Australian regulator sues AmEx for alleged breaches of distribution obligations

Follow us on Google News:
 Australian regulator sues AmEx for alleged breaches of distribution obligations
Image source: ©2022 Kalkine Media®

(Adds details, background)


Dec 6 (Reuters) - Australian corporate regulator on Tuesday filed a civil lawsuit against American Express Co'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 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. (Reporting by Himanshi Akhand in Bengaluru; Editing by Shounak Dasgupta and Uttaresh.V)

Disclaimer

The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Featured Articles