Why is a FR so bad?

[bs6054]

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@Revelate wrote:

Gentleman, can we please refrain from introducing various insinuations and sniping at individuals into what's otherwise a lively and interesting discussion?  

I know people in this thread have strong opinions, but we can do without the above-mentioned behavior.

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OK, to try to be good, here is my attempt at a consensus summary.  Despite the length of the thread, I think there are fairly few points of disagreement.   Let me know if you disagree!

Points of general agreement:

1) So long as they are not targetting protected classes (e.g. race, sex, vets) in their selection, Amex has a right to perform FRs.

2) It is up to the user to decide whether to comply, understanding that non-compliance will probably lead to account closure. As a special case, you may choose never to get an Amex card to avoid being put in this situation.

3) It makes sense to always have a backup card from another issuer.  Apart from an FR freezing your account, any account can be frozen by any issuer for security/fraud concerns.  (e.g Cap One froze my account in SECONDS after I attempted a purchase at https://www.talkmobile.co.uk/online_topup.aspx, a perfectly legitimate site)

Points of disagreement:

1a) Asking for tax returns is a big overreach, there are privacy concerns and Amex doesn't need this data to meet its needs.

1b) Amex is exercising necessary due diligence in asking for this data, a good way of identifying troubled accounts.

2a) More of a general feeling:  FRs are triggered by events that are associated with troubled accounts.   While they don't always find issues, a lot of the time they do.  Often people have lied about their income or their general financial situation

2b) We don't know that!

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I sort of think that it is 2 that is generating some of the heat.  Basically 2a is "These people had it coming" and so concerns for privacy are less because these are people who are basically attempted fraud and need to be stopped.   If you feel that many innocents are being caught up in the process, worries about overreach might be more important.

[CreditCrusader]

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@Anonymous wrote:

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@CreditCrusader wrote:

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@Anonymous wrote:

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@CreditCrusader wrote:

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@Anonymous wrote:

I have no idea.

And if I ever get FR'ed, guess what I'll be doing in the meantime... charging to all my other cards.

I get the "hassle" part. Sure, it is, but I have options. And if I get declined on a card while I'm with other people, I KNOW that I have at least 4 others that'll swipe just as well.

Not a problem.

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...and there it is...common sense at its best. Instead of hating Amex, complain with your wallet, not your keyboard

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Kind of comical.

A forum without keyboards.

Or the people on this forum who in their signature only have 2 AmEx's, a JCP and a CapOne.  I guess the restaurants you invite people to accept JCP.  Or McDonald's where pretty much that's all your CapOne limit will get you.

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I doubt that someone with Amex in their wallet only has JCP and Cap1. You know precisely what I was getting at with that comment...namely that using other cards is far more gainful as a statement against Amex than 1,000 pages of whining.

FYI...hyperbole typically doesn't get you anywhere in a debate.

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You should have realized by now that the issue isn't really the inconvenience since that is not exclusive to AmEx.  Many, if not most, lenders have been known to cancel cards or CLD cardholders.

As much as you pretend it is not, the issue is making an informed decision and it's unclear why you have issues with that.  If you are and half the universe feel comfortable giving anybody access to your tax returns, great.  You have the absolute right to do so.  You also have the right not to do so if you so choose.  Also your right.  I think the term we've used here is something like informed + consent.

There are posters who show only Credit One, CapOne, JCP / Macy's and a couple of AmExs.  Or do you also take offense at the fact that AmEx, like many other issuers, isn't really as exclusive a club as you'd hoped? 

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It is clear that you are intent on projecting your own thoughts into my actual comments i.e. that I have some issue about Amex's exclusive nature...as though that is in any way relevant to this conversation (I'll spare you the suspense...it isn't).

Point of fact: I could care less who does or does not have an Amex. I have a problem with people who whine and complain about an FR procedure that is both well-known by anyone with half an ounce of Amex CC policy knowledge and prudent from a business perspective. Whining about a policy that is perfectly legal and smart business is, in my opinion, completely counter-productive. Tossing them into the closet and using another card - Credit One, Cap1, Chase...WHOEVER - is a productive way to tell a CCC that you don't care for their policies...or if you REALLY want to put your principles on display, GET RID OF THE CARD ALTOGETHER. There you have it...problem solved.

In any event, I would hope that after this thread (and the nearly endless threads that preceded this one) potential or current Amex users would be as educated as possible about their options. If they aren't, they are certainly welcome to create yet another "Amex is FRing me...why don't they just trust me?" thread to join the others. Just know this...all the whining in ther world won't change a thing. Amex will continue to be as paranoid as it wishes...and their business model will thank them for it.

Have a great evening.

[Anonymous]

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@CreditCrusader wrote:

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@Anonymous wrote:

You should have realized by now that the issue isn't really the inconvenience since that is not exclusive to AmEx.  Many, if not most, lenders have been known to cancel cards or CLD cardholders.

As much as you pretend it is not, the issue is making an informed decision and it's unclear why you have issues with that.  If you are and half the universe feel comfortable giving anybody access to your tax returns, great.  You have the absolute right to do so.  You also have the right not to do so if you so choose.  Also your right.  I think the term we've used here is something like informed + consent.

There are posters who show only Credit One, CapOne, JCP / Macy's and a couple of AmExs.  Or do you also take offense at the fact that AmEx, like many other issuers, isn't really as exclusive a club as you'd hoped? 

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It is clear that you are intent on projecting your own thoughts into my actual comments i.e. that I have some issue about Amex's exclusive nature...as though that is in any way relevant to this conversation (I'll spare you the suspense...it isn't).

Point of fact: I could care less who does or does not have an Amex. I have a problem with people who whine and complain about an FR procedure that is both well-known by anyone with half an ounce of Amex CC policy knowledge and prudent from a business perspective. Whining about a policy that is perfectly legal and smart business is, in my opinion, completely counter-productive. Tossing them into the closet and using another card - Credit One, Cap1, Chase...WHOEVER - is a productive way to tell a CCC that you don't care for their policies...or if you REALLY want to put your principles on display, GET RID OF THE CARD ALTOGETHER. There you have it...problem solved.

In any event, I would hope that after this thread (and the nearly endless threads that preceded this one) potential or current Amex users would be as educated as possible about their options. If they aren't, they are certainly welcome to create yet another "Amex is FRing me...why don't they just trust me?" thread to join the others. Just know this...all the whining in ther world won't change a thing. Amex will continue to be as paranoid as it wishes...and their business model will thank them for it.

Have a great evening.

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Nobody is whining and complaining unless, of course, you consider pointing out the fact that an IRS tax transcript contains data that goes deeper than the actual line-item numbers is whining.  And even then, your issue is with Webster's, not me.  For the upteenth time, it's about making an informed decision.  

If and when somebody gets an AmEx FR they do have many options.  They can comply, try to negotiate a way around giving up IRS tax transcripts or fire AmEx.  What each chooses to do is their problem and I could care less what decision they reach.  What is at issue here is that one understands what can be gotten by the line-item information on their transcripts.  Regardless of the evasive logic you pull out of thin air, the simple fact is that an IRS tax transcript can often provide far more than just a cardmember's simple income verification.  

AmEx can choose to ask for whatever documentation they wish and only you are imagining that we are saying they don't currently have a right to do so.  At the same time, the cardmember has the right to refuse or, if it suits their fancy, comply.  At least some will now realize that when they comply they are providing information far and above simple income verification.  It really is that simple.

Please provide copies of your scientific research showing that anybody who feels uncomfortable with an AmEx FR has something to hide.  Of course, you cannot ... just as you cannot show that AmEx is successful or not due in any way to their FR policy.  It would be laughable to think that AmEx has a monopoly on prudent business practices when almost every other lender does not routinely demand IRS tax transcripts.  I have yet to see any non-mortgage lender demand any income verification above and beyond W-2s.  Do they know something AmEx doesn't?  If anybody has a reason to demand up-to annual tax transcripts for the life of the loan it would be your mortgage holder.  Unless you are in the club someone mentioned earlier with a $30k AmEx and a mortgage on a $20k house, it would seem your mortgage holder should be more worried than AmEx.  Oh, I forgot, AmEx has ESP.               

As previously pointed out, AmEx can get a lot of information based on where you use your card.  Given that AmEx has verifiably already FR'd and AA'd cardmembers based on where they one-time swiped their card, I choose not to trust them with data even more sensitive.  I choose not to give them SSN and economic data on members of my family.  If you trust them, great.  But you do so better informed.

[Anonymous]

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@bs6054 wrote:

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@Revelate wrote:

Gentleman, can we please refrain from introducing various insinuations and sniping at individuals into what's otherwise a lively and interesting discussion?  

I know people in this thread have strong opinions, but we can do without the above-mentioned behavior.

---

OK, to try to be good, here is my attempt at a consensus summary.  Despite the length of the thread, I think there are fairly few points of disagreement.   Let me know if you disagree!

Points of general agreement:

1) So long as they are not targetting protected classes (e.g. race, sex, vets) in their selection, Amex has a right to perform FRs.

2) It is up to the user to decide whether to comply, understanding that non-compliance will probably lead to account closure. As a special case, you may choose never to get an Amex card to avoid being put in this situation.

3) It makes sense to always have a backup card from another issuer.  Apart from an FR freezing your account, any account can be frozen by any issuer for security/fraud concerns.  (e.g Cap One froze my account in SECONDS after I attempted a purchase at https://www.talkmobile.co.uk/online_topup.aspx, a perfectly legitimate site)

Points of disagreement:

1a) Asking for tax returns is a big overreach, there are privacy concerns and Amex doesn't need this data to meet its needs.

1b) Amex is exercising necessary due diligence in asking for this data, a good way of identifying troubled accounts.

2a) More of a general feeling:  FRs are triggered by events that are associated with troubled accounts.   While they don't always find issues, a lot of the time they do.  Often people have lied about their income or their general financial situation

2b) We don't know that!

=====================

I sort of think that it is 2 that is generating some of the heat.  Basically 2a is "These people had it coming" and so concerns for privacy are less because these are people who are basically attempted fraud and need to be stopped.   If you feel that many innocents are being caught up in the process, worries about overreach might be more important.

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The whole point is informed consent. 

Regarding the points in disagreement:

1.  For an individual wage-earner, for what purpose do they need SSNs and economic data for your entire family?  To verify your income, W-2's paint the whole picture unless you are claiming additional income from sources which do not provide W-2's or 1099's.  Why do they need financial data that shows, for example, your medical expenses?  Is AmEx making an end run around the illegality of having medical data posted on your credit reports?  Who knows.  I would believe anything above and beyond proof of stated income and employment is overreach.

2.  Nobody has a crystal ball so nobody can say what triggers a FR.  Anybody who claims otherwise must have ESP.  We do know that AmEx performs FRs and takes AA based on where you have shopped.  That, at least to me, makes it harder to trust a company to be fair.  Someone could be the most reformed bank robber in the world, but let's see a bank trust them enough to hire them even 50 years after the event.      

In the end, knowing what can be gleaned from IRS transcripts only allows you to be better informed.  In the end, it's up to each and every individual to decide whether they want to provide the information or not.  Whatever you choose is fine by me.

[vanillabean]

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@Anonymous wrote:

Just like FICO has developed a scoring system that makes a science out of predicting economic health, there are entities that have made a science out of reverse engineering common financial data such as that found on your tax returns.  I wouldn't think AmEx has reached that level, but then again we already do know they monitor where you shop and use that data against you.

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Ouch.

[Open123]

A few random thoughts.

1.  I've often wondered and never understood the "if you don't have anything to hide, you'd offer them up."  Well, this is akin to, "why won't you answer this question, if you're innocent?"  Or, "can you prove that you didn't do it?"  The answer to all of them is that I simply don't have to.  To me, it's that simple.  In America, unless we're compelled to by a process, we can and have the right to refuse anything simply becuase we "choose" to, or don't feel like it.  To suggest we have something to hide based on that only has always be ludicrous, in my view.

2.  Offering one's tax returns is a very sensitive issue for most of us.  For me, I can't help the IRS and my State gov't having access to them, but I would sure think very long and hard before allowing anyone else to be privy to them.  One of my concerns with Amex is that when they receive my documents and it's processed in India, while my returns are in some computer hard drive or archive center in a foreign country, do I lose the laws of my State and Federal lgoverning the privacy and use of those documents?  Or, am I and my returns now under the jurisdiction of Indian law?  Or, some International law rubbish sort of thing?  For me to submit tax returns, Amex needs to provide me in writing assuring me that should I submit, my information will be subjected to all the laws and protections of not only my State and US Federal laws, but that no laws of any foreign or international law will govern their use.  Then, they can have it.  If they're ever compromised or used inappropriately, I have recourse through my State and Federal courts.

3.  I can understand if Amex requests returns.  During the credit crisis (and, even before) tax returns were routinely altered via photoshop, W2s created on desktop publishing programs, and bank accounts easily faked.  Hedge funds were sending out fake financial statements all showing balances and stock position that existed in paper only.  The 4506T is the only authentic method to verify assets and income--only thing more reliable would be a full audit.  Everything else can easily be forged, and can't really be taken at face value.

Agreed that every person should make his own choice if and when he's selected for an FR.

[Anonymous]

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@Open123 wrote:

A few random thoughts.

1.  I've often wondered and never understood the "if you don't have anything to hide, you'd offer them up."  Well, this is akin to, "why won't you answer this question, if you're innocent?"  Or, "can you prove that you didn't do it?"  The answer to all of them is that I simply don't have to.  To me, it's that simple.  In America, unless we're compelled to by a process, we can and have the right to refuse anything simply becuase we "choose" to, or don't feel like it.  To suggest we have something to hide based on that only has always be ludicrous, in my view.

2.  Offering one's tax returns is a very sensitive issue for most of us.  For me, I can't help the IRS and my State gov't having access to them, but I would sure think very long and hard before allowing anyone else to be privy to them.  One of my concerns with Amex is that when they receive my documents and it's processed in India, while my returns are in some computer hard drive or archive center in a foreign country, do I lose the laws of my State and Federal lgoverning the privacy and use of those documents?  Or, am I and my returns now under the jurisdiction of Indian law?  Or, some International law rubbish sort of thing?  For me to submit tax returns, Amex needs to provide me in writing assuring me that should I submit, my information will be subjected to all the laws and protections of not only my State and US Federal laws, but that no laws of any foreign or international law will govern their use.  Then, they can have it.  If they're ever compromised or used inappropriately, I have recourse through my State and Federal courts.

3.  I can understand if Amex requests returns.  During the credit crisis (and, even before) tax returns were routinely altered via photoshop, W2s created on desktop publishing programs, and bank accounts easily faked.  Hedge funds were sending out fake financial statements all showing balances and stock position that existed in paper only.  The 4506T is the only authentic method to verify assets and income--only thing more reliable would be a full audit.  Everything else can easily be forged, and can't really be taken at face value.

Agreed that every person should make his own choice if and when he's selected for an FR.

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Yes, every person needs to make their own informed decision in accordance with their own circumstances.

A few observations:

#2.  You may never know if they have been compromised or used inapproprilately.  

#3.  The 4506 T method, with the options AmEx selects, is very easily spoofed.  The process to do so is slightly complex, but not difficult overall.  I refuse to go into details on how one would accomplish this here, but there is a reason why in higher level security clearance investigations, high level background investigations and criminal investigations we get entire tax returns, amendments, attachments and a complete accounting of all taxes paid and / or tax refunds.  And even then it is not foolproof.  

I think the 4506 T with the options AmEx utilizes might be the easiest method for AmEx to efficiently accomplish the task.  Other methods they could use might be less intrusive, but also, perhaps, less efficient.  

[HiLine]

Digging up an informative and thought-inducing discussion ...

[myjourney]

Very old thread Lol

[blondy250]

Oldie but goodie. This is where I come down on a FR.  1. I'd be upset if it was at an inconvenient/embarrassing time, they should try to tell you in advance.  2. I'd have security concerns about submitting my W-2, although I'd do it.  3. I think most FR are justified, and the majority of  concerned people are lying  about their income. On point 3 you just have to read the threads in this forum, several posters insinuate that over report their income.