Australian regulator sues AmEx for alleged breaches of distribution obligations

(Reuters) -Australian corporate regulator on Tuesday filed a civil lawsuit against American Express Co (NYSE:)’s (AmEx) Australian arm, seeking declarations and pecuniary penalties for alleged breaches of design and distribution obligations.

The Australian Securities & Investments Commission (ASIC) said the lawsuit was related to two co-branded credit cards issued by AmEx to retail consumers in David Jones stores, owned by South Africa’s Woolworths Holdings (OTC:) Ltd.

Between Oct. 5, 2021 and July 5, 2022, AmEx failed to clearly define target market determinations (TMD), describing who the credit cards would be appropriate for and how the cards should be distributed, the ASIC said.

ASIC added that AmEx continued to issue the cards despite being aware of the deficiencies in TMD, risking customers with a financial product that was not in line with their needs.

“Product providers must monitor and review whether consumers are receiving products consistent with their needs and cannot bring a ‘set-and-forget mindset’ to product governance,” ASIC Deputy Chair Sarah Court said in a statement.

AmEx and Woolworths Holdings did not immediately respond to a Reuters’ request for comment.

[ad_2]

Source link