American Express Under Investigation Over Card Sales Practices
American Express is being investigated for its card sales practices. Federal investigators are probing business-card sales at American Express Co..
The information comes from several people familiar with the matter, as reported by Wall Street Journal. The inspectors general offices of the Treasury Department, Federal Deposit Insurance Corp. and Federal Reserve are investigating whether AmEx used aggressive and misleading sales tactics to sell cards to business owners. They are also looking into whether customers were harmed by these practices.
It is not clear if it is specific employees that took part in the alleged behavior or if higher-level employees supported it. The Office of the Comptroller of the Currency is also investigating business-card sales practices at AmEx, according to people familiar with the matter.
It has been reported in the past that AmEx salespeople have strong-armed or misled small-business owners into signing up for cards to boost sales numbers. Some salespeople misrepresented card rewards and fees, or issued cards that customers hadn’t sought, they said. A former manager at Amex also spoke out last year.
The push for extra sales, allegedly led salespeople to cut corners. Some of them had earned commissions of $50,000 to $100,000 within six months. The investigation by the inspectors general offices is probing whether employees made sales calls that weren’t recorded. Some managers would also make calls from their personal phones.
A spokesman for AmEx said the company had been cooperating with a regulatory review of small business card sales between 2015 and 2016 since spring.
Shares of AmEx were down almost 4% after news of the investigation came out.
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Looks like someone finally RATted out AMEX. Will we next be hearing about card accounts being set up without permission, ala Wells Fargo?