CHESSNOID

I received another comment on my American Express blog post. This particular one demonstrates how Amex is getting very aggressive to make people pay off their cards by pissing them off. Seems weird they are demanding extra documentation on accounts that are not delinquent and have never been so nor asking for any credit limit increases. This commenter Laura said she has been a member since 2000.

Laura, July 31, 2008:

Amex just suspended my account. It is in good standing, current, with no late payments. Reason: they want to review my finances. They asked me to send either recent checkstubs, bank statements or tax returns for past 2 years…..can you believe this! Never in my life have I had to do this for a credit card, and I have a strong credit score! I have had recent (last 2 months)large purchases on an associate card, but had just mailed in a $5000.00 payment on a $14,000 balance. (minimum payment required was only $1200. I said I did not feel i had to submit my personal documents, as my account was current, I just mailed in a large payment, and there was no indication my account was a high risk account. (member since 2000, never any issues). They refused to remove the suspension and said they would not do so unless i sent in the documents. If they do not receive them within 15 days they will cancel my account. This is the most ridiculous thing I have ever heard. I am not applying for new cards or even asking for a higher credit limit. I feel there is no valid reason they have to ask me for this information as I have obliged by all their terms and conditions. I am so frustrated and insulted by the way they are treating me, that I will never use their services again.!!

I don’t understand how you can become a high risk overnight. They are hiding behind generalized reasons of why they are cutting credit lines which basically apply to their entire portfolio of customers bar none.

I think most credit card companies are now adopting this aggressive policy to scrutinize anyone carrying any significant balance on any credit cards. My friend just mentioned to me that his Discover card cut his limit after just giving him an increase in December. Guess what they cut his credit limit too? They reduced his credit limit down to the balance he owed. Sound familiar?

I don’t think there is anything illegal about this, but it is definitely wrong. In my opinion, customers who have never been late are innocent until proven guilty. Late payments could be circumstantial evidence, but in many cases everyone is being reduced to the balances they owe. Basically, the credit card companies are chasing the balance.

All these changes seem to correspond with the companies latest earnings report:

July 22 (Bloomberg) — American Express Co., the biggest U.S. credit card company by purchases, fell the most in six months in New York trading after earnings missed analysts’ estimates and the lender withdrew its 2008 forecast.

Chief Executive Officer Kenneth Chenault said yesterday in a conference call that the business climate was “much weaker” than earlier this year and American Express was hurt in the second quarter by rising U.S. unemployment and falling house prices. The New York-based company fell $2.91, or 7.1 percent, to $37.99 at 4:15 p.m. in New York Stock Exchange composite trading, after slumping as much as 12 percent.

“Rapid growth of lending balances over recent years” in regions of the U.S. with the worst real estate declines caused greater-than-expected losses, Scott Valentin, analyst at Friedman Billings Ramsey & Co., said in a research note today. “At no point in history have consumers incurred as much debt relative to wealth.” He rates American Express “underperform.”

The U.S. economic slowdown worsened in June, affecting even American Express’s wealthier cardholders with high credit scores, Chenault, 57, said in the call. Late and uncollectible loans were higher than expectations in the quarter and will rise as the year progresses, Chenault said. The U.S. lost 62,000 jobs in June, the sixth straight period of shrinking payrolls.

The lender’s profit from continuing operations dropped 37 percent to $655 million, or 56 cents a share, in the quarter ended June 30, falling short of the 82 cent average estimate of 17 analysts surveyed by Bloomberg.

This aggressive move that has occurred to Laura is something I expect to happen to me soon.  To reiterate, I have no late payments with them ever, and no late payments with any of my other creditors.  Yet, they are on a witch hunt to find customer to harass.  If you read my post of all the other comments left by other dissatisfied customers, you will notice a pattern of how they cut everyones’ credit lines. I expect Laura will be the new pattern of an attempt to get customers to close out their accounts and alienate their client base.  By this measure, they have succeeded.  I am no longer a fan of American Express and avoid leaving home with it.