Basically, the language was just an add-on to a section that said that if there is some kind of error or dispute about a debit, and AMEX gives you the credit temporarily back to your bank account, and it turns out the debit was okay in the first place, then they will take it back. Nothing about that is changing, just now you explicitly agree that that's okay.

Here's the old clause:

If we determine that there was no error, we will send you a written explanation within three business days after we finish our investigation. Upon your request we will provide you with copies of the documents that we used in our investigation. If we have provisionally recredited your Bank Account during the investigation and determine that there was no error, we will notify you of the date on which we will redebit your Bank Account, and the amount to be redebited.

Just add, "You authorize us or an agent to debit your Bank Account for this amount." to the end.

The rest of the new terms of service changes, with some of the increased APRs and fees may still be cause of concern for some customers.

American Express: "We Can Yank From Your Bank Automatically" Clause? Not Quite [CreditMattersBlog] (Photo: pnoeric)

AMEX just sent out some new changes to terms of service for some customers, and one of them has us scratching our heads in particular. There's various increases in APRs and fees, but then under "In Case of Errors or Questions About Your Transactions" they're now adding "You authorize us or an agent to debit your Bank Account for this amount." What scenarios would qualify under "errors" or "questions"? Don't like the sound of agreeing to let anyone make withdrawals on my bank account without myself pulling the lever. The notice of TOS changes, inside...

Notice of Changes to Your Account

The terms of your Account are subject to change in accordance with the American Express Cardmember Agreement ("Agreement") governing your Account (including increasing rates and fees, changing fixed rates to variable rates, and adding new terms). Any language in your Agreement contrary to or conflicting with terms amended herein is replaced fully and completely. All terms of the Agreement not amended herein remain in full force and effect. These changes apply to existing balances and future balances on your Account. We urge you and any Additional Cardmembers on your Account to read this notice carefully and file it along with your Agreement in a safe place for future reference.

APR for Flexible Payment Features
For billing periods that begin on or after December 2, 2008, we are replacing the third sentence of subsection B of the Finance Charges section of your Agreement with the following:
- "Except as provided below, the APR is the Prime Rate plus 11.99%."
This is a variable rate. As of October 13, 2008, the Prime Rate plus 11.99% is an APR of 16.49% and a DPR of 0.0452%.

APR for Default
For billing periods that begin on or after December 2, 2008, the last sentence of subsection D of the Finance Charges section of your Agreement is replaced with the following:
- "The Default Rate is a DPR which corresponds to an APR equal to the Prime Rate plus 23.99%."
This is a variable rate. As of October 13, 2008, the Prime Rate plus 23.99% is an APR of 28.49% and a DPR 0.0781%.

Late Fees
We are changing the day upon which late fees may first be assessed as a result of late payment. If you have not paid the Amount Due on this statement before the 10th day after the Closing Date of your next statement, you will be assessed a $35 late fee (Iowa $15). For billing periods that begin on or after December 2, 2008, we are replacing the Late Fees section of your Agreement with the following:
- "If any portion of the Amount Due on a billing statement is not credited to your Account before the 10th day after the next Closing Date, we may assess a fee of $35 (Iowa $15). In addition, if any portion of that Amount Due is not credited by the following Closing Date, we may assess an additional fee in that same billing period of the greater of $35 or 2.99% of any amount past due (Iowa $15). If any amount past due is not credited to your Account by successive Closing Dates, we may assess a fee equal to the greater of $35 or 2.99% of any amount past due (Iowa $15)."

Transactions Made in Foreign Currencies
Effective January 11, 2009, the bolded clause in the Transactions Made in Foreign Currencies section of your Agreement is replaced with the following:
- "in each instance increased by 2.7%."

Electronic Funds Transfer (EFT) Agreement
Effective December 2, 2008, we are adding a sentence to the last paragraph of the "In Case of Errors or Questions About Your Transactions" section of your EFT Agreement. The following is added after the third sentence:
- "You authorize us or an agent to debit your Bank Account for this amount."

(Photo: TheTruthAbout...)

From the Wall Street Journal:

While retailers, car companies and others hit by the slowdown in consumer spending haven't gotten the government money, financial firms of all kinds are getting federal bailouts.

It isn't clear if the application under the Troubled Asset Relief Program came before or after the credit- and charge-card giant got Federal Reserve approval Monday to become a bank-holding company.

Amex's shares are down 57% this year as even affluent consumers keep their plastic in their wallets. The WSJ says that it is unclear how Amex would use the money — and that it's clear that $3.5 billion won't help with the consumer spending slump.

Notoriously slime-filled credit card issuer Capital One has already received approval for $3.5 billion in bailout cash.

AmEx Said to Request $3.5 Billion in U.S. Aid [WSJ] (Thanks, Jameson!)
American Express Wins Fed Approval to Become Bank (Update1) [Bloomberg]

"Consumers have thrown in the towel,'' said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts, who correctly forecast the drop in spending. ``They have no choice but to cut back on spending in a very big way. This is going to be a fairly deep, long recession.''

American Express is feeling the pain, as consumers stop spending — and stop paying their credit card bills.

American Express Co., the largest U.S. credit-card company by purchases, said yesterday it'll slash 7,000 jobs as consumers spend less and defaults rise. Cardholders failed to repay loans in the third quarter at almost twice the rate of a year earlier, and the company set aside $1.4 billion for loan losses.

U.S. Consumer Spending Declined 0.3% in September (Update1) [Bloomberg]
(Photo: mirnanda )

So it all began when Dan's father-in-law died recently . Now AMEX is hounding the mother-in-law for the $15,000 due, apparently because they don't want to have to go through the estate lawyer.

His mom was listed as an authorized user on the credit card. Under Alabama state law, authorized users are not responsible for the debt. Ah, but you're the sole account holder says AMEX. When the family checked his credit report, they see that its listed that the father-in-law closed the account in September '08. During all of September, the father-in law was in a coma.

Then on the mother-in-law's credit report, there's now an AMEX account that says it was opened in 1982...but not reported on the credit until September '08.

It seems that so they could pursue the mother-in-law for the money and avoid dealing with the estate, AMEX closed the father-in-law's account, then made a new account where the mother was solely responsible, and then transferred all the debt over to her. Now the aggressive and bullying collection calls have started.

"Isn’t this illegal and how should we proceed?" asks Dan.

(Photo: Clemson)

Pierre says:

I just received a shocking call from American Express.

My small business has had an American Express Business Account for the past two years. Our credit limit was around $25,000 and our average bill was approximately $12,000/month.

We have NEVER had a single late payment and, according to Amex's customer service reps, our spotless payment history is considered "perfect." In fact, most of the time, we pay our full bill prior to the date it is due.

So imagine our surprise when Amex called us today to inform us that our new credit limit on the account was $1,800. When pressed for details, the Amex rep made some vague references to a credit report.

However, our credit report is spotless. The only possible factor could be the fact that, since we are a private company, we do not share our financial information with Dun & Bradstreet.

Our company has bank lines worth several millions of dollars. We have been a loyal Amex customer. In an era where defaults are soaring through the roof, we have consistently paid our bill in full and prior to its due date. Doesn't that count for anything anymore?

Maybe not. The Wall Street Journal says:

Credit-card issuers have been decreasing credit limits in the wake of the subprime meltdown. Folks with good credit scores and solid credit histories are now getting caught in the fray.

"Most banks are cutting their credit limits," says Carol Kaplan, spokeswoman for the American Bankers Association. "They're doing it to everyone."

(Photo: Getty)

• Graveyard Mall: Wooden Roll-top Desk Organizer for $9 + $6 s&h
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• Circuit City: Element FLX3711B 37-inch LCD HDTV $600
• American Express: Up to 5% Cash Back on Purchases with SimplyCash Business Card
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• Hewlett Packard: $500 off $1399 HP Pavilion Notebooks w/ code NB0915
• Frys.com: Western Digital GreenPower 500GB Serial ATA/300 Hard Drive for $69.99 + shipping
• Edmund Scientific: $25 Off $50 or more w/ coupon code ES25

• Apple: Refurbished iPod touches on sale, 8GB for $180, 16GB for $240, 32GB for $320
• Amazon: Rewards points upgrade for existing Amazon.com Visa holders
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• Travelocity: United Airlines Sale: Round-trip flights from $108
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• Sears: Seven7 Women's Jeans for $18 + $6 s&h, more

• Budget Truck Rental: $50 Gift card when paying w/American Express
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Customer Satisfaction Index Ranking (1,000 point scale)

American Express 783
Discover Card 751
Industry Average 724
National City 721
Chase 719
U.S. Bank 716
WaMu 712
Citi Cards 710
Wells Fargo 709
Bank of America 692
GE Money 683
Target Visa 682
Capital One 678
HSBC 667

Source: 2008 Credit Card Satisfaction Survey [J.D. Power and Associates ]

Do you agree with their results? Leave your thoughts in the comments.

PREVIOUSLY: JD Power Credit Card 2007 Customer Satisfaction Survey (Photo: Tengaport)

Garry writes:

First, I want to say that I was a happy Vonage customer for 4 years. The only reason I chose to leave them was I got a better deal. Leaving is the rub. Even after you leave, Vonage keeps on billing, and they resurrect dead service without notice. This company is technically a good operation, but the customer service and billing has earned this fiasco of a company the right to a dirt nap.

In late September 2005 I ordered VOIP service form another carrier and canceled Vonage. Several calls to Vonage sent me through a succession of people, many who had poor command of English, and eventually led me to wait on hold for the person authorized to end my account. The wait was too long, and I finally believed I closed the account on a Saturday after spending more than 2 hours on the phone with them. When I had allegedly discontinued service, I had been using my new carrier for several weeks and had disconnected the Vonage ATA box. They billed my American Express charge for the entire month, and I paid the entire bill. All was well until the next American Express bill arrived and the usual charge from Vonage was again on the bill again. I had now not used the service for 2 months Long waits finally got assurances form a Vonage employee that the service was discontinued, although no one would agree to credit me for the illegitimate charges. I paid the bill and moved on to more productive endeavors rather than fight over $30. The next month, you guessed it. Vonage billed my American Express again. I phoned American Express, and they contested the charges and since Vonge did not bother to prove they were legitimate, the charge was reversed. Every Month following that time, I had a new charge from Vonage that was contested and reversed. I repeated called Vonage and emailed them to no avail. As a rule no one could find my account when I phoned them or I was told it was an error. This continued for more than 2 years until I finally closed the American Express account. Finally all was quiet after 2 years of trying to get read of the Vonage beast.

Today I received two collection notices from an agency writing on Vonages' behalf. They say I owe more than $250 for Vonage service including charges from last year - more than 2 years after I canceled service.

First, ask your ex-phone company for written confirmation that you canceled your service two years ago. Send your request directly to Vonage's executive offices. Forward a copy of the confirmation letter to any debt collector that demands money. If, like Vonage, they don't relent, threaten to report them for mail fraud.

RELATED: Sample Letter For Disputing A Debt Collection Notice
Unlawfully Billed? Threaten To Report Them For Mail Fraud
(Photo: Getty)

From BusinessWeek:

Many consumers say it's about time. The rules were proposed just as the U.S. economy started to tank, when many card holders were falling further behind on their payments at the same time home equity lines of credit were drying up and jobs were disappearing. Regulatory agencies came under fire to act, and Senator Carl Levin (D-Mich.) held hearings this spring to examine card company billing practices.

The proposed regulations generated more than 56,000 comments from individuals, banks, credit unions, and industry associations. That's a record number of submissions, says the Fed, beating the previous record of 45,000 submissions for a proposal that would have let financial firms assume the role of real estate brokers.

BusinessWeek says that since 1996 our nation's credit card debt has doubled to almost $1 trillion dollars. And unpaid credit card bills are growing fast as the economy sours. For their part, the credit card companies are trying to stop the bleeding by raising interest rates on otherwise "good" customers. And those customers have had enough.

Here's how the Federal Reserve describes the proposed reforms:

• Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the consumer to pay off that balance over a reasonable period of time.
• Banks would be prohibited from applying payments in excess of the minimum in a manner that maximizes interest charges.
• Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible.
• Banks would be prohibited from imposing interest charges using the "two-cycle" method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle.
• Banks would be required to provide consumers a reasonable amount of time to make payments.

If you'd like to add your comment to the proposal, click here, then scroll down to "Proposals for Comment."

Federal Reserve Proposal Press Release [Federal Reserve]
Credit Card Rage [Business Week]

Colliton insisted he wasn't running from the law and had gone to Canada only to attend some harness races.

"You're not a fugitive if you sign into a major chain hotel using your driver's license and your American Express card," he said.

In his suit, filed in Manhattan Supreme Court, Colliton says Canadian authorities would never have "falsely arrested" or "unlawfully detained" him on immigration charges if American Express hadn't revealed when and where he had used his credit card.

"That's not why I gave them 20 years of fees and thousands of dollars in profits," he said. "They spied on me."

We're not lawyers, but we're pretty sure convicted felons lose their right to moral indignation or the right to vote or something.

Anyway, the moral of the story is that if you're an indicted pedophile on the run, don't use American Express.

Ex-con sues AmEx, says it aided in his arrest in Grimsby, Ont. [The Canadian Press]
Ratted out by American Express, charges perv attorney [New York Daily News]

There's a lot of information below, so here is an executive summary:

• Regardless of who the merchant uses to process credit card transactions, merchants that add a surcharge or require a minimum purchase to accept a Visa or MasterCard credit or debit card are violating their merchant agreement, and you should report them to the bank that issued your card.
• American Express does not forbid minimum purchase requirements, but they require parity with the other credit cards, so a minimum purchase requirement just for American Express, but not for Visa, is not allowed. American Express does not allow surcharges, unless they are assessed as a convenience fee...
• Convenience fees are allowable surcharges for specific types of payments, generally to schools and government entities (like taxes or fines).
• Asking for ID is not prohibited, but refusal to show ID cannot, by itself, be a reason for the merchant to halt the transaction.

Does this only apply to credit cards? What about when I use my [Visa, MasterCard, American Express]-branded debit card?

We've mentioned this before, but it's worth repeating: the merchant agreement applies to a consumer who uses a debit card with a major credit card company's logo on it, regardless of whether he signs it or uses a PIN. Note that this is for things like minimum purchases, surcharges, and requests for ID; a credit card often offers additional consumer protections for chargebacks, warranty extensions, and buyers assurance plans.

What's the deal with third-party processors?

After we posted about a McDonald's adding 25¢ to credit/debit card purchases, commenter Corporate Shill wrote in to tell us that many small businesses, like bars, use a third-party credit card processor to offset the expenses of purchasing credit card terminals and accepting different cards:

3rd Party CC Processing Companies offer Merchant Bank services to small businesses that cannot afford to offer CC services to their customers, or to businesses that have been denied CC processing by Merchant Bank.

(In simple legal terms the 3rd Party Companies will act as a straw man between the Merchant Bank and the business that actually accepts the CC from the customer.)

In addition to offering Merchant Bank services the 3rd Party CC Processing Company will often provide the data terminals and supporting equipment at a very low cost or even free to their clients. The data terminals, because they are accessing the 3rd Party network rather than an actual Merchant Bank network, can be programmed to accept an even wider variety of CC's and perform other functions, such as check clearing.

We asked the credit card companies whether a merchant that contracts with a third-party processor still has to adhere to the merchant agreement: MasterCard simply said "Yes," and American Express said that these merchants still sign a contract with the credit card company regardless of how they sign up for card acceptance. Corporate Shill disputes this, saying that using a third-party processor does not require the merchant to sign an agreement with the credit card companies, but the companies, at least American Express, disagree.

Are government and educational entities exempt from these rules? What is the exception for convenience fees?

MasterCard says:

We allow a "convenience" to be charged by certain educational institutions and public sector merchants, including:

• Elementary and secondary schools for tuition and related fees, and school-maintained room and board
• Colleges, universities, professional schools, and junior colleges for tuition and related fees, and school-maintained room and board
• Local, state, and federal courts of law that administer and process court fees, alimony, and child support payments
• Government entities that administer and process local, state, and federal fines
• Local, state, and federal entities that engage in financial administration and taxation
• Government Services; merchants that provide general support services for the government

In addition, a merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used. For example, a merchant that has a website that accepts MasterCard, Visa and direct debit to a checking account as its three forms of payment, may ask for a surcharge IF the fee is applied to all three methods of payment. The same applies to a merchant that has a physical store that accepts cash, checks, MasterCard and Visa. The store can charge a fee as long as the fee is applied to all four methods of payment.

American Express says such fees are only allowed "in very limited industries, for example, taxes."

Can a merchant ask for ID with I pay with a credit card? Can I refuse to show it?

We've addressed this before, too, and it also bears repeating, along with a little elaboration from MasterCard: "However, to be clear, the MasterCard rule does allow merchants to ask for ID. Our rule prohibits the merchant from refusing to perform the transaction solely on the basis of the cardholder refusing to provide the ID. (If the merchant asks for ID and the cardholder refuses, then the merchant can either perform the transaction or call their acquirer for direction.)"

That being said, this isn't going to help you when you're out of cash and the guy at the convenience store won't let you charge that can of Drank. But reporting these violations, to the credit card company, to your issuing bank, and to us (preferably with pictures), will draw enough attention to the merchant that it will, hopefully, change its way.

About two months ago, I went on a business trip with two colleagues that featured a layover in Memphis. We stopped and had breakfast at a restaurant at the airport. We made the error of not informing the waitress at the start of the meal it would be separate checks. She separated them after the fact, I charged mine to my American Express card. When I got back, I submitted my receipt for reimbursement, and kept a copy for myself.

Fast forward about two weeks. When my electronic statement was ready, I noticed that the charge from the restaurant was three times larger than it should've been. I guessed that someone fouled up and submitted the entire tab on my card. I filled out an online dispute, grabbed my copy of the receipt (from my expense report), and set it aside.

A week later, I received a letter from AmEx, informing me that a temporary credit had been placed on my account and asking for additional information. Unfortunately, life got the best of me, and I missed the deadline to submit my copy. I thought for sure I'd be on the hook for it (based on the way that most credit card companies approach customers).

Saturday, I received another letter from AmEx, which I assumed could easily be summed up as "No paperwork, no credit; too bad, so sad."

Instead: "We have determined that the inquiry was correct, and the credit has become permanent." They had reached out to the restaurant, confirmed the error, and I "won"!

While I don't recommend doing what I did (in terms of forgetting the paperwork), I want to give AmEx a public round of applause. When I was growing up, my dad always told me that AmEx was infinitely better than the other credit card companies. This validates it.

Hooray! It's nice to hear a happy story.

(Photo: kajatl )

UPDATE: The 43.5% APR is the effective APR after you include the £150 annual fee. Like commenter Hanke wrote, "It's just like those payday loan places, where although the actual interest rate is low, the fees associated with the service give you a 300%APR." Makes you wonder, though, what about all those American credit cards with annual fees? Their effective APR is also higher then, and as far as I know, they don't have to include the fee in the stated APR (big print or no).

British Airways American Express [Official Site] (Thanks to Kerwin!)

1. Fees and More Fees

On any given month, you might pay a late payment fee, overlimit fee, cash advance fee, balance transfer fee, foreign exchange fee, bill payment fee, Western Union fee, and whatever else your lender can devise. Not to mention monthly and annual fees.

2. Tricks to Make You Pay Late

These come in many varieties. If you’re late you’ll pay a hefty fee and your interest rate may go up. Check each statement carefully and pay your bill as soon as it arrives.

Changing Due Dates – Your bill will not be due on the same day every month.

Early Due Dates – Bills may be due just a few days after you receive them.

Weekend Due Dates – If your due date is on the weekend and your payment arrives on the date, it
won’t be processed until Monday and you’ll be considered late.

Morning Due Times –Your payment may be due at 9am on the due date, not 5pm.

3. Approved Overlimit Charges

If a purchase puts you over your limit, your credit card company will approve the charge then hit you with an overlimit fee and maybe even raise your interest rate. Keep careful track of your balance and know that even approved charges may put you overlimit.

4. Universal Default

Pay Card A on time but pay late to Card B (or anything else monitored by your credit score) and your interest rate on Card A may jump!

5. “Any Time For Any Reason” Changes

Most contracts include this ominous phrase. It means just what it says – they can increase your interest rate on a whim. Teaser Rates That Don’t Stick – An introductory 0% interest rate can jump to 30% with a late payment or if you go overlimit. Don’t bank on keeping that 0% rate for the entire promotional period.

6. Retroactive Application of Higher Interest Rates

To make things worse, if your interest rate increases, they can apply the higher interest rate to the entire existing balance, not just to new charges.

7. Allocation of Payments

If you end up with two or more different interest rates, they will apply your payments to the balance with the lower interest rate first. The rest of your balance will continue to generate high interest charges until the low-rate balance is entirely paid off.

8. Tricky Interest Calculations

For some cards, you can pay interest on purchases from previous cycles. This is known as double cycle billing. Look for a card that uses the “Average Daily Balance” interest calculation method.

9. Credit “Protection”

Services like this may sound good, but they’re usually useless. The fee for the service likely exceeds the minimum payments it would cover if you became sick or lost your job. Avoid add-on products like this.

10. Binding Mandatory Arbitration (BMA)

This provision requires that you resolve any conflict with an arbitrator selected by the lender, which means you give up your right to take the credit card company to court.

Scan your contract and terms and conditions to see if they apply to you. Don't worry, if you try really really hard, it's possible to understand your credit contract's language...oops, that's trick number 11, not writing contracts in plain English.

[via AFFIL]
(Photo: Ben Popken)

As we've previously suggested, Brandon reported the violation to Mastercard and Visa, as well as to McDonald's headquarters. To reiterate: most credit card companies' merchant agreements forbid merchants from requiring a minimum charge to pay with a credit card, asking for ID when you pay with a credit card, or adding a surcharge for paying with a credit card (merchants are usually allowed to give a discount for paying cash, however, if it's clearly labeled as such), and we encourage readers to report violations directly to the credit card company using the info here.

My recent problems with Sears have driven me so crazy I checked to see if you had EECB contact info. When I saw all the stuff you had on Sears, I thought you'd love this story. I'll try to be short.

As background, I have an irrational loyalty to Sears. In the last 5 years I have spent probably over $20,000 on appliances, mattresses, and power tools there. I drive by 3 Home Depots to get to Sears; I want them to succeed for some bizarre reason. I don't even get it, haven't really even had great experiences, but nonetheless keep on going back. In May I tried to buy a lawn tractor, which is where the problem began.

ROUND ONE: The day after ordering the tractor online, I went back to check the order status and saw nothing. So I called Sears and they said the order had been declined by AMEX. I asked, "Was anyone going to call and tell me?" and she said, "No, we don't do that." So I called AMEX, told them to take the charge (which they denied declining), and called back to place the order live. She then told me that it would take 3 WEEKS for delivery. (Do you know how much it costs to pay someone to mow 3 acres?) Reluctantly, and accepting the situation in good humor, I agreed.

ROUND TWO: 3 WEEKS later: nothing. No call, no delivery, nothing. I call Sears, and they again blame AMEX. I explained that AMEX cannot possibly be the problem since I spoke to them live. I also noted that in the intervening three weeks, I charged a $15,500 set of airline tickets and $18,100 for a new roof, both of which zipped through without a problem. Nonetheless, I told him I'd replace the order if they didn't make me wait 3 more weeks. He put me on hold for an eternity and then agreed. I had bought the tractor on sale so I actually think he was doing some work to recreate the original terms of the sale. I told him I would not hang up until he confirmed that the charge went through so there would be no more opportunity to blame AMEX. He laughed and agreed, and we hung up friends. I suggested that they call customers when a sale doesn't go through, because that's a way to GET MORE MONEY, and he said he'd pass that along. Which he clearly didn't.

ROUND THREE: My tractor, now ordered twice, was scheduled for delivery today, so I called last night to confirm. What a shocker, same story. Now, normally I would just say screw it and order somewhere else, but (1) it takes a long time to research tractors, and I didn't want to go through that process again, and (2) I had gotten a really good price or $1299 for a $1799 tractor and I wanted them to honor the price. ALso, the sales for tractors all happened around fathers day and now I would be stuck at full price somewhere else. I should also note that one bizarre thing about Sears tractors is they have identical models where one model is on sale and one isn't. I don't get it, but the picture on the site does show them in different colors, but when you click "compare," they are exactly the same - every word, every spec. So when the woman said, I'm sorry, it's out of stock, I laughed (as did she) and suggested that they give me one of the identical ones at the sale price. She said that a supervisor could do that and told me to call back today.

ROUND FOUR: So I called this morning, asked to go to a supervisor. I explained what happened, that I've been waiting 6 weeks now for a tractor, and can't belevee that no one at Sears actually seems to want to take my $1500.

Me: I just want to know, can you get me the same or similar tractor at the same price, delivered this week. (She put me on hold and in the meantime I went to sears.com, found an identical tractor at the same SALE price, in case she was too incompetent to do so).
Manager: That's not possible, I can give you the same tractor for $1800.
Me: Why would I pay more for the same tractor? Can't you honor the same sale price you originally gave me?
Manager: Because it's not our fault the card was declined.
Me: But it is your fault, because the customer service guy told me it was not declined, and promised me the sale went through. We went through a big exercise to make sure it wouldn't be declined.
Manager: I can let you talk to someone else.
Me: No, just do what the last guy (who wasn't a supervisor) did, and give me the original sales price. You have a record of that transaction, right?
Manager: I'm not going to do that. I can let you talk to someone else.
Me: NO, LET"S JUST ORDER THIS OTHER ONE (the identical one I found on sears.com), fully ready to put myself through another round of wholesale incompetence.....sound of silence....the bitch hung up on me!

I got transferred to some other customer service line, and the first thing the woman said to me was, We don't do Sears.com problems. I asked who I could talk to, and she said, there's an email on sears.com. I asked if she wanted my $1500 or wanted to lose a loyal customer, and she said, you'll need to go to sears.com.

Please note, and I swear on this — I have always been polite, never rude, just insistent and clear in what I want. And I've asked each person why a company which loses a sale due to an (alleged) credit card decline doesn't call the customer to let them know about it, and they all say, We just don't do that. I've had $10 orders not go through other companies for one reason or another, and the company at least emails me to let me know. It's like Sears doesn't want to succeed or make the sale, or secretly delights in knowing that I'm sitting around waiting for my non-existent delivery to show up.

And to hang up on one of the last people in America who haven't totally given up on this piece of shit company? Is just plain stupid. Whatever, I guess I'll have to go to Lowes.

Really, Gregg. We'd love to tell you to write an EECB or something to Sears, but let's be honest with ourselves. They just don't care.

(Photo: So Cal Metro )

She writes:

I handle the credit card accounts for my company. We had an inactive American Express Delta Sky Miles card that hadn't been used in several years. (3 to be exact) I called AMEX and closed the account informing the CSR that our company had another AMEX account and that was our primary. I was assured the account was closed and moved on.

Come March, our production manager made a small purchase from a company whom we use infrequently and may have had this old account number in their database (a disturbing thought). Now our production manager does not have the old card in his possession, nor does he have the old account number anywhere. One individual, our CEO, had exclusively used this particular AMEX.

I immediately called the vendor and American Express wanting to know how a transaction could clear on a closed account. The American Express CSR informed me that the account was indeed closed, but it was not uncommon for transactions to go through. I was told that recurring transactions will go through. I told the CSR the story that this was a company we infrequently purchase from, and that this card had not been used in years.

The just from AMEX – Since this was a phone order and the physical card was not used to make this purchase the transaction would have been approved. Apparently the vendor also used a dummy expiration date as the old card expired in 2007. Since the vendor keyed in the account number the transaction was permitted to go through. I told American Express that this was an appalling practice – a closed account – especially one closed 6 months ago – was a closed account and any transaction put to that number should have been declined. The CSR kept insisting that it was my responsibility to make sure all vendors eliminated the old information. This is absurd. Oh, and the CSR told me that this happens all of the time. Many of the credit card transactions machine do not require the security code to process a keyed transaction – just a number and date.

I have sent emails to whatever executives I could find at American Express, and I wanted to alert your site to this wonderful practice. I mean I had heard about ISP's and television services not actually canceling your account, but a credit card company? Seems like bad business practice if you ask me.

American Express isn't alone in keeping zombie accounts on life support. Bank of America's never-die accounts are also known for their miraculous rejuvenations, complete with unexpected service fees. The tactic lets creditors cling to customers, while appearing to oblige their reasonable requests to close their accounts. It's a disgusting practice that should be outlawed.

(Photo: danesparza)

I sent AmEx two checks for a penny each, one for two cents, two for three cents, one for four cents, and one for a nickel.

I didn't want them to accidentally drop one, and I was still in a bad mood, so I folded the first check up. Then the second. Then I realized I could fold them all up... around each other.

Topped off with the billing slip, with "stupid bill" written in green marker on it.

Smith writes:

Since at least 1994 I have had an American Express Optima card.

We finally paid the darn thing off.

I waited patiently for my final billing statement, and sent in the payment electronically the next day.

Except AmEx doesn't believe in Grace Periods, only Average Daily Billing.

So, AmEx decided my final bill of 340 odd dollars was an average daily bill of $23. So they sent me a bill for $.19 interest.

Unfortunately for all involved they sent me that in the middle of a really BAD week.

I thought about this.

What is the most evil way I can pay this thing?

If I do 19 payments of one cent each through my bank it will just go to the AmEx computers. That's too easy.

I started to send in $.19 from my desktop piggy bank.

Then I realized I wouldn't know they received it, and I really don't want a LATE bill for nineteen cents.

So I started to send a check for one center and 18 cents cash. (I have sent in $1.00 or similar checks before with paper forms to other billers—- then I know they got the damn thing).

Decided I didn't want to pay for the postage to mail a nickel.

Realized my bank gives me unlimited checks, unlimited check cashing for free.

So I tear out a chunk of checks.

Realize that if I'm the person processing the check, 19 checks for a penny each is pretty easy.

So I sent AmEx two checks for a penny each, one for two cents, two for three cents, one for four cents, and one for a nickel.

I didn't want them to accidentally drop one, and I was still in a bad mood, so I folded the first check up. Then the second. Then I realized I could fold them all up... around each other.

Topped off with the billing slip, with "stupid bill" written in green marker on it.

It just might have taken less time to wait on hold and be transferred 17 times trying to get them to waive a bill for $.19, but I have my doubts. AmEx has call centers in India just like everyone else.

Am I a bad consumer, or just sick of bull hockey? How hard would it have been for the computers to be programmed to say, "bill amount is less than cost of mailing, cheaper to waiver bill?" I have one medical laboratory I deal with who doesn't bill below a threshold — it's cheaper to eat the bill than send out and process a bill for some minimum.

Stupid conglomeramegacorporation.

-Bad Consumer Smith

Let's first check out the professor's relevant credentials:

Professor Levitin's research focuses on financial institutions and their role in the consumer and business credit economy, including credit card regulatory and competition issues, mortgage lending, identity theft, DIP financing, and bankruptcy claims trading.

I called Citi and disputed the charge. The charge is a billing error under 15 CFR part 226.113(a)(1). Unfortunately my dispute did not compute in the Citi system. Because I was contesting an unliquidated amount of the charges, however, my case didn't fit into one of their eight dispute check boxes. (Note that Reg Z does not require that I know the amount of the error. See 15 C.F.R. Part 226.113(b)(3).) Finally, after speaking to a supervisor, I just decided to dispute the entire amount because that was the only way I could go forward with a dispute given the unbending parameters of Citi's computer system. I also contacted PACER to make sure that they had processed all my fee exemptions.

Fast forward to earlier this week. I still hadn't heard anything from Citi or PACER about the dispute's resolution. But, to my great surprise this month's Citi statement arrived. It says that I owe the full PACER balance and there's a finance charge tacked on for the disputed amount.

When I called Citi to inquire, I was told that I hadn't disputed the charge the previous month. This was in spite of fact that there were numerous notes about the nature of the dispute in my file. In other words, Citi had taken down all sorts of details about my dispute, but never actually processed that I was disputing the charge. Citi entered the dispute a month late, and only after I called to check up on it.

Well, Citi has now (supposedly) removed the finance charge and recorded the charge as contested. But Citi tells me that I need to submit documentation about the dispute or the charge will be reinstated. That means I have to send some 50 pages of court orders to Citi at my own time and expense for a merchant's mistake. The duty to investigate a billing error is Citi's. Nothing in Reg Z requires that the cardholder submit written documentation to the card issuer at my own expense. So why am I footing the bill? (Maybe there's language to that extent buried in my cardholder agreement...)

1. His credit report may take a ding from the late payment, something he has no control over and Citibank's CSRs are too incompetent to fix.
2. The surprise rate on the finance charge was 101.211%
3. After futzing with a compound interest calculator for half an hour, the professor couldn't figure out how Citibank was calculating the finance charge.
4. The late payment could trigger universal default provisions with his other creditors, causing a world of financial pain from Citi's mistake.
5. He can't close the account without losing his rewards or further dinging his credit score.

We take away one very simple lesson that every policymaker should appreciate: a renowned expert on credit cards is being harmed by his creditor and is practically powerless to fight back. Does this seem fair or reasonable to anyone?

My Very Own Risk-Based Repricing Experience [Credit Slips]

My girlfriend and I had a layover at JFK last week. While I was waiting for her in the bathroom I started reading a poster that seemed to be prompting me to get a JetBlue American Express card.

I say seemed because as it turned out this wasn't a poster prompting me to sign up for the credit card, but a poster prompting JetBlue employees to entice consumers to sign up for the card with a promotion offering a "complimentary" in-flight alcoholic beverage (the fact that this promotion expired in June 2006 isn't even the funniest part of this misplaced poster). What really caught my eye and woke me up out of my early morning layover haze with the final selling point - the why. Why should they encourage consumers to sign up for the card? To generate millions of extra dollars for JetBlue of course.

I for one wasn't sold to sign up with the thought of helping the airline make more money. How did this poster get placed there? And how long has it been there, since 2006?

American Express Warns About Earnings [NYT]

Visa
Phone Number: 1-800-VISA-911 (International: 1-410-581-9994). Or call the number on the back of your card
Mailing Address:
Visa U.S.A. Inc.
P.O. Box 194607
San Francisco, California 94119-4607
Online: Your card issuer's website may let you send them complaints about merchant violations and start a dispute if your were charged a fee to use your card.

"Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge you a fee when you want to use your Visa card."

"Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures."

See this VISA faq on how minimum charges are not allowed.
Rules for Visa Merchants.

MasterCard
Make a report online.
Phone Number: 1-800-MASTERCARD (International: 1-636-722-7111) Or can also call the number on the back of your card.

"A merchant must not require, or post signs indicating that it requires, a minimum or maximum transaction ammount to accept a valid MasterCard card."

"A merchant must not refuse to complete a MasterCard card transaction solely because a cardholder who has complied with the conditions for presentment of a card at the POI refuses to provide additional identification information."

MasterCard Merchant Rules

American Express
Make a report online
Phone Number: 1-800-528-4800 (International: 1-336-393-1111)
Mailing Address:
American Express
P.O. Box 297812
Ft. Lauderdale, FL 33329-7812

"American Express's regulations do not explicitly prohibit minimum charges, but its policy is to discourage any merchant practices that create a "barrier to acceptance." Amex does prohibit "discrimination" against the Amex card, however, so if a merchant has no minimum or maximum charge or require ID for Visa and MasterCard, the merchant may not discriminate against Amex by imposing a minimum or maximum charge or requiring ID." [gofso]

RELATED:
MEGA UPDATE: Requiring Minimum Credit Card Purchases is a Violation
Stores can't set credit card minimum [MSNBC]
California Civil Code Prohibiting Surcharges for Credit Card Use
What Merchants Can And Can't Do In Regards To Credit Cards
Google Answers on State Laws Regarding Surcharges

I am an MD-PhD, working at a medical center in New York. In 2006 I came here form Wisconsin, and at that point I called American Express (had a credit card with them for about 7-8 years before), explained my move, and the new academic position I was taking on, and asked them if they can help me in the transition period while moving. The rep told me that since my account is in excellent standing, I can go for 2 to 3 months without incurring late fees or penalties, IF I can prove that I am moving to another state and taking on a new job, to which I said, of course, there will be plenty of documents such as rental agreement, job offer, etc., to prove that. I was at the same time told, that "American Express helps its card holders in times of need and transition".

About 2-3 months later I wasn't able to make a payment on-line, then found out that my on-line access was inactivated and the account closed and forwarded to collection agencies.

Since then, I have been dealing with collection agencies, some of them - the most nasty ones. Even though I specified that I would like to pay what I owe, I asked for validation, because the amount they indicate is higher than the credit limit and I never used that much. I simply want to see what I am paying. I sent a validation request to the first collection agency, they stopped contact with me and sent the account back to American Express; then a second collection agency contacted me, I asked for validation, and they also stopped contacting me after that. It seems that none of these agencies are able to send me a simple piece of paper, to explain in detail what they are collecting. On the other hand, they are so aggressive...I recorded the latest collection agency calls. They are asking me to pay "today" or "within 6 hours", when I ask for their mailing address they are telling me "if you want the mailing address then wait until we forward this to an attorney", etc. How is someone supposed to make a payment to someone with unrevealed physical contact information? This is not supposed to be like a payment from a Mafia movie! Simply this account should not have gone to collection in the first place. By the way, even though I notified American Express about my new mailing address when I came to NY, I found out that HALF A YEAR after I moved they still sent me letters to Wisconsin. Of course, I don't know what letters I might have missed from them, but they didn't even have the courtesy to send me a letter before placing the account on collection. And, above all, I am trying to focus on my work. I am a well respected medical scientist in the community, I published about 50-60 articles over the past few years. With my cell phone ringing in the middle of the day, (even though I informed these agencies repeatedly that my phone is only for professional calls during business hours because I work in a medical center), I find it hard to focus. Kindly please let me know if you have the e-mail addresses for the American Express executive people. Many thanks in advance, and Congrats for your wonderful web site, it is an amazing place for learning lessons on a daily basis! Warm regards, Richard

The good news is that I've heard that if a debt collector fails to provide a validation of the debt, it's a violation of the FDCPA to sell it another collection agency. You might be able to hold each of those successive agencies liable for statutory damages of $1,000, plus the costs of your lawyer.

Hi, Ben,

Many thanks for your reply. This is good news, in fact I was wondering whether it is legal to refuse validation then just send the debt to the next collection agency. Theoretically, this would mean (since there are hundreds/thousands of them), that I would need a full time job just to wait for these letters from the next collection agency, then promptly send validation requests, and not to have extended vacations just in case I miss one of them...

Actually, I am amazed at how fraudulent they can be. I have them recorded, threatening me with "legal review" and "sending it out to an attorney" during the validation period.

Actually, the latest collection agency that called me, left messages on my cell phone, they are "The Law Offices of [redacted]", and to the best of my knowledge, (at least days ago when I checked them out), they are not even licensed as a collection agency in this state! I am thinking to take them to small claims court. In addition they left a detailed message, telling me that they are calling me on behalf of their client, and the case is under legal review, and I have to immediately/urgently call back, to explore my options. My understanding is that such a detailed message is a violation itself. Now I am wiser than I was just months ago, and I never call anyone back...they should contact me in writing, since none of them can be trustworthy.

Thanks so much for your help, I will e-mail you in the future with the outcome. This "[redacted]" agency is a particularly creepy one. And I saw on many discussion boards that they are not licensed (as I found out myself).

Have a great week,
Best regards,
Richard

RELATED: Verizon Unleashes Zombie Debt Collector Scourge On Innocent Consumer
(Photo: Bahman.)

I told the representative that I didn't like RFID as a consumer or a citizen and I worried about the potential privacy issues and was it possible to get a card without RFID on it? She said what she could do for me was disable the RFID function at AmEx's end. (She did not actually answer me about whether non-RFID cards are available.) So I had her disable the ExpressPay function, which took about two minutes on hold (for which she apologized).

PREVIOUSLY:
No-Swipe Credit Cards Pose Risk Says Senator
Long-Distance RFID Snagging Possible, Already Done
No-Swipe Credit Card No Problem For Thieves

The strategy actually evolved after FMF got in a discussion with a reader over which card was better. After side-by-side spreadsheet comparisons under different spending scenarios, they tell you how you can adjust your spending habits and earn up to 2.6% cash back — an amount well above the 1% "industry standard" for cash back credit cards.

For bonus points, here's how to de-RFID your Chase Freedom card.

How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards [Free Money Finance]

A Microsoft tech on the phone even said to Richard, ""Is there anything else I can help you with... and by the way I am laughing at you."

While it's indisputable that he shouldn't have cracked open the case, it looks like Richard has the last laugh:

Thanks to the people who posted comments to my story I have been able to get a refund from my AMEX card. They did extend Microsofts 1 year warranty by another year. I was able to get a full refund of the original purchase price, thanks to American Express.

I guess Jose did me a favor by ticking me off enough to seek you and your readers help.

Thank you to You and your readers... oh and Jose... I am thanking at you right now.

PREVIOUSLY:
Xbox360 Tells Customer "I Am Laughing At You" And Hangs Up
RELATED:
American Express Extended Warranty Protection Buys You A New Laptop
(Photo: avlxyz)

At the bottom of page three is a coupon with four check boxes on it. Check each one and I can opt out of a multitude of different marketing opportunities. Naturally, I'd prefer to simply call in my opt-out preferences to the 800 number printed on the the slip. Otherwise I'll have to dig up an envelope (no reply envelope was included), write the multi-line address on it, stamp it, mail it, and hope for the best. Calling the 800 number is relatively free and painless, while dealing with postal mail is by definition a pain in the rear. And for some reason, I just don't trust this method to actually work.

I call (800-297-8378 if you want to try it for yourself). I get a recording welcoming me American Express and notifying me that the call could be recorded... then abruptly says: "The computer system needed to answer your questions is not available." And it hangs up.

Sadly, one cannot opt-out of telephone and postal marketing through AmEx's website, so it seems that Christopher will have to locate that stamp. What's the deal, AmEx? 5 days is much too long to go without a way for your customers to opt out via telephone. As Christopher says, "If this is all a scam (and I hope it isn't), shame on AmEx. If, instead, it's the longest, most difficult computer error in the history of mankind, well, it's time to put out a press release." Too much to ask? —MEGHANN MARCO

American Express' Shady Privacy Practice [Yahoo! Tech]

Jump forward to December 27th. 8:30 AM. I get woken up by a collections agency telling me a) that I owe American Express for a charge from August, that b) I was obviously defrauding them, and that c) I was, to put it mildly, not being cooperative.

American Express truncated my address so it didn't include my apartment number. Where's it going? No idea. I explain that nothing's going to get to me unless you send the apartment number, and that's probably what's wrong all the way back. Since I checked the address wa-aay back in June, this one's their fault.

So, I got an American Express card around April. It was meant to be a backup card, so I didn't expect to use much of it at all. I used it in May, but not in June. A week or two after I didn't get any statement, I called in, and asked. American Express informed me that American Express wouldn't send out statements if I didn't make any charges. Thinking that this was an easy way to get someone in trouble, I asked if they'd send them along anyway, and was informed that it was a company policy.

Well, I wasn't expecting it to be used much, so I wasn't exactly worried, and since they would send one out to me if I had a charge, I'd just not use it much.

Jump forward to December 27th. 8:30 AM. I get woken up by a collections agency telling me a) that I owe American Express for a charge from August, that b) I was obviously defrauding them, and that c) I was, to put it mildly, not being cooperative.

I honestly didn't know what the charge was, I hadn't received any statements. After several minutes of trying to be polite prior to coffee, and trying to get actual information, I got off the phone with the collections agency, called American Express. They wouldn't talk to me. That's right — their policy is to not talk to people who've gone to collections.

I called back and finally got with a CSR who basically told me that all she could do was send me the statements. All contact I had over the matter was to go to the collections agency (yes, the same one who had called me, first thing I asked about.) I call back to the collections agency, and spoke with a rather nice woman, who sympathized, but said that basically I did owe them. I asked that they send me some paperwork talking about what I owe, and what's going on. They ask me to send money, and I said I'd see what I could do.

OK, flash forward a couple of days. Another phone call from the collections agency. I state that I still haven't gotten any written information on what I owe them, what I owe them. They claim they sent it, and want to know if I've sent the check.

At this point, I'm more worried about my credit report than anything, so I say that I'll pay the whole thing off, right now, no questions asked, if they'll just clean off the credit report, and we all go our separate ways. There's been a goof-up, I don't know who's at fault, but I'm willing to fork out the money just to let it go away.

The collections agency said that they couldn't do that, and that the collections agency has little or no contact with American Express. And then, just to make certain it's just going to be a lovely day, I was told that if I keep asking about trying to make a deal, it will be considered a refusal to pay.

It's at this point that I point out that the Fair Debt Collection Practices Act requires that they send the written statement to me in 5 days, and it's been more than that. So, why no letter?

And finally, that's when this all clears up. American Express truncated my address so it didn't include my apartment number. Where's it going? No idea. I explain that nothing's going to get to me unless you send the apartment number, and that's probably what's wrong all the way back. Since I checked the address wa-aay back in June, this one's their fault.

I'm told it doesn't matter.

After several minutes of arguing with them, I'm exhausted. So I'm finally browbeaten into saying that I'll see about sending money along.

Asked around, talked to several professionals, attempted to talk to my attorney (no calls back? Buh-bye.), even called into Clark Howard. All suggested that this was basically a no-win situation, pay it off and get on with life.

So, that's what I did. I paid it off. And the payment went through, and I now have a nice faxed letter stating I paid off the money.

Why faxed?

BECAUSE THEY STILL HAVEN'T MAILED ME. Not a scratch. Bugger all.

Even when I called in to ask they fax me the information they're required to send me by LAW, I got squat. I've asked, and asked, and asked. And now, I'm at my wits end.

Any suggestions?

So I dug out the receipt and she called Compaq/HP. She told them everything and they said it needed to be sent in for repair and that they WOULD cover it under the 1 year warranty. So she had me fax them the receipt. When she called back they said that they WOULD NOT cover it.

Now I am mad. So I called back this morning and went through the whole thing with several layers of managers and what not all saying no. I find this absolutely ridiculous...is there anything I can do? Should I contact HP non-support customer service? I just find this so ridiculous. I literally could have bought the laptop a week later, still given it to her on Christmas, and thus it would have broken the same time, and it would be covered.

The Consumerist writes:

David,

Sorry to hear about your troubles. Technically, you are past the one year warranty and they don't have to help you. The way I see it, you have two options.

1) You can try to get in touch with a supervisor and plead your case. Play the Christmas card. (No pun intended.) You might find someone sympathetic who will help you out. They are not obligated to help, so be nice.

2) If you bought the laptop with a credit card, you might not have any problems at all, which is why we always, always, always suggest you buy large tech items with a credit card. Say, for example, you had a Citi Mastercard:

"Extended Warranty is a special benefit offered to Citi Platinum and Gold MasterCard Cardmembers. This service enables you to make a claim for repairs if the original manufacturer's warranty has expired on an item you purchased on your MasterCard card. Your claim must be made within the Citibank Extended Warranty period (double the time of the manufacturer's warranty, up to one additional year). No registration is necessary."

You can submit your info to Citi and make a claim for repairs through them. Lots of credit cards have this. If you don't have a card that does, we suggest you get one specifically for this type of purchase. You don't need to carry a balance on it to be eligible for this program, and you don't need to register.

Some debit cards also have the Extended Warranty benefit. You might want to check to see if yours does.

Please let me know if this advice helped you. If you get your laptop repaired we'd love to post your story! Good luck and keep in touch.

Yours,

Meghann

David writes:

Meghann,

I wanted to follow up with you concerning our emails copied below to let you know that your help was incredible. I have an American Express Rewards card that I use for everything. I love the customer service from Amex and the fact that I have to pay it off every month keeps me out of the credit card debt problem (which I luckily just dug out of).

Thus, your wonderful response reminded me that I bought the computer with my Amex which should have the extended warranty for products. I called them up and sure enough, they would take care of it. I just had to take it into a shop to be diagnosed. After that just fax in the report and receipt, and since they were giving me a full refund on the computer, the computer itself. They even said they would cover the cost of the diagnosis!

It took a little over a month to get everything taken care of and the proper authorizations, but I now have been credited the full cost of the computer plus tax and can go get a brand new computer.

I am more than impressed with Amex and eternally grateful to you and the Consumerist for reminding me of this wonderful service available to m