In a move we all expected would first be made by health insurance corpo's denying coverage to people with "bad habits", American Express has started lowering customers' credit if they don't like where that customer does his/her shopping. And no, this isn't an Onion joke.
The Atlanta Journal-Constitution is reporting that Amex, without any kind of warning or provocation, lowered the credit limit of an Atlanta entrepreneur because "[o]ther customers who have used their card at establishments where you recently shopped have a poor repayment history".
Kevin D. Johnson returned from a dreamy Jamaican honeymoon in October eager to check out wedding photos and help his new wife open stacks of beautifully wrapped wedding gifts.
Before getting distracted by the fun stuff, the 29-year-old entrepreneur opened the mail. Johnson’s mood soured when he got to a letter from American Express, saying it had slashed the credit limit on his account
(Photo by Elissa Eubanks/eeubanks@ajc.com)
Johnson was surprised, since he has a perfect payment history and a high credit score. And he was floored by one of the reasons American Express cited: It didn’t like where he shopped.
“Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express,” the letter said. Johnson complained to American Express by phone and letter.
“That doesn’t have anything to do with whether I’m a paying customer or not,” he said in an interview.
Johnson checked his charges to try to figure out what might have raised a red flag in the American Express data-mining model. He didn’t see anything but typical transactions, including purchases at Amazon, Ruby Tuesday, Wal-Mart, Starbucks and Federal Express.
“I understand the need for and the power of predictive analytics,” Johnson said, “But I think they have crossed the line.”
American Express declined to discuss Johnson’s account. But it confirmed that it examines spending patterns. It’s just one of many tactics that credit card companies are using to try to keep default rates from growing higher. Along with studying shopping habits, American Express considers which mortgage lender a customer uses and whether the customer owns a home in an area where housing prices are declining.
These factors are combined with a review of other details to decide whether to adjust a credit limit.
“We’re just doing this to manage risk,” said Lisa A. Gonzalez, an American Express spokeswoman.
Uh-huh. But Kevin represents no risk. His credit history is A-1. This is a guy that they ought to want. Instead, they're penalizing him because somebody else who didn't pay shopped at some of the same places? That's nonsense. Amex is cutting its own throat.
The first two explanations that pop to mind are the obvious ones.
But no matter what the reasons are ("managing risk" isn't a reason, it's a PR-laced self-justification), there's no excuse for this kind of Nanny behaviour. It isn't their job to tell people where they can shop, only to look at your credit history and assess the risk of being re-paid. If the risk is low, it shouldn't matter what stores are involved.
Or is that what I'm missing here? Is Amex picking up some extra cash on kickbacks from Big Box stores on condition it will steer customers to them? Has the Bush/GOP corruption spread so far already?
I always thought the "Nanny State" that conservatives are always howling about was less likely to come from liberal govt than from a fascist, corporate-conservative cabal protecting itself from "risk". It wasn't much of a prediction. Conservatives have always cared more than liberals about what other people did with their lives.
It isn't liberals who want to barge into the bedroom with a sheet of paper that has acceptable sexual positions (1) and activities (1) and arrest you if you're involved in one they haven't approved.
It isn't liberals who want to control women's bodies from Washington.
It isn't liberals who are demanding that everybody who doesn't believe what they believe should, in the words of Ann Coulter and Michael Savage and Sean Hannity and Limbo, "be taken out behind the barn and shot."
It isn't religious liberals who want to force Government-by-Bible on a secular, religiously diversified society.
It isn't the liberals who are afraid of anything they don't understand (pretty much everything, as we've learned to our sorrow) and hyperventilating about shadows while over-reacting to ghosts.
It isn't liberals copying Stepin Fetchit's "Feets don't fail me now!" routine whenever a Muslim buys a donut down the street or says a prayer on an airplane.
It wasn't a liberal presidential candidate who didn't known the difference between Sunni and Shi'ia - or care.
It isn't liberals who insist on being ignorant of everything that happened after the Civil War except for John Wayne movies.
It ain't us, pal. It's Amex.
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