Is Amex Shutting Down People With Airline Incidental Clawbacks? Need More Data Points

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Amex Shutting Down People With Airline Incidental Clawbacks

Is Amex Shutting Down People With Airline Incidental Clawbacks?

I have seen a couple of scary data points in terms of Amex shutdowns. There have been a couple of people that got entire account shut downs and the common thread between them was airline incidental credit clawbacks.  But it is just a few data points so we need more.  If anyone has been shut down for something similar over the last few days let us know.  The accounts have been locked out and points have been confiscated American Airlines style.

Details & Data Points

The data points came from a Miles Per Day reader and poster drakiez on Reddit.  It is confirmed that they are not the same person.

The Miles Per Day reader recently closed a Charles Schwab Platinum card and assumed that may have put eyes on their account.  They also said they had 9 charge cards which I thought may be the issue with American Express’ recent change even though they were under the new 10 card limit. I had figured this would be the area Amex would crack down on next.  But then they said that they had around $2000 in airline incidental clawbacks.  Vinh thinks this is what caused it and I agree with him.

The post from drakiez on Reddit kind of confirms this theory.  They said they had a few airline incidental clawbacks in the last year.  Nothing else from their data point stood out to me.

Amex Shutting Down People With Airline Incidental Clawbacks

Why This Is Scary

As we all know 2020 is the year of the cancellation so it puts me on edge a little bit.  And even if some people were gaming the airline incidental credits I made the point that many had flights cancelled etc. and the clawbacks were in poor form.  Well guess what, a ton of people have had cancellations in 2020 – myself included.

I had selected Frontier as my airline and used my airline incidental credit on seat fees for a trip to Vegas.  Those flights were cancelled and I filed a charge back to get my money back because Frontier was only offering vouchers, against DOT regulations.  I received the charge back but that means I got a double credit for my airline incidental.  Now I don’t have an issue if they claw that back but reset my meter. Something I don’t think they have the capability to do.  But what if they continue this trend and shut me down because of it?  I would have said no way a few years ago but Amex is now the least predictable lender out there.

Should We Move Membership Rewards Out Of Our Accounts?

This begs the question, should we play offense?  If you have had airline incidental clawbacks should you move your points out now in fear of a shutdown? Even if it was a legitimate cancellation I don’t know that it matters at this point.

If you have a currency you use most of the time etc. or normally cash out via the Schwab Platinum at 1.25 cents a piece I would strongly consider it.  American Express confiscates the good with the bad during these shut downs.  One of the posters said they just paid taxes from referrals on points Amex confiscated, talk about rubbing salt in the wound.

Final Thoughts

This seems to be an extreme overstep on American Express’ part if it is in fact because of airline incidental credits.  They already recouped their money and sent the warning.  They collected an annual fee for a perk that was not use, instant profit.  Amex made it known where the line was drawn in the sand.  But then they shut down people on top of that and take back all of their points as well. Is this in response to their poor quarter one showing and looking to cut costs?

Hopefully we can get a few more data points to see if it is for sure the airline incidental clawbacks that are causing this.  Then we can all bite our nails for the rest of 2020 as we see flight cancellations, that are out of our hands, pile up and hope Amex doesn’t take advantage of it to clean their books.

Mark Ostermann
Mark Ostermann is a father, husband and miles/points fanatic. He left the corporate world after starting a family in order to be a stay at home dad. Mark is constantly looking at ways to save money and stay within budget while also taking awesome vacations with his family. When he isn't caring for his family or taking a weekend trip, Mark is working towards his goal of visiting every Major League Baseball ballpark.

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13 COMMENTS

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13 COMMENTS

  1. I think it might be best, IF you get a cancel and a refund, to go ahead and tell Amex and ask if they want their $$ back. Maybe by being proactive and not waiting to see if they claw back might be, the best thing to do. Noblesse Oblige, kind of thinking maybe? If they say yes and you give the $$ back, then they do not get to claw it back and act like you swiped it from them.

    I have no data points on that but it is just a thought.

    • I know people that have reached out and said that the flight was canceled and the Amex agent swore up and down they wouldn’t clawback the credit for that (screen shot of one such instance in the linked article about how it was poor form on Amex’s part) so I don’t think it would do anything.

      • Yes, but my point being was that MAYBE if you were pro-active and offered to hand it back, they would later not act like you swiped it and cancel everything. It isn’t the few bucks win or lose, but showing you were a good and honest customer so they wouldn’t cancel all your cards and stuff.

        • Seems like it would be worth a shot. One of those things that couldn’t hurt, and might help. I’m probably going to have to cancel a flight for July as the trip is no longer feasible due to COVID-19 – or it may be cancelled by the airline – and am wondering if it’s better to just eat the fairly small amount of Lifemiles (domestic UA flight, one-way) I redeemed rather than get shutdown due to the E+ credit getting clawed back.

    • A lot depends on what airline you fly the most and where you are going. Delta is a safe one since their miles don’t expire and they are unlikely to fold but it is on the lower end of the value spectrum. I like Virgin Atlantic but they are having financial issues. Some like British Airways others Flying Blue etc. If you have a 3 to 1 Hilton bonus offer that is an option as well for some. So much depends on your personal situation.

      Not as easy as it would be with Ultimate Rewards – Hyatt or United all the way haha.

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