GMA Story on Credit Card Profiling

disneysteve · #1 (**permalink**) 01-28-2009, 06:44 AM

Did anyone else see the story this morning on Good Morning America about "behavioral analysis" by American Express? Just when I thought I'd heard all the ridiculous stuff CC companies could do...

I can't find a link to the story on their site, but basically they showed a guy with good credi who pays his bills on time, rarely carries a balance, etc. He got a notice from AmEx that they had sharply lowered his limit. The reason given was that other customers who shop in places he has shopped have poor repayment histories. The company refused to tell him which store or stores resulted in that decision and refused to reverse the decision even though his credit and repayment history was excellent.

What a crock. So if a bunch of people who shop at Wal-Mart have trouble paying their bills, I'm going to be penalized if I shop at Wal-Mart? That's insane.

SnoopyCool · #2 (**permalink**) 01-28-2009, 06:48 AM

I did hear about the Wal-Mart, AE tie. I'm beginning to think that the customer is valued less and less all the time.

maat55 · #3 (**permalink**) 01-28-2009, 06:52 AM

If they do that to me, I'll just cut it up. I like getting the 2% but not enough to deal with unwarranted changes. Wow, that's extreme. Dave will say it is business as usual for them.

disneysteve · #4 (**permalink**) 01-28-2009, 07:04 AM

Universal default, which raised your rate on card A if you were late paying card B at least made some sense as it could indicate that you were a higher risk. And it is something that you totally control, whether or not you pay your bills on time.

This is just nuts. Changing your terms because of the behavior of total strangers. How is my ability to repay my charges in any way affected by what others do? There's absolutely nothing I can do about that.

poundwise · #5 (**permalink**) 01-28-2009, 07:05 AM

What makes it more asinine is that in 2008 American Express ran a promotion with Wal-Mart, offering a bonus for people who shopped there and used their AmEx card.

Here is an old blog post, which details the offer.

red92s · #6 (**permalink**) 01-28-2009, 07:12 AM

I've read they also target people who shop in zip codes where default rates are higher. So, if you stop to buy gas with your credit card in a neighborhood with a higher than average default rate . . . your limits go down.

disneysteve · #7 (**permalink**) 01-28-2009, 07:18 AM

I just wanted to clarify something. The story didn't specifically say it was due to shopping at Wal-Mart and AmEx didn't confirm that. I just used Wal-Mart as an example.

simpleyme · #8 (**permalink**) 01-28-2009, 08:56 AM

what really gets me is the merchants who have the codes that may trigger this are paying for the honor of accepting cards and their customer are being penalized ,
I have read several stories about this for the past few years and I have to think it has hurt some businesses
it was reported that using tired retread shops massage parlors , marriage counselors makes you risky
we used to buy retreads all the time for our Dump Truck it has nothing to do with anything its just what we bought! our truck had odd sized tires is all

mommyof4 · #9 (**permalink**) 01-28-2009, 09:06 AM

This story just reinforces my thoughts that once I am finished paying off my credit cards (target date June 2009), I want nothing more to do with CC companies. I don't care if I don't get cash back on my purchases, etc., I just want them out of my life once and for all.

Here's a link to the story if anyone is interested.

ABC News: 'GMA' Gets Answers: Some Credit Card Companies Financially Profiling Customers