CNBC Source Likens Issues with Apple Card to “Growing Pains”

10 AUGUST 2022 - It seems Goldman Sachs’ problem with Apple Card was all the people using Apple Card. According to a headline from CNBC, “Apple Card’s rapid growth, outside vendors blamed for mishaps within Goldman’s credit-card business.”

I told you earlier this week that the Consumer Financial Protection Bureau was investigating Goldman’s credit card business, which mostly consists of Apple Card business. CNBC said then that the agency was investigating the bank’s “account management practices, including with respect to the application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.”

What the world’s hearing now from CNBC is not a finding from the CFPB nor from the bank itself - not officially, anyway. Secret sources said to know something about something, as usual. Remembering that this was pretty much Goldman’s entry into the consumer credit card thing, the secret peeps say “the card’s rapid growth and the new platform built (…) to service it created difficulties, resulting in failures…”

They did not expect as many chargebacks as they got, according to the report. Funny/not-funny enough, those appear to the the area of focus for regulators. The secret-so-and-so says:

We were making the case that we have a seamless way to dispute transactions… But we got no credit for the front end, and we had some failures on the back end.

The source or sources for the report liken Apple Card problems to growing pains attributable to a few points. They include the bank’s decision to build its own systems rather than relying on the same systems other cards have used for decades, outsourcing customer care to third parties instead of building a workforce of folks who knew their system, and staggering growth for Apple Card.

Makes sense. And yet, when people’s money gets messed up, they’re not usually as concerned with your problems as they are with the problems your problems are creating for them.

The CNBC source sounds like somebody inside the Apple Card machine. Officially though, neither Goldman Sachs nor Apple offered comment for the report.