Product: Credit card

My friend, XXXX XXXX and I, made a purchase with a merchant. My purchase was for {$27000.00} and XXXX 's was for {$40000.00}. The principal objective of the purchase was for his company to build us e-commerce stores. We were responsible for some work on the project- namely optimizing our credit profiles to obtain credit from banks to fund the e-commerce store and his team was responsible for building the stores. Despite XXXX and I successfully upholding our end of the bargin, he took our money did not complete the project by the deadlines set out, and his team refused to show us the work that had been done. We filed chargebacks for no services received with a number of the banks and were successful in a majority of those chargebacks. AMEX refused our chargeback on the grounds that their cardmember agreement prohibits the use of the card for an investment/security and that this was an investment/security, not the purchase of a service. 

We don't believe this is a security, as determined by the XXXX test - the accepted legal framework for determining whether something is an investment contract/security or not. But first, I would like to understand how the cardmember agreement explicitly prohibits the use of the AMEX card for investments. The relevant section of the cardmember agreement says : Eligible Purchases Eligible purchases are purchases for goods and services minus returns and other credits. 
Eligible purchases do NOT include : fees or interest charges, purchases of traveler 's checks, purchases or reloading of prepaid cards, purchases of any cash equivalents, or personto-person transactions. Additional terms and restrictions apply. 

Since there is no mention of invesments or securities in the eligible purchases section of the agreement, where are these additional terms and restrictions? AMEX must show us that we agreed to not use our card for the purchase of investment contracts. 

Even if they are able to show us that we were bound to not use the card for investment contracts, we believe this was a service contract. AMEX must demonstrate to us how our contract- which is entitled a contract for services - passes all prongs of the XXXX XXXX. 

The XXXX Test : " The test [ for an investment contract ] is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. '' We believe our contract fails to meet two prongs of the XXXX test : Those of a common enterprise, and that the profits come solely from the efforts of others. 

A common enterprise is typically determined by whether there is " horizontal commonality '' which generally requires that investors are told that their funds are pooled together. Horizontal commonality is the tying of each individual investors fortunes to the fortunes of the other investors through the pooling of assets, usually combined with the pro-rata distribution of profits. In the SG case, participants were told that their funds were to be pooled in a single account. We were not. Moreover, we were each told we would be getting different e-commerce stores. In some cases, participants might share an e-commerce store. In my case and in XXXX 's case, we were told we would be getting separate stores and there was no mention of our funds being pooled together. 

On the requirement about profits coming solely from the efforts of others, we were both involved in the work after paying the merchant the fee. We were asked to optimize our credit profiles and spend hours meeting with banks to obtain credit that we would use to fund the stores. Each of us allocated more than XXXX hours of work to this process. So the effort was not solely on the part of the merchant- we were very involved in the work. 

AMEX needs to show us exactly how an investment contract violates the cardmember agreement and if they are able to do so, they need to show us exactly how this is an investment contract. They have not done so despite us asking for more than four months. The only argument I have gotten from AMEX as to why this is an investment contract is that the merchant has classified itself on the AMEX system as an investment manager/asset manager. But we don't believe this is a good argument, as we had no idea how the merchant classified itself in the AMEX system. An investment manager could sell all kinds of products and services that are clearly not investments. It's really about the specific purchase we made. That purchase was for predominantly for the creation of an e-commerce store.