Don’t mess with American Express.
Back in Spring 2009, I ordered coins on an American Express SPG business card. In retrospect, this wasn’t the smartest thing to do. The default rates on small business accounts is very high, and American Express in particular, runs financial reviews on accounts if they suspect that the borrower is likely to default.
One day, both my American Express personal and business SPG cards stopped working! I called the customer service help desk and was connected to the Financial Review department (Check out this FlyerTalk post for a Monty-Pythonesque explanation of the AMEX Financial Review process).
The curt representative wanted to know more about the purchases from the US Mint. I said that I was a coin collector (true) and that I was fascinated by the $1 coins issued by the mint (also true). 😉
Long story short, she explained that all my cards would be suspended until American Express reviewed my tax returns. And if I didn’t submit the tax returns within 30 days, ALL my American Express cards would be cancelled. She wanted me to complete Form 4506 and submit it to the IRS who would then send American Express a copy of my tax returns.
American Express didn’t want a tax transcript (Form 4506-T) which lists a line-by-line breakdown of the tax return, but wanted me to pay $57 for the 4506 to get my entire tax return (including all forms, schedules, and W-2s)!
I was young and foolish, and had enough SPG points at the time for my 6 week trip to Europe, so I told her to cancel my accounts (It is much better to have your credit report show that accounts were cancelled at your request, than by the creditor).
Fast Forward to July 2011, when the SPG card is back with a sign-up bonus of 30,000 points after spending $4,500 within 3 months. I applied for the card via a referral from a MilePoint member as part of my July App-O-Rama which netted me 340,000 miles and points.
I got approved for all the cards except for the American Express SPG card. 2 weeks after my application, I received a letter from American Express asking me to submit Form 4506 to the IRS and a letter from my bank verifying my current mailing address.
Fair enough, and since my SPG balance was dwindling, submitting my tax returns didn’t seem too bad. I replied back and enclosed a letter from Chase verifying my home address and a copy of the IRS form which I had submitted. A few weeks later, I got another letter (#2) saying that the letter from Chase couldn’t be accepted because American Express couldn’t contact the person who signed the letter.
Of course they couldn’t contact the person who signed the letter, because it was a form letter which Chase regularly produces for clients! I wrote AMEX back with a letter from Bank Direct verifying my address and I also let them know that the IRS was processing the tax return.
I got back another form letter (#3) from American Express which was identical to the one I had received previously. So I called the application status number and finally spoke to an agent who told me that the letter couldn’t be accepted because he couldn’t contact the person at BankDirect who signed the letter.
At this point, I lost my patience and asked for a supervisor. Somehow the line got disconnected, so I called back and again asked for a supervisor. I told the supervisor that he had letters from2 banks and that both verified my mailing address. The supervisor agreed to look into it, but couldn’t process the application since the IRS hadn’t yet sent in my tax return (though they had cashed my check!).
Yup, I then got form letter (#4) which was identical to the previous one. I called AMEX again (#3) and this time got a terrific rep who acknowledged receiving a photocopy of my tax return from the IRS and acknowledged that AMEX had received 2 copies from my bank verifying my address. He said that I would hear from AMEX soon.
I did hear from AMEX soon (letter #5), and yes, they still wanted a copy of my tax return and letter confirming my address. *Sigh* I was reminded of Randy Pausch’s speech where he says that roadblocks are just ways to see how badly you really want something. I badly wanted the 30,000 SPG points, so I sent them another letter from my local bank verifying my address.
I later called American Express, exchanged pleasantries with the rep, but asked for a supervisor after the regular rep told me that AMEX had received neither my tax returns nor any letter from my banks!
The supervisor was apologetic and snorted in surprise when I mentioned that it was 3 months since my application and I still hadn’t got a decision. He initially claimed that AMEX hadn’t received my tax return yet and that was holding up the process. I told him that the IRS had cashed my check and that another rep had acknowledged receiving my tax return. I stressed that the conversion was recorded and that he could listen to the tapes while I was on hold. 🙂
After a long time on hold, the supervisor was very apologetic and asked me to stay on hold while he processed the application. He was soon back and said the magic words “You’re approved.”
So 3 months later I was approved for the card!
American Express has very low tolerance to activities suggestive of financial distress in borrowers and is quick to initiate Financial Reviews. I’ve read reports of American Express initiating Financial Reviews for adding too many authorized users to cards and for buying too many American Express gift directly from American Express.
I’m glad to be back in American Express’ good books and will do my best to not fall from their good graces!