Apple Card has a large number of non-payment problems

Apple Card has a large number of non-payment problems, and Goldman Sachs relies on three external suppliers to help serve Apple Card customers. This increases the possibility that the business representative is new or not fully trained. Apple Card has a large number of refusal to pay. There are a large number of refusal to pay for Apple Card. 1

Due to the continuous growth of Apple Card users, Goldman Sachs Group, a cooperative card issuer, is not prepared enough to deal with a large number of refusal to pay for credit cards.

when apple launched the Apple Card business in 219, it claimed that its own credit card was very simple and transparent, and was regarded as a game changer.

However, people familiar with the matter said that the rapid growth of the credit card business made Apple unexpected, and the problems of the new service platform created by Goldman Sachs also emerged one after another, which made Apple's credit card business more like a traditional card issuer that suffered various failures, rather than a customer-oriented subversive like Apple itself said.

Data Map

According to people familiar with the matter, it is difficult for Goldman Sachs to deal with the large number of non-payment problems of Apple credit cards. The customer applies to the bank for refusing to pay a transaction on the credit card bill for various reasons. Payment consultants said that these disputes have plunged banks into differences between customers and merchants.

According to people familiar with the matter, when Apple credit card users object to a transaction, Goldman Sachs needs to find a solution within the regulatory time limit, but it often fails to do so. People familiar with the matter said that users sometimes receive contradictory information and sometimes wait too long.

A source said that the number of transaction disputes that Goldman Sachs needs to deal with exceeded expectations. "You need to clean up these issues within a certain period of time. The amount of business has become so huge that suddenly we have to develop more automation tools to deal with these businesses. "

Goldman Sachs declined to comment for this article, and an Apple representative did not immediately respond to a request for comment.

Nightmare

The problems of Goldman Sachs' credit card business were exposed on August 4 this year, when Goldman Sachs disclosed the investigation of a series of bills and service problems of credit cards issued by the Consumer Financial Protection Bureau of the United States. Goldman Sachs did not specifically mention Apple in the document, but in January this year, Goldman Sachs just launched the GM co-branded credit card; So far, most of Goldman Sachs' $11.84 billion credit card loans come from Apple credit cards.

Goldman Sachs said that regulators are investigating Goldman Sachs' customer transactions, "including refusal to pay applications, irregular credit, bill error resolution, advertisements and incidents reported to credit institutions."

According to people familiar with the matter, regulators are concerned about the content of customer complaints in the past few years, the most of which is refusal to pay.

it can be tricky to resolve these disputes. Customers sometimes use system loopholes to purchase goods through normal channels and then apply for refusal to pay; There are also merchants who are fraudulent. Among the large number of applications received by Goldman Sachs, there are many normal refusal problems that should be solved, such as identity theft or never receiving goods, but there are also problems such as customers complaining that music festivals and other activities do not meet the credit card charging standards.

In the credit card forum, some Apple credit card users complained that despite providing evidence of fraud, Goldman Sachs initially refused to take their side.

A post on the Reddit forum said: "Goldman Sachs asked me to pay the $93 fee for using the Apple Payment service in the Apple Store." "So far, I have never found that big companies can provide such unprofessional services. This is a nightmare." There is a large number of refusal to pay for Apple Card. 2

Apple Card may be one of the earliest signs of Apple's financial business. Although the card has the "Apple”logo on it, it is basically a joint credit card, and the bank still provides approval and other support behind it.

"Make friends carelessly"

In 219, when Apple released the Apple Card, the company claimed that this credit card was a "game changer", which provided unprecedented simplicity and transparency.

At that time, Apple chose Goldman Sachs as its partner. However, Goldman Sachs had not yet entered the field of consumer credit cards, and Apple Card was the first consumer credit card launched by the company. So, why didn't Apple choose an old credit card partner? In fact, Apple also negotiated with JPMorgan Chase, Citigroup, Barclays Bank and other traditional credit card companies at that time, but these banks failed to undertake Apple business because of their low profits.

As a "novice" in American credit card industry, Apple Credit Card represents the biggest step taken by Goldman Sachs to enter the financial life of ordinary Americans. According to people familiar with the matter, although major card issuers rely on decades-old technical systems, Goldman Sachs has chosen to build its own platform.

Controversial transactions

Apple claims to innovate the credit card industry, but people familiar with the matter say that behind this, the rapid growth of Apple Card and the new service platform created by Goldman Sachs have created difficulties for them, and the failure has made them more like a traditional card issuer than a customer-oriented subversive.

According to people familiar with the matter, it is difficult for Goldman Sachs to deal with the number of disputed transactions that exceed expectations, which is also known in the industry as "credit card dishonor". Credit card refusal occurs when customers demand a refund for products or services for various reasons. According to the payment consultant, these disputes put the bank in a disagreement between customers and merchants, which surged during the epidemic.

when an Apple Card user objects to a transaction, Goldman Sachs must seek a solution within the time limit required by the regulation, but sometimes it can't do so. People familiar with the matter said that customers sometimes get contradictory information or go through a long wait.

A person familiar with the matter said that the dispute that Goldman Sachs encountered exceeded expectations. "You need to clear up these queuing problems within a certain period of time. The business has become so huge that suddenly we have to create more automated programs to deal with it. "

Nightmare service

The problems in Goldman Sachs' credit card business suddenly came into public view on August 4th. At that time, the new york investment bank disclosed a series of bills and service problems investigated by the US Consumer Financial Protection Bureau. Goldman Sachs did not mention Apple in its documents, but so far, most of its $11.84 billion credit card loans have come from Apple Card. In January of this year, Goldman Sachs also launched a GM co-branded credit card.

Goldman Sachs said that regulators are investigating its customers' transactions, "including refund applications, `crediting' of unqualified payments, bill error resolution, advertisements and ways of reporting consumer information to credit reporting agencies".

according to people familiar with the matter, regulators are concerned about customer complaints in the past few years, and the biggest reason for these complaints is trying to get a refund. These disputes may be difficult to resolve, because customers sometimes try to trick the system by seeking a refund for legitimate shopping. Moreover, merchants are not always willing to help. Although it should be clear that identity theft or refund of goods never received should be involved, Goldman Sachs also faces some more subtle cases, such as customers complaining that activities such as music festivals are not worth paying so much money and applying for refunds.

many users complained on the online credit card forum that although they provided evidence of fraud, Goldman Sachs initially refused to take their side.

"Goldman Sachs asked me to be responsible for the $93 fee paid for using Apple Pay in the Apple Store, but I didn't spend the money. So far, I have never experienced such unprofessional services provided by large companies. This is a nightmare. " The user said in a post on the social forum Reddit.

People familiar with the matter said that although Goldman Sachs provided customers with an automated way to register disputes through the iPhone, it did little to simplify the solution of such cases. At first, Goldman Sachs did not consider what people in the industry thought was a "marginal case", that is, breaking the rules in most transactions.

"We want to prove that we have a seamless way to handle disputed transactions," said a person familiar with the matter. "But we didn't get any praise at the front end and we also encountered some failures at the back end."

another puzzling problem is that Goldman Sachs relies on three external suppliers to help serve Apple Card customers. This model is called business process outsourcing (BPO), but the employee turnover rate in this field is high, which increases the possibility that the business representative is new or not fully trained.

In February this year, Apple issued a notice to some credit card users, giving them the opportunity to resubmit old disputes. Apple admitted in an email that "some disputes initiated by customers may not have been correctly resolved". There are a large number of non-payment problems with Apple Card 3

Goldman Sachs, the cooperative bank of Apple Card Credit Card, revealed that they are facing an investigation by the Consumer Financial Protection Bureau. The focus of the investigation is the management regulations of Goldman Sachs' credit card accounts in the United States, of which Apple Card is an important part.

the consumer financial protection bureau (CFPB) is the highest consumer protection agency and regulator in the financial sector in the United States. The investigation of Goldman Sachs focuses on the bank's credit card account management practice, which includes many different factors.

Goldman Sachs said in its filing with the US Securities and Exchange Commission that it is cooperating with CFPB's investigation:

The company is cooperating with the Consumer Financial Protection Bureau to investigate the credit card account management practices of GS Bank USA, including refund application, crediting of unqualified payments, billing error resolution, advertising and reporting to the credit bureau.

Goldman Sachs has only recently begun to enter the personal consumption credit card business in the United States; Its cooperation with Apple to develop Apple Card is by far the biggest move.

most of apple card's financial back-end depends on Goldman Sachs. This includes approval and rejection, credit limit, disputes, credit bureau reports, etc.

Shortly after its launch, Apple and Goldman Sachs faced accusations that gender discrimination was affecting the algorithm used to determine the credit limit of Apple Card. These allegations prompted new york's Financial Services Department to investigate.

Goldman Sachs responded to the accusation that its credit decision was "based on the credibility of customers, not on gender, race, age, sexual orientation or any other factors prohibited by law". Apple has never publicly responded to these allegations.

at present, there are no more details about the specific contents that CFPB is investigating, but in view of the important role that Apple Card plays in Goldman Sachs' consumer credit card business, this business is regarded as the key of this investigation.