“ The regulator also said Apple and Goldman misled many consumers into believing they would automatically get interest-free monthly payments when buying Apple devices. Instead, those same customers were charged interest.”
Probably payment on GS backend was processed late even if customer initiated payment on the due date. So customer was charged interest.
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.
> an auto payment taking a week to withdraw from my bank account
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.
It actually sounds like some customers thought any Apple purchase would be eligible if they paid with their Apple Card, but that is not how it works – you actually need to choose the interest-free monthly installment option when buying the device.
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.
I've used the service plenty of times now, and was never charged interest. I wonder what situations lead this to happen? I know one has to select the payment option when purchasing through Apple and not all items are eligible. Maybe people just assumed the payment plans would be automatically and didn't require selecting the option during checkout?
Yeah, I don't think I was ever charged interest on Apple products either, but I wasn't paying that close of attention. I'll have to go back and check to see if I can get a sweet class action payout.
But you have to click the payments option (and pay the billed amounts). If you put the full balance on your card, you can't ignore it for 12 months and then pay.
IIRC, the installment each month hits your card like any other charge. So maybe if you let it become part of your revolving balance at that point, you'll pay interest.
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.
I cancelled my Apple/Goldman card after they were totally useless on a transaction dispute. Frontier Airlines gave me a "refund", and printed me a "receipt" for it, and then later refused to give me the refund. When I showed the "receipt" to Goldman/Apple support they would chew on it for 4 weeks and then come back with. "Judgement for merchant. Reason: no evidence." I'd say: what was that "receipt" they printed, just a lie? And they would say "sorry" and reopen the investigation, repeat the same result. Lame. And I will try to avoid Frontier for the rest of my life.
Isn’t that what Goldman wants? IIRC they’re losing money on the card so they’d prefer to bleed off customers - just like the forced attrition so many tech companies are currently doing.
The article says they're banned from launching any more credit cards unless they can 'demonstrate they are going to follow the law' (whatever that means).
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.
News to me, since I still have a Marcus account that is fully functional and the website says "Goldman Sachs" all over it. I've been expecting it to split off or shut down at some point, but no signs of it so far from my perspective.
For some reason I think it will have been even more mundane. It is quite a long time ago, but Matt Levine wrote at the time that GS was (for whatever reason) desperate to get into consumer finance. They saw the market as an open opportunity, and paired up with Apple to get a foothold reaching well beyond their Marcus brand.
[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.
Saying "good job Apple" in the context of payment processing deals is like cheering on a slightly more buff gladiator bashing in the face of his opponent. Both of them intend to fleece the users, they just disagree over who gets priority access.
I'm not saying you can't have a favorite gladiator, I'm saying you can't pretend this isn't pugilism.
- 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.
There’s actually some nuance to this. One of Apple’s big requirements was to have quite lax acceptance criteria. They didn’t want lots of their customers being denied for cards and creating a negative brand association.
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.
Without simply citing greed, I find this difficult to justify or explain. Apple is a premium, luxury brand. They make opinionated hardware and software that has offended many. They’ve certainly never given a phone away, but they’re afraid of offending someone by turning them down if they have bad credit? Rubbish.
Forgive me, I’m not trying to shoot the messenger. Nuance or not, I think GP is right. It wasn’t very customer centric.
I can understand the surface appeal beyond greed. Goldman Sachs offers good terms, is willing to have higher acceptance rates, has a strong 'luxury'/'high net worth' feel about the brand etc.
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.
Also I've been working with their latest Swift & SwiftUI and I think they've made some fundamental missteps with the language and the APIs. Nothing that a company of Apple's size can't correct with enough effort I suppose but it doesn't inspire a lot of confidence in their software engineering chops.
Keep in mind what you're using isn't much of what they're launching. 18.1 only has a couple of features, the three releases after that have the bulk of what they demonstrated.
Checks out. I never carry a balance on my Apple Card and always make sure to pay it off every month. Yet, I’ve noticed discrepancies between the transactions shown in the Apple Wallet UI and my PDF statements. The two times I’ve called customer service, they just put me on hold and say they’ll look into it.
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
I’ve spent over a…lot of money…on the Apple Card. It’s my wife and I’s primary card ever since it came out. Never paid any interest, and made lots of Daily Cash. More than anything I just find the wallet app so much more pleasant than other banking apps.
Readit News
Interesting!
Will they notify those charged interest?
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.
What is "Apple glazing"?
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.
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.
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.
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.
They were begging for (below market wage) devs to pack those seats pre2020
No. For starters, because it doesn’t get them out of the deal.
[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.
I'm not saying you can't have a favorite gladiator, I'm saying you can't pretend this isn't pugilism.
- 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.
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...
(https://news.ycombinator.com/item?id=41926162)