UPDATE:Italy Central Bank Halts American Express Card Issuance
08 Aprile 2010 - 8:40PM
Dow Jones News
The Bank of Italy has ordered a halt to further issuance of
American Express credit cards in Italy.
The central bank took the action after inspections revealed
compliance gaps by the card issuer related to rules covering usury,
money-laundering and transparency.
The suspension was an "inevitable step" after the inspections
found irregularities, a representative for the Bank of Italy
said.
Existing credit cards issued by American Express Co.'s (AXP)
local unit aren't affected by the ruling, which goes into effect
April 12.
A spokeswoman for American Express acknowledged the Bank of
Italy's action and said it was cooperating fully with the bank.
The company said it has begun implementing an upgrade of its
information-technology systems and other procedures in order to
"adhere more closely to the regulations applicable to payments
service providers and financial intermediaries."
The central bank probe was triggered by a judicial investigation
into client complaints regarding interest rates charged by their
credit-card suppliers. A similar suspension was ordered last year
for Diners Club cards in Italy.
Diners Club said in a statement it also was working on upgrading
its information-technology systems. Diners Club International Ltd.
is a unit of Discover Financial Services (DFS).
The Bank of Italy is pressuring financial-services providers to
present more clearly the actual costs of their products.
There are around 30 million credit cards in Italy, one for every
two Italians, but only around two-thirds of them are actively used,
according to the Italian Banking Association.
-By Christopher Emsden, Dow Jones Newswires; +39-06-6976-6921;
chris.emsden@dowjones.com
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