[Update] Waves of Amex shut downs this week

Some accounts have been reopened for a $25 fee after a reader contacted us to let us know. It may be worth calling if you were unfairly shut down.

Reports at Miles to Memories and Doctor of Credit show a wave of Amex shut downs in recent days. I think most readers won't be affected by this, but with increasing reports I thought it was worth a quick post to highlight what happened and how to avoid being shut down like this.

The first wave of shut downs were people who applied for a specific card with a specific rep through an Amex Midmarket Sales Offer, and the rep would make sure that applicants bypassed application rules to get a welcome bonus. It seems reasonable to assume that Amex caught on to what this rep was doing and dropped the hammer on anyone who applied through that rep side-stepping bonus rules. Even if there was only one application through that rep, it may have been enough to get the axe.

It isn't fair of Amex to punish customers for what sounds like a commission-hungry employee's actions, but at the same time I think Amex has established that this type of behavior is playing with fire. I think that some in the first wave of shutdowns took a calculated risk and got what they wanted.

Some people only did this once or twice and in some cases even a couple of years ago, that's the pain point. Someone would expect an offer to be read off over the phone from an American Express representative. I don't know if any people who called were directed to this rep or not. That would stink. I have heard from people who only opened a Business Platinum card for a new business and only spent it on legitimate things. The card was opened by a single employee and it appears that they marked it for shut down.

My initial thought was that those opening through a rep with an outlier offer were aware of the risk. Who would expect an Amex sales representative to give them an offer that will cause their accounts to be shut down? Amex has thrown out the baby with the bathwater, but surely there were some who expected to be shut down.

There are more reports in the last day of people who claim to have applied through mailer offers with no lifetime language who were also shut down. I think this may have affected people who used a mailer in their name that did not include lifetime language. That would be terrible if true. If Amex targeted you and sent you an offer that didn't indicate you were ineligible, it would make sense that you would be eligible for the offer.

Most credit card offers indicate that you can only get the bonus once per lifetime, and I think that most people don't know that. It would be unreasonable to close accounts that applied through a legitimate mail offer that didn't indicate rules of eligibility for the bonus. We have seen Amex be heavy-handed before, so it isn't shocking.

Some people who took advantage of the "Expand your Membership" offers have had their memberships shut down. For months, Amex has been trying to get Business Platinum card holders to open a second card. I don't know if this wave is affecting people who only opened one additional Business Platinum card or if it is limited to those who used physical mailers. I haven't heard of people who applied through links in their online accounts who have been shut down, but the story is still developing.

The bottom line is that Amex continues to move against those that they feel are gaming them. The case shows that there is real risk in stepping outside the bounds of acceptability. The hardest part is not knowing where they will draw the line if they are shutting down accounts. Hopefully not many readers get caught up in this one.

You should be able to transfer points out to partners if your accounts are closed quickly, though I understand that you may want to keep a close eye on your account in the coming days.