Check out The new white gold card and how it works

The federal court in Australia has ordered American Express Australia Limited (Amex) to pay AU$8 million in fines for failing to meet its design and distribution obligations (DDO) for two of its co-branded credit cards that were distributed at the David Jones stores.

The court found that Amex breached the DDO as a credit card issuer as it distributed two of its credit cards at the stores of the luxury brand between May 25 and July 5, 2022, without determining the target market, corporate regulator Australian Securities & Investments Commission (ASIC) stated.

The ASIC had initiated civil penalty proceedings against Amex for breaching the DDO while distributing two co-branded credit cards — the David Jones American Express Card and the David Jones American Express Platinum Card — at the David Jones department stores.

Amex will have to pay AU$8 million in penalties because it did not realize that the high rate of cancelled applications meant that target market determinations (TMDs) for the cards were inappropriate; second, the company failed to issue credit cards without first reviewing the TMDs.