Apple Card’s rapid growth credited with triggering Goldman Sachs probe
Tuesday August 9, 2022. 08:16 PM , from Mac Daily News
Apple Card’s rapid growth and the new platform built by Goldman Sachs to service it created difficulties that attracted regulators who are focused on customer complaints from the past few years, CNBC reports citing “people with knowledge of the matter.”
Hugh Son for CNBC:
Goldman struggled to handle a bigger-than-expected influx of disputed transactions, known in the industry as chargebacks, according to the people. Chargebacks happen when a customer seeks a refund for a product or service billed on their card for any number of reasons. The disputes, which put banks in the middle of disagreements between customers and merchants, have surged during the pandemic, according to payments consultants.
When an Apple Card user disputes a transaction, Goldman has to seek a resolution within regulatory-mandated timelines, and it sometimes failed at that, said the people, who requested anonymity to speak candidly about the situation…
Goldman got more disputes than it counted on, said one source. “You have these queues that you need to clear out within a certain amount of time. The business was getting so big, suddenly we had to create more automation to deal with it.”
Problems at Goldman’s card business burst into public view August 4, when the New York-based investment bank disclosed a Consumer Financial Protection Bureau probe over a range of billing and service issues. (Goldman made no mention of Apple in the filing, but most of its $11.84 billion in card loans to date are from the Apple Card; the bank launched a GM-branded card in January.)
MacDailyNews Take: Rapid growth is a good problem to have. These teething pains will be resolved, if they’re not already.
See also: Apple Card partner Goldman Sachs discloses probe into U.S. credit card division – August 4, 2022
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