American Express' risk-cutting poses its own risks

What does AmEx want?

That's a question American Express cardholders are asking more and more these days as the company turns the screws on long-standing customers and seems determined to show as many as possible the door.

Similar moves by leading card issuers drew a scornful response from President Obama, who told industry leaders last week that "the days of any-time, any-reason rate hikes and late-fee traps have to end."

But AmEx, which pocketed $3.4 billion in bailout cash from taxpayers, seems to have been especially successful at making customers feel unwelcome.

I wrote Sunday about a Los Angeles man who had his AmEx credit limit slashed twice by the company and then had his card canceled, all because of a "serious delinquency" in his credit file that apparently no one but AmEx could see.

I've since heard from numerous others who related similar experiences, including some who said AmEx even demanded that they send in copies of their tax returns if they wanted to keep their accounts -- a notion so outlandish that I was sure it had to be a scam.

And demonstrating that AmEx isn't just pushing around middle-class cardholders, I spoke the other day with Beverly Hills resident James B. Davis, who runs a publishing company with about $16 million in annual sales. He said he holds three AmEx Platinum cards, one for personal use and two for business.

Davis, 61, recently received a letter from AmEx saying it was canceling a benefit allowing him to carry an extended balance on certain travel expenses. It said this was due to an unspecified problem with his credit file.

"I have no debt -- zero," Davis told me. "So I called up my credit file and went through all 40 pages of it. I kept seeing 'Account in good standing,' 'Account in good standing.' Every account was in good shape."

He said he finally found a single instance when he was late with a MasterCard payment -- about three years ago.

"I can't believe they were going after me for this," Davis said. "I'm the sort of customer who buys cars on his American Express card."

Worse, he said that when he contacted the company to find out what was going on, all he got was a lot of unhelpful mumbo-jumbo from service reps. This is a customer, mind you, whose credit limit runs in the hundreds of thousands of dollars.

Davis' theory, and I think he's on to something, is that AmEx has unleashed some sort of computer program that's combing cardholders' credit files for any problem, no matter how small or outdated.