American Express Leave home without them
August 9, 2009
To: Chief Executive Officer Kenneth Chenault, American Express
Executive Offices â¨American Express Company â¨
200 Vesey Streetâ¨
New York, New York 10285â¨
From: American Express member since 2002
Gold Business Account
RE: This is a letter seeking redress of our $40,000 credit limit reduced to $6,000. Please read our letter and we await your timely response.
Time to leave home without American Express!
As long time customers of American Express let us share our frustration and disappointment in the way this company has been treating us and indeed many card members during this past year. Our cascading grief is over American Express reduction of our credit limits, and raising credit card interest rates. American Express is reacting to the financial crisis out of fear. The financial damage to American Express will be long lasting and far-reaching.
Let us give you a little history as to what type of customers we have been. Our payments are always on time to all our creditors. Our story is like so many other card members. We have two open accounts with American Express. We have been members for seven years, perfect credit with long established payment history, FICO scores over 800 but only Amex has tampered with our credit limits. Only Amex has seen this pressing need to reduce our credit limits. We called Costco and took off the auto renewal for Amex, we no longer want American Express to continue any further unilateral credit damage to our pristine credit portfolio. American Express can no longer be trusted with our credit. We have stayed the course but American Express has run into the economic ditch!
We have called several times, talked to numerous staff, those who survived, faxed our request with supporting documentation and now we are writing to you for redress. In the past it was a punishment to raise interest rates for those who could not pay their debt on time. Is this our reward for being loyal card members with established credit histories, to raise our interest rates for paying our debt on time? We suggest, just as American Express looks ever so closely at our credit worthiness, we look to the executive board and CEO for leadership worthiness!
These actions take us back to a time where perhaps Pony Express might be a better company name. American Express is in total freefall. American Express is failing to provide customer service with a total disregard for ethics and indifference to the many card members. It seems we are going back in time with Pony American Express. â¨
We just recently read of American Express filing a lawsuit against the infamous Courtney Love. Legal papers showed the rocker owes $352,059.67 in unpaid charges and fees on her Amex Gold Card â which has since been suspended by the company.
So let us understand, American Express trusted a well-known drug addict, notorious for her litigation in not paying bills and American Express extended credit on a gold card for $350,000 but Amex cannot restore our previous credit limit of $40,000? We pay all our bills on time, never been late on any of our payments and we are not drug addicts, in fact we do not even use drugs, not even the good kind!
American Express will never need to file litigation against us but we know so many who want to file a class action lawsuit against American Express.
We jumped through the languishing morass of the many hoops of fire and sent in our full credit report, tax returns and listed assets along with an overall financial statement.
We are writing to inform you that, after reviewing your letter of August 2009 denying us our credit increase, with obfuscated contrived reasons we will not accept this treatment from American Express.
We are financially solid and have not changed, we are not sure the same can be said of the financial hemorrhaging of American Express that will hold another round of layoffs, after cutting 7,000 jobs in October 2008, decimating its work force along with frozen salaries and good luck with that Courtney Love lawsuit. It was sadly, no surprise, when we read your computer-generated letter of indifference. The famous words of Thomas Jefferson rang so true âBanking establishments are more dangerous than standing armies.â
In July of 2009, American Express itself stated second-quarter net income came in at $337 million, down 48% from 2008 when the company made $653 million. This net income attributable to common shareholders was only 9 cents a share, down from 56 cents a share in the year-ago quarter, according to the company.
At the same time net write-offs for the company were 10% of total loans in American Express's U.S. card-services business in the second quarter. Loans that were at least 30 days delinquent represented 4.4% of total loans in the latest period, up from 3.3% a year earlier. We do read the Wall Street Journal.
Yet with all this bad news, there was one bright spot as stated by the financial leader of American Express, Chief Executive Kenneth Chenault:
âThe number of card members who are falling behind in their payments, the volume of bankruptcy filings and the level of loan write-offs were better than we had expected.â
âIf these trends continue, we expect U.S. lending write-off rates on a managed basis to be below 10% for the second half of the year, which is lower than the outlook we offered earlier this year,â Mr. Chenault added.
Yet American Express continues to punish us, the good card members, why? Is it out of fear that we might increase the financial bloodletting? I do not think you need our help for that! May I suggest a bold new direction, take care of the customer first and the bottom line will follow!
American Express appears, as a company, to be in poor financial shape, and undercapitalized. Since we take our financial life seriously, we cannot be associated with a financial company that manages to loose so many employees, assets and runs its own affairs so poorly.
We are not proud of our American Express relationship, are you proud of your leadership? In addition, American Express has too many bad reviews within the consumer community, and your overall rating on every consumer site, is a very poor rating.
I looked, in vain, for a POSITIVE review of your company from any person or news source, and could not find even one except for the mysterious award from JD Powers. Even JD Powers would not return my calls when I asked them to define further what criteria they used to base American Express only award of âgood customer service.â
This recession will not last forever. When it is over, and people choose the few credit cards they are willing to use, there will be fewer companies and cards to choose from. The ones who will survive are the ones who realize that the only thing that keeps a credit card company afloat are customers who accept a card, use it, and pay their bills. The companies who will be in business then are the ones who take care of that good group of people today. You are clearly NOT taking care of your good customers today, so I donât expect you to be in business then.
American Express has raised our interest rates on not only new purchases but on all existing balances. In fact when Congress passed the Credit Card Reform Act, this is exactly what they wanted to prevent Credit Card Companies from doing.
We also found this very interesting from Financial News USA. WASHINGTON (AP) -- American Express Co. spent $710,000 lobbying the federal government in the second quarter on legislation touching on an array of financial issues, a recent disclosure report shows. The article continues with American Express lobbied lawmakers on legislation related to credit card fees and practices, data security and consumer privacy.â¨
American Express also lobbied in the April-June period on consumer bankruptcy, advertising and taxes.â¨ Beside Congress, the company lobbied the Federal Reserve, Treasury Department, Office of Thrift Supervision, Office of the Comptroller of the Currency, Internal Revenue Service and Executive Office of the President, according to the report filed July 20 with the House clerk's office.â¨The $710,000 spent by American Express in the second quarter compares with $830,000 in the first quarter, and nearly $1.1 million in the year-ago period. We were amazed to find American Express on the fast track to being granted banking status in just a 30 day period. This usually takes much longer. Of course with this banking status, the company gained over 3 billion in TARP funds.
It was not so nice for American Express to get credit but deny the card members credit.
Our final question, was the $710,000 well spent for the persuasion of influence in Washington DC? While your company is losing funding, market share, customers, bad debt write offs, against a backdrop of massive company layoffs and your increasing salary of over 42 million with a base salary, cash bonus, stock and other options was it all worth it? Just curious!
So Mr. Kenneth Chenault can you redress this issue with our credit limit or do we need to hold American Express accountable in the court of public opinion? The choice is yours.
Waiting your reply,