American Express refunding $1.6M after exchange pricing investigation
American Express Co. is refunding some customers after an internal probe found salespeople misrepresented pricing.
The company is reimbursing 198 customers for a total of about $1.6 million, a spokesperson said. It also terminated 10 foreign-exchange employees and is retraining 28 others.
AmEx’s investigation into its foreign-exchange division’s pricing practices was prompted by a Wall Street Journal report last year that found the department recruited business clients by offering low currency-conversion rates and then routinely raised prices without notifying customers.
Customers noticed margins off by as much as a quarter of a percentage point last year, according to the report. In earlier years, margins rose by as much as 3 percentage points, former employees told the Journal.
The practice occurred from at least 2004 until 2018, according to the original report.
The foreign-exchange division is separate from AmEx’s better-known credit card business and its consumer currency exchange. It’s a “microscopic” part of AmEx’s business, accounting for less than a half-percent of its total revenue, according to the company. Its customers are mostly small and midsize businesses that make cross-border payments between five countries.
The company hired an external law firm and has investigated the report since last year. The affected customers being refunded account for about 1 percent of AmEx’s foreign-exchange clients over the past five years, according to the company. The refunds include the difference between rates plus interest.
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Federal officials have also looked into the pricing practices, according to another report.
Shares of American Express slumped slightly Wednesday morning. Earlier this month, the company announced earnings of $2.07 per share in the second quarter, with a net income of $1.8 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMX | AMERICA MOVIL SAB DE CV | 15.18 | +0.20 | +1.34% |