Beware Amex benefit clawbacks on closed accounts

Beware Amex benefit clawbacks on closed accounts
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#1

In Sep 2018 I bought about $55 of clothes at Saks Fifth Avenue with my Amex Platinum card. Amex credited my account $50 because they have a perk where they will credit your account $50 semi-annually for Saks purchases.

Looks like about $38 of the items were returned in Oct 2018 (and credited to my account). I vaguely remember this.

In Nov 2018 I closed this consumer plat account (I had another Plat card and didn’t need two). They sent me a letter confirming a final $0 balance.

In Feb 2019 they applied a $33.02 bill to my account representing the amount of the Saks credit that they shouldn’t have applied (since I ended up only having $16.98 of net spend in H2 2018). This seems totally fair, but unfortunately it was kind of … not communicated. Since my account was no longer visible online there was no way to see this charge, and as far as I can tell they didn’t send any physical correspondence mentioning the charge. They did, apparently, send two e-mail messages saying “please pay your balance” and mentioning the last 5 digits of my former Plat card, which unfortunately looks very similar to the last 5 digits of my other Plat account. This was a red flag that I missed (an e-mail saying “please pay your balance” with no other details which referred to a closed account).

They applied two $30 late fees plus interest in Mar 2019 and Apr 2019, then reported my account as “30 days late” to TransUnion.

A single 30-days-late remark dropped my credit score significantly:

  • CreditKarma - 819/819/821/820 to 734
  • Credit Sesame - 826/814/823/816/819/823/822/819/821 to 734

Oddly neither CreditKarma nor Credit Sesame noticed the “30 days late” account – I had to pull my TransUnion report via annualcreditreport to see the remark, reportedly updated 04/05/2019.

In a brief 25-minute phone call, Amex CS explained the charge, explained the history of correspondence (“we sent a letter in Nov 2018 and some e-mails in March 2019 and April 2019”), waived the late fees, took payment for the $33.02 balance over the phone; and transferred me to Amex’s credit reporting team, who said they would be happy to ensure the “30 days late” remark is removed, which will involve “re-aging” the account, which involves creating and mailing three new statements and waiting for the next statement date, in early May.

I was shopping to refi my mortgage in the next month or so, so this does actually directly affect my finances. This is very surprising.

Obviously I take the blame here for not monitoring my e-mail inbox more closely (the “please pay your balance” e-mail should have been a red flag, my fault for assuming it referred to my currently open Plat card which had a balance which I paid), and for not noticing that a closed account was reporting a balance to credit bureaus.

This is very challenging to check – the free credit monitoring services do not currently apply a heuristic to warn you that “you have a new nonzero balance on a closed account”. This is a scary scenario; balances on closed accounts are particularly difficult to notice because closed accounts often don’t generate statements and disappear from online-management portals.


#2

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#3

What a hassle telemachus. I’m so sorry you had to deal with this. Thanks for letting us know.

Did you ever get the letter they referred to?

I do hope they quickly re-age the account for you so you can get that late removed. Be sure to keep checking that periodically, as those late notices can come back from the dead sometimes.


#4

CK updates your score every 7 days, but it only updates the full report every 30 days. This may explain why the account isn’t showing up yet.


#5

Somewhat related article from DoC today about amex clawing back bonuses on accounts closed within 12 months:

https://www.doctorofcredit.com/american-express-rat-cracking-down-on-closures-within-12-months/


#6

I don’t think so – I think the only correspondence I got in November 2018 was “this is your final bill and the total is zero”. I haven’t double-checked that filing-cabinet file.

Yeah good thought, will probably need to monitor this for a while.

That would do it, yup.

Separately, a few hours after I checked my Credit Sesame score, they sent me an e-mail and an SMS saying they found a new delinquent account (the web shows it now too).

Yeah interesting. I wonder about DOC’s view that “if you do something they don’t like, they will go through all of your accounts and bonuses to try and find a reason to deny you the sign up bonus, or claw back a bonus that has already posted”. That could be it. This Plat card had been open for about 4 years and I was a happy customer, just not enough of a happy customer to keep both the consumer Plat and the Schwab Plat open.


#7

I’m not surprised on clawbacks. A little surprising a clawback of an annual credit allocation, because presumably a new purchase after the return would not have automatically triggered the credit.

With chase, I had the $300 travel credit fulfilled one year with a flight that I ended up cancelling several months later. No issue with the travel credit, they only debited the x3 UR points.