Consumer complaint received 2020-09-07
Product: Debt collection — Credit card debt
Issue: False statements or representation — Attempted to collect wrong amount
Company: AMERICAN EXPRESS COMPANY (CA)

VIA MAIL ( ref. : XXXX ) XXXX XXXX , XXXX c/o XXXX XXXX XXXX. XXXX XXXX XXXX, TX XXXX email : XXXX American Express XXXX XXXX XXXX XXXX XXXX, TX XXXX VIA MAIL AND ELECTRONIC MAIL ( ref. : XXXX ) XXXX XXXX XXXX XXXX XXXX XXXX 
XXXX XXXX XXXX XXXX Suite XXXX XXXX, DE XXXX email : XXXX XXXX XX/XX/XXXX Dear Mr. XXXX et. al., In response to your electronic mail dated XXXX  [ and XXXX ] XX/XX/XXXX, I hope the following information finds you well. 

On XXXX XX/XX/XXXX, the President of the United States of America declared the State of California a disaster area due to the COVID-19 pandemic. Institutions gave relief to its Customers in the form of credits, or at least 2-month payment deferrals. 

The statements hereunder are in the recorded line calls to American Express and should be reviewed by the recipients of this letter, prior to responses. 

The XXXX American Express account was established in XXXX, without any significant impacts to the use of the account ( s ) up to the XXXX XX/XX/XXXX COVID-19 declaration. 

In XX/XX/XXXX, I requested a 2-month deferral of payments from American Express. The American Express representative stated that there was only an option to defer for one year. This is documented on the American Express website at : https : //www.americanexpress.comXXXX XXXXXXXX % XXXX % XXXX & XXXX & XXXX American Express Financial Relief Program Terms Program Overview Eligible Card Members may request to enroll in either the short-term payment plan or the long-term payment plan of the American Express XXXX XXXX XXXX ( the Program ) by [ calling XXXX ]. The short-term payment plan can provide relief benefits for 12 months following enrollment and the long-term payment plan can provide relief benefits for 36 or 60 months following enrollment. Eligibility for the 36 or 60 month long-term payment plans will be based, in part, on your American Express Card product and will be communicated to you before you submit your request for enrollment. We will determine your eligibility for the Program, upon your request to enroll, based on factors including delinquency status prior enrollment in the Program or the balance on your Card account. After you complete the Program or exit early for any reason, your Card account will then be subject to the APRs, fees, and minimum payment in your Cardmember Agreement.

Program Relief Benefits While enrolled in the Program, you will have access to the following benefits : Your minimum monthly payment due will be reduced to an amount that will be disclosed to you at enrollment Your Card account will be subject to a reduced variable APR ( for balances subject to an interest rate ) that will be disclosed to you at enrollment We will waive any late payment fee and annual Card membership fee that would have been charged while you are enrolled in the Program For the short-term payment plan only, you may be able to make purchases up to a reduced spending limit, which will be disclosed to you following enrollment and may adjust at any time during the Program. If, prior to enrollment, you are at or over your spending limit you will not be able to make purchases until you bring your balance below the limit.

Program Requirements In order to maintain all the benefits of the Program, you must comply with the full Program Terms, which will be communicated to you at enrollment and which will include the requirements that : Your enrolled American Express Card account ( s ) must not be cancelled after enrollment Program payments for all your American Express Card accounts must be made by the respective due dates Program Limitations Program limitations will be communicated to you at Program enrollment, which will include the following : If enrolled in the long-term payment plan, you will be unable to use your Card to make purchases while enrolled You may not have access to all Card benefits and features We will cancel any account you may have with a balance less than {$100.00} Reporting to the Credit Bureaus Any reduction to your credit limit on enrollment into the Program may have a negative impact on your credit score If your account is reported to consumer credit bureaus and if you are enrolled in the long-term payment plan, we will inform the consumer credit bureaus that you are participating in a payment plan, which will not directly impact your credit score, but will be visible to other lenders If you do not comply with Program Terms and you are being reported to the credit bureaus, we will report that status, which may negatively impact your credit score If you are removed from the Program because you do not comply with the Program Terms, your Card account ( s ) may be cancelled, which may impact your credit score I nevertheless stated that the late payments would be made by in 2 months. Without a shorter deferral option, I requested to apply for the 1-year deferral, and the American Express Representative stated that the account ( s ) must be in default before ( s ) he can process the application.

I received numerous harassing calls from American Express checking on the status of the payments up to XXXX XXXX. The American Express representative stated that the agreement was in the notes for the account. At the end of XXXX I made the payment, and brought all two accounts up to date by XX/XX/XXXX. 

Thus as at XXXX XX/XX/XXXX the accounts were up to date. 

The subsequent predatory actions of American Express, were for the purpose of fraudulently returning the account to late status and attempting to levy a higher interest rate : 1 ) American Express blocked any further payments to the account ending in ( XXXX ) : XXXX XX/XX/XXXX [ Evidence Figure # 1 ] 2 ) American Express returned the payment to the account ending in ( XXXX ) and charged interest on the payment ; the confirmation number is XXXX : XXXX XX/XX/XXXX [ Evidence Figure # 2 ] I received numerous letters that the account  would be temporarily suspended until the account was up to date. On XXXX XXXX, I contacted American Express, and they stated that in order to remove the temporary suspension on the account they have to wait for the payments to clear [ the payments usually clear in under 24 hours ]. I called back on XXXX XXXX and the American Express representative stated they have to wait for the payments to clear and to call back in 24 hours. 

On XXXX XXXX, the American Express representative stated that the accounts were cancelled [ see Appendix A for definitions of Cancel ], and a XXXX XXXX letter stating that reinstatement of the account was declined, which is after the accounts were brought up to date on XXXX XXXX : [ Evidence Figure # 3 ] I then received a backdated letter dated XXXX XXXX that the accounts were canceled. The accounts were not Canceled per the calls on XXXX and XXXX XXXX. 

A XXXX XXXX letter stated by American Express, Were working to resolve your inquiry as quickly and accurately as possible ... 

During the phone calls, the American Express Representative also stated that an alleged letter was sent on XXXX XXXX stating that the accounts were Canceled ; this is highly suspect as in XXXX I stated that the accounts would be paid in 2 months. No such cancellation letter has been received up to the calls, and this contradicts the statement made by American Express on XXXX XXXX. 

In the mist of the COVID-19 pandemic, all financial institutions are serving their Customers by giving 2 to 6-month deferrals for payments. In this case you are using XXXX bias to try to maintain the late payment status in order to charge higher interest rates, and fraudulently collect late fees and interest. I was then told I must reapply for the accounts, which the reinstatement request was done on XXXX XXXX XXXX XXXX including a dispute resolution, reference number XXXX. I was told by the American Express representative to wait for an answer in the mail in 7 to 10 days. 

American Express sent emails to make payments to blocked and return payment accounts knowing that they prevented payment ( s )  to be made to the accounts per above. 

No such Resolution letter came in the mail after the XXXX XXXX letter, and two collection emails were received by the recipients of this letter XXXX and XXXX XX/XX/XXXX. 



Conclusion : After XXXX XX/XX/XXXX, you blocked payments to the account to damage the Customers credit rating, levy higher interest rates in excess of 30 % APR, and collect on CANCELED accounts ( see Appendix A, pages 6, and 7, s 6 and 7 ). 
You invoked an illegal practice called Predatory Lending. 
Returning the XXXX XX/XX/XXXX {$1600.00} payment, and then charging {$540.00} in interest and {$110.00} in late fees on the payments is fraud on the part of American Express and the recipients of this letter. 
It will be appreciated that you refrain from illegally using my online & email activity to monitor, track and respond. 

Cease and Desist with your illegal collection. Such illegal practices will be reported to the XXXX XXXX XXXX ( XXXX ) and Federal Trade Commission ( FTC ). 



Sincerely, eMedia Appendix A Definition of Cancel https : //XXXX/ 6. ( Banking & Finance ) a. to close ( an account ) by discharging any outstanding debts b. ( sometimes foll by out ) accounting to eliminate ( a debit or credit ) by making an offsetting entry on the opposite side of the account 7. ( XXXX ) a. to close ( an account ) by discharging any outstanding debts b. ( sometimes foll by out ) accounting to eliminate ( a debit or credit ) by  making an offsetting entry on the opposite side of the account https : XXXX 1. The borrower chooses not to finance the policy. 
In most states, after a borrower signs a premium finance agreement, he/she is given the option of disaffirming ( undoing ) the finance transaction. If the borrower chooses to disaffirm their request for financing, the premium finance company will flat/cancel the loan and notify all parties involved that they are no longer a party to the transaction. 
XXXX XXXX XXXX XXXX XXXX XXXX, CA XXXX VIA MAIL AND ELECTRONIC MAIL ( ref. : XXXX ) XXXX XXXX XXXX XXXX c/o XXXX XXXX XXXX. XXXX  XXXX XXXX, TX XXXX email : XXXX American Express XXXX XXXX XXXX XXXX XXXX, TX XXXX VIA MAIL AND ELECTRONIC MAIL ( ref. : XXXX ) XXXX XXXX XXXX XXXX XXXX XXXX 
XXXX XXXX XXXX XXXX Suite XXXX XXXX, DE XXXX email : XXXX XXXX XX/XX/XXXX Dear XXXX XXXX et. al., This is an Addendum to my XXXX XX/XX/XXXX response, and has been submitted within 30 days of your XXXX and XXXX XX/XX/XXXX letters. 


Remission or Cancellation of a Debt Cancellation of Debt ( COD ) occurs when a creditor relieves a debtor from a debt obligation. Debtors may be able to negotiate with a creditor directly for debt forgiveness. They can also receive debt cancellation through a debt relief program or by filing for bankruptcy. Debts forgiven by a creditor are taxable as income. Canceled debt will typically be recorded by the creditor and reported to a debtor as income on a 1099-C. 

The main impact of cancellation of debt is the legal requirement to pay taxes on the amount that has been forgiven, as the Internal Revenue Service ( IRS ) counts this canceled amount as income. When obtaining debt relief borrowers should plan ahead for taxes on potential savings expected from the cancellation of debt.

There are quite a few exceptions when it comes to the cancellation of debt income. Defined by the IRS, the following are not considered cancellation of debt income : 1. Debts canceled as gifts or inheritance 2. Some qualified student loans that meet specific criteria 3. Other education loans or relief programs that help provide health services 4. Canceled debt that would be deductible if an individual as a cash basis taxpayer, paid it 5. A qualified purchase price reduction on a property provided by the seller 6. XXXX XXXX payments that reduce the principal balance of a mortgage under the XXXX XXXX XXXX XXXX 7. Amounts of student loans discharged upon the death or XXXX of the student The following exclusions are considered cancellation of debt income but the IRS excludes them from being reported as income. 
1. Canceled debt from a Title XXXX bankruptcy case 2. Canceled debt to the extent insolvent 3. Cancellation of qualified farm indebtedness 4. Cancellation of qualified real property business indebtedness 5. Cancellation of qualified principal residence indebtedness With debt cancellation, the Debtor is no longer on the hook for the canceled  amount, and does not have to worry about the lender or collections coming after them in the future. 


Usury Rate Limitations With returned payments, American Express charged in excess of 30 % APR. Letters from American Express originate in California, Florida and Texas. 

A 1978 court ruling Marquette National Bank of Minneapolis vs. First of Omaha Service Corp. provided a transitionary moment for both the banking industry and a handful of entrepreneurial states most notably South Dakota and Delaware California : Contract or agreement for greater than 12 % shall be null and void as to any agreement to pay interest ( Civil Code 1916-2 ) ; debtor may recover treble amount paid ; willful violation-guilty of loan-sharking, a felony and punishable by imprisonment in state prison for not more than 5 yrs. or county jail for not more than 1 yr. ( Civil Code 1916-3 ) Florida : All interest forfeited and repaid double ( 687.04 ) ; criminal usury : credit at rate of 25-45 % is misdemeanor with penalty of up to 60 days in prison and/or {$500.00} fine ; over 45 % is 3rd degree felony ; keeping the books/records for loan at 25 % is 1st degree misdemeanor, and if loan or forbearance is criminal, debt is not enforceable ( 687.071 ) Texas : The greater of 3 times the amount computed subtracting the amount of interest allowed by law from the total amount of interest contracted for, charged, or received ; or {$2000.00} or 20 % of the amount of principal, whichever is less ( Finance 305.001 to 305.003 ) ; creditor who is liable is also liable for reasonable attorney 's fees ( Finance 305.005 ) ; each offense is a misdemeanor with fine of up to {$1000.00} ( Finance 305.008 ) Credit Card Act of 2009 ( Not Cited for Reference - For Example Only ) Note : Business and corporate credit cards are not covered by the protections in the CARD Act, however the basic functionality is the same. 

Highest interest balances paid first : When consumers have accounts that carry different interest rates for different types of purchases ( i.e., cash advances, regular purchases, balance transfers or ATM withdrawals ), payments in excess of the minimum amount due must go to balances with higher interest rates first. 

A common practice in the industry had been to apply all amounts over the minimum monthly payments to the lowest-interest balances first thus extending the time it takes to pay off higher-interest rate balances. 

And if the card issuer makes any significant changes such as mailing address to send payments or its ways of handling card payments, and this results in any delay to the payment being credited in a 60-day period following the change, the issuer can not charge the  cardholder a fine or interest on such payment. 


On XXXX XX/XX/XXXX, American Express returned XXXX XX/XX/XXXX payment, ie. to the account ending in XXXX and as of XXXX XX/XX/XXXX blocked future payments, ie. after XXXX XX/XX/XXXX, to the account ending in XXXX. The account ( s ) was then cancelled in a backdated letter dated XXXX XX/XX/XXXX, which is prior to your XXXX and XXXX XXXX letters : accounts ending in XXXX and XXXX ( CANCELED ) [ Evidence Figure # 4 ] [ Evidence Figure # 5 ] account ending in XXXX ( CANCELED Blocked by {$0.00} Loan ) [ Evidence Figure # 6 ] account ending in XXXX ( CANCELED Returned Payment ) [ Evidence Figure # 7 ] American Express Letter Dated XXXX XX/XX/XXXX : We are writing you that, your American Express account listed above has been cancelled .... 




American Express XXXX XXXX XXXX : American Express implemented racially discriminatory practices to Customer rights exercised in good faith under the Consumer Protection Act by [ as a result of COVID-19 Federal & State orders starting XXXX XX/XX/XXXX ] not applying their published 1 year [ to 60 month ] maximum deferral to the accounts. 

American Express exceeded usury rates for the interest charged to the account. 

On XXXX XX/XX/XXXX, American Express refused to accept legal tender for payment of a debt in violation of 31 U.S.C. 5103. The intent of American Express was to artificially damage the Customers credit rating and levy higher interest rates. This Customer account was Canceled by American Express. 

For internal reasons American Express did not want to carry the balances in their books, per their published deferral arraingements, for [ 2 months to ] 1 year. Nevertheless, the accounts were CANCELLED by American Express in writing on XXXX XX/XX/XXXX ( actually XXXX XX/XX/XXXX ), which is prior to your XXXX and XXXX XX/XX/XXXX letters, thus the cancellation predates & voids any collection effort. 


Next Step : Therefore, by Federal & State legal provisions, the account balances are deemed CANCELED, and the only further action is submittal of IRS form from American Express to the former Customer, ie. 1099-C as applicable.

Please provide an Estimate Date of American Express Submittal, of the 1099-C. 








Sincerely, XXXX XXXX The American Express Customer Representative stated Your account must be in default before we can enter you in the financial relief program. Then, American Express uses the related & manufactured reduction in FICO score to deny entry in to the Financial Relief Program.

American express CANCELED the account prior to my being  contacted by XXXX XXXX or XXXX XXXX XXXX XXXX XXXX XXXX there fore they are pursuing a {$0.00} debt. Refer to the legal definition of CANCEL herein. 

The COVID-19 disaster declaration XXXX started on XXXX XX/XX/XXXX. After about 2 months of financial relief, the American Express account was up to date as of XXXX XX/XX/XXXX. American Express then CANCELED the account, RETURNED the payment ( s ), BLOCKED further payment, and transferred CANCELED DEBT to Debt Collectors, instead of waiving late fees & interest. If American Express had enacted the American Express Financial Relief Program Terms, the next payment ( s ) would be due XX/XX/XXXX ; thus any collection of payments before this date is fraudulent. 

The interest rate on the loan has a maximum APR of 14.97 %. From XXXX to XX/XX/XXXX, XXXX XXXX increased the CANCELED BALANCE from {$6800.00} to {$12000.00} ; thus charging an APR of 307 %, which is exorbitantly above usury rates & the maximum APR, and is predatory.

CFPB enforcement action In XX/XX/XXXX, The Consumer Financial Protection Bureau ( CFPB ) announced an enforcement action with orders requiring  three American Express subsidiaries to refund an estimated {$85.00} XXXX to approximately XXXX customers for illegal card practices between XXXX and XXXX. Allegations included that American Express made misleading statements regarding signup bonuses, charged unlawful late fees, discriminated against applicants due to age, and failed to report consumer complaints to regulators. 

American Express XXXX : In United States banking, a federal savings bank ( XXXX ) is a savings bank that is created ( or chartered ) under and regulated by United States federal law, and administered by the United States Department of the Treasury 's Office of the Comptroller of the Currency. The Federal Deposit Insurance Corporation ( FDIC ) insures deposit accounts in federal savings banks up to  prescribed limits. Thus American Express is Federally backed, and must comply with Federal COVID-19 mandates from the President & Executive Office, by implementing payment deferrals. From XX/XX/XXXX to Present, the President and the Governor of California etc. prohibited non-essential business from operating, which primarily affected small business from earning revenue. In my case, American Express did not comply with Federal payment deferral mandates or its own policies. On XXXX XX/XX/XXXX, XXXX reported that American Express announced that it offers COVID-19 relief by waiving late fees & interest to its customers ( XXXX XXXX XXXX ). 
***************************************************************