Synchrony Financial

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Synchrony Financial
Public
Traded as NYSESYF
S&P 500 Component
Industry Financial services
Headquarters Stamford, Connecticut, United States[1]
Key people
Margaret M. Keane[2]
President and CEO
Products Credit cards
Payment systems
Number of employees
11,000[3]
Website synchronyfinancial.com

Synchrony Financial is a consumer financial services company headquartered in Stamford, Connecticut, United States.[1] Prior to its 2014 initial public offering, Synchrony operated as GE Capital Retail Finance Corporation and was a division of General Electric.[4] The company offers consumer financing products, including credit, promotional financing and loyalty programs, and installment lending, and FDIC insured savings products through Synchrony Bank, its wholly owned subsidiary.[5] Synchrony raised $2.88 billion in its initial public offering, making it the third largest IPO of 2014.[6] It is publicly traded on the New York Stock Exchange.

Synchrony is the largest provider of private label credit cards in the U.S. In 2014, the company comprised 42 percent of the private label credit card market.[7] The company provides private label credit cards for such brands as Amazon,[8] Walmart,[9] Lowe’s,[9] Guitar Center,[10] Gap,[11] BP,[12] Ashley HomeStores,[13] Discount Tire[13] and P. C. Richard & Son.[13] The CareCredit credit card, also through Synchrony Bank, is for elective healthcare procedures or services, such as dental, veterinary, cosmetic, vision and audiology.[14]

Accusations of deceptive practices and CFPB consent decree

In June of 2014, Synchrony agreed to pay $225 million after entering into a consent decree with the U.S. Consumer Financial Protection Bureau. The CFPB alleged "deceptive and discriminatory practices" regarding Synchrony's consumer credit cards. [15] With regards to the practices that the CFPB called "deceptive," it was alleged that, while operating as GE Capital, Synchrony telemarketers had sold numerous credit card add-on services, such as debt cancellation agreements, to consumers without notifying the buyer in an upfront manner of the terms of the agreements. According to the CFPB, in many cases, consumers were unaware that they would be charged for these services.

With regards to the practices the CFPB called "discriminatory," it was found that Synchrony had discriminated against Latino Americans by excluding from two different promotional statement credit deals customers who had elected to receive communications in Spanish and customers with mailing addresses in Puerto Rico. The promotional deals were offered from 2009 until 2012 to customers with delinquent accounts and allowed them to settle their balance with Synchrony Financial by paying some amount which was less than the outstanding balance, under certain conditions. It is not known why Synchrony chose not to offer this promotion to its Hispanic customers, but the CFPB found that this practice constituted "discriminat[ion]... on the basis of... race and national origin."

References

  1. 1.0 1.1 Briggs, Nicole (July 21, 2015). "Synchrony Financial Expanding, Adding Up To 400 Jobs In Stamford". Stamford Daily Voice. The Daily Voice. Retrieved August 19, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  2. Schawbel, Dan (May 10, 2015). "Margaret Keane: How Synchrony Financial Built A Winning Culture". Forbes.com. Forbes. Retrieved June 3, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  3. "Synchrony Financial Careers - We're Hiring". Synchrony Financial. 2015. Retrieved August 12, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  4. De La Merced, Michael (March 13, 2014). "G.E. Files to Spin Off Retail Finance Unit". The New York Times. New York: The New York Times. pp. B6. Retrieved June 3, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  5. Kraemer, Steve (August 18, 2015). "Synchrony Financial Analyst Rating Update". American Trade Journal. Retrieved August 19, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  6. "Renaissance Capital's 2014 US IPO Annual Review". Renaissance Capital IPO Center. Renaissance Capital. 2 January 2015. Retrieved 19 August 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  7. Picker, Leslie (July 31, 2014). "GE Overhang Looms for Synchrony Before Planned IPO". Bloomberg. Retrieved June 3, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  8. Kapadia, Milanee (November 24, 2014). "Credit card issuer says the "consumer is back"". Yahoo Finance. Yahoo. Retrieved June 3, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  9. 9.0 9.1 Johnson, Andrew (March 13, 2014). "GE Plans Credit-Card IPO as Plastic Gets Popular; New Company to Be Called Synchrony Financial". The Wall Street Journal. Dow Jones & Company Inc. Retrieved June 3, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  10. Passeri, James (April 17, 2015). "GE Spinoff Synchrony Financial Is Still Trying to Stand on Its Own". The Street. TheStreet, Inc. Retrieved June 3, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  11. Nash, Kim (May 14, 2015). "GE Spin-Off Synchrony Financial Builds Tech to Support Growth Plans". The Wall Street Journal. NewsCorp. Retrieved June 3, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  12. Tierney, Jim (March 3, 2015). "BP Upgrades Loyalty Program for Greater Value Proposition". Loyalty 360. Loyalty 360. Retrieved June 8, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  13. 13.0 13.1 13.2 Walston, Chuck (March 31, 2014). "GE: How The Upcoming Spin-Off Will Prove Profitable". Seeking Alpha. Seeking Alpha. Retrieved August 19, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  14. "Samsung Finally 'Unpacks' Samsung Pay". PYMNTS. 14 August 2015. Retrieved 19 August 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  15. http://www.consumerfinance.gov/newsroom/cfpb-orders-ge-capital-to-pay-225-million-in-consumer-relief-for-deceptive-and-discriminatory-credit-card-practices/

External links