Consumer complaint received 2015-09-18
Company: AMERICAN EXPRESS COMPANY
State: NJ
Product: Prepaid card
Sub-product: General purpose card
Issue: Fees

Complaint:
I was charged a {$2.00} per month service fee which I believe is illegal under Credit Card Accountability Responsibility and Disclosure Act of 2009 ( H.R. 627 ). 

Title IV on gift cards : '' it shall be unlawful for any person to impose a ... service fee ... with respect to ... general-use prepaid card '' Exceptions : a ) The fee starts *seven months* from issuance therefore it does not meet that exception. 
b ) disclosure requirements are met ( see below ) c ) N/a ( there is only one fee per month ) d ) I will refer to Bureau experts on additional rule-makings ( 3 ) Disclosure req. 
a ) Clearly and conspicuously states : ( i ) that a fee may be charged - this is *not clear nor conspicuous* as the only place it was mentioned was in the verbiage of the terms sheet which no consumer reads and on the back of the card ... so I had no reason to look for it until I checked my balance. 

( ii ) the amount of the charge - this is clearly listed on the back of the charge but it is *definitely not conspicuous* especially when I was aware that charges on prepaid cards are illegal I expected extra-ordinary notice with references to these exceptions. 

( iii ) how often such a fee may be issued - the term on the boiler plate of the back of the card states " monthly '' I do not know if that meets the specificity requirements here. 

( iv ) *** The term does not list this as an inactivity fee just a service charge but that is exactly what this is. 

( B ) " the issuer or vendor of such certificate or card informs the purchaser of such charge or fee before such certificate or card is purchased, *regardless of whether the certificate or card is purchased in person, over the Internet, or by telephone. * '' I was not made aware of these fees before I received these cards from rebates. Moreover, given the media attention this act received the default position is that there are no fees so any fees need to receive explicit notice ( s ) in order to be clear and conspicuous given the context. 

I spoke with Supervisor XXXX of the Rewards Team Ext : XXXX who even after I explained why these terms are illegitimate said they would not reverse the XXXX {$2.00} charges as a response to the law or as a courtesy due to the terms and conditions. 

These sort of fees which fly in the face of the spirit of the regulations in place to protect consumers also violate the letter by not informing recipients before they receive the card and not clearly and conspicuously stating terms. As I 'm sure many people go by the expiration date and when they go to use their card it is declined for insufficient balance and they find themselves with less than half there expected balance. 

Currently the back of the card tells you to go to americanexpress.com/reward or call customer service. And the website tells you to call customer service number listed on the card. This is classic diversion and time wasting tactics to keep consumers ill informed. 

This deceitful practice grants American Express and and other prepaid company a windfall of XXXX dollars in the form of {$2.00} per month charges times up to 6 years. 

The CFPB needs to be strict on these cases because it is not worth disputing {$2.00} at a time for the consumer but millions are being stolen this way.

Company response to consumer: Closed with explanation