
The American Express Blues - ciscoriordan
http://www.avc.com/a_vc/2009/05/im-feeling-the-costs-of-credit-card-fraud-and-defaults.html
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madair
I had really horrible experiences with Amex, but on the opposite side, as a
small business owner. In my opinion (libel zone here) they purposefully
squeeze very small businesses, as a matter of policy.

American Express came very close to sinking my business, having to tell
employees that their paycheck was late, even though we had crossed every T to
make sure that our customers payments were on time, due to American Express
causing problems that would purposefully keep large payment amounts in their
own coffers for the smallest and most manufactured of "issues", was one of the
worst experiences of my professional life.

You know how customers who are "king" often fume that they supposedly will
"never do business again" with some company due to some perceived slight?
Well, I am fully aware that I may lose business, lose money, and fail to get
customers for my choice, but they hurt me, my reputation, my sanity, my
employees, so badly with their selective policy enforcement that I will truly
never do business with American Express again. You have to draw the line
somewhere.

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russell
Counterpoint: BofA suspended my account because of a suspicious $1 charge.
They thought it might be a probe to to see if the account was active before
flooding the account. I looked at the charge and it didn't look like anything
I had seen. Two days later I got a new card.

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lallysingh
A question: Why does AMEX matter? I had a card (for a startup, a long time
ago), and I found that most places just didn't take it.

Was I missing something? Did they have other functionality that made them
worthwhile?

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tptacek
Off the top of my head:

* Amex cards don't have pre-set limits. That's now true of many other business cards too, but the fee structures still differ. Visa allows/expects/hopes you'll carry a balance on your card. Amex disallows it.

* In business-to-business situations, everyone accepts Amex.

* Amex has absolutely killer customer service. There is simply no comparison. Amex dispute resolution is "default deny" to merchants; when I've contested charges, I've never spent more than 5 minutes on the phone. Total. I feel safer charging big-ticket items on my Amex than on any other card.

The major difference between Amex and Visa is the business model; Visa is a
payment system that works through card-issuing banks. Your relationship isn't
with the card; it's to some bank. Amex is a company, and your relationship is
to Amex.

~~~
nopassrecover
The problem here is that "default deny" means merchants are constantly chasing
after Amex to actually get money owed them - disputes are a particular hassle
for Amex as compared to Visa/MasterCard. Besides which, merchant costs are
higher with Amex. In Australia at least it's the exception now to support Amex
and additional fees are charged by the merchant to cover these hassles.

~~~
tptacek
This "problem" seems like a major feature to me.

~~~
nopassrecover
Except there is no way for merchants to prove themselves - they can do phone
authorisations, take copies of driver licences, get signatures and more and
they are still out at the end of the month. What's more, Amex will either
withhold the money, or if a late chargeback debit it straight from other money
Amex owes the mechant before even settling the situation. Merchants shouldn't
be penalised because Amex doesn't have a sufficient authentication mechanism.

Visa (or your bank) manage to reconcile the situation first.

~~~
tptacek
I've never had a fraudulent charge on my Amex. I'm talking about "disputes",
like, "you wouldn't let me get on the next flight out after you canceled my
previous flight out, so I bought a full-fare coach ticket to get the fuck out
of town and then charged it back to you". That has worked for me with Amex,
and so they have me for life.

~~~
nopassrecover
Except what you are doing is wrong if you agreed to their policy of no refunds
in the first place.

~~~
tptacek
I've screwed over an airline that didn't keep its promise to fly me somewhere
on the date/time agreed on. And yet somehow I sleep just fine at night. Odd,
isn't it?

~~~
nopassrecover
I hate to be this guy but you violated a contract that you agreed to. If you
weren't happy with their refund policy you shouldn't have bought their ticket.

~~~
tptacek
Oh well. They lose.

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adatta02
I can only speak to my personal gold card (which is pretty new) but I've also
had issues with my card being frozen unexpectedly for charges they thought
were illegitimate.

I think the big rub here is that American Express will freeze your card
without informing you first. This leads to the uncomfortable situation where
you try and swipe the card and it is immediately declined

Hopefully things will settle down in the next few months.

What I can say is that so far AMEX customer service has been top notch - my
issues have always been handled promptly and professionally . Their travel
services division also came through in a pinch a few months ago.

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quellhorst
I have an American Express Plum Card, never had any problems with charges and
really depend on the card to help my cash flow.

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eli
Always paying your bill and never being late may not be their idea of a
perfect customer. Especially if we're talking about Blue which is just a
regular credit card and accrues lucrative interest if you don't pay it in full
every month.

~~~
tptacek
Don't know about Amex Blue, which a business certainly isn't using, but all
charges on Amex Gold and Business cards are due when the statement arrives.
I'm pretty sure you're wrong about Amex's idea of a perfect customer.

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thinkcomp
I've had the same problem. My credit history is perfect, I've had at least one
American Express card at all times since 1998, and they recently flagged a
$150 purchase at Staples (on a corporate card) as fraudulent. Then they did it
again when I bought a computer. I've never had this happen at all until last
month.

~~~
tptacek
How long did it take in each case to resolve the problem? If you're just
losing 4 minutes on the phone with Amex customer service, I'm not really
worried about my card.

~~~
sho
That's a stressful 4 minutes arguing with someone on the phone, while trying
to avoid the annoyed glares of the line behind you, that I'd rather not spend.

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octane
Does anyone know of a site on the net where AmEx customers have come together
to complain or at least contribute anecdotes so we can get an overall feel of
how many customers this is really affecting?

If venture capitalists are getting their purchases denied, this concerns me as
a small business owner because I depend on my amex card more than anything
else to make purchases for my business and having my buyer protection and
ability to make large purchases disappear would be pretty devastating. Buying
goods like computers and furniture from multiple vendors with cash out of my
bank account is an awful idea that should make anyone uneasy, business owner
or not.

And if AmEx is actively shutting their largest and most high-profile accounts
down, I'm not sure how easy it would be to get a new "unlimited" line of
credit in this environment, with AmEx or any other company.

