More evidence is coming in that American Express (AXP) is looking for any reason it can to stop customers from using their cards. The action is so extreme, that some have expected there’s a glitch in the AmEx computers, though the company has denied this.
Last week, a few reports surfaced of people losing access to their cards after missing a single payment, and then being forced to send in years of tax returns to establish their customer-worthiness.
Top NYC venture capitalist Fred Wilson, who should be the definition of a good credit risk, says he’s been the victim of the company’s aggressive action:
I’ve been a customer of American Express since 1983 and have never failed to pay a bill. Right now, between my business interests and family, I carry and pay for five American Express accounts. I’m not going to get into the monthly amounts that these accounts turn over, but I will say that they are significant.
The smallest of these accounts is an old Flatiron Partners account. We don’t use that account very much anymore, but we do still use it occasionally. A month ago, we were accidentally late paying that account. And as a result American Express shut down all of my accounts without notifying me. My partners in Union Square Ventures could not use their cards, I could not use my personal card, they shut off all of the accounts I have with them even though they were not in any way related to the Flatiron account. I suspect the accounts are linked because they all funnel membership miles into one single account.
But that’s just one example of the hassles of being an American Express customer these days. My wife and I are routinely denied when making charges at stores and restaurants. When we call to ask why, we are told that the charge looks “fraudulent”. And then they ask us if we really are making that charge. When we assure them that we do indeed want to make that purchase, American Express authorizes it.
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