Why is a FR so bad?

[cashnocredit]

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@Revelate wrote:

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@bs6054 wrote:

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sccredit wrote

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I don't disagree that some FR recipients fudge income, I don't think it's anywhere near 95%.  For those that do shame on them.

As far as their right to do so I never argued that.  After they performed mine, and I passed with no issues, I cancelled their card.  The rep then tried to give some line about the esteem of American Express, bull****.  They can do whatever they want, my Signature cards hold no less esteem that American Express and once they figure that out they will be a much more consumer friendly company.

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I agree that 95% sounds too high (and plucked from nowhere I would guess!).  

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FWIW I don't think it's off by an order of magnitude or anywhere close.  Having been around this past year and reading every FR thread, I'd estimate that 60% or thereabouts are people who misreported income, and another 25% are those running business expenses through a personal card.  That's in the ballpark of the 95% figure that was suggested.  Mine are pure swags too, actually I think the first number may well be higher for that matter at least in the earlier part of this year, but we've had a run of business expense folks in the past few months which edged it that way.

I think Amex's miss rate is close to 10% on this, so it's hard for me to argue their business practice as someone correctly pointed out they have the lowest default rate in the industry.   Certainly a part of this is their charge card business which are inherently less risky in my estimation with all generations of people, but likely a non-trivial amount is the zealousness that they protect their investment through both fraud analytics and their FR practices.

Personally I doubt my expenses will ever outstrip my income or come anywhere close to it, so I suspect I'll never get a FR unless I do something horrendously awkward; that said, if they want my supporting documentation they're more than welcome to it and like another poster suggested I never leave home without at least one other card in my pocket and typically $20 in cash.

Edit: I'll also point out the people who post here often feel they were wronged or surprised, the ones who knowingly missrepresented income on the application probably don't even post full details here, and on that theory when looked at the wider population base and not just those who actually post their stories to the forum here, 95% is probably even more reasonable.

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I was half expecting an FR when I got my Plat. I'm long retired and my credit file has no prior record of employment not to mention being less than 4 years old. My income is high (enough so that I materially understated it on the app). Still, I charged up some sizeable chunks rather quickly without a peep out of them.

So who knows how their analytics work. I know I would easily pass an FR and would have found it reasonable for them to do it under the circumstances.

[bs6054]

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@Revelate wrote:

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@bs6054 wrote:

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sccredit wrote

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I don't disagree that some FR recipients fudge income, I don't think it's anywhere near 95%.  For those that do shame on them.

As far as their right to do so I never argued that.  After they performed mine, and I passed with no issues, I cancelled their card.  The rep then tried to give some line about the esteem of American Express, bull****.  They can do whatever they want, my Signature cards hold no less esteem that American Express and once they figure that out they will be a much more consumer friendly company.

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I agree that 95% sounds too high (and plucked from nowhere I would guess!).  

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FWIW I don't think it's off by an order of magnitude or anywhere close.  Having been around this past year and reading every FR thread, I'd estimate that 60% or thereabouts are people who misreported income, and another 25% are those running business expenses through a personal card.  That's in the ballpark of the 95% figure that was suggested.  Mine are pure swags too, actually I think the first number may well be higher for that matter at least in the earlier part of this year, but we've had a run of business expense folks in the past few months which edged it that way.

I think Amex's miss rate is close to 10% on this, so it's hard for me to argue their business practice as someone correctly pointed out they have the lowest default rate in the industry.   Certainly a part of this is their charge card business which are inherently less risky in my estimation with all generations of people, but likely a non-trivial amount is the zealousness that they protect their investment through both fraud analytics and their FR practices.

Personally I doubt my expenses will ever outstrip my income or come anywhere close to it, so I suspect I'll never get a FR unless I do something horrendously awkward; that said, if they want my supporting documentation they're more than welcome to it and like another poster suggested I never leave home without at least one other card in my pocket and typically $20 in cash.

Edit: I'll also point out the people who post here often feel they were wronged or surprised, the ones who knowingly missrepresented income on the application probably don't even post full details here, and on that theory when looked at the wider population base and not just those who actually post their stories to the forum here, 95% is probably even more reasonable.

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But basically it is impossible for us to really know, so putting out figures like 95% is just a matter of opinion (and to be fair, that IS how it was presented).  As others have said, people posting here because they are worried (because they know they misstated income) may well not be representative of the wider population subject to FR, but again, we really have no idea.

From the info I posted above, looks like, at least last year, Bank of America had the highest default rate.  So, for the less moral here, that suggests if you need more credit than your income warrents, Bank of America might be your issuer of choice!

[jake619]

I would stop short of saying I welcome a FR; however, since I've been honest with my apps I'd be open to the inconvenience if it satisfied them (AMEX). With little to hide I just don't see why it wouldn't be in both our interest. They see my capabilities and extend credit responsibly and I get a CL that in likelihood is aligned with my income and obligations factored in. This is only a game to a point.

[HiLine]

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@jake619 wrote:
I would stop short of saying I welcome a FR; however, since I've been honest with my apps I'd be open to the inconvenience if it satisfied them (AMEX). With little to hide I just don't see why it wouldn't be in both our interest. They see my capabilities and extend credit responsibly and I get a CL that in likelihood is aligned with my income and obligations factored in. This is only a game to a point.

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Well, I hope they don't strike you when you're on vacation overseas....

[bs6054]

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@jake619 wrote:
I would stop short of saying I welcome a FR; however, since I've been honest with my apps I'd be open to the inconvenience if it satisfied them (AMEX). With little to hide I just don't see why it wouldn't be in both our interest. They see my capabilities and extend credit responsibly and I get a CL that in likelihood is aligned with my income and obligations factored in. This is only a game to a point.

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Well, I think that is fair if it happened at app time.   The issue is that you have your CL, you've been using the card for ages with no problem, and then you suddenly have to go through this at a potentially inconvenient time with your account shut off (perhaps generating fees from things that charge to it) and prove yourself, and maybe have a CLD or an account closed.   And it's not as if there are no false positives, many people "pass"

Again, a full IRS audit or police interrogation share the same characteristics, if you have done nothing wrong, you have nothing to fear.   Doesn't mean that they are not something to detest!

[jake619]

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@HiLine wrote:

Well, I hope they don't strike you when you're on vacation overseas....

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 Me too.  I also hope I don't find myself overseas with only an AMEX to cover expenses.  That would be the real issue.

[HiLine]

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@jake619 wrote:

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@HiLine wrote:

Well, I hope they don't strike you when you're on vacation overseas....

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 Me too.  I also hope I don't find myself overseas with only an AMEX to cover expenses.  That would be the real issue.

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Agreed. But of course you'd also have a Visa or Mastercard, and possibly a Discover, with you on such trips. You know enough to not rely exclusively on one credit card. 

[GoldenloveNY]

Does AMEX have the right to ask for income verification? Certainty. I don't anyone can give a legit reason why they shouldn't seek that information from their cardholders.They are lending you money with a agreement to pay them back (in the case of their charge cards, paying them back in full every month) in a timely manner. They have every right to protect themselves and acquire employment documents. I don't understand why some consider it a invasion of privacy. Did you not provide them with your name, address, social security number, etc, on your application? If you are concern about privacy and identity thief, then perhaps you shouldn't have filled the application for credit in the first place

Does AMEX handles these FR's the wrong way? Certainty. People already gave the reasons why Amex does these FR in a unprofessional manner. I think those who fear FR are either for inconvenience or for the simple fact that they bent the truth on their Amex application [s].

On the other hand, I just don't understand why Amex will target a cardmember that has been with them for years, have pay their bills long before the due date, and made their spending habits consistent (with some a larger than normal charges here and there). In my opinion, they aren't a threat. 

After reading several forums on Amex FR's, it seem that they do these FR's randomly at time and other times,  for specific reasons. They are Amex cardmembers who swear that they never had a FR in there 10+ years of being with Amex. Others have been with them for the same time frame and Amex decided to do a FR on them for no apparent reason. Yet, they are those who say they were FR after doing something outside their normal pattern (like chargeing a huge purchace or spending 2k more on their charge cards than they normallly would). 

As Amex cardmember, you should be aware that FR's are possible. In the end, the one that holds the cards on the table is you, not Amex. They have every right to condult finanical searches on their members, but you, as a consumer, have every right NOT to comply to their demands and take your business elsewhere. It's their lost. 

[Revelate]

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@jake619 wrote:

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@HiLine wrote:

Well, I hope they don't strike you when you're on vacation overseas....

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 Me too.  I also hope I don't find myself overseas with only an AMEX to cover expenses.  That would be the real issue.

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In fairness people who even nominally read this forum aren't likely to find themselves in such a situation .  Fairly certain also in the documentation I got with my Zync they did ask if I was going to be travelling to let them know, which is a fairly reasonable thing I think these days.

@bs6504 Re: BOFA - yeah you'd think that, but they slashed my secured card graduation limit... which now I'm somewhat regretting graduating at all but wasn't any way to predict I'd get a windfall of a second job immediately after that.  Have to see whenever I go request a spurious CLI or PC with them post-mortgage, might as well use that TU report for something heh.

[mxp114]

If I ever got FR, I would immediately close out. I hardly even use my AmEx and have a Bank of America AmEx anyway. AmEx doesn't offer me anything I can't get elsewhere so I wouldn't comply. I don't need them, I guess some people need/like them enough to pursue fulfilling the FR.