AMEX Staff mislead small business owners to boost card signups

Matt Winkelmeyer/Getty Images for American Express

American Express employees misled and coerced scores of small-business owners into signing up for cards, according to a new report from The Wall Street Journal.

Employees reportedly checked customers’ credit scores against their wishes, “misrepresented” the fees and rewards associated with the cards, and sometimes issued cards that customers didn’t ask for, according to more than a dozen current and former employees across sales, customer service, and compliance who spoke to the Journal.

Brian Daughtry, who owns a disaster-cleanup company in Ohio, was one such small business owner who one day received a $250 bill in the mail for a card he didn’t agree to sign up for. After he called to dispute the charge, the company canceled the bill.

The employees who spoke to the Journal said the practices came after Costco cut ties with American Express in 2015, leaving the company to chase after small-business owners who were frequent Costco shoppers, and therefore heavy spenders on AMEX credit cards connected to the wholesale chain.

Employees reportedly checked customers’ credit scores against their wishes, “misrepresented” the fees and rewards associated with the cards, and sometimes issued cards that customers didn’t ask for, according to more than a dozen current and former employees across sales, customer service, and compliance who spoke to the Journal.

Brian Daughtry, who owns a disaster-cleanup company in Ohio, was one such small business owner who one day received a $250 bill in the mail for a card he didn’t agree to sign up for. After he called to dispute the charge, the company canceled the bill.

The employees who spoke to the Journal said the practices came after Costco cut ties with American Express in 2015, leaving the company to chase after small-business owners who were frequent Costco shoppers, and therefore heavy spenders on AmEx credit cards connected to the wholesale chain.

Employees reportedly checked customers’ credit scores against their wishes, “misrepresented” the fees and rewards associated with the cards, and sometimes issued cards that customers didn’t ask for, according to more than a dozen current and former employees across sales, customer service, and compliance who spoke to the Journal.

Brian Daughtry, who owns a disaster-cleanup company in Ohio, was one such small business owner who one day received a $250 bill in the mail for a card he didn’t agree to sign up for. After he called to dispute the charge, the company canceled the bill.

The employees who spoke to the Journal said the practices came after Costco cut ties with American Express in 2015, leaving the company to chase after small-business owners who were frequent Costco shoppers, and therefore heavy spenders on AmEx credit cards connected to the wholesale chain.

In a Business Insider report recommending the best credit cards for small business owners to get in 2020, three of the nine top picks belonged to American Express, which boasts some cards offering travel benefits, no annual fees, and high-points returns.

Business accounts drive about 30% of the company’s revenue through the variety of services that business owners can sign up for, the Journal noted. 

A spokesperson for the company said in a statement to Business Insider that the telesales team referenced in the report was responsible for approximately 0.25% of the 65 million total cards American Express issued between 2014 and 2019, and the company found that less than 0.25% of the group’s sales activities were identified as “inconsistent with our sales policies.”

“We have rigorous, multilayered monitoring and independent risk-management processes in place, which we continuously review and enhance to ensure that all sales activities conform with our values, internal policies and regulatory requirements,” he said. “We carefully examine any issues raised through our various internal and external feedback channels and audits, and we do not tolerate any misconduct.”

American Express is not the only company in recent years that has been accused of padding its client numbers by enrolling customers in cards or accounts without their consent or knowledge.

In 2016, it was revealed that employees across Wells Fargo opened 2 million retail accounts without customers’ knowledge. Reuters reported at the time, citing sources familiar with the matter, that 10,000 small business accounts were also affected by the scandal.

The alleged effect on small businesses was also raised during Wells Fargo CEO John Stumpf’s testimony to the House Financial Services Committee in the wake of the scandal, but he denied any knowledge of a ripple effect from the retail accounts.