American Express Sued Over Currency Exchanges

American Express Co. has been sued for allegedly failing to adequately disclose foreign currency exchange fees to California cardholders, the company revealed in a regulatory filing Thursday.

The suit is nearly identical to a case filed against Visa International Inc. and MasterCard International Inc. In that case, an Alameda County Superior Court judge recently ordered the credit card companies to rebate the fees -- which plaintiffs’ attorneys have pegged at $500 million to $800 million -- to cardholders who paid them from Feb. 15, 1996, to the present.

The American Express suit, which was filed in late March, alleges that the company imposes a secret 2% fee on customers who use their American Express cards to buy goods and services priced in foreign currency.

The lawsuit asks that the fees be rebated to consumers who paid them from March 2001 to the present, said Dennis Stewart, a partner with law firm Hulett Harper Stewart in San Diego.

San Francisco nonprofit Consumer Action, one of the lead plaintiffs in the case, said the suit was more about disclosure than fees.

“Every year, we do a national survey of credit card fees and interest rates,” said Ken McEldowney, executive director of Consumer Action. “In doing this survey, we discovered that these fees are not disclosed whatsoever to the consumer.”

American Express spokeswoman Judy Tenzer said the fee is disclosed in cardholder agreements.

“We believe our practices are fair and appropriate,” Tenzer said. American Express disclosed the lawsuit in a filing with the Securities and Exchange Commission.