephone.

“Too often, businesses make people jump through endless hoops just to cancel a subscription," Lina Khan, chair of the FTC, said in a statement on the new rule. “Nobody should be stuck paying for a service they no longer want.”

Click-to-cancel is an amendment to a 1973 Negative Option Rule, says the Washington Post, which " is when a company notifies a consumer about their subscription expiring, and, if the consumer doesn’t answer, the company can take silence as permission to keep the subscription active."

“It’s just one of the many ways that pricing feels unfair and is unmoored from the stability it once had,” Lindsay Owens, executive director of Groundwork Collaborative, adds. And where companies make it easy and mindless "on the way in", they are “trapping you in a corn maze or Rube Goldberg machine when it’s time to quit.”

But not everyone is against this disparity. According to The Verge, two groups (the Internet and Television Association, Electronic Security Association, and Interactive Advertising Bureau) have filed a joint suit aiming to block the new rule, saying the FTC is acting unconstitutionally and outside its powers by "trying to 'regulate consumer contracts for all companies in all industries and across all sectors of the economy.'"

The US Chamber of Commerce finds the FTC's ruling an overreach as well. "Not only will this rule deter businesses from providing sensible, consumer-friendly subscriptions, but it will leave Americans with fewer options, higher prices, and more headaches,” Neil Bradley of the Chamber said.

Amazon Suit

In one of its more high-profile battles over subscriptions, the FTC sued Amazon last year over its Prime Membership tactics.

"Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money," Khan said of the case at the time, reports NPR. As the filing details, the company used "manipulative design elements that trick users into making decisions they would not otherwise have made."

In May, Amazon tried unsuccessfully to get the case dismissed, but a judge rejected that bid and a trial date is set for February 2025, says Reuters.

Verdict

Sure, any company would like to trap customers in paying them on a regular cadence indefinitely but…come on. This seems about as direct and clear cut as a federal regulation could get.

‍