Screwed up with Amex

[DangerNoodle]

Hi Everyone,

It's been a while since I last posted here. I never thought I'd be in this situation.

To make a long story short, I paid a friend a little over $10,000 via PayPal with my Amex to buy a watch off of him. Stupid me didn't see any issues with doing this until shortly after when I started getting strange emails from Amex every time I swiped telling me that "future transactions may be declined" unless I paid off my balance in full, which I did. I'd never seen that email before and figured it was just because they got spooked by a sudden purchase larger than usual. A day or two after the purchase, I get a call from the FR team telling me that I've been selected for a financial review. I instantly knew I messed up bigtime.

The lady asked me what the purchase was for and I explained honestly. She was very nice and understanding, and kindly stated that such purchases are against policy because of a conflict of interest, but that everything should be OK since it was a one-time occurrece and I have many years of relationship with Amex. She said that she still has to go through the FR process and asked me for my total income and how long I've been employed at my company. Upon answering these questions, she tells me that she sees no concern with my ability to pay off my balances and that she will have the case tossed from her department. However, she also mentioned that there will unfortunately be a mandatory responsible lending evaluation which may impact my credit limits. I figured nothing would happen and that was the end of that.

Everything was fine until a couple of weeks later, when I got several letters in the mail explaining that the following hard limits have been placed on my cards:
Platinum: $5,000

Business Gold: $3,100

And that the following reductions have been made on the following cards:

Delta Platinum: $22,000 -> $10,900

Business Prime: $10,000 -> $2,500

With the following justification:

"We have identified charge activity on your account that was submitted by a merchant with which you are associated. We believe no goods or services were rendered by the merchant in connection with this charge activity."

Now I know that this was 100% my fault and I should have never done it. For some odd reason it didn't even occur to me that this could possibly be an issue.

My question is has this happened to anyone else? The customer service reps understandably don't seem to be able to give me a solid answer as to when these limits will be reversed, if ever. Will I have to apply for these limits to be undone or do could come off automatically?

Thanks...

[Remedios]

CSR cannot tell you when because they dont know when, so really, no need to continue asking them.  Those few who might have an idea - you aren't going to get a chance to talk to them. 

While you might have been uniformed consumer, what you did there is also part of a particular fraud pattern, so yay for Amex letting you keep the cards. CLD is precautionary measure to minimize damage should it turn out that it was a wrong decision on their end. 

In time, it will be okay, effects aren't forever, but you need to give them some eBreathing room, it's too soon for any change to be made. Also, if you want to keep those cards, stop calling them and asking about the limits. You only need to give one person impression that you're up to no good, they forward account for a second peak, and it's here-we-go-again-but-without-happy-ending. 

Do not use your credit cards for P2P transfers, that's what your checking account is for. If you thought you were going to get rewards, you won't, they are viewed similarly to cash advance (slightly worse due to fraud potential). 

[GZG]

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@Remedios wrote:

While you might have been uniformed consumer, what you did there is also part of a particular fraud pattern

Do not use your credit cards for P2P transfers, that's what your checking account is for. 

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Is just trying to use a credit card through paypal just a giant red-flag indicator of fraud across the board? 

Would it only because the transaction went through paypal as friends and family and not as goods and services? 

Would it make any difference if he had an invoice from the seller? 

[learningcredit54]

I am sorry to hear of those hard limits place on the NPSL cards and the CLD on the credit cards. Although one may see it simply as a straight transaction card issuers see them as potential fraud or a sort of cash advance while trying to earn rewards or points or some sort of benefit.

Years ago I had an issue where I provided freight services for a relative of mine and when they paid me via credit card we had to go through hoops and hurdles to get the transaction cleared and funds released. Unfortunately for us I got my merchant account closed due to violations and my relative got his card closed as well. Your outcome is byfar better than what we went through.

[Remedios]

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@GZG wrote:

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@Remedios wrote:

While you might have been uniformed consumer, what you did there is also part of a particular fraud pattern

Do not use your credit cards for P2P transfers, that's what your checking account is for. 

---

Is just trying to use a credit card through paypal just a giant red-flag indicator of fraud across the board? 

Would it only because the transaction went through paypal as friends and family and not as goods and services? 

Would it make any difference if he had an invoice from the seller? 

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1)No, there is nothing wrong with using cards via PayPal or paying a merchants, this wasn't card being used via PayPal. It's P2P transaction, and as such, coded differently.  

2) Yes, it went through as P2P transaction, but those transactions resemble type of fraud I'm not inclined to discuss. 

3) Paying a business is not an issue, money is easy to follow and recipient is clear (providing it's a legitimate business). 

This has nothing to do with PayPal,  it's nature of transaction that got it flagged. 

[OmarGB9]

You'll be fine in due time, OP. Just stay under the radar, pay your bills, stop calling and asking about limits, and they'll eventually move on from it.

[ptatohed]

Personally, I don't see anything wrong with the OP doing what PayPal (and AmEx?) allowed the OP to do.  He paid his dues by paying the 2.9% + $0.30 fee to send money via 'Friends and Family' using credit card (ouch).  If AmEx doesn't like it, then don't allow it.  Why wasn't the transaction stopped by AmEx if they don't like it?  Heck, AOD has no problem stopping my purchases of gift cards at Card Cash.  OP immediately paid his balance in full when requested by AmEx.  He gave a prompt and honest answer as to why he did what he did.  At absolute worse, AmEx should have imposed a cash advance fee and been done with it.   

But, wait, $10,000 for a watch?  :-O  I wear a $30 digital Casio watch, should I be re-thinking what goes on my wrist?        

[YogurtFan]

What model watch?  Did you get a good price?

I use my Venmo to send cash occasionally from my American Express "Send" Account to my wife's Venmo which I then deposit into our checking account.  It's an interest-free cash advance to me.  Is that something that American Express might consider inappropriate?

I also use PayPal heavily during this quarter for Discover bonus purposes.  I don't see anything wrong with using PayPal to buy goods or services - within reason.  Out of the ordinary transactions poke the bear.

[bigseegar]

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 @ptatohed wrote:

Personally, I don't see anything wrong with the OP doing what PayPal (and AmEx?) allowed the OP to do.  He paid his dues by paying the 2.9% + $0.30 fee to send money via 'Friends and Family' using credit card (ouch).  If AmEx doesn't like it, then don't allow it.  Why wasn't the transaction stopped by AmEx if they don't like it?  Heck, AOD has no problem stopping my purchases of gift cards at Card Cash.  OP immediately paid his balance in full when requested by AmEx.  He gave a prompt and honest answer as to why he did what he did.  At absolute worse, AmEx should have imposed a cash advance fee and been done with it.   

But, wait, $10,000 for a watch?  :-O  I wear a $30 digital Casio watch, should I be re-thinking what goes on my wrist?       

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In a former life I was a Fraud Investigator. Now I'm NOT saying OP did this. I'm simply telling you how AmEx sees it since you see no wrong doing. Here's whats wrong with it in the eyes of AmEx. A P2P Paypay transfer in their eyes could very well be their card holder giving themselves a $10K cash advance as the "friend" or family member just acts as the receiver but actually hands the $10K back over to the card holder.  Thus fraud and they also see it as the card holder is possibly financially troubled. Thus the FR (which in the OP case wasn't a true FR if all they did was ask him income and they didn't have OP send in docs to verify it) and the Hard Limits and CLD. As stated above AmEx now suspects possible fraud by thism user so they are positioning themselves in protection mode. As also stated above the OP is VERY lucky they didn't completely shut down their cards and while OP needs to stop calling and asking questions about limits and just use what they have, use it correctly and stay under the radar for at least a year probably.

[bigseegar]

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@Remedios wrote:

CSR cannot tell you when because they dont know when, so really, no need to continue asking them.  Those few who might have an idea - you aren't going to get a chance to talk to them. 

While you might have been uniformed consumer, what you did there is also part of a particular fraud pattern, so yay for Amex letting you keep the cards. CLD is precautionary measure to minimize damage should it turn out that it was a wrong decision on their end. 

In time, it will be okay, effects aren't forever, but you need to give them some eBreathing room, it's too soon for any change to be made. Also, if you want to keep those cards, stop calling them and asking about the limits. You only need to give one person impression that you're up to no good, they forward account for a second peak, and it's here-we-go-again-but-without-happy-ending. 

Do not use your credit cards for P2P transfers, that's what your checking account is for. If you thought you were going to get rewards, you won't, they are viewed similarly to cash advance (slightly worse due to fraud potential). 

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^^ALL of this!^^