Goldman and Apple 'illegally sidestepped' obligations to credit-card customers
finance.yahoo.com
finance.yahoo.com
Interesting!
Will they notify those charged interest?
Yes? Where do you think this money is going?
> Goldman will pay $64.8 million. Of that total, $19.8 million will go back to consumers.
It might also be that it only applied during specific circumstances (buying directly from Apple) instead of as a blanket offer. I've bought a few devices through this deal and personally am a happy customer, so I hope this doesn't kill it.
It's been a while since I bought an Apple device that way, but I do think that's how it showed up. I always pay my card off each month so I never got to find out if the installment would be subject to interest if I didn't immediately pay it.
Another interpretation is that the credit card balance is charged interest but the monthly payments, which are paid using the card, do not have interest applied. Which sounds accurate and not necessarily misleading, though there's an argument to be made given they market the card so heavily. I think the confusion stems from the situation of making monthly payments with a credit line that also expects monthly payments.
I agree, that is very likely where the confusion comes from. It would probably be better if they kept the billing separate even when it's on the same statement.
I hate to jump directly to assuming nefarious greedy corporation, but obscuring the monthly installment by paying it with the credit card does strike me as a deliberate choice. I guess CFPB agrees.
I was an early adopter of the AC during my Apple glazing days. Everybody has the same due date (end of month) and GS systems just could not handle the volume.
I remember an auto payment taking a week to withdraw from my bank account and applied to account. I wasn’t charged interest and didn’t have an installment at the time though. I believe installments were introduced a year later after AC was generally available.
As an aside, for anyone using an Apple Card today, a handy way around this is to not make payments via ACH. Use your debit card with Apple Pay to pull money instantly into Apple Cash, then use that to instantly pay your credit card bill. An extra step, sure, but it's instant.
Any tips?
Personally I have a bank account that I use solely for the purpose of auto pay/ach. It’s only funded with enough money to pay creditors.
This is what keeps me from even considering an apple card, I don't need any credit and getting credit registered against my name will make it more difficult to get a mortgage.
If you use debit, you might be leaving 2% of the deal on the table. (But you are helping the merchant, which could be a good reason)
Seems crazy for end users but I understand it from the banks' perspective
My bank told me they definitely favour those who can live their lives without having to take loans at all. Any loans get subtracted from the maximum possible mortgage, this includes credit cards at their maximum authorised credit level(!). Also, we have to pay 20% of a house in hard cash here so anyone looking to buy one is saving substantial money. So you have a decent buffer. There's no point in taking out credit if you can supply your own.
I get ten percent cash back on groceries right now. It is subsidized in a sense, and builds out an advertising portfolio on me - those are questionable - but it is money in my pocket.
I do have a "credit card" because some sites refuse to accept debit ones. But no cashbacks or anything. Maybe it differs by bank (I use caixabank in Spain)
The one thing I do like as a reward is that caixa funds several museums and you can get in for free if you have an account with them. But it doesn't have to be a credit card, a normal account is enough.
In Europe these are legally capped, in the us they are not. So the 2% cash back on US cards is the cards and banks competing for market share by providing kickbacks from these fees to customers.
https://www.bitsaboutmoney.com/archive/how-credit-cards-make...
You must share which card is this, I will get one immediately. 10%?
https://www.discover.com/credit-cards/cash-back/it-card.html
The ten percent is a promotion they were doing for getting the card; matching your cash back for a bit. 1% on everything, 5% on a couple of categories, and x2 for only a bit.
If it gets stolen/someone else uses it, all I need to do is tell my bank, and since I have not paid the debt, I am not out any money. It is on the bank. If I was using a debit card, it may take a month+ to be investigated/money returned.
Emergencies/availability having available credit is useful, most of my money is in investment accounts, even if only to get higher money market interest rates. I can transfer to my bank account, but that takes time. Having ~10k in credit available for if I need a last minute plane/hotel/hospital is good in an emergency. Once I'm safe I can move the money around as needed.
Cash back, coming from the USA credit cards give me 2-3% cash back. That is significant considering I use them for all purchases.
I do not believe that credit card accounts have a negative affect on mortgages. They are different types, with credit cards being revolving. As long as you are paying it off and not maintaining a valence, then it should only be a net positive (shows credit history of paying debts).
But if the bank still claims it was you it is still in question and they still want their money back, with interest.
> I do not believe that credit card accounts have a negative affect on mortgages. They are different types, with credit cards being revolving. As long as you are paying it off and not maintaining a valence, then it should only be a net positive (shows credit history of paying debts).
Ah I see, this does definitely not apply here in Europe. The amount you can borrow for a mortgage is reduced by the amount of loans you have, including the maximum spending limit on credit cards (even if you never use said card at all!). This is why I have a card with only 1000 euro spending limit, just for some backwards sites that don't support debit cards (there are still some unfortunately.
A mortgage is credit. And as far as FICO scores go, having high available credit would make it easier to get a loan, not harder.
This is not, generally, a correct statement. Having a history of 1) paying off debt or 2) not using a credit line available to you actually makes it MUCH easier to get a mortgage.
Might be different in other countries but in the US the only way credit lines harm your chances of getting a mortgage is if you don't pay the bill in full every month or take out new lines of credit within a few months of taking out the mortgage.
I, personally, had more than 20 lines of credit open when I was approved for my mortgage at their lowest interest rate. My mortgage was/is actually lower than my available credit on my all my revolving accounts, combined.
Debit cards are the worst of all options. Any fraud means the money is immediately gone from your account. Yes you can often get it back eventually, but eventually takes time.
> I don't need any credit and getting credit registered against my name will make it more difficult to get a mortgage.
If you're planning on getting a mortgage I suggest studying up on this, because reality is the opposite of what you say. An important factor in your credit score is how much credit you have that you don't use. So what you want is lots of credit cards with very high limits to maximize your credit score.
A case of potentially misleading advertising, but also customers being dumb. I personally found the whole process quite clear with regards to how the interest-free installment plans work.
For example, that is not even an option if you try to buy an Apple device from an Apple Store outside of the US, even if you already have the Apple Card. You just get the max 3% cashback.
Maybe there were earlier versions of the advertising/process that weren't as clear, and it was made clearer over time?
What is "Apple glazing"?
This is really funny, because Goldman has been very public about how much they hate the Apple Card deal, and they have been and still are looking to unwind the deal or sell the portfolio, so something tells me this experiment in retail consumer finance is not something they're looking to replicate any time soon.
I'm not saying you can't have a favorite gladiator, I'm saying you can't pretend this isn't pugilism.
It is by far my favorite credit card.
There are definitely cards with better rewards, but few with such a straightforward and simple cash back program. Also, the rewards are not bad by any means. I also like the tight integration with the high yield savings account, which again is not the best rate possible, but makes up for it with the UI of its software and overall simplicity and ease of use.
> Giving a month to pay off a balance I believe is referred to as a "grace period" which is pretty common place in credit cards. A month is nice, but I believe most cards are usually around 4 weeks.
I'm talking about the actual due date, not the grace period which is a different thing entirely. You have until the last day of the following month to pay off the balance to avoid incurring interest, which is different than any other credit card I've ever used. Usually the due dates are a specific day of the month which often changes every month.
What's wrong with pugilism?
[Still paraphrasing Levine.] As one would expect, that didn't go well. Goldman Sachs as a company is geared to do complex low-volume, high-margin deals. Consumer banking by its very nature is high-volume, low-margin. To make things "worse", consumer finance is also very heavily regulated to discourage routinely fleecing your customers.
Which is how you get a vampire squid squad trying to feed off of a decaffeinated strawberry juice carton. Someone is going to be disappointed, and it's not the juice carton.
GS were probably willing (initially) to pay a hefty sum to get into that market, so then the question becomes: why Apple? At the time Apple had a net float of >$200B. When you have that much cash and assets to deal with, you no longer seek the help of a bank. You are a bank.
In a funny twist, their Marcus brand is still alive at least in the UK, and they are offering some of the (supposedly)[ß] best front line savings rates to attract customers. I've never seen anyone with their brand of card, though, so clearly their offered rates are not attractive enough.
ß: few other UK high street banks are offering even better rates, but every single one of them has set a ludicrously low cap on the amount they pay good rates on before dropping to just-about-tolerable rates for whatever goes above the threshold.
And who could afford to give out bonuses in this economy?
CIBC is currently at 4.61%!
Note: I'm aware it's a Canadian bank, but this particular branch of it does business in the US and this is a normal USD account.
> Goldman Sachs as a company is geared to do complex low-volume, high-margin deals.
It is funny that you think Goldman is so monolithic. They have 45,000 employees, and a vast array of businesses. As a related point, JPMorgan is both a mega commercial/retail bank plus ibank. They do both types of transactions.
Failing to process or share consumer disputes: Apple Card users were directed to dispute transactions through a “Report an Issue” feature in the Wallet app. For some disputes, Apple sent consumers a separate link in the Messages app asking for more information. Apple failed to send these disputes to Goldman Sachs if the second form was incomplete. Even after Goldman Sachs alerted Apple to this issue, the problem persisted. As a result, neither Apple nor Goldman Sachs investigated tens of thousands of such disputes and cardholders were unfairly held responsible for disputed transactions.
Failing to investigate cardholder disputes: For the disputes that Apple did send to Goldman Sachs, the bank failed to consistently send acknowledgment notices within 30 days, conduct reasonable investigations, or send resolution letters explaining the determinations of its investigations within 90 days. These failures led to Goldman Sachs illegally placing damaging information on consumers’ credit reports and holding cardholders responsible for potentially fraudulent or unauthorized purchases.
No. For starters, because it doesn’t get them out of the deal.
They were begging for (below market wage) devs to pack those seats pre2020
GS offloaded $1B in consumer loans to Varde the year prior [2]. Marcus website doesn’t even have a way to apply for personal loans.
Then of course the widely discussed bad terms of the Apple and GS partnership and rumors of GS trying to sell this to another bank. [3]
Not quite sold off but consumer division is circling the drain.
[1] https://finance.yahoo.com/news/betterment-acquire-digital-in...
[2] https://www.reuters.com/business/finance/goldman-sachs-offlo...
[3] https://www.aol.com/news/apple-talks-jpmorgan-bank-over-2016...
- Moves into finance have been a failure, cancelling their BNPL as well.
- Vision Pro basically dead at this point.
- A large number of senior execs getting reshuffled/moving on from the company.
- Apple Intelligence, still no where to be seen.
This is most likely a Goldman Sachs issue, but still, who at Apple decided to partner with the bank that hasn't got any track record in consumer banking?
The only advantage GS would have had over competitors is that they would have offered Apple very generous terms because they wanted to leverage Apple to get into a new market. Choosing GS was not very customer centric.
Apparently GS was up for that. Possibly because they didn’t actually know what they are doing. My understanding is the loss rate was way too high for them to be profitable.
It was well covered at the time, here’s the first example to come up in a quick search: https://www.cnbc.com/2022/09/12/goldmans-gs-apple-card-busin...
Forgive me, I’m not trying to shoot the messenger. Nuance or not, I think GP is right. It wasn’t very customer centric.
People all across the income/wealth spectrum use Apple products, in huge proportions.
Apple and Huawei both sell smartphones, which one has the margins of Ferrari and which one has the margins of Toyota?
Even with the benefit of the doubt it was naive. Did no one think, he maybe there's a reason all these companies with a lot more experience than GS aren't giving credit cards to everyone?
The real brand risk was never denying people cards – that still happened anyway, the risk was exactly what's happening now.
This has never happened with any of my AMEX cards, so I can only conclude that either the whole division is incompetent or there’s something more troubling going on
CFPB Orders Apple and Goldman Sachs to Pay Over $89 Million for Apple Card Failures
https://www.consumerfinance.gov/about-us/newsroom/cfpb-order...
To me that says EU is doing the right thing.
If the fine is too low, it’s just absorbed as a “cost of doing business” and ceases to be a deterrent.
That's a reasonable position to hold, but crappy comparisons like in the OP doesn't contribute little to the discussion. The fine might be tiny part of worldwide revenue, but how much money are they making off apple cards? If that's tiny as well then the argument is moot.
I disagree. I don’t think the fine should be relative to money gained by breaking a rule. Then it’s not a deterrent for large companies.
You end up in a situation where very large companies can act in illegal ways and just absorb the fine.
A company doing anything worth fining should be fined relative to the size of that company (by some metric)
Sorry, I’m not sure I follow. How would selling products to smaller countries automatically incur fines for illegal activity?
So the solution is to make breaking laws not truly punished?
Seems like companies should be damn sure they’re not breaking laws…
Of course not every fine needs to put the company in danger of bankruptcy.
Fines could start relatively small and grow quickly and exponentially with repeated offenses.
But they should act as a real deterrent.
I wish I lived in your world.
> but shit happens and despite their best efforts they might still get fined.
You’re telling me that it’s okay that laws are sometimes broken with no real consequence because the company in question may mistakenly break laws?
Yikes…
> Under your proposed regime of a "deterrent", that would put them at risk of fines worth 5% (or whatever) of their global revenue
I don’t know if revenue is the exact metric to use to making a deterring fine. It very well may not be.
But the fine should act as some real deterrent
> All 40k Liechtensteiners are worse off as a result. This isn't a hypothetical. It's happening in EU right now, as Apple doesn't want to deal with the legal headaches associated with Apple Intelligence and therefore opts out of the EU market entirely.
This is a very complex topic and I don’t feel well equipped to discuss it with any real nuance.
But here I go anyway…
I’m not convinced that not having access to Apple intelligence makes a country worse off.
Not all countries need to be supported by a large corporation. That’s not strictly a good thing.
If they (the EU) wanted that, they’d lax their regulations…
If a company with $1B in revenue, rolls something out to make $10M, then anything over $10M is suitable punishment - you turned a profitable venture into a money losing venture.
But if that company was $1T then that fine is effectively the cost of legal research. It won’t deter that company from trying to weasel their way around regulations in the future as the cost of trying justifies the potential upside.
That seems like a reasonable approach.
By your logic, if a company is running at a loss should the fine be negative?
Sure, but I don’t think just causing any amount of loss acts as a deterrent. Especially if the company is large enough to absorb the loss with no real consequences.
> By your logic, if a company is running at a loss should the fine be negative?
No, that’s a dumb question. A negative fine isn’t a fine and isn’t a deterrent…
I don’t know what metric one should use to determine how to make a fine a deterrent. Maybe market cap?
But the point of a fine is to be a deterrent.
Is it? Or is it purely to make the action a net negative?
Making an action a net negative _can_ act as a deterrent as in the $1B case earlier.
The issue is that, at a certain scale, the risk of simply having an action be a net negative may be worth the potential upside.
I honestly don’t understand what’s so disagreeable about this idea.
What else would a fine be other than a serious deterrent to an illegal action? A mild annoyance?
What else could the point be? I guess social retribution? But that’s just pointless.
I agree there, but if you're going to come up with a system of fines to incentivize not breaking the law, it needs to make sense.
Just making it a huge numbers is likely to not even pass muster in the courts.
A $10B company paying a $1B fine for sending out spam mail to 10 customers would be seen as "cruel and unusual punishment".
I’d like to live in a world where fines are deterrents, though.
Primary example of this is there is no way to update your email address with the bank. It's your Apple ID and can't change. How do I know this? I changed my Apple ID several years ago, but my credit card comms still come to the old address, and no matter how many times I contact either bank or Apple support, they have no power to fix this. The bank has zero access to edit my information at all, and Apple just sends me in idiotic circles like logging out and into my devices, deleting all other contact emails from my Apple account, etc.
These articles worked for me?
Update your Apple Card account information (including email address): https://support.apple.com/en-us/102512
Change your Apple Account primary email address: https://support.apple.com/en-us/109353
Only Apple Card didn't get the memo and there's no way to poke them to make them update.
tsk tsk. Almost feel bad.
Them's the breaks. I don't love it either, but submission spam doesn't move the needle for our community regardless of timestamps, especially when one randomly didn't gain traction first. If you have a better solution, feel free to email hn@ycombinator.com, maybe the staff will take it up!
Don't sweat the small stuff. This story made it to the front page, isn't that cool? Someone was on to something.
All of these issues would be infuriating if I encountered them, but it's interesting how the breakdown of failures seems to be 50/50 "Apple doing a terrible job designing a clear and consistent UI or process" and "being bit by their attempts at locking people into their ecosystem, independent of the card" and the Goldman Sachs portion seems just outright malicious.
Incompetence and malice combined are a really powerful force.
But the UI is pretty clear when you make a payment, if you drop the amount under the recommended payment how much interest it’s going to cost you.
I really wish everybody who makes claims like these would go to the local library and do volunteer tech support for the elderly, poorly educated and cognitively challenged for a day.
The bar for these things is not "would the average HN reader find this confusing" it is "would the average customer find this confusing". The average IQ is 100, more than half of the US population reads below the grade 6 level.
Caveat Emptor should not mean "They can make the contract literally inscrutable and then you just have to go get fucked".
There's nothing wrong with reasonable consumer protections and required default warranties that CANNOT be discharged by a TOS. You shouldn't have to take a second job to understand whether you are signing away your soul when signing up for a damn credit card.
I cannot, in a contract, just refer to a street address. For reasons of specificity, I must state where the survey marker corner is located -exactly- and then detail how many feet from that in a direction, etc. These long descriptions ensure that there are no misunderstandings later.
The verbiage of these contracts have grown more specific through use. People, or companies, wiggle out of things and new contract language is invented to prevent such wiggle-room in the future.
How would one go about accomplishing a 'dumbing down' of a contract, without losing the anti-wiggle specificity?
Also, I really like that word. Say it with me, please: 'specificity.' Neat.
Perhaps go with the UCC default and not try to have the buyer opt out of every specific consumer right.
The longer the contract, the more one party is probably being screwed with great specificity.
Even if the customers didn't you read the contract, they still got the gist of it through the marketing copy and probably won't hit a point where they're really mad about you. Actual trials will also be easier to deal with as you're in good faith.
For all the press we get on "frivolous" lawsuits, no average Joe are winning actual stupid suits.
Here it's an issue because what the credit card is fundamentally made for (make you pay fees on additional services) and the marketing hook (no additional fee) are at odds and is only true for very specific conditions someone can easily fall out of.
However as you point out - credit cards essentially make money from the less financially savvy by design. It's not entirely a bad thing, in a sense.. some people just run out of money between paychecks and need some liquidity.
Credit access vs predatory debt are sometimes in the eye of the beholder and a very fine line.
It also reminds me of some of the "I've been paying my student debt for 10 years and the balance went up!" like.. yeah, but it means you paid less than the interest. Would you have been happier paying more for the last 10 years? Like what outcome were you expecting and what college education did you go into debt for that didn't prepare you to have reviewed your monthly statements even once in 10 years to realize this?
I'm just saying that "6th grade reading level" is extremely basic level of literacy that a lot of contracts probably couldn't be easily communicated to that level.
Lina Khan seems to be one of the bigger contributors to curbing excesses, at least in the domains she's authorized to, and she may not keep her job in the next admin.
(As to ARMs, from the regulator point of view, much of the economic damage done is in the rear-view mirror; the next big thing is presumably student loans.)
> more than half of the US population reads below the grade 6 level.
So no different to using their website.
- iCloud storage notifications saying have to upgrade to $9.99 plan to continue to store my photos, videos and even worse if I wanted to continue getting my iCloud emails. What(?), as my Google Photos is still sucking/backing up all the same media (goes back to 2016) for free. LAME Apple especially threat of not getting my iCloud emails!!!!
- Apple Intelligence is so LAME compared to chatGPT app that runs on my iPhone. ChatGPT's iPhone app, it's assistant is almost sentient while Siri is still HORRID as it still at times doesnt understand you, you cant have a conversation with it or have it recall previous conversation/info you previously discussed as you can with GPT on iPhone. Again very LAME Apple!
If Microsoft and Open AI made a ChatGPT AI phone I'd drop Apple quickly especially after my first point above ...threatening me that i wont receive my emails if I didnt give them more money!
(Or, what happens when you get an early GMail invite and erroneously think, "Awesome, I have a four-character email address. How cool is that?")
To my knowledge Google will do the same thing if you are running out of space. I believe it is shared also but I could be wrong. I have been out of Google's ecosystem for a while.
Apple should increase the base amount of storage with iCloud for free. What you mentioned itself is not an Apple thing to my knowledge.
> Apple Intelligence is so LAME compared to chatGPT app that runs on my iPhone. ChatGPT's iPhone app, it's assistant is almost sentient while Siri is still HORRID as it still at times doesnt understand you, you cant have a conversation with it or have it recall previous conversation/info you previously discussed as you can with GPT on iPhone. Again very LAME Apple!
Unless you are on the beta, you are not actually using Apple Intelligence. Even if you are on the 18.1 beta, they have made it clear that they there are multiple updates for everything to come out.
As for Apple Intelligence Ive been using it since late September/early October. Been using ChatGPT app on iPhone for months to more so I expected Siri to be comparable to GPT but its not even close at all. Siri still doesnt understand you always like GPT does, points you to a Google search (maybe that's due to a built agreement with Google) for most things and can not recall how many calories i ate a few days ago (example of recall memory). Using GPT while driving is awesome/handy/i find it very useful (to get info for various chores & count my daily calories). Yet Siri to have the same experience would cause me to have accident.
18.1 (the current beta) has minor improvements to Siri for immediate follow up requests and parsing requests where you stumble over words. 18.2 is supposed to be picking up ChatGPT integration so Siri can ask it about things. The "personal context" recall is apparently in 18.4, so we won't see it until next year.
Honestly, 18.1 launching the new Siri UI (the glowy look) feels like a bad idea -- I'd have kept it until 18.4 when the real intelligence improvements actually land.
https://www.macrumors.com/2024/09/22/apple-intelligence-feat...
The horrid thing is Apple Intelligence is not worth upgrading your device for and yet that's their marketing to get people to upgrade lol. As another commenter in this thread commented a comparable ChatGPT Siri is coming yet not for some months.
Definitely would jump to another platform if the phone is an AI sentient like driven phone (new paradigm in phone design / layout where there's not as much UI). So far ChatGPT is my best experience with such an AI and Microsoft who owns what half of Open AI did create pretty good Windows phone back in the day. Maybe it will happen... been wanting such since I first used ChatGPT.
iPhone 14 has 6GB RAM. iPhone 15 Pro + 16 have 8GB RAM.
The LORA adapters need to be loaded into memory so seems reasonable they would need extra.
Using the web interface of another cloud provider to upload files there, and downloading it on your other device? Most cloud providers give you around 10GB for free, which should be more than enough room to install ios updates.
And the capabilities of this model would still be limited as well given that Apple is not going to be able to host a large parameter one for each user.
Be ready to accept a huge decrease in quality, even compared to chatgpt 3.5
Phones are not computer, they use battery. Whatever apple do, it can't beat the law of physics.
There is no way but send it all on remote computer for ai.