The Wall Street Journal reported last week that the FBI is investigating American Express’ (AmEx’s) pricing practices at its foreign-exchange unit. The probe, which is reportedly still in the early stages, according to “people familiar with the matter”, focuses on whether AmEx’s foreign-exchange international payments department lured clients with offers of low currency-conversion rates and then raised those rates without any notice or warning. The Office of the Comptroller of the Currency (OCC) is also reportedly looking into how AmEx disclosed foreign-exchange pricing to customers. The investigation centres on AmEx’s foreign-exchange business that serves mostly small- to medium-sized businesses, so individuals are unlikely to have been impacted.
Fortunately for Amex its forex business, accounts for less than half of a percentage point of the company’s total revenue. Nevertheless, news of the probe saw its share price sliding, with the AmEx share price dropping as much as 2% on news of the report on Wednesday, 5 September. However, the share price has since come back and is up 1.2% WoW, closing Tuesday (11 September) at $108.31/share.