Regulators open investigation into Apple Card for possible gender discrimination

OAKLAND, Calif. (KTVU) - New York's Department of Financial Services is investigating gender discrimination complaints over Apple's new credit card. 

Back in March, the company introduced the "Apple Card." CEO Tim Cook said, "Apple Card was created by Apple and built on principles we stand for."

By far, the most famous complainant comes from the company's co-founder Steve Wozniack. He tweeted that Apple granted him a credit line 10 times greater than what his wife was approved for. Another tech entrepreneur said his limit was set at 20 times his wife's, even though they are married and live together in a community property state. The glitch wasn't a big surprise to veteran tech analyst Larry Magid. 

"This is certainly an example where they're way outside of their area of expertise," said Magid.

When the card was introduced in March,  the tech company's vice president of Apple Pay, Jennifer Bailey said, "As a newcomer to consumer financial services, Goldman was up for the challenge of doing something bold and innovative." 

Tech analyst Magid said Apple relies on financial giant Goldman Sachs, to grant credit based on credit scores and computer analyses. 

"It depends on how they've got the algorithms. I'm sure it wasn't done by hand. I think it's probably an algorithm that fails to understand that this is a couple and a couple should be treated equally if they're applying for credit together," said Magid. 

But, Goldman Sachs said it only issues Apple Cards to individuals and denies that it even uses gender in the determination of creditworthiness. The bank said it will now consider ways to include family members when applying for Apple Cards. 
       
Magid said Apple must be careful with the faux pas. 

"Branding is very important and if Apple is going to venture into the credit card business, it has to do it in a very classy way and that's more than just having fancy titanium cards and integrating them into an app. It also has to be user-friendly and it has to be fair. So, when they have something like this, even if it's the fault of a partner company, it reflects badly on them," he said. 

When the Apple Card was announced, the company specifically stated that is was a "new kind of credit card, created by Apple, not a bank."