Would you prefer instant closure or FR?

[dabrian]

Thanks for the reply.  I could see where that could be a slight issue if you report a 100k income while flipping burgers at Mcdonalds.

[b_seeker]

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@enharu wrote:

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@dabrian wrote:

Could someone explain to me what is so bad about an FR?  You're only sending tax records amirite? 

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In summary, yea.

However, those records are extremely detailed, so some people do not like divulging all that info. 

And there's also another group of people who fudged their apps so they can't show the real docs because that is essentially as good as them confessing they committed fraud.

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Other issues with the FR is people who hold the CC in their own name but file joint taxes don't want Amex to have their spouse's info. FR uses a couple year old taxes which don't nessecarily reflect current income.

[ezdoesit]

CItibank chould close accounts for perks abusers and all associated accounts period.  Just because you found a loophole doesn't make it right especially since the abusers know exactly what they were doing.  Amex does the FR like they are the IRS but I guess that doing business with them you know that they could ask for that info at anytime. 

[enharu]

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@longtimelurker wrote:

I think this is really the major complaint of those shut down by Citi.  The whole thing could be avoided by having a cap on the 5x earnings, something Citi already does on any cards.   And, in some cases, purchases as small as $1000 of gift cards over 2 months caused a shutdown of all accounts: in this case the person had a large TY balance built up in 2009, wanted to cancel her card as it wasn't used, got a 5x retention bonus, and bought some gift cards, perfectly normal at graduation time.

There may have been "abuse" but a) there really isn't a good definition of that, and b) it really is Citi's fault, as with a simple cap they could have made the rules clear and avoided any trouble.    It's not people spending $30K a month that are the only ones impacted (and various FTers would say "And even if it was, where is that prohibited")  

And as for the statement that these are the cancer reducing rewards for all, well, I disagree.  To others spending less, anyone's use of a lamented benefit was an abuse.   It really is up to the issuer to control possible loss by capping, without that no-one knows what is allowed (e.g. gift card purchase above).

And of course, Citi doesn't close for "Perk Abuse", it is security related.  Yes, right!

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From what I know, the promo was up since 2011. Back then Amex was still doing uncapped BCP, I think. I like the idea of not having a cap because it actually benefits people who actually do real shopping at groceries / gas / drug stores a lot. For example an expensive ongoing prescription medication qualifies for 5% entirely w/o any cap. 

I would be pretty skeptical about a person having all his/her accounts shut down just because of 2 gift card purchases over the entire course of her account history. Many people exaggerated about Amazon being draconian as well when they were shutting people down and banning certain customers. They were crying on Fatwallet about how they only returned 1 camera over the entire 3-4 years, or how they only reported 1 lost item, but a lot of times the returns, or lost item reports (especially for packages that were signed for) were just too excessive. Any logical business will refuse these customers, and many of them do. Petco, Saks Fifth Avenue, Best Buy, and many stores all do. The only stores that don't seem to care are stores that have a restocking fee each time you return (i.e. Newegg), because that fee essentially cover most of their losses.

I have known people who bought over 5-10 gift cards (most of them being for Amazon) using the same Citi TYP and nothing has happened to their accounts. Granted, gift cards were not the only purchases they were making. They were spending heavily on that card for many other purchases as well, and most likely through that they manage to be profitable for Citi to retain as a customer even with those gift card purchases.

And of course, mistakes do happen. I am not saying it doesn't. But such occurances are very rare in most cases, definitely not as many as the number of people crying on Slickdeals, Fatwallet, FT and other sites.

Citi's method of controling possible loss is to eliminate those unprofitable customers, and IMO this is a much better solution. Get rid of the bad eggs, and still deliver an overall good product for most people. Rather than to nerf across the board and make everyone unhappy.

Lenders can close accounts for any reason. Just like how Amazon, restaurants, or any business can refuse your business for any reason. Consumers can also refuse to do business with them. Basically one hand washes the other.

[enharu]

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@b_seeker wrote:

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@enharu wrote:

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@dabrian wrote:

Could someone explain to me what is so bad about an FR?  You're only sending tax records amirite? 

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In summary, yea.

However, those records are extremely detailed, so some people do not like divulging all that info. 

And there's also another group of people who fudged their apps so they can't show the real docs because that is essentially as good as them confessing they committed fraud.

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Other issues with the FR is people who hold the CC in their own name but file joint taxes don't want Amex to have their spouse's info. FR uses a couple year old taxes which don't nessecarily reflect current income.

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I think it varies on which year of tax docs they ask for, depending on what they're trying to review people about.

In some cases they ask for tax docs during the year of account opening, in order to review for fraud on the credit app itself. They basically just want to cross reference to make sure income and everything stated on the app is real.

And in some cases they ask for recent 2 years tax docs. They might adjust CL accordingly based on those docs, like how they did for CA. Granted, it's not a perfect solution since it doesn't reflect current income, but it's the easiest and cheapest way to verify income, as opposed to having the customer hire a CPA to audit his books for example. One could always take the CLD hit for now, and then ask for a CLI again in the future when the new tax docs are ready. 

And like you said there are people who do not want to reveal their spouse info and all other info. There's really no wrong with that either and those people should just move on with other lenders.

[longtimelurker]

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enharu wrote:

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I would be pretty skeptical about a person having all his/her accounts shut down just because of 2 gift card purchases over the entire course of her account history. Many people exaggerated about Amazon being draconian as well when they were shutting people down and banning certain customers. They were crying on Fatwallet about how they only returned 1 camera over the entire 3-4 years, or how they only reported 1 lost item, but a lot of times the returns, or lost item reports (especially for packages that were signed for) were just too excessive. Any logical business will refuse these customers, and many of them do. Petco, Saks Fifth Avenue, Best Buy, and many stores all do. The only stores that don't seem to care are stores that have a restocking fee each time you return (i.e. Newegg), because that fee essentially cover most of their losses.

I have known people who bought over 5-10 gift cards (most of them being for Amazon) using the same Citi TYP and nothing has happened to their accounts. Granted, gift cards were not the only purchases they were making. They were spending heavily on that card for many other purchases as well, and most likely through that they manage to be profitable for Citi to retain as a customer even with those gift card purchases.

 reason. Consumers can also refuse to do business with them. Basically one hand washes the other.

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I agree in general but in this case the story seems (as far as I can tell of course) genuine.  The problem seems to be having a high balance from years before, was converted to a TYP some time ago, wanted to cancel and got a retention offer.  She was told by a Citi rep that the gift card purchase was a problem, and this really seems to be an excuse.

But obviously we disagree who the bad person is!  Setting a cap for all seems to help everything. 

In your example, if I ended up buying every month  "too expensive" prescriptions (so it becomes unprofitable) what makes you think that Citi would say "Oh dear, we are not making a profit, but that is real spending so it's OK"?  I don't!   That's why saying "Up to $X gets 5%, after that 1%" seem simple and fair.

[myjourney]

I would be more incline to be FR for 2 reasons

1 I gave you accurate info when I applied so I can back it up

2 shutting me down w/o any recourse and eliminating my reward points in the process just plain sucks

[Open123]

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@longtimelurker wrote:

I think this is really the major complaint of those shut down by Citi.  The whole thing could be avoided by having a cap on the 5x earnings, something Citi already does on any cards.   And, in some cases, purchases as small as $1000 of gift cards over 2 months caused a shutdown of all accounts: in this case the person had a large TY balance built up in 2009, wanted to cancel her card as it wasn't used, got a 5x retention bonus, and bought some gift cards, perfectly normal at graduation time.

--  Agreed.  Citi and Chase should have handled their oversight similar to how Amex handled their's with the uncapped BCP.  I'm sure there are many unfairly caught in the purge, but the casualty is unavoidable.  The moment an organization starts to make exceptions and offers an appeal process, then everyone will appeal and apply for the exception--costs way too much time and resources to review frivolous appeals.  Again, my respect for Citi is their pragmatic approach sever the 1% or 2% of users who may potentially erode the rewards for the other 98%.  They finally seem to understand that it makes no sense to find the needle (the one exception) in a haystack of bad faulty needles and have the fortitude to standfast.  

There may have been "abuse" but a) there really isn't a good definition of that, and b) it really is Citi's fault, as with a simple cap they could have made the rules clear and avoided any trouble.    It's not people spending $30K a month that are the only ones impacted (and various FTers would say "And even if it was, where is that prohibited")  

--  I haven't read Citi's T&C (may have once upon a time, but certainly don't remember it now), but I'm sure there's a clause in there where they have the righ to (1) change or eliminate the rewards at any time; (2) close accounts for any reason.  

And as for the statement that these are the cancer reducing rewards for all, well, I disagree.  To others spending less, anyone's use of a lamented benefit was an abuse.   It really is up to the issuer to control possible loss by capping, without that no-one knows what is allowed (e.g. gift card purchase above).

--  Cancer may be too harsh of a term, but such egregious perk abuse (which I'm also certainly guilty of too) would tend to leech away the rewards benefits for others.  All in all, I do agree with you here that the abusers aren't the problem, which is why I have a "new found" respect on how Citi is handling.  If I were running the Company, this is how I would handle what I believe are "bad" customers.  The one thing a company cannot ever afford is to allow a small percentage of customers to usurp the benefits from the other "good" customers, which left unabated would cause all the "good" customers to leave.  This has to be avoided at all costs, even at the expense occassional innocent bystander caught by association.

And of course, Citi doesn't close for "Perk Abuse", it is security related.  Yes, right!

--  Looks like their playing hardball to confiscate the points by using the letter of the law, much like we do with their T&C.  It's all fair in "love and war," as they say.  Again, I finally have some respect for them since the old Citi I knew would wilt at the first sign of customers complaining.  

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[b_seeker]

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@Open123 wrote:

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@longtimelurker wrote:

--  I haven't read Citi's T&C (may have once upon a time, but certainly don't remember it now), but I'm sure there's a clause in there where they have the righ to (1) change or eliminate the rewards at any time; (2) close accounts for any reason.  

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Citi® ThankYou® Rewards
Citi ThankYou® and Citi ThankYou® Preferred Card Terms and Conditions
•	Citi® ThankYou® Rewards is offered to certain cardmembers ("you") at the sole discretion of Citibank, N.A. ("we"), the issuer of your card account ("Card Account"). ThankYou Rewards or any portion thereof may be revised or terminated with 30 days prior written notice. Any revisions may affect your ability to use the ThankYou Points you have already accumulated. If ThankYou Rewards is terminated, you will only have 90 days from ThankYou Rewards termination date to redeem all your accumulated ThankYou Points ("ThankYou Points"). Rewards offered by ThankYou Rewards and the ThankYou Point levels required for specific rewards are subject to change without notice

•

You may earn ThankYou Points as long as your Card Account is open and current. If your Card Account is closed, you will not be able to earn ThankYou Points and you will lose any accumulated ThankYou Points that have not been transferred to your ThankYou Member Account. Balance transfers, cash advances, convenience checks, returned purchases, disputed or unauthorized purchases/fraudulent transactions, finance charges, Card Account fees, and fees for services and programs you elect to receive through us do not earn ThankYou Points unless otherwise specified.

•

If you are approved for a Card Account, a ThankYou Rewards Member Account ("ThankYou Member Account") will be set up for you. ThankYou Points post to your Card Account at the close of each billing cycle, and at that time we will transfer the ThankYou Points you earned to your ThankYou Member Account. ThankYou Points are not eligible for redemption until they are transferred to your ThankYou Member Account. ThankYou Points may not be redeemed and may be lost if your Card Account is not open or current.

Although, I think this is turning into rewards redeemed when the accounts were open and current that are now being clawed back as the bigger issue. At least that would be the smart area to target. 

[Open123]

Thanks for posting T&C!

Looks like Citi's using the "security" concern to clawback earned points, since they're limited by their T&C.  Because of the 30 day written notice to change rewards, I see where they're closing accounts rather than revising the program allowing the 5X earnings to continue.

Calling it "fraud" and/or "security" concerns allows them to confiscate points without adhereing to their own T&C. 

PS - This could also be because of SAR concerns and just wanting to avoid even letting even one "money laundering" purchase pass through the cracks.  Given the penalties for money laundering, it's just easier not to allow any "money laundering" sort of transactions.