Customers accuse companies of lying about reasons for adverse account changes

More and more often, I receive detailed e-mails from customers upset about credit card companies that cite bogus reasons for adverse changes to accounts. In fact, I received one an hour ago.  This common story has reached a point of frequency that leads me to believe this deception is widespread. 

In the most recent e-mail, a woman (let’s call her Tracy) from Chicago claims that after her credit line was reduced from $18,000 to $500 two days ago, American Express told her that it did so because she has too many delinquent accounts.  Tracy obtained her credit report and everything was perfect as she believed–no delinquent accounts.  Furthermore, American Express told her that her credit score was good –in the mid 700s--but she continued to get the same story about too many delinquencies. 

Companies are not required to be specific about the reasons for changing an account. In most cases, they give hints about their reasoning and then point customers in the direction of a credit bureau for a free report.  However, there are cases in which the reasons given by the company are completely groundless.  Rather than stating the real reason or revealing a new or unethical way of assessing risk, companies lead customers on a path to nowhere but frustration and helplessness. 

In short, I am convinced that companies are now intentionally giving bogus reasons to justify adverse changes to customer accounts, especially those that are in good standing.  If this is not the case, there is only one other likely possibility: they are using other criteria to assess one’s credit worthiness, but are reluctant to divulge these standards –standards that customers have a right to know.   

Comments

[JSD]

I thought I was the only infuriated person going through this. Someone mentioned to me they are trying to get this debt off their books, so it would appear they are financially better.

Is there anything we can do? Or do we just close our accounts like they want. I want to keep my account open and not use it just for spite.

[Kym Scott]

Amex did it to me in November as well reducing my limit for the second time in less than a year with good credit. I am closing the account as I have not used it in over a year anyways a resent their non-explanation for the change.

[daryl]

another way credit cards companies are making money off us.... conveniently credit card companies seem to be posting payment a day late so they can assess finance charges and late fees. I pay my bills online through my bank. I kept getting finance charges and late fees when I was certain I had scheduled money to change hands with plenty of time to spare. I now mark on each bill the day I go online and schedule, the day I schedule for payment to arrive. I recently called and had a finance charged removed because of my careful note taking. Has anyone else had this experience?

[Timothyphx1]

"they are using other criteria to assess one’s credit worthiness, but are reluctant to divulge these standards"

This is well said-
As you know I have had my issues with AMEX as well and have done significant research on this.

Ready for the "real" reasons?
Self Employed with an at risk SIC code.
Mortgage in "Problem zip code"
Balances on other cards/high debt to income.

HELOC balances

No additional AA from Amex for me in 6 months.

In hindsight- I had several of these "risk factors", I was self employed for most of 2008 (I work in IT)
I live in an zipcode that my home value is dropping 2.5% per month and has dropped $200K over the last 2 years (still have equity).

I have also understated my income when I applied with AMEX- so they must wonder how I pay all my obligations.

I have just kept paying Amex in full and using my Discover and Chase cards.

[Holly]

Kevin,

If I recall, your problem with AMEX happened in October. Mine was November 6th. Nothing at all is happening, AMEX is not responding.

Are you tired of this waiting game? I sure am!! I have complaints on file, yet nothing seems to be changing.

What results can we achieve from this? I have asked this question before and feeling like I need to know what, if anything, the Government and/or Regulators are doing? Congress is not and will not move fast enough -- what will make AMEX change their ways, they know it will take years before anything will happen to them, therefore, what is AMEX's motive to do anything differently? The volume of complaints should get their attention and it is obvious that they could care less. If they are regulated by OTS has that not "gotten their attention"? Clearly it has not. Please shed light on what else can be or will be done.

[Jessica Grey]

I think there is a lot of this going on. These companies don't know what the hell to do. Screw them!!