American Specific shares dip on report that federal investigators are probing gross sales practices
American Express shares fell after the Wall Street Journal reported that the investigative arms of three U.S. financial agencies were probing the card issuer’s sales practices.
Shares of the company dipped 1.3% Thursday after falling as much as 5% earlier.
The offices of the inspectors general of the Federal Reserve, Treasury Department and Federal Deposit Insurance Corp are looking into whether New York-based AmEx pushed its cards on small business clients with misleading tactics and whether customers were harmed, according to the Journal.
Citing current or former workers of the issuer, the Journal reported in March that in an effort to boost sales, some AmEx employees misrepresented card rewards and fees or issued cards that customers hadn’t sought.
AmEx said Thursday in a statement that it has “robust compliance policies and controls in place, and [does] not tolerate misconduct.” The firm added that it has been cooperating with regulators’ review of small business card practices that occurred in 2015 and 2016.
“We have conducted a detailed, independent review of these sales from this time period, and found no evidence of a pattern of misleading sales practices,” AmEx said. “The commercial acquisition group responsible for these sales represented approximately 0.25 percent of the 65 million total new cards American Express acquired worldwide between 2014 and 2019. We take these matters seriously, and will continue to cooperate with our regulators.”