Consumer complaint received 2019-06-14
Company: AMERICAN EXPRESS COMPANY
State: MI
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Closing your account
Sub-issue: Company closed your account

Complaint:
My American Express Gold and American Express Platinum cards were canceled in XX/XX/XXXX due to the misapplication of payments I'd made since XX/XX/XXXX ( see CFPB complaint XXXX-XXXX response dated XXXX XX/XX/XXXX ). Per the American Express card agreement my payments are due upon receipt and are accepted thru the first of each month. The ten ( 10 ) day grace period allows them to be received without any late payment charges thru the XX/XX/XXXX calendar day of the month. All payments ar allocated first to cover the pay-in-full portion of a card member 's plus the minimum payment due on the pay-over-time portion of the account. 

Per American Express own written statement to the CFPB dated XXXX XX/XX/XXXX, American Express admits that an overage was applied to my Pay-Over-Time Balance, on the date of XXXX XX/XX/XXXX in the amount of XXXX XXXX ( XXXX ) dollars and that having received a total of processed payments in the amount of XXXX between XXXX XX/XX/XXXX and XXXX XX/XX/XXXX, an overage from the XXXX XX/XX/XXXX payment plus prior payments within the same time-frame were applied to my pay-over-time balance. 

To quote the signed statement submitted by American Express to the CFPB with CFPB Ref No : XXXX-XXXX and dated XXXX XX/XX/XXXX : " An over-payment of {$3600.00} was allocated to the Pay Over Time balance. '' Now, the payment was made on XXXX XXXX and was therefore intended to be credited towards the immediate balance due on XXXX XX/XX/XXXX. That payment was not to be used to in-full to reduce the pay-over-time balance within the statement period. As a result, every subsequent statement period reported that my account was nearly thirty ( 30 ) days past-due, ultimately leading to the closure of my accounts and reporting of invalid adverse credit history to the three ( 3 ) major CRA 's. 

It is perfectly reasonable to pay a balance due on XXXX XX/XX/XXXX one ( 1 ) week in advance ( XXXX XX/XX/XXXX ), especially considering that American Express previously lost my payment that was WIRED, and for whatever the reason was unable to process other payments. So, American Express has apparently concocted a scheme such that if a payment is made AFTER the closing of a statement period, but before that statement period balance is due, their computing system will misapply payments made prior to the exact due date for that statement period, for all card members who have the pay-over-time functionality on their charge cards. That is, American Express is able to take in two times ( 2 ) the pay-in-full balance due under threat of reporting adverse credit history if only the payment due is made within one ( 1 ) week before the due date of the payment. Again the payment is technically due upon receipt and in my case was expected to be paid by the XX/XX/XXXX of the month, XXXX XX/XX/XXXX. 

An investigation was conducted regarding the payment history resulting in American Express having to change the due dates of ALL my statement periods between XX/XX/XXXX and XX/XX/XXXX because there was no other way to correct the error in the computer system. In American Express ' statement to the CFPB on XXXX XX/XX/XXXX with CFPB Ref No : XXXX-XXXX, American express states : " On XX/XX/XXXX a credit supervisor called you per your request. He was able to obtain an exception to remove the delinquency. We have provided appropriate feedback to his leader to prevent this from happening in the future as we are obligated to report accurate information to the credit reporting agencies. '' That is, the supervisor that assisted me in trying to make things right to the extent they COULD be made right given the series of colossal screw-ups in the way my XXXX XXXX payment was REPRIMANDED for having done so -- apparently no good deed at American Express goes unpunished. If the XXXX XX/XX/XXXX payment had been applied as it was intended to be, there would have been no " late payment '' and no need for the supervisor to have had to take the extraordinary actions to fix the issue regarding the reporting for XX/XX/XXXX. 

Now, I chose to be respectful and to try and resolve the issue internal to American Express between XXXX of XXXX thru the XXXX XX/XX/XXXX date, as mentioned in American Express ' XX/XX/XXXX statement. However, if I'd chosen to file with the CRA 's and asked that the invalid credit history be removed, and provided information indicating that a payment was misapplied, that information would have been removed because American Express does not even dispute the date a payment was made, but in how they chose to apply a payment made within one ( 1 ) week of the due date for the statement period. 

As a prior American Express shareholder outright, and one that most-likely continues to be a shareholder through index/mutual funds, it is alarming to see this sort of behavior in how American Express treated me as a card member, and shareholder, AND how they treat their employees who try to retain card members that have been harmed due to flaws in their computing system logic, whether those employees are in the United States, or abroad. The sad thing is that I am a millennial -- it is statistically the single most-difficult group that American Express has tried to attract to it's products and services. 

At this point American Express has chosen to keep my accounts closed, despite admitting to a misapplication of payments, AS I INTENDED THEM, and per their own statements to the CFPB. Their consolation has been to offer me " guaranteed reinstatement '' once the pay-over-time portion of my account is paid in-full with a risk-exposure limit that pales in comparison to the prior limit. With the stiff competition in the marketplace in terms of credit cards, especially for " up and coming '' millennial making well into six-figures like myself, it would behoove American Express to re-evaluate how it treats its card members overall, especially millennial card members like myself. While I am not privy to the level of disciplinary action that was taken against the supervisor that assisted me, it's unfortunate that I would even need to state that American Express should consider looking inward on how it treats employees who attempt to reset a relationship with a card member that has been harmed due to an error in payment allocation. 

There are a series of steps that American Express must undertake if they wish to keep me as a card member after going through this with them for the past one ( 1 ) year. If American Express can not do ALL of these things as I have specified as a fair resolution, then it will be clear that I am not valued as a card member and that American Express has not learned their lessons with millennials and brand loyalty. 

Under that scenario, I will work with another financial institution that I currently have accounts with, explain the situation and provide the copious documentation of this experience with American Express and part ways with AXP as a card member. Furthermore, I will limit my exposure to AXP in any of my index/mutual fund holdings. 

Regardless, I will provide feedback to the CFPB and request that the feedback be posted so that other consumers will be aware of just how American Express chooses to treat its millennial customers.

Company response to consumer: Closed with explanation