American Express Co. is refunding some customers after an internal probe found salespeople misrepresented pricing.
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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.
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.
|AMX||AMERICA MOVIL S.A.B. DE C. V.||10.82||-0.52||-4.59%|