The American Express Company (NYSE: AXP) is to refund a number of its small business clients following an investigation into allegations that the financial services giant misrepresented forex conversion rates.
The company based in New York is to allocate a total of $1.6 million USD in order to refund almost 200 small businesses at the centre of the alleged forex rate manipulation tactics employed by Amex.
American Express was accused in July 2018 of promising potential business clients low currency conversion rates. The company was then accused of quietly increasing the rates later on time by raising the margin of fees that American Express add on to the base exchange rate without informing its clients.
It is alleged that American Express had been conducting business in this manner for over a decade. It is believed to have continued until early 2018.
On top of the refunds, American Express has reportedly fired 10 staff members and instigated retraining for a further 28 employees within its forex payments department.
Ongoing Investigations
A number of federal agencies, including the Justice Department, the Federal Reserve, and the Consumer Financial Protection Bureau, have been investigating the foreign exchange pricing practices of American Express with investigations ongoing.
American Express said it found no management-driven or systematic problems with sales practices in the division from its own investigation. However, the company did find that “some colleagues did not properly represent our pricing.”
Altogether, 198 small business customers will be refunded based on the dollar amount they were overcharged plus interest for actions from 2013 – 2018. The investigations focused on customers from the US but also included small business customers from Australia, Singapore, New Zealand, and the UK.
At the time of writing, American Express Company (NYSE: AXP) is down 0.29%, valuing the company’s stock at $126.78
