Bank of Italy has ordered American Express to temporarily hold the issuance of new credit cards in the country from April 12, 2010, reported Associated Press.
During the central bank’s investigation American Express was found short of required information technology upgrades to prevent money laundering and usury. Central bank has also found that the US-based card issuer provided supplementary cards without following the guidelines in calculating the interest rates.
However, the central bank said that the decision will not be applicable for the existing cardholders, and they can use the card normally.
Reportedly, Joanna Lambert, spokeswoman of American Express, said that the American Express Italy is currently 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.
Ms Lambert added that it has already begun to address the issues raised in the report, and is cooperating fully with the bank of Italy in an effort to resolve the matter. The American Express will resume issuing the new credit cards once it reaches the requirements of the central bank of Italy’s guidelines.
Reportedly, last year, the Bank of Italy took similar steps against credit cards issued by Diners Club.