American Express has agreed to pay more than $138 million to resolve a wire fraud investigation related to its sales and marketing practices. The New York-based financial giant provided inaccurate tax advice to customers, claiming that the company’s fees were tax-deductible as business expenses.
The Internal Revenue Service’s office in New York found that American Express “misled their customers” by touting non-existent tax breaks to sell wire products primarily marketed at small and mid-size businesses. The investigation led to the termination of approximately 200 employees in 2021 and the discontinuation of these products later that year.
As part of the settlement, American Express will pay a $77.7 million criminal fine and forfeit $60.7 million, which represents the net revenue attributed to sales of the wire products. The company also separately entered into a multimillion-dollar civil settlement with the US Department of Justice.
American Express stated that it cooperated with the investigation and took decisive action to address the issues, including discontinuing the problematic products and enhancing its policies, compliance, and training programs. However, authorities criticized the company’s sales practices, saying they had “no business pitching inaccurate tax avoidance schemes” to sell products.
Source: https://apnews.com/article/american-express-amex-deceptive-sales-marketing-settlement-9cca4888204458c9d10c24402ef2ebe6