Amex to pay $230M in penalties to resolve charges it deceived customers, banking partner

American Express (Amex) will pay approximately $230 million in fines and penalties to settle allegations that it deceptively marketed credit card and wire transfer products, and also misrepresented the tax benefits of two payroll wire transfer products.

In the settlement entered into Thursday with the Department of Justice, Amex allegedly misled its banking partner when it allowed numerous small businesses to obtain credit cards with dummy employer identification numbers (EINs) from 2014-17, according to a DOJ press release.

In its nonprosecution agreement (NPA) with the U.S. Attorney’s office for the Eastern District of New York (EDNY), Amex allegedly misled its small business customers about the supposed tax benefits of Amex payroll wire transfer fees. Amex told customers that the cost of the transfers were fully deductible as business expenses, when in fact the inflated fees for those transfers were not fully deductible, the EDNY said in a separate press release.