American Express 2012 Annual Report Download - page 14

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After a lengthy review of our U.S. card practices, several regulators determined
that American Express failed to follow consumer laws in a number of instances
over the past few years. The issues involved several areas, including card
solicitations, late fees for charge cards and debt collection practices. In general,
they stemmed from what the regulators found were customer disclosures that
could and should have been clearer, misinterpretation of new and evolving
regulations, and certain process-oriented errors.
We worked closely with the regulators throughout their reviews. In fact, we
brought some of the problems to their attention. We have taken responsibility
for correcting the issues and strengthening controls to help prevent future
mistakes. The review covered a period going back several years. Since that time,
we’ve made signifi cant investments to expand and enhance our compliance
program. These e orts will surely continue.
As a result of October’s enforcement actions, we agreed to pay $27.5million in
fi nes and establish an $85million fund for cardmember refunds. Our own ongoing
analyses of cardmember inquiries, complaints and account records identifi ed an
additional $153 million in reimbursements for various types of transactions
dating back several years, which we recognized in the fourth quarter.
Beyond the fi nancial costs, our main concern is safeguarding the American
Express brand and our relationships with customers. Compliance is more critical
than ever, given the heightened scrutiny and expectations of regulators and the
public. The bar has been raised for everyone in our industry, and fi nes against
To Our Shareholders
2012 Financial
Results
Marketplace Moves
Shareholder Returns
Foundational
Changes
Advantages in a
Digital Economy
A Broad Footprint
Customer Focus
Board of Directors
Change and Tradition
COMMITMENT TO CUSTOMERS We received our sixth straight J.D. Power and Associates
award for “Highest Customer Satisfaction Among Credit Card Companies.”
AMERICAN EXPRESS COMPANY
12