What happens when Amex does FR

[Anonymous]

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@Anonymous wrote:

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@Creditaddict wrote:

but why are you so against giving them the info.

you practically just gave that same info to USA fed to join, whats the difference

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Do you actually know what information is gleaned from your tax returns?  And do you know exactly how AmEx uses the information they obtain?

Unless AmEx swears they only obtain a simple 1099 / W-2 verification, there is the potential that they get a complete transcript of all your itemized deductions.  Do they really need data on your deductions for medical expenses because your spouse has cancer in order to determine that you are a good credit risk?  Do they need to know that you have $120k in interest income if you have chosen not to include that in your stated income when you applied for the AmEx card?

An AmEx FR is overkill and not only a sign of nefarious intent, but a serious invasion of privacy. 

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I'm hoping you can help me understand... Then what's the difference between a FR from AMEX and when a lender asks for the tax returns for when you apply for a mortgage or auto loan? I find it invasive either way, but if the commonality is that they are all extending credit to you, what's the difference?

ETA: Also, is it possible that AMEX recently soft pulled your CR and saw all the inquires from all those apps you did over the past couple of weeks?

[Anonymous]

Do you think this is a result of your recent application spree?

[jefftca925]

The tax documents will provide the creditor who is extending credit to an individual or business the amount of discretionary income (after taxes and other liabilitites) a debtor has available in order to repay a debt.  ANY creditor has a right to this information and per the new consumer credit protection law a creditor must verify a debtor's capacity to repay a loan.  The extension of credit is a business arrangement that either party may limit or terminate at any time.  If you don't like having your finances viewed under a microscope then the answer is simple....DON'T ASK FOR CREDIT TO BE EXTENDED TO YOU.  I'm not surprised that American Express did this as the OP has admittedly applied for an amount of credit that definitely would send up red flags.  This should be a lesson for everyone that reads these forums that if you want to preserve the relationship you have with a person or business then you need to treat it as such.  Paying your bills on time every month is great but we have all seen (or experienced) that their have been times when people get in way over their heads and that is totally not possible.  Creditors are just trying to prevent themselves from being a victim of that.

After reading all of the OP's posts I'm just curious on how many Amex accounts (that have been backdated) are showing up on his CBR that are contributing to his AAoA despite the fact that some of these accounts were not really open that long.  This just shows that the FICO system is NOT perfect and that creditors need to consider other factors when extending credit to individuals.  A lot to think about I know....

[Anonymous]

Man, F/Rs got to suck. Just last week I was in a Warehouse store, and there was this guy trying to pay for his stuff but his Amex was getting declined. He then proceeded to call the number behind his card and in like a couple of minutes he started going Samuel L. Jackson on the CSR. He was yelling something about tax returns, and was so loud that I guess the whole store could hear him curse. He then started crying (guess he had no other card?) 

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

---

@Creditaddict wrote:

but why are you so against giving them the info.

you practically just gave that same info to USA fed to join, whats the difference

---

Do you actually know what information is gleaned from your tax returns?  And do you know exactly how AmEx uses the information they obtain?

Unless AmEx swears they only obtain a simple 1099 / W-2 verification, there is the potential that they get a complete transcript of all your itemized deductions.  Do they really need data on your deductions for medical expenses because your spouse has cancer in order to determine that you are a good credit risk?  Do they need to know that you have $120k in interest income if you have chosen not to include that in your stated income when you applied for the AmEx card?

An AmEx FR is overkill and not only a sign of nefarious intent, but a serious invasion of privacy. 

---

I'm hoping you can help me understand... Then what's the difference between a FR from AMEX and when a lender asks for the tax returns for when you apply for a mortgage or auto loan? I find it invasive either way, but if the commonality is that they are all extending credit to you, what's the difference?

ETA: Also, is it possible that AMEX recently soft pulled your CR and saw all the inquires from all those apps you did over the past couple of weeks?

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Several differences:

1.  There is a difference between buying a car or a house and $29.99 worth of office supplies at Costco.

2.  When AmEx pulls your tax returns they pull everything including your deduction itemizations.  With a mortgage I have never been forced to supply all schedules.

3.  I trust the mortgage company not to sell my data to the MIB.  AmEx is less trustworthy.

By the way, I have never had a lender ask me for tax returns on an auto loan.  W-2's or 1099's maybe, but not tax returns. 

[Anonymous]

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@jefftca925 wrote:

The tax documents will provide the creditor who is extending credit to an individual or business the amount of discretionary income (after taxes and other liabilitites) a debtor has available in order to repay a debt.  ANY creditor has a right to this information and per the new consumer credit protection law a creditor must verify a debtor's capacity to repay a loan.  The extension of credit is a business arrangement that either party may limit or terminate at any time.  If you don't like having your finances viewed under a microscope then the answer is simple....DON'T ASK FOR CREDIT TO BE EXTENDED TO YOU.  I'm not surprised that American Express did this as the OP has admittedly applied for an amount of credit that definitely would send up red flags.  This should be a lesson for everyone that reads these forums that if you want to preserve the relationship you have with a person or business then you need to treat it as such.  Paying your bills on time every month is great but we have all seen (or experienced) that their have been times when people get in way over their heads and that is totally not possible.  Creditors are just trying to prevent themselves from being a victim of that.

After reading all of the OP's posts I'm just curious on how many Amex accounts (that have been backdated) are showing up on his CBR that are contributing to his AAoA despite the fact that some of these accounts were not really open that long.  This just shows that the FICO system is NOT perfect and that creditors need to consider other factors when extending credit to individuals.  A lot to think about I know....

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1.  Creditors do not have a right to see your tax returns.  They have the right to request access, and you have the right to tell them to shove off and close your accounts.

2.  A creditor does not need your entire tax return and schedules to determine discretionary income.  A simple transcript showing gross income and the amount of your deductions is sufficient.

3.  Can you provide a legal guaranty that AmEx does not sell information gleaned from your complete tax returns to, say, the MIB?   

[haulingthescoreup]

I would add that one of the big objections to a full-blown AmEx bend-over-and-cough FR is that they don't ask for this stuff upfront upon application.

Why do they figure that you're OK when they approve you, and then later say, oh by the way, we'd like to know every last detail of your financial life, including your charitable contributions, your medical expenses, the SSN's of your dependents, and whatever else you might have displayed on your tax returns?

I like AmEx; I've never had a bit of trouble from them. But if they pop this one on me, my card goes in the shredder.

[Anonymous]

Plenty of other card companies that won't do this. I'd just move on and call it a day.

[Anonymous]

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@haulingthescoreup wrote:

I would add that one of the big objections to a full-blown AmEx bend-over-and-cough FR is that they don't ask for this stuff upfront upon application.

Why do they figure that you're OK when they approve you, and then later say, oh by the way, we'd like to know every last detail of your financial life, including your charitable contributions, your medical expenses, the SSN's of your dependents, and whatever else you might have displayed on your tax returns?

I like AmEx; I've never had a bit of trouble from them. But if they pop this one on me, my card goes in the shredder.

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Excellent point.

It's also important to point out that while Concorduser is an upscale AmEx cardholder, also the little peons with AmEx Green Cards and $500 a month expenditures also get FR'd.  There are also well-documented cases of people getting FR'd because of where they shop. 

Sooner or, more than likely, later, I envision a real nice EEOC class action against AmEx.  If I had the time I'd pick and choose two or three good representative samples and go for it.  And thanks to Sarbanes - Oxley, it would not be that difficult to eventually show what, if anything, AmEx did with the data they obtained from the IRS on you.  If they sold it, I'd own AmEx ... maybe even move the corporate HQ to Wyoming or Montana and let UB-UP manage it. 

[Anonymous]

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@Anonymous wrote:

Plenty of other card companies that won't do this. I'd just move on and call it a day.

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Very true.

Unless one files a real simple tax return which doesn't contain any potentially sensitive data, I would move on.  The vast majority of other card companies do not force you to release tax information.