Beware Amex benefit clawbacks on closed accounts

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.

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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.

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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.

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/

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.

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.