Update on the American Express Financial Review

March 01, 2012

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5 min read

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A few weeks ago I posted about the unexpected Financial Review that American Express required my mom (aka Grandma Points) to go through if she wanted to keep her Amex account open. It was unexpected to us as she is not a real card churner, has only one Amex card, does not use it heavily, doesn't make any unusual purchases, etc. She did add four family members as authorized users in August 2011, and has been in discussions with Amex about their not honoring multiple referral bonuses she is owed for referring others to the Premier Rewards Gold card (back when the only way to get the 25K sign-up bonus was by being targeted or getting referred). So, who knows if either of those played into the review. It has certainly been anecdotally reported that having multiple authorized users can increase the chances of a financial review.

The first notification of her financial review was discovered online when her account displayed as "Charging Suspended". A few days later, a letter came in the mail giving official notice of the review. Thankfully she wasn't somewhere that she was relying on her Amex to pay for anything, because it suddenly wouldn't have worked. She was given five business days to respond to their request for a completed 4506T form (Request for Transcript of Tax Return) that would allow Amex access to some of her tax information such as her reported earnings.

My mom was upset by the way the Financial Review was handled. Had Amex called her directly when her card was initially suspended, instead of her finding out by logging in to the account, it might have set things off on a better foot. Admittedly, it probably also didn't help that the review came in the middle of her trying to fight for points that legitimately Amex owes her (which we are still fighting for). She does understand and respect Amex's right to review the finances of those that they provide credit to, but the bad timing, and the way it all started made it sting more than it might have otherwise.

In the end she did decide to comply with the review, in part because she wants to keep fighting for the points Amex owes her (go Grandma!), and also because she wants to continue a good relationship with Amex so she can take advantage of other great deals in the future. Hello, Amex SPG..... She faxed in the required form that they sent her via email. About 7-10 days later she received a letter in the mail that stated her credit line had been capped at $9,300, but that her charging privileges had been reinstated.

The income she stated in her initial application would match what was found on her tax information. I wonder why Amex doesn't just place charging limits on cards to start with. When they go about it in this somewhat backwards way, it can leave a bit of a bad taste in your mouth. I only have one charge card that isn't from Amex, the Chase Ink Bold, but when I applied for it I was told that I had a $10,000 charging limit. That was fine with me, and it seems to be a much simpler process to get that out of the way upfront than what Amex has in place.

The few takeaways we have from this Financial Review are:

American Express Financial Reviews can and do happen to potential anyone.
Your first notification of the review may be when you log in and see a big red "Charging Suspended" written next to your account or your card may just suddenly stop working. I guess that is a good reminder to never travel without cards from at least two banks and access to cash.
Once the review starts you do not have very much time to comply. It would help to know in advance of a possible Financial Review if you plan to comply or not, because if you take a few days to think it over, you aren't left with much time in the event Amex comes back and says there is something wrong with the way you filled out the form. That last thing you want is for your account to display as "Closed by Issuer" because you simply ran out of time to get Amex what they needed. So, add your response to a Financial Review to your list of things to ponder as you lay falling asleep in your bed at night. ;)
A likely outcome of the review is that there will be a limit placed on your charge card. This isn't just my mom's experience, but that of several others I have read about/communicated with as well.
The process took several days after she faxed in the form, so don't expect your charging ability to be instantly restored when you fax in the required form. If Amex is the only card issuer you have, it might be wise to add at least one other bank into the mix as a back-up.

So, at the end of the day the good news is she survived the Amex Financial Review! I figured that this was a good time to write this update since I know many people just got in on the one-day 75,000 Membership Rewards offer for the Amex Business Gold Card. I hope that none of those new Amex cards will lead to Financial Reviews, but in case they do, at least you know the relatively happy ending to this Financial Review story.