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American Express to pay $230 million to settle deceptive sales claims

January 17, 2025
American Express has agreed to pay $230 million in penalties after settling with the Justice Department and others. The credit card company is paying the fine after allegations that it engaged in deceptive marketing, and touted tax breaks to customers that did not exist, between 2014 and 2021.

Federal investigators accused American Express of entering dummy account information on behalf of small businesses, which is a shortcut that salespeople used to increase card sign-ups, and is against the law. The company is also accused of misrepresenting the card’s rewards or fees.

Also, prosecutors said American Express was not upfront about whether credit checks would be done without a customer’s consent, and the DOJ accused the company of submitting false financial information, such as overstating a business’s income.

“When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system,” Brian Boynton, the head of the Justice Department’s Civil Division, said.

American Express issued a statement, saying in part that it cooperated extensively with regulators, took decisive voluntary action to address the issues, and took appropriate disciplinary measures.

To that end, American Express fired 200 employees after an internal investigation.

The $230 million settlement involved the Justice Department, the Federal Reserve and the U.S. Attorney’s Office for the Eastern District of New York, as the company is based in New York City.
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Neil Gaiman faces fallout amid multiple sexual misconduct allegations

January 14, 2025
Fantasy writer Neil Gaiman, known for creating worlds like “The Sandman” and “Good Omens,” is facing allegations of sexual misconduct. A recent Vulture report highlights accusations from multiple women, bringing his personal life and career under scrutiny.

Last summer, Tortoise Media reported accusations of sexual assault against Gaiman by two women who used pseudonyms or only their first names. These allegations were explored in-depth through a six-part podcast series.

One accuser, Scarlett Pavlovich, worked as a nanny for Gaiman and his ex-wife, Amanda Palmer. Pavlovich alleges that Gaiman sexually assaulted her, citing incidents of inappropriate touching and coercion. She recounts one episode where Gaiman allegedly joined her in a bathtub without consent and engaged in sexual acts despite her objections.

Additional accusations emerge

Another woman, identified as Caroline, claims Gaiman’s ex-wife confided in her about marital issues. Caroline later worked as a caretaker in Gaiman’s home, where she alleges Gaiman coerced her into sexual activities, including an incident where he allegedly placed her hand on his genitals while his son was in the same bed.

Gaiman’s representatives deny these allegations, asserting that Caroline initiated the encounters and that no inappropriate behavior occurred in the presence of his son.

NDAs and financial settlements

Both women claim Gaiman offered financial payouts in exchange for signing non-disclosure agreements. Pavlovich reportedly received a five-figure settlement, while Caroline claims she negotiated $300,000. Following the initial reports, six more women have come forward with similar allegations.

Projects impacted by allegations

The fallout has affected several of Gaiman’s projects. The third and final season of “Good Omens” was initially put on hold before Prime Video reduced it to a single episode, with Gaiman stepping back from production.

Netflix canceled “Dead Boy Detectives,” while Disney paused work on “The Graveyard Book.” It’s unclear whether these decisions were directly tied to the allegations.

Gaiman responds to allegations

On Tuesday, Jan. 14, Gaiman released a statement on his website: “Some of the horrible stories now being told simply never happened, while others have been so distorted from what actually took place that they bear no relationship to reality. I am prepared to take responsibility for any missteps I made.”

Gaiman insisted that his interactions with the accusers were consensual and expressed his unwillingness to accept being portrayed as someone he is not.
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New year, same fees: The debate over credit card swipe fees continues

January 6, 2025
Even as inflation cools, small businesses across the country are feeling the heat from credit card swipe fees as more consumers pay with plastic. “Swipe fees” is the catchall term for businesses’ payments to banks and card companies each time customers use their credit or debit cards to pay.

While a federal rule caps debit card swipe fees at 21 cents per transaction, fees for credit card swipes can be much higher. Businesses have seen credit card transactions only go up as more and more people opt to link their card to mobile payment apps.

According to the Nilson Report, which tracks the card and mobile payment industry, in 2023 the U.S. saw $172 billion in swipe fees. Nilson Report said merchants paid Visa and Mastercard an average of 2.26% in swipe fees, accounting for more than $100 billion.

Visa accounted for 52% of all spending on the U.S.’ four major credit card networks, which also includes Mastercard, American Express and Discover.

On top of that, some of Visa’s fees just went up on Jan. 1. That move comes amid growing pushback from critics, including some lawmakers, who say swipe fees are excessive and frequently get passed on to shoppers.

In September, the Justice Department filed a lawsuit accusing Visa of maintaining an illegal monopoly over debit card payment networks, which Attorney General Merrick Garland said has impacted the price of “nearly everything.”

Visa and Mastercard also agreed to a $30 billion settlement in March, meant to reduce their swipe fees by four basis points for three years. However, a federal judge rejected the settlement in June, saying they could afford to pay more.

Congress has taken up the fight, proposing the Credit Card Competition Act. The bipartisan bill, which has stalled, would boost competition among credit card processing companies, which advocacy group Merchants Payments Coalition says is essential.
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GrubHub agrees to $25m settlement for ‘deceptive’ practices

December 18, 2024
Grubhub agreed to pay a $25 million settlement on accusations that it tricked users, delivery drivers and restaurants in an effort to quickly grow its business. The Federal Trade Commission (FTC) and the attorney general for the state of Illinois said the food delivery company engaged in unlawful practices designed to deceive customers and workers.

The agencies claim Grubhub hid the real costs on its app leading to a final price that was often double than what was originally advertised due to added service and small order fees.

Grubhub is also accused of inflating hourly pay rates in ads that were well above what drivers would realistically earn. The ads claimed applicants could make up to $40 an hour, when only 2% of its drivers actually did.

According to the complaint, Grubhub regularly listed restaurants on its platform without their knowledge as a self-described “mechanism to gain national scale.” Then when things went wrong, customers blamed the restaurants.

Grubhub also allegedly delayed taking those places off its platform after being asked.

The company commented on the settlement.

“While we categorically deny the allegations made by the FTC, many of which are wrong, misleading or no longer applicable to our business, we believe settling this matter is in the best interest of Grubhub and allows us to move forward,” Grubhub said.

In addition to the $25 million payment, Grubhub must also stop adding junk fees and disclose the true cost of deliveries up front.
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Disneyland owes back pay to 50,000 employees in $233 million settlement

December 16, 2024
Years after Disney was first accused of violating minimum wage laws at its California resort, the “happiest place on Earth” has agreed to settle a class-action lawsuit for $233 million. A lawyer representing Disneyland workers confirmed the settlement to Straight Arrow News.

Based on the law firm’s research, it’s believed to be the largest wage and hour class-action settlement in California history.

“For this to be the result, and all of the money to go back to the workers, and the interest on top, it doesn’t quite get better than this,” attorney Cornelia Dai told SAN. “Especially when you have a long fight like this, five years.”

Dai said the settlement will cover 100% of back pay, plus interest and penalties, owed to more than 50,000 Disney employees since 2019. If a judge approves the settlement next month, workers will then find out how much they get.

The five-year fight

Back in 2018, Anaheim voters approved Ballot Measure L, which specifically required employers in Disneyland and Anaheim resort zones that had tax rebate agreements with the city to pay a higher minimum wage. Starting in 2019, that was $15 an hour. It increased $1 every year to $18 an hour by 2022. From there, it started rising by the rate of inflation. In 2024, the rate is $19.90 an hour.

The ballot measure got a boost from this 2018 survey of Disneyland employees, “Working for the Mouse.”

The report said, “Disneyland employees report high instances of homelessness, food insecurity, ever-shifting work schedules, extra-long commutes, and low wages … Almost three-quarters (73%) say that they do not earn enough money to cover basic expenses every month.”

The ballot measure passed with 54% of the vote, but Disney’s lawyers were already on the case. Disneyland argued it didn’t fall under the “living-wage law” because the 1996 expansion deal it had with the city didn’t qualify as a tax rebate. The Anaheim city attorney agreed, but workers filed a class action lawsuit anyway.

Years into this legal battle, a judge also sided with Disney in 2021. But by 2023, the district court of appeal reversed the ruling, saying Disney did fall under the living-wage law and therefore was illegally evading it for years. The California Supreme Court declined to hear the case, effectively ending Disney’s fight.

Disneyland today

“Disney is meeting the Measure L hourly rates and going forward, they’re going to match the increase,” Dai said. “So this is going to change lives in a real way. And I’m not just saying those words. It’s really going to change the lives of the Disney employees and their families. So it’s a big deal. It’s a real big deal.”

“We are pleased that this matter is nearing resolution. Currently, all cast members make at least the Measure L requirement of $19.90 per hour, and, in fact, 95% of them make more,” Disneyland spokesperson Suzi Brown said in a statement to Straight Arrow News.

This summer, Disneyland staved off a strike by agreeing to a three-year contract with unionized workers that pays a $24 minimum wage for 2024.
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FTC issues Fortnite players refunds after being ‘tricked’ into purchases

December 10, 2024
Hundreds of thousands of Fortnite players are getting a refund after federal regulators found the game’s developer tricked players into spending money on unwanted purchases. The Federal Trade Commission said it’s starting to send $72 million in payments to Epic Games customers.

It’s just the first round of refunds following a 2022 settlement of $245 million – the FTC’s largest-ever refund amount in a gaming case. Epic Games agreed to the settlement for its “unlawful billing practices.”

Fortnite is free to download and play but charges gamers for other items. They include experiences known as microtransactions, like costumes and dance moves.

While microtransactions are a common feature in video games, Epic Games used a design tactic called “dark patterns” that hid in-game purchases. This led to people, including children, racking up charges.

In some cases, just one accidental press of a button led to players incurring charges.

The complaint described it happening from 2017 to 2022. Players tried to wake the game up from sleep mode or pressed a button to preview a purchasable item.

Epic Games is also accused of locking out customers who disputed unauthorized charges. That caused them to lose access to all the content they purchased.

The average payment amount in the settlement is about $114 per customer through PayPal or check.

The FTC said customers who selected their payment method when they completed their claim form have 30 days to redeem PayPal payments and 90 days to cash checks.

Fortnite customers who think they’re eligible for a refund can submit a claim online until Jan. 10.
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City of Las Cruces pays out $20M to family of woman killed by police officer

November 26, 2024
A city in New Mexico is paying out millions of dollars to the family of a woman who was shot and killed by a police officer during a traffic stop in October of last year. More than a year after the shooting, the city of Las Cruces, New Mexico, announced that it has reached a $20 million settlement with the family of 45-year-old Teresa Gomez.

In a statement on Monday, Nov. 25, the city said that the settlement does not admit “criminal guilt” on the officer involved in the shooting and the city maintains it will respect the criminal justice process. The city added, “This settlement should be understood as a statement of the city’s profound feeling of loss for the death of Gomez and of the city’s condolences to her family.”

An attorney for Gomez’ family said they are thankful that the city has recognized the “injustice of Teresa’s death” and hope Las Cruces will make sure no other family has to suffer losing a family member to police violence.

The officer’s legal team did not have a response at the time of this report.

Bodycam footage of the shooting shows now former Las Cruces police Officer Felipe Hernandez fatally shooting Gomez during a traffic stop.

Hernandez can be heard questioning Gomez and her passenger as he accused them of trespassing. Hernandez said Gomez’ passenger had multiple warrants for trespassing as the pair sat in Gomez vehicle.

Gomez told Hernandez she could not find her keys. As the incident of around nine minutes unfolded, Hernandez can be heard telling Gomez, “I will make your life a living hell. I will tow your car.”

The confrontation ends with Gomez starting her car and attempting to drive away as the Hernandez yells, “stop,” several times. Hernandez then opens fire on the vehicle and calls in “shots fired” to his radio.

Gomez later died from the gunshot wounds at a hospital. The passenger in the incident was not injured.

Hernandez was fired following the shooting, and awaits a trial scheduled for June of 2025 on second degree murder charges in Gomez’ death.

He has pleaded not guilty to the charges.
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Disney to pay $43M to settle gender pay gap lawsuit

November 26, 2024
Disney agreed to pay $43 million to settle a lawsuit on Monday, Nov. 25. The lawsuit alleged Disney paid female employees less than their male counterparts in similar roles for more than a decade.

The settlement stems from a 2019 lawsuit brought by a woman who worked for Disney. She claimed six men with the same job title earned substantially more than her, including one man with several years less experience, who was earning $20,000 more than she did annually.

About 9,000 women who were current or former employees joined the lawsuit.

As part of the settlement, Disney must hire a labor economist to analyze pay equity among full-time, non-union California employees below the vice president level for three years and fix the differences. The settlement still has to be approved by a judge before it’s official.
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Less than 24 hours left to stake claim in $15M CashApp settlement

November 18, 2024

Time is quickly running out to get some cash from CashApp. Users have until 11 p.m. PST on Monday, Nov. 18 (2 a.m. EST on Tuesday, Nov. 19) to file a claim as part of a $15 million settlement with CashApp, a digital wallet app.

The settlement stems from a 2021 data and security breach that resulted in the unauthorized release of 8.2 million customers’ personally identifiable information. On top of that, the lawsuit alleged a former CashApp employee had gotten access to users’ personal information and downloaded it without their knowledge while still working there.

CashApp users who had unauthorized, fraudulent withdrawals or transfers on their accounts between Aug. 23, 2018 and before Aug. 20, 2024 are eligible to submit a claim for up to $2,500.

To learn how to file a claim, follow the steps on the settlement website.
US pork processor Smithfield to pay $2M in child labor settlement

November 15, 2024
Smithfield Foods, one of the U.S.’ largest meat processors, agreed to pay $2 million in a settlement over child labor allegations. A Minnesota Department of Labor and Industry investigation found the Smithfield packaged meats plant in St. James employed at least 11 children between the ages of 14 and 17 from April 2021 to April 2023.

The agency also found Smithfield let nine of the underage employees work after allowable hours and all 11 performed potentially dangerous work. As part of the settlement, Smithfield also agreed to not break labor laws in the future.

In a statement, Smithfield denied knowingly hiring anyone under 18. It also said all 11 passed the federal E-Verify employment eligibility system by using false identification.

The case is the latest in a series of alleged violations by major U.S. meat producers, which have for years struggled to fill their plants amid worker shortages. Last year, the federal Department of Labor imposed more than $1.5 million in civil penalties against one of the country’s largest cleaning services for food processing companies after finding it employed more than 100 children in dangerous jobs at 13 meatpacking plants across the country.
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