American Express sets exorbitant penalty interest record

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I have had an Amex card since 1981 (yes, unfortunately, I am that old).

For the past five or so years, it has had a website where you can check transactions and make payments.

I use the payment button which takes you how much is due. You don’t need to type anything. It’s just a simple select a radio button, press continue, press confirm and the bill is paid. The payment due is supposed to take into account any disputed transactions or credits that have been processed since the statement was issued - for example, if you get a credit for a transaction on that statement or an earlier statement, the amount due is reduced by that. Simple and effective in theory.

My September account was due near the end of September but because it was small, I paid it about two weeks early.

When my October statement came out, there was a $20 late fee. So I rang today to get it reversed as it was clearly an error.

Well, talk about making life difficult. It was explained to me that the $20 late fee related to a short payment of $1.01. Yes, $1 and 1 cent. That’s 2000% for one month or 24,000% per annum. If I charged the same rate for the payment I made early, Amex would owe me about $300,000.

Apparently, due to a system glitch a temporary credit of $1.01 (yes, $1 and 1 cent) was lurking somewhere so the amount shown as due which I paid early was incorrect by that amount. . The temporary credit was discovered to be an error and it was reversed but only on 9 October, the day my statement came out. So when I checked my account for transactions in the two weeks between the payment and this statement, it showed $0.00 due.

It has taken me 29 minutes to get Amex to fix this. But first they had to try to justify it (with a straight face) and tell me it was my error and the charge was perfectly fine. It was only when I became assertive and asked them to check their system that the begrudgingly discovered there had been a glitch.

However, even if there hadn’t been a glitch, which rapacious bastard would instruct the IT department to program a system to charge as a late fee twenty times more than the amount paid late? I checked their T&C and it is supposed to be a 3% penalty for late payment. That’s 3 cents worth - a whole cent more than my 2 cents worth in this post.

Cheers

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Thanks for sharing the experience @gds. It goes to show that unfortunately consumers often need to fight and stick to their guns to receive fair treatment. Glad it was sorted eventually

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You came out well. 30 years ago my Amex had a charge for a rental car in Florida. I had not been in Florida for years. They held the charge pending investigation, no worries. A few months later they sent me a copy of not my card with a charge receipt not in my name with not my address and a notice the charge has been reinstated since it was mine. George Orwell had to be laughing.

Again contacting them the agent typed the details from the charge and my account came up. He could not comprehend something not in my name with not my address, and not my card number could be anything but my responsibility to pay.

Being an ICT type, it was obviously a data base corruption; but nobody there could comprehend a true computer error and it took about 6 months to get sorted, all the while with them heavying me to pay up.

Needless to write I never had another Amex issued card again, until our banks started issuing Amex branded cards with the Visa and MasterCard.

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I presume your version of the Amex is the classic where the full amount is due each month? Since many issuers, Amex included, often have have multiple variations of their card products, some poor buggers probably have accounts with a flat $20 late fee if not paid in full by the due date, not just some interest. But then there are so many wondrous, convoluted, and interesting possibilities including a programmer error :slight_smile:

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Thanks for your horror story that definitely trumps mine. A Millennial would say “I share your pain” :blush: as a sort of trite coverall response. However, these sort of corporate screw ups are far too frequent and their process for resolution is deliberately distant, complicated and extremely time-consuming to cause people to give up seeking redress. Only the most determined get through. I have a premium card which is claimed to offer superior customer service so it is particularly annoying to be stuffed around.

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