Why is a FR so bad?

[Anonymous]

---

@Anonymous wrote:

And even if the concern is with changing financial circumstances, a tax return is hardly a current snapshot, likely to be several months old in most cases.

I was just thinking of my current situation.  By far the largest expense this year has been $110K on college tuition.   This is not reflected at all on my tax return, except that I have two kids who are of college age.  On the credit report there are some closed PLUS loans from previous years, but they didn't reflect on past tax returns either.  So an intrusive, non-timely instrument that may not have the relevant data....

---

You know what is even funnier?  There is a very easy way to game the whole IRS transcript process.  If someone were really out to scam AmEx, a 4506 T will not stop them. 

[Anonymous]

Also, AMEX isn't just a company, it is a group of employees, with all the normal human traits and issues.

In telecom,from time to time employees get fired for looking up call records of their partner (or for those that think ahead a little more, they get their friends to look it up).  More rarely, they decide to mess with the account by removing payments, cancelling the line etc.   For this reason, careful records are kept of who is accessing what, and audits are performed (show me the incoming call record that asked you to access this account etc).

Presumably Amex has similar safeguards against employees surfing billing records, but as the sensitivity of the data increases, as with tax returns, more is needed.  Does Amex do this?  Probably/possibly, but one of McArthur's points is that we simply don't know.   This is why discussions of Amex's right to do this etc, may somewhat miss the point.  We need to know that Jane isn't being asked to see how much John's new possible girlfriend is really earning, is she already married and is it true that she doesn't have kids.  Or rather, if Jane IS asked, she is unable to get at that information.

And yes of course, the same applies for mortgage companies, but that is not comparing like with like.

[Anonymous]

---

@scenery_guy wrote:

---

Personally, I wll not release my tax returns.

---

So a mortgage or a refinance is out of the picture for you? Perhaps you rent or had a mortgage prior to the financial meltdown? Sorry but you are making it look like the ONLY people who ask for this information is American Express and that's simply not true. They might be the only credit card company who asks for it, and good for them. Again it's their money so it's their terms and you can close out and not submit the info requested. 

I'm not really seeing the risks with releasing this info to AMEX. You pointed out on prior posts that they can deduct your marital status, sexual orientation, P&L for businesses, expenses, medical bills and so forth but how does sharing this data put you at risk? I can see the obvious situation where they learn you have a medical condition of some sort and decide to close your accounts before you run up the cards and have no way to pay them but in that case how is that wrong? I can't advocate screwing a lender in a situation like that and I am sure you can't as well. I can easily see how they can check that your reported income matches closely to your application information. What else am I missing? (I am not trying to be a jerk here - I just need a better example of the dangers). 

With that being said thank you for posting your information. It's a valuable discussion and people need to know all aspects in a situation like this so they can make up their own mind about a FR from AMEX. 

EDIT: Sorry I missed your reply above this post. You covered much of this post, thanks. Feel free to add more comments as applicable. 

---

I'm lucky in that I own our homes free and clear, but if that were not the case then I might - just might - consider providing tax returns if there were no other way.  

Speaking of credit card issuers, AmEx is the only issuer that demands a 4506 T.  Even when you lump in mortgage issuers, AmEx is the only one who can lock you out unless you provide it years down the road.  Yes, you are absolutely correct that it is their money and they - for now - establish the rules.  If you feel comfortable, by all means let them have what they want.  Again, free choice.  Just make it an *informed* free choice.

The data AmEx obtains from the IRS can be reverse engineered to provide an incredible amount of information.  First of all, it has names and SSN of your wife and dependents.  Are those kids yours biologically?  I can get a pretty accurate assessment with their DOB and SSN.  Pay alimony?  That's also on there.  Depending on amount and your income, I can pretty much tell if you are paying to more than one ex.  I can tell much how much you have in savings and investments from transcript data.  Legal fees being deducted?  I can usually determine whether or not it is because your neighbor is suing you for cutting down their tree or you are under indictment.  

And that is just the tip of the iceberg.  We have an inside joke here that, perhaps, isn't really a joke:  "We'll even get their shoe size."

I, for one, don't think AmEx should or even legally can take AA based on medical records.  Remember, medical information is not even legally allowed on your credit reports.  So what if you have larger than normal medical expenses?  Perhaps a spouse has cancer or something.  As long as you pay your bills that is none of AmEx's business.  I mean, that is why they soft you religiously every month, right?

As much as I think USAA's poop doesn't stink, I wouldn't even give them a 4506 T.  Much less a card issuer that has a proven history of taking AA only because cardholders - in perfect standing - shopped once at an inner-city Wal-Mart.  

But in the end, it's all about *informed* consent.

[Anonymous]

---

@Anonymous wrote:

Also, AMEX isn't just a company, it is a group of employees, with all the normal human traits and issues.

In telecom,from time to time employees get fired for looking up call records of their partner (or for those that think ahead a little more, they get their friends to look it up).  More rarely, they decide to mess with the account by removing payments, cancelling the line etc.   For this reason, careful records are kept of who is accessing what, and audits are performed (show me the incoming call record that asked you to access this account etc).

Presumably Amex has similar safeguards against employees surfing billing records, but as the sensitivity of the data increases, as with tax returns, more is needed.  Does Amex do this?  Probably/possibly, but one of McArthur's points is that we simply don't know.   This is why discussions of Amex's right to do this etc, may somewhat miss the point.  We need to know that Jane isn't being asked to see how much John's new possible girlfriend is really earning, is she already married and is it true that she doesn't have kids.  Or rather, if Jane IS asked, she is unable to get at that information.

And yes of course, the same applies for mortgage companies, but that is not comparing like with like.

---

Exactly!

If AmEx comes out with documented audits and swears on a stack of Bibles that my tax returns go from USPS hands directly into a secure environment and in the hands of a bonded employee with a top secret security clearance who immediately makes the decision on my account and then shreds my data and incinerates it, then I might think less of signing a 4506 T.

[scenery_guy]

Thanks for the detailed reply McArthur. I appreciate your opinions and can see where you are coming from on this matter. 

None of the situations from releasing a 4506-T you listed effect or apply to me. Heck I would more than likely answer all of those questions WITHOUT surrendering the form. I guess I just don't care what they see in my reports or when they request a 4506-T. I have nothing to hide as I have nothing (an inside joke..). Worst case scenario for many of us is they cut us off. Fine. I'm prepared with a great relationship with other banks and cards (as we all should be prepared). Heck I'll go back to checks and cash if needed (but I will miss the points and miles). 

I can ascertain that you think regulations or rules should be changed. Fine, I could agree with you on that. Level playing field for all card issuers would help. A clear and concise financial audit path - one that we consumers know and understand. A secure method of handling documents would be nice. I can't say if I am for more or less regulation but in this case a clear understanding would help. So would a clear understanding of credit scores and reports by all three bureau's but that is another battle. 

Thnaks again!

[jake619]

---

@Anonymous wrote:

A FR may be voluntary, but failure to comply gets your account closed.

---

do you know this to be true?

[Anonymous]

---

@jake619 wrote:

---

@Anonymous wrote:

A FR may be voluntary, but failure to comply gets your account closed.

---

do you know this to be true?

---

Well, are you suggesting something else happens?   Your accounts are frozen immediately and you are given a short time to provide the information.  Are you suggesting that if you don't, Amex will say "OK, here's your account unfrozen"?

There are tons of accounts posted every few weeks on this and other forums.

[Anonymous]

And just as a reminder to those who seem to think Amex can do no wrong:

American Express will reimburse $85 million to about 250,000 customers to resolve accusations that the company violated federal law in its marketing, billing and debt collection practices, the company and the government said Monday.

The multiagency investigation of American Express included the Consumer Financial Protection Bureau, the Federal Reserve, the Office of the Comptroller of the Currency and the Utah Department of Financial Institutions. They discovered violations of consumer protection laws between 2003 and this year that started “from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” Richard Cordray, the director of the consumer protection bureau, said in a statement.

To win customers for its Blue Sky travel reward credit card program, the lender sometimes offered customers a misleading promotion. Some customers thought they would receive a $300 reward, but that never materialized, the regulators said.

In doling out credit, they said, American Express also discriminated against applicants based on their age. The company also duped consumers into paying off stale credit card debt with the promise of improving their credit score, the investigators said; in fact, regulators found, American Express was not reporting the payments to the credit bureaus at all.

American Express customers should expect refunds by March 2013, regulators said. The company also agreed to pay $27.5 million in fines to the regulators.

Not exactly totally above board!

[Anonymous]

---

@jake619 wrote:

---

@Anonymous wrote:

A FR may be voluntary, but failure to comply gets your account closed.

---

do you know this to be true?

---

I do not have a representative sample.  I only personally know 2 individuals who have been FR'd and they were pretty much told to sign the 4506 T or else.

There are numerous posts on this and other forums about people getting FR'd and very, very few who have stated they were able to weasle their way out of it with their accounts intact.

[Anonymous]

---

@scenery_guy wrote:

Thanks for the detailed reply McArthur. I appreciate your opinions and can see where you are coming from on this matter. 

None of the situations from releasing a 4506-T you listed effect or apply to me. Heck I would more than likely answer all of those questions WITHOUT surrendering the form. I guess I just don't care what they see in my reports or when they request a 4506-T. I have nothing to hide as I have nothing (an inside joke..). Worst case scenario for many of us is they cut us off. Fine. I'm prepared with a great relationship with other banks and cards (as we all should be prepared). Heck I'll go back to checks and cash if needed (but I will miss the points and miles). 

I can ascertain that you think regulations or rules should be changed. Fine, I could agree with you on that. Level playing field for all card issuers would help. A clear and concise financial audit path - one that we consumers know and understand. A secure method of handling documents would be nice. I can't say if I am for more or less regulation but in this case a clear understanding would help. So would a clear understanding of credit scores and reports by all three bureau's but that is another battle. 

Thnaks again!

---

Just to be clear, I was never suggesting that anybody had anything to hide.  Even though you are squeaky clean, what is the purpose of them demanding such sensitive data? 

Actually, I believe they use it to create their own sort of internal metrics along the lines of  "you have a mortgage with Countrywide whose mortgagees have a statistically above average default rate so we are closing you down -- guilt by association" type of thing.  Personally, I prefer not to help them do that.