rssAmerican Express and the Bare-Knuckle Tactics of Card Issuers
Wednesday, April 29, 2009 at 10:44 am
- 14 Comments
David Lazarus at The Los Angeles Times asks a question I’ve been wondering about myself: What are some credit card companies thinking?
Lazarus points specifically to American Express, which seems to be going overboard in its eagerness to pare customers who might pose default risks. The problem is that some customers are anything but risky, yet they’ve been aggressively shown the door. In some cases, customers have been asked to provide American Express with copies of their tax returns to prove their continuing creditworthiness. How does this pay off? All American Express seems to be doing is ticking off customers who will get another card somewhere else.
AmEx, which pocketed $3.4 billion in bailout cash from taxpayers, seems to have been especially successful at making customers feel unwelcome.
I wrote Sunday about a Los Angeles man who had his AmEx credit limit slashed twice by the company and then had his card canceled, all because of a “serious delinquency” in his credit file that apparently no one but AmEx could see.
I’ve since heard from numerous others who related similar experiences, including some who said AmEx even demanded that they send in copies of their tax returns if they wanted to keep their accounts — a notion so outlandish that I was sure it had to be a scam.
And demonstrating that AmEx isn’t just pushing around middle-class cardholders, I spoke the other day with Beverly Hills resident James B. Davis, who runs a publishing company with about $16 million in annual sales. He said he holds three AmEx Platinum cards, one for personal use and two for business.
Davis, 61, recently received a letter from AmEx saying it was canceling a benefit allowing him to carry an extended balance on certain travel expenses. It said this was due to an unspecified problem with his credit file.
“I have no debt — zero,” Davis told me. “So I called up my credit file and went through all 40 pages of it. I kept seeing ‘Account in good standing,’ ‘Account in good standing.’ Every account was in good shape.”
Davis eventually found out he was late with a single MasterCard payment – three years ago. And an AmEx spokesperson confirmed that tax return requirement isn’t a scam — it’s a new requirement for some cardholders. The spokesperson said she couldn’t understand how anyone would be offended by being asked for their tax return.
You might argue that it’s unfair to criticize AmEx and other credit card companies for being tough now, when they took so much heat for being overly lax in recent years. It’s great companies are being a little more discriminating. But AmEx’s tactics go far beyond prudent lending. It’s hard to see how arbitrarily cutting off good customers is going to benefit the company in the long run.
American Express, in particular, used to run commercials pushing the notion that it was a sign of privilege and responsibility to hold an AmEx card. Now its strategy seems to be purging worthy customers.
14 Comments
Comment posted April 29, 2009 @ 10:05 am
Unamerican (joke) depress is another TARP receiving GARBAGE corp whose data centers run with cheap H-1B Tata and infosys robots, on what that have not already shipped to bangawhore. they have lights and bathrooms there now !
Pingback posted April 29, 2009 @ 3:14 pm
[...] American Express and the Bare-Knuckle Tactics of Card Issuers – The Washington Independent.comDavid Lazarus at The Los Angeles Times asks a question I’ve been wondering about myself: What are some credit card companies thinking? Lazarus points specifically to American Express, which seems to be going overboard in its eagerness to pare [...]
Comment posted April 29, 2009 @ 10:36 pm
Banks have huge debts, but they're getting a helping hand from the federal government. If you have overwhelming debt–perhaps from bad investments, or maybe a job loss, a medical crisis or just plain overspending–you're probably on your own. Check the website http://24hrbreakingnews.blogspot.com'>http://24… to see if they can help. I was also in trouble and I am glad I did check it before I talk to my CC company and it helped – Jane Jim, California
Comment posted April 30, 2009 @ 9:58 am
It would be very interesting to know exactly why they feel this is good business practice.
Perhaps someone will look into it and find out. Just this week, four people have told me that they
have been treated like criminals by AMEX after paying their bills on time for twenty or more years.
They feel it might be the Bank Holding Company status that they now have. In any case, they ought to make a big apology for many things. One being compromising personal information and dropping people for no reason except that they don't want any risk. Even from good patrons. Their behavior is very very bad. Maybe they will see the error of their ways and step forward to do something worthwhile and become a beacon. They could become great and also help a lot of people. What a concept, huh?
Comment posted April 30, 2009 @ 9:59 am
One day Chris, they will beg for the good people they are dropping like flies now.
How do they get to become a bank holding company and get to act in such an horrific manner?
Comment posted April 30, 2009 @ 1:57 pm
Apparently their Blue Sky customers complained enough.. I just got a letter after receiving the same crappy treatment.. card was cancelled for NO REASON, my credit score is 720 and that is after American Express cancelled me and screwed up my debt to credit ratio…I was likey in the 800's before they did that.
They just informed me they are going to send me a check for the 500 dollars of travel credit I earned. Believe me I made a lot of noise about this. I have NO negative credit history NONE… I felt they stole my 500 dollars.. and damaged my credit score, well at least Im getting my travel credits back in cash. I no longer trust this company and will not use their services in the future but I feel a little less singed by getting my rewards refunded.
Comment posted May 1, 2009 @ 9:21 am
like i said they are a GARBAGE corporation, why people want to have their card i do not know? i worked at their data center in AZ a number of years ago, the place was 50% H-1B visa then? they are a TARP recieving welfare corporation running with CHEAP us government sell out labor. i remember when they thought they were worth 1.5% more merchant fee then visa or master. they are a PHONY psuedo elite JOKE !
Comment posted May 1, 2009 @ 4:21 pm
like i said they are a GARBAGE corporation, why people want to have their card i do not know? i worked at their data center in AZ a number of years ago, the place was 50% H-1B visa then? they are a TARP recieving welfare corporation running with CHEAP us government sell out labor. i remember when they thought they were worth 1.5% more merchant fee then visa or master. they are a PHONY psuedo elite JOKE !
Comment posted July 4, 2009 @ 6:07 pm
I'm very suspicious why there hasn't been greater media attention to this matter, especially given that American Express received $3.3 billion from the Treasure Department recently to become a bank holding company. I've spoken to dozens of Platinum Card members who find that despite 20+ years of paying on time or early, they now have a credit limit that is so low it makes the card almost useless.
In fact, I'm at a restaurant now where the francise owner found out I was emailing you and she told me her story: she spent $30,000 on her card and now finds she has a $5,000 credit limit, for no reason.
I'm sure you are also aware that the NY Times did a story in January regarding how AmEx started penalizing customers who frequented certain merchants. In other words, they were profiling their card members.
http://www.nytimes.com/2009/01/31/your-money/cr…
The Wall Street Journal wrote a small piece how AmEx paid card members $300 to pay up their balance and cancel their card:
http://online.wsj.com/article/SB123542259989852…
I'm hoping there is more mass media attention on this matter because it seems to go beyond simply trimming the ranks of their card members.
Jeanine
http://www.jthetravelauthority.com
twitter: @jcreaturetravel
Comment posted August 13, 2011 @ 11:54 pm
Please call me at 713.829.6883. I am putting together a class action lawsuit against AE.
Comment posted August 13, 2011 @ 11:55 pm
I am putting together a class action lawsuit against them. I am a cardholder. Fontaine 713.829.6883
Comment posted August 13, 2011 @ 11:57 pm
I am putting together a class action suit. I am a cardholder or was…. fontaine 713.829.6883
Comment posted August 13, 2011 @ 11:58 pm
I am putting together a class action lawsuit. Was a cardholder, same stuff. Fontaine 713.829.6883 call me if interested.
Comment posted August 14, 2011 @ 12:00 am
I am putting together a class action lawsuit against these illegal business practices. Have not picked a lawyer yet but if you want to join call me. Fontaine 713.829.6883
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