It looks like there has been a wave of American Express shutdowns with many reports across US Credit Card Guide forums and /r/amex (compiled list of datapoints can be found here). The common trait seems to be a lot of international spend, with buying groups focused on purchasing internationally being the biggest hit.
Got all my cards canceled. I also have checking account with AMEX, but I couldn’t transfer point to travel partner, so I chatted with customer agent to transfer all my 1.05M points out.
I think my shutdown is related to some bill pay payments I received many years ago… It’s crazy that I have had AMEX cards for 20 years. Now I am not sure if I want to switch to Chase or someone else.
thats crazy. can u share more info? when did this happen? anything recent that maybe u did? cuz did amex really shutdown for bill pay from years ago? like wat? WMBP? or 3rd party GC payments? cuz that means nobody is safe even if banned behavior stopped long ago.
All are just speculation about BG or foreign purchases etc. The poster at Flyertalk does not show anything wrong.
I can only think about “normal” “abuse” like new card bonus, and spending for the coupon credits etc. If 90% of my spends are on those AmEx coupon credits, AmEx won’t make money from my cards. I guess that is the cause. AmEx wants to make money. Smart cardholders are abusers.
By “AmEx coupon credits” are you referring to “Amex Offers”? If so, why don’t you think that Amex makes money on those deals? If not, what are you referring to?
No, it is usually referred to the chopped up incentives they give you, i.e. the Disney+ $84 for the blue preferred that you can only use $7 each month.
“New Wave” sounds like this shutdown was done by a cult
Or Duran Duran.
I delivered morning newspaper to Simon Le Bon 1982 – Pinner, UK
The whole BG scheme sounds benign, but it really brings great challenge to bank’s risk management algorithm.
Imagine a (international) student with zero income doing this BG and recycling their CL again and again. They can make big-ticket purchases every week/month and always pay off credit card balance in full. Six months or a year later, algorithm is tricked to believe they are rich and reliable customer, boosting their credit score from 500 to 800 and increasing their CL from $500 to $30000.
One day they max out the card, walk away with $30000 cash, and default/flee. The bank is left without recourse.
My guess is that this already happens a lot, prompting Amex to bust the BG network.
Nonsense.
BG isn’t really a “scheme”, t’s more like a niche arbitrage business model. They recruit buyers to purchase limited-quantity, high value, on-sale consumer electronics like Apple stuff at Wal-Mart, Best-Buy, Amazon, etc. Then resale the inventory overseas, probably in South America where the same items cost 100% more due to tariffs or import fees.
In theory, Amex gets paid just like with any other heavy-spender and they should love it, but the risk pattern can look suspicious: increasing credit limits, cycling, and heavy spending on “liquid” resaleable items. It looks like bust-out fraud or money laundering, especially with international sales. More than likely the system can’t distinguish between arbitrage and fraud at scale without deeper data.
Amex is already pretty good at financial reviews when they start to get uncomfy with spending patterns. Happens a lot in BG circles. I haven’t dug into the recent shutdowns, but I’m inclined to believe these people were doing something more.
your speculated pattern could apply to everyone here, what is the difference between BG and giftcard / MO laundry
Volume and velocity make the difference. A couple of MSer buying $2k money orders is nothing compared to thousands of BG mules sitting on coach laundering $10mm every month. Which one has more regulatory and financial risks?
did you know the Russian student with obc card vs irs case?
and improve your math, 2k is per person and 1mm is the total of group
you are comparing apple with orange
didn’t some chinese student rack up $140k in balance, went back to China, posted about it on xiaohongshu and gloated about it? https://www.sohu.com/a/876963866_170104
it is not the single one, it just got viral
students from any country without extradition with us did the same, but they just stay low
Your imagination runs wilder than Amex algorithms
Bust-out fraud is actually a thing.
I was an international student until few years ago. I got around 20k credit limit working on Campus. But I thought about how one can swipe the card and abscond from the US.
You just described every Chinese poster on UScreditcardguide
This is not how credit scores or any of this works at all
I knew an international student at my college who did something similar. He signed up for some credit cards, got his limits really high, then just maxed them out right before his graduation. By the time banks realized what had happened he had already left the country and never planned to return.
It’s basically crowdsourced manufactured spending. Low profit margin, low risk, but extremely high revenue (say 10mm every month). That’s $1.2mm annual income if BG owner keeps profit margin at 1%.
They have warehouses in tax-free states like NJ and DE, the buyers aren’t shipping directly to these customers.
NJ isn’t tax free
Probably meant NH.
exactly. it’s the opposite of tax-free
honestly I’m impressed
Having buyers send products directly to customers of the group would be a nightmare in terms of disputes and returns and taxes. Most of the ones in the U.S. just work like a normal supplier/distribution warehouse sorta thing. Except they are crowd sourcing discounts with low limits (1-2 per customer etc) in order to get a decent amount of inventory.
It sounds like some of the international BG players that got shut down were getting reimbursed directly via billpay back to their cards.
Wow. They deleted the post due to DoC covering it. I read parts of it and it seems like it was related to billpay. From the responses it’s pretty clear to me that they were doing things that US users are not aware of so most if not all readers here should be safe
They moved to platinum+ member only post as they think some information belongs to platinum only, like fluz, and some admins consider DOC readers may spread misinformation
This is a sign that Amex is upgrading their algorithm, and possibly adding more AI features. It has become better at looking at spending patterns, and weeding out unprofitable customers or MSing.
BG activity isn’t unprofitable, by itself. Churning for SUBs can be, but the spend is at Wal-mart, Amazon, Best-Buy for Apple and tech products. Nothing different from a business owner or wealthy consumer. They still get their cut. International changes the risk profile though.
no more international travel due to self-imposed tariffs way to go AMEX
American Express: Leave Home Without It
Seems to me this would only effect people who are doing something untoward, that is probably forbidden somewhere buried deep within the cardholder’s agreement. A US Citizen living in a foreign country doing “normal” things has nothing to worry about. Yet another case of people doing things they shouldn’t be doing.
How is that different than 99% of these types of posts? 😉
Pretty much! 😉
A US citizen who moved to Mexico to work posted on Reddit their plat was also recently cancelled, and they never engaged in MS or anything besides ordinary life spend.
Well. If it’s the one in Reddit I read. It’s a friend of a friend story… take it with a a grain of salt. Maybe a little more but not much really.
Are you are referring to this: “I heard today from a friend that a couple of folks living for extended periods in Mexico got their Platinum cards cancelled today.”? That is third person hearsay. It just says the card was cancelled, it doesn’t say why.
Good riddance. Hopefully this enables Amex to reduce their merchant fees by 0.00%. This will trickle down to consumers for an average savings of $0.00 per transaction.
You know visa infinite cards have higher swipe fees right?
I use Costco’s payment process system and government’s credit cards have the highest process fees. using the same VISA network, consumer or commercial users got the normal fees but the government payment cards got double. this is so corrupted.
you know Amex has different tier of swipe fee per card category AKA interchange etc?
I’m all for kicking out violators but you have to be on something if you think this will lower fees.
r/woooosh
I think that you need to reread the comment from
Burgers?.
Do you even coupon bro?!?