American Express is facing allegations from the corporate regulator that credit cards it designed with retailer David Jones confused consumers who thought they were loyalty cards and breached new post-Hayne Royal Commission laws created to make financial products easier to understand for consumers.

In the first legal action under new design and distribution obligations, the Australian Securities and Investments Commission alleges Amex knew, or should have known that two credit cards – the David Jones American Express Card and the David Jones American Express Platinum Card – were not appropriately flagged under new regulations as it kept receiving complaints from customers who signed up to the cards.