Don't Leave Home; Your Credit Card is on Hold

msnbc.com ^ | March. 8, 2009 | Joel Grover

[christx30]

If you have an American Express card, beware: your card could be put on hold at any moment, even if you think you've made all your payments on time. That means, you won't be able to charge anything on your Amex card.

That's exactly what happened to Cathy Jones, a businesswoman with three Amex charge cards. She got a call from Amex last week saying her cards were now on hold, while the company did a financial investigation to make sure she could pay her bills.

Jones was baffled. She's been an Amex cardholder since 1989 and can't remember being late on a payment. So, to get some answers, Jones and I got on the phone, and called the customer service number on the back of her card.

An Amex representative in New Delhi, India, said because of the bad economic times, American Express is now doing financial investigations of thousands of cardholders. The rep said Amex is insisting these customers fill out an IRS form 4506-T, authorizing the company to get their tax returns for the last three years. The rep told us if Jones didn't fill out the IRS form, they'd cancel her charge cards for good, within five days. And here's the part that concerned Cathy Jones: The rep said these "investigations" were being done, not in the US, but in India.

[ninonitti]

Looks like AmEx is going the way of the other decrepit credit card companies.

Didn't you get them memo? They're now a bank so that they can get their fair share at the TARP trough/window. They then lend that cheap money out to chumps who pay them for the privledge and then gouge merchants who accept their plastic. Folks have been paying attention and paying them down.....they're stuck with lots of dead wood now

Watch for them to take another dip this week.

[BubbaJunebug]

That’s exactly what happened to Cathy Jones, a businesswoman with “”three Amex charge cards””. She got a call from Amex last week saying her cards were now on hold, while the company did a financial investigation to make sure she could pay her bills.

Simple “red flag” 3 AMEX cards...no reason for that. If I was AMEX I would want to talk to her also. I would bet that they have been sending her information that she has not responded to.

100 to 1 there is more to this than has been reported

[IamConservative]

I’ve heard of a couple of people with excellent driving records losing their auto insurance as well. Companies are actively shedding risk.

[G Larry]

Corporate HQ needs to tell AmEx that the corporation stands behind the accounts and if that’s not good enough the corporation will change accounts!

[Tainan]

Yeah...I call BS on this story also. I've carries an Amex since 1974 and paid when due ever since. Never a problem. Also had a Diners Club since '72. Went thru a long spell of not using it; but now that's a good one to have. Never a problem;especially with cash advances at hotels.
The 3 Amex cards is the key here. I've had 1-bidness card and 1-personal card...but with the three in the story...my money says she kiting herasccounts for every cent and getting ready to do a bankruptcy. Sounds like due diligence on Amexs' part.

[Pablo64]

"My husband has NO choice. The corporation he works for has all their employee expense cards through American Express."

He still has a choice, it just may not be a very likable one, or one you would ever want to have to consider.

For myself, personally, I would never be the one to take the risk of having to pay the business expenses of the company I work for. Since I would never have an AmEx card in my name (especially not for a company I didn't own) I would be left with the choice of looking for different work.

[G Larry]

Well Mr. “no reason for that”, try this one percent possibility:

Husband has a Corporate AmEx Card,
Wife has Corporate AmEx Card,
Couple has private AmEx account.

[mikey_hates_everything]

I’ll bet $10 this woman has high balances and is making minimum monthly payments to get this kind of attention from AmEx. They wouldn’t shoot themselves by hitting just “anyone” with demands for tax returns.

[ClaudiusI]

The original article should’ve read “legitimate businesswomen”. :)

[Peet]

Many years ago an AmEx representative said of me “We don’t want his kind.” The shopkeeper wasn’t supposed to repeat that to me, but it made him so mad that he did.

As my income rose in later years, they started sending applications. Keeping in mind their earlier gaffe, I never even opened them...

P.

[listenhillary]

Very good point

[Arkinsaw]

It it were your own money you were lending, wouldn’t you want to find out ways to ‘stop the bleeding’...stop losing money to all the small businesses going bankrupt?

My thought is that if you are concerned enough about a customer, or know so little about them, that you find it necessary to have them send their private tax information to India........you probably shouldn't lend to them in the first place.

[CodeToad]

There ought to be a law that forbids companies from sending private information to foriegn countries. We do not have the ability to be represented by our laws under which the contract was signed so we have no contractual recourse.

Perhaps all AmEx shoudl sue them for violation of privacy.

[longtermmemmory]

There is a reason Blackrock, the investment arm of Amex is among the worst returns of the investment houses.

I think it should be prohibited to outsource offshore such financial data.

[Publius Valerius]

Me. And when I call, I get someone that speaks clear English within 1 button press.

Definitely love my Amex.

[Publius Valerius]

I’ll bet $10 this woman has high balances and is making minimum monthly payments to get this kind of attention from AmEx.

The article says that she has three Amex charge cards. Charge cards have to be paid in full each month. Amex has recently allowed some large purchases to be paid over time, but for the majority of purchases, it must be paid in full at the end of each month.

[BubbaJunebug]

Well Mr. “no reason for that”, try this one percent possibility:

Husband has a Corporate AmEx Card,
Wife has Corporate AmEx Card,
Couple has private AmEx account.

Well lets see. I have my personal AMEX as does my wife. I also use a corp AMEX card. The key is there are never any balances, never past due. I have only had one instance of a hold and it was on a trip recently where I was in China, Malaysia and Vietnam in the span of 20 hours....it raised a red flag with AMEX...which quite frankly I’m glad it did. I got a “stop” as I was making a purchase...got on the phone with them and it cleared in 5 minutes.

I stand by my earlier comment...more than meets they eye here.

[DieNarrin]

I am a small business owner and I have 3 Amex cards. One for myself and 2 for my employees. My company (ME!) is responsible for making the payment on all of them. So it is possible to have 3 cards and not be scamming.

And Amex decided to apply a limit on my cards without any prior notice. In fact, I was traveling on business so I was really “thrilled” by their action. I had to provide information not as detailed as was requested for Ms Jones. But then again my balances are usually less than $1000 at any given time.

While I understand the need for companies to manage their risk prudently, the recent abrupt actions are causing Amex more reputional risk than they realized.

In lending for the self-employed it is not uncommon for the lender to require 3 years of tax returns to verify income and cash flows.

[YankeeGirl]

I’m with you on this. Why did she have three cards?
If AMEX has to absorb consumer bad debt, they’ll just pass along the cost to the merchants and then fewer will accept the card.

Also, as a worker, whose total family income is reportable and subject to tax law, I don’t mind if folks with non-reportable income are now being scrutinized more carefully. AMERX is extending you credit; they have a responsibility to their stockholders and other customers to ensure that you will be able to pay it back

The fact that they farm their customer service out to India is irritating, but I think that American unions have just priced themselves out of the market. I’ve had good and bad results with customer service abroad; same as with domestic workers. If the language skills are good, sometimes you just don’t know where you are talking to. The other day I had an Australian living in Costa Rica answering the phone. As long as they do their job well and resolve my issue, I don’t care; I don’t have a personal relationship with these people.

I am annoyed that my employer has farmed out the phone call center responsibilities to a (domestic) company. I thought that the personal touch was one of our strong points. I suppose that if they found a foreign company that was cheaper they would send the job abroad too. Once you lose the personal touch with your students, do you really care if the call is answered by someone in Texas or Delhi?

[riverdawg]

I had an Amex corporate card a number of years ago when my employer forced me to charge business-travel expenses on it. (That contract was allowed to expire when so many people complained about the card's less-than-universal acceptance.)

I've never understood why anyone would want the standard, high-annual-fee Amex personal card. Most of the no-fee Visa and MC cards have virtually unlimited charge limits, cash-back or other rewards programs, and convenient year-end accounting statements. Plus, many of the places we go don't accept Amex cards because of the relatively high fees Amex charges merchants. I have a number of friends that have the Delta Airlines Amex card for the FF points, but, given the difficulty of using points and the implicit exchange rate, I'd rather have cold, hard cash back. Many years ago, there used to be some comfort in carrying an Amex card when traveling abroad, but that hasn't been an important issue for about 20 years.