American Express - Deceptive credit practices
I am writing to complain about American Express.
I applied to open an American Express credit card toward the end of August, and was approved for a $3700 line of credit. When I spoke to the representative about opening the account, I expressly stated that I planned on doing a balance transfer from Capital One. At this time I was never told I would have to be reapproved for a balance transfer.
I received the card about a week later, and I called to activate the account. I talked to another representative about changing my due date to the end of the month, since that is when I am paid, as well as doing a balance transfer; he advised me the rate would be the same on balance transfers as my normal rate, and I stated I would call back in about a week for my balance transfer, because my account was getting ready to bill and I needed the correct amount for payoff. He advised me to call back when I was ready to do the balance transfer, and I stated I would call back in about a week.
I called on about 09/17/2011 to complete the balance transfer. The representative I spoke with told me the balance transfer would be completed in one to two weeks, and if a payment was due with Capital One within that time frame to make the payment as not to miss my due date; he never stated that I had to be approved for the balance transfer, and just stated the transfer would be done within two weeks max. All these phone calls are verifiable per recorded phone conversations with American Express.
On 10/06/2011 I received a letter from American Express. The letter states my balance transfer has been turned down, which makes no sense considering I was never at any time told that I needed to be reapproved for transfers, and states I was turned down for the following reasons:
"¢ Proportion of revolving balances to revolving credit limits is too high
"¢ Proportion of loan balances to loan amount is too high
"¢ Length of time accounts have been established
"¢ Insufficient time since most recent account established
"¢ Too many inquiries in the last 12 months
I'd like to start by saying each of these reasons for denial can be disputed. First, my proportion of revolving balances to revolving credit limits is lower today than it was when I applied for the account in August; in August, I owed about $6000, with $11,300 in lines of credit, which placed me at about 53% credit card utilization; as of September 17th, I owe about $5900, with $15,000 in lines of credit, which places me at about 39% credit card utilization. So American Express's statement that my revolving balances are too high doesn't make sense, specifically because my account was initially approved with the higher utilization amount. Second, my proportion of loan balances to loan amounts is lower today than it was in August. The only loans I owe outside my deferred student loans are these credit card debts, and as you can see from my prior statement the amounts I owe have decreased while my high lines of credit have increased. So again, American Express's statement that my loan balances are too high does not make any sense, specifically because my balances should be lower now. Third, and here I combine two different reasons for turndown, American Express states I am being turned down for a balance transfer due to the length of time my accounts have been established, and because my American Express account has not been open long enough. I have the same accounts reporting on my credit bureau as when American Express approved me, outside of their account; but more importantly, I was never told the account needed to be open for a specific amount of time or that I needed to be reapproved for a balance transfer. All the representatives I spoke to prior to 09/17/2011 assured me the balance transfer would take place, and this can be confirmed through American Express's policy of recording telephone conversations. Finally, American Express states I have had too many inquiries in the last 12 months. I should have no more inquiries today then I had when the account was opened in August, so this reason for denial makes no sense either.
I called the number listed on the letter (800-535-7790) to discuss why I was being turned down, specifically because I had not been told the balance transfer had to be approved, since I was assured by previous reps the payment would go out quickly to Capital One. The first person I spoke to was Ahmed, id #6159095, and he gave me no clear reason other than the already listed reasons on the letter. I asked to speak to a supervisor, and he placed me on hold three separate times for about 30 minutes total; he never transferred me to a supervisor, but rather hung up on me at about 30 minutes, which required me to call back again. When I called back I spoke to Toy, who transferred me to her supervisor in Salt Lake City; the supervisors name was Jerrene Nelson. I voiced my complaint to Jerrene about the reasons for turndown, as well expressing that I was never told by any previous representatives that I had to re-qualify for a balance transfer. Jerrene states it is American Express's policy to re-qualify customers for balance transfers, specifically because balance transfers are higher risk; if this actually was the case companies would not be advertising balance transfers at 0% for 12 months, and they would be pricing balance transfers at a higher rate than purchase rates, as they do with cash advances. A cash advance is a much higher risk, so why don't I have to be reapproved for one of those? Also it makes no sense considering they issued me a credit card for $3700, increasing my total credit lines to $15,000; but more importantly I could go out, rack up my credit card to $3700, still having an outstanding balance on my Capital One account; and this therefore will increase my revolving loan balances; increase my total balances in general; and also increase my debt to income ratio. The latter, from a risk management standpoint, actually puts a customer at a higher risk of default, as well as the creditor at a higher risk for charge off. I know all of this because I worked as an underwriter for about 15 years, and a Credit Manager for about 4 of those years. But outside of that the point is that I was never told I had to be reapproved for a balance transfer when speaking to any of the representatives between August and September 17th of this year. It isn't an ethical of legal practice to tell customers you can do one thing during the application process and then do something completely different.
I'm sure this isn't the only problem customers are having with American Express. I have taken the time to write complaint letters to the BBB, Attorney General, Federal Trade Commission, FDIC, Consumer Financial Protection Bureau, and the OCC, as well as posting the complaint on Rip Off Report. Does it take a little bit to file all of these complaints? Yes. Is it worth the time? Most definitely. It is important that we file these complaints so that companies are held responsible when they communicate one thing and then act another, when they advertise one way and then act another, and when they promise one thing and then fall through on their promises. Completely unacceptable. I urge you to file your own reports against American Express if you have experienced similar problems.