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Unethical American Express?

After recently interviewing Tamsin Smith, of RED, (see: http://www.ethicalcorp.com/content.asp?ContentID=4693&ContTypeID=61 for the podcast) a collaboration of American Express, Gap, Motorola, and Apple on tackling HIV/Aids in Africa, I signed up for the American Express RED AMEX card.

AMEX were extremely professional in their handling of things. Except one small yet vitally important point if corporate responsibility in financial services is ever to really gain traction – unethical opt ins.

To explain, I am sure most readers will know the trick most companies, including all the banks and many retailers are now employing to squeeze some extra profit out of consumers. It’s called payment protection, or extra insurance. Basically its the same thing – buy a 200 quid product and lose it, and your 5 pounds a month ‘extra’ insurance policy will cover it (even if your household insurance might cover it).

With financial products, of course, its about if you lose your job or get struck down by illness yada yada. The financial and consumer regulators in the UK are now wise to the most onerous schemes and have cracked down, a bit.

Yet the irony of having AMEX put the insurance on my new card at a monthly charge when I specifically HAD not asked for it, while signing up for an ethical product, is not lost on me. Sneakily, they do it in a separate letter, which arrives several days before the card and is littered with confusing jargon and layout. Evidently this is in the hope the consumer will be confused and then will forget about the letter. The charge is added to the card ‘automatically’, according to the terms and conditions, so many wouldn’t notice it.

Upon taking this up with AMEX I was told that it was another department that deals with it (like I care as a customer, I want the brand representative I speak to to sort it, not to be put on hold) then that department, with a hard voiced nasal representative, informed me that it must have been since I had ticked the box on their website. While I am 100% sure I did not, since I am so aware of such scams I spent several minutes scouring the website to make sure I had not done so.

There’s no chance this was my mistake, (another application in a fictional name proved this to me), and so if I am right, this is decidedly dodgy practice by a well known brand that ought to know better. Perhaps this is how they fund their RED donations? I surely hope not.

Toby Webb, Editor

8 Comments

  1. Anonymous

    I head public affairs for American Express and have looked into Toby’s experience with American Express Red and learned that we do not automatically enrol Red Cardmembers for insurance products. Further, we don’t know of any other cases where this has happened and have received no other complaints of this nature. So while I can apologize for any inconvenience this may have caused in this instance, it is neither a routine policy nor our practice.

    Gail Wasserman
    Vice President of Public Affairs & Communications Europe

  2. All I can say is I hope it is not normal practice, but it happened to me as stated, and I am happy to post the letter I had from AMEX’s insurance folks online if any readers would like to see the physical evidence. AMEX has an excellent reputation overall and I hope it will now keep a closer eye on its practices as a result of this.

    Toby Webb, Editor

  3. An update to this story:

    I had a call in late December from American Express’s complaints department who told me they were investigating my complaint. The only complaint I had made was on this site but it was good to see them looking into it. They said they would call me back in January. Then I got a letter telling me they had looked into it, and it turns out it was all my fault. Fair enough if that was true, but I am 100% sure there was no insurance box on the form I filled in, and AMEX’s Gail Wasserman told me on the phone that this option is not even available. So as a customer, user of Amex RED (which is v cool and you should all sign up to) I am left a little bemused by this to say the least.

    Toby Webb, Editor

  4. This is what American Express did to me. I have been a American Express business cardholder since 2006. I have the ‘True Earnings Business Card’. I pay my balance in full on this account every month, and have NEVER made a late payment to American Express. Recently I opened the ‘Delta Skymiles Gold Card’. After receiving my card, I activated It and used the card at a restaurant with no problems. The next day I stopped to pick up me medication from the pharmacy and was declined. I got home and called American Express to find out why, since this was a brand new account. I was informed by cutomer service that “my account had been blocked for financial reveiw”. The service rep told me I had to fax in my 2006 tax returns before they would remove the block, even though I was already a cardmember in good standing. Now, after almost a week and many calles to AMEX they still have not removed the block from the new account, even though the same amount of income I have is listed on my other account. Even though I did fax in the documents they wanted for whatever reason. I have other cards with other issuers, and have NEVER had this happen. American Express should never be trusted by anyone. Do not EVER think that AMEX cares ANYTHING about you as a customer, because I am livingproff that they DO NOT!! They do not care anything about their customers, and treat them horribly!

  5. Anonymous

    This is all very nice, but let me share with you were the REAL problems are coming from: I have platinum Am Ex since 98 – 10 years my credit limit is $60,000, my wives limit is $ 50,000. My business has depended on that as “last resort” or “just in case”. Guess what as of yesterday my limit was reduced to $19,000 (yes, my current balance) and my wife’s to …$ 500!! By the way my credit score is 740 and 735 and i have never missed any payments. Reason – no reason..just informed us.. So, watch out – its coming to the
    area “near you”. You better go and spend your credit limit on anything -they will take it from you anyway soon, its coming..its here. Just when you might need those money the most.. Thanks G-d i don’t care, but the trend is here – you will wake up one day – all your credit form cards, equity lines, etc is gone…Thanks a lot Am Ex – i will remember that once time is right and you will offer your credit again, thanks a lot for showing your real face))

  6. Anonymous

    This is all very nice, but let me share with you were the REAL problems are coming from: I have platinum Am Ex since 98 – 10 years my credit limit is $60,000, my wives limit is $ 50,000. My business has depended on that as “last resort” or “just in case”. Guess what as of yesterday my limit was reduced to $19,000 (yes, my current balance) and my wife’s to …$ 500!! By the way my credit score is 740 and 735 and i have never missed any payments. Reason – no reason..just informed us.. So, watch out – its coming to the
    area “near you”. You better go and spend your credit limit on anything -they will take it from you anyway soon, its coming..its here. Just when you might need those money the most.. Thanks G-d i don’t care, but the trend is here – you will wake up one day – all your credit form cards, equity lines, etc is gone…Thanks a lot Am Ex – i will remember that once time is right and you will offer your credit again, thanks a lot for showing your real face))

  7. Anonymous

    I do not know if this is OT or not. In preparation for an upcoming trip i loaded my AMEX skymiles card. as i was ready to depart i discovered Americam Express reduced my credit line by 1000.00 thereby erasing my 1000.00 credit line. unconcionable maybe? Just beware. I have never made a late paymrnt on this card. AMEX said it was because they conducted a “review”. BEWARE as i now embark on my trip with no spending money.

  8. Anonymous

    I had the great pleasure of visiting the American Express building during my most recent excursion to New York City and found myself having lunch next to some of the SOG staff. I must admit I was rather disappointed to see a group a women, none of which looked even old enough to legally purchase alcoholic beverages, steer the fortune of your company. Just when I wanted to address the group and ask a few questions they started talking about your company’s clever move to becoming a bank, thus taking advantage of federal grants. Not to mention your goal of having collected 80-100 billion dollars in deposits. Listening to your staff made this move sound like a rather malicious one. I have also learned about other projects your SPG team is working on. I know about health care, mobile payments, project Exeter with PayPal and your renewed efforts around the Delta airlines card. It is beyond my comprehension why you hold this group in such high regard when they have no sense of discretion or confidentiality. I was shocked to see such immature and shameless behaviour in what your company claims to be the ‘think tank’ of American Express. I can only imagine how much worse off other departments must be if this was the elite right there. Please understand that I am canceling my card and that I will advise my friends and family to do the same.

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