Posted by William Charles on May 23, 2019
Credit Cards

Published on May 23rd, 2019 | by William Charles

81

Chase Sending Out Business Credit Card Forced Product Conversion Letters For ‘Government Entity Clients’ [Now In Effect]

Update 5/23/19: People are reporting receiving the annual fee fully refunded. People are also receiving ‘Credit for unused rewards’, even if they transfer the Chase UR to another account. I assume the second credit will eventually be clawed back. Hat tip to Kareem_Elbadry

Update 4/2/19: If you weren’t able to get your case reconsidered, it has now been converted to the Chase Business Capital Card.

Update 3/4/19: At least one person has gotten a follow up letter after contacting Chase to say they are not a government entity client. Might be worth calling in to fight this if you haven’t already. Hat tip to ProfitDarkly

Chase has sent out letters to a number of Chase business credit card holders. The letters state that these cardholders are having their business rewards credit cards changed to Chase Business Capital cards on April 2nd because they are ‘government entity clients’ and want to avoid a potential conflict of interest. The Chase Business Capital card does not earn rewards.

The problem is that the people receiving these letters aren’t government entity clients, so it appears that Chase has sent out these letters in error. We’ve reached out to Chase for comment and have yet to receive a reply. The full letter can be viewed below:

Small Update: This seems to be affecting people that selected ‘Educational Services, Colleges/Universities/Professional Schools’ during sign up.

Hat tip to GoodLifeTravel



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Parts Unknown
Parts Unknown

Chase is on a hot streak lately. If they screw up stuff like this, what happens when they… oh I don’t know, move a few billion dollars around? Nothing to see here, it’s all on the level.

TB
TB

Seriously though, people need to get fired over this and then the paperless bonus 500 UR = $500 mishap. I don’t trust them as a company right now.

miafll
miafll

That is what you get when cutting costs too much by moving critical programming works to India!
There also seems no Quality Assurance on the jobs, i.e. flagged out accounts that required 1099 (but using wrong criteria or plainly mistaken 500 pts = $500 – how could that happen and not being caught? ), the current blunder is to assume any jobs in an education entity would be employed by government, i.e. the whole education system is public… noting can be more wrong from such, especially the top schools in this country are all PRIVATE.

Ann
Ann

And many small businesses are contractors in the education industry, not employees of the government school/university they perform work for.

vipul
vipul

I am sure corporates used to make stupid mistakes even before the work moved offshore. Why so much hostility?

miafll
miafll

Not only the mistakes were a lot less, but when there were mistakes the customers could deal with some dept with employees based in the same country and UNDERSTOOD how the laws and regulations worked.

There were no problems with offshore firms and workers IF they were properly trained and understood / knew what they were doing.

That is why you need Real Quality Assurance in place – to make sure the outsourced works are correctly performed.

Get it why cutting costs by outsourcing often cost corporations a lot more when blunders like this happen?!

vipul
vipul

Do you have any evidence that this particular mistake was because of offshoring work? Or do you automatically blame all mistakes on offshoring?

Jo
Jo

+1
Miafll have you been in a computer science class in most of the top public/private universities? Most of them are Indian!

JonS
JonS

Just a racist. Anything bad happens, blame some dark skinned foreigners without any evidence of their slightest involvement. Ignore this racist.

Dylan
Dylan

If chase cuts my rewards my spend goes to zero with them.

SameSituation
SameSituation

Got the same thing here today. I work full time in elementary education. Really hoping this is some error that gets straightened out.

MoreSun
MoreSun

The question here is what is the small business that you are the owner of? Maybe you mis-classified yourself?

SameSituation
SameSituation

I definitely chose educational services as the nature of the side business is related to presenting and curriculum development( for my own distribution outside of the school).

MoreSun
MoreSun

IF we don’t get conversion notices on the Educational Services category maybe that fits better. You might also have a case for consulting here. Hopefully Chase gets back to DoC on what exactly they take issue with so you can make an informed call.

lenin1991
lenin1991

Many teachers that do a bit of tutoring on the side would correctly select “Educational Services”…

MoreSun
MoreSun

Wow! Chase has outdone Citi with this one.

MoreSun
MoreSun

Seeing the new info I take this back. Looking at the drop down menu on the application to end up with that specific classification as a business owner I can definitely see Chase’s assumption you are a Goverment Entity Client. Interesting that Chase has decided to clamp down on Rewards being earned by those who control public education businesses.

Lumipz
Lumipz

I don’t think it’s just if you control the school. Most cases they university will provide you their own card. I think it is even if you are a university client or vendor. .

MoreSun
MoreSun

I’m saying it sounds like people can argue they misclassified the nature of their business. They saw it through the eyes of an employee and not an owner. An employee works in the education industry. An owner works in whatever area their actual business is- not their client’s industry. For the vendor what type of vendor? Food, IT, janitorial services, consulting, etc. would be your industry not Education. Tricky is if you belong in Educational Support Services, like being a tutor- do we have DPs of that category getting converted as well?

Snorlax
Snorlax

Ummm my aunt has a private tutoring business, she’d pick “educational services.”

There’s also private schools…

miafll
miafll

The top Universities in this country are ALL PRIVATE COLLEGES. Have you heard about Ivy Leagues?

lumipz
lumipz

+DP here for likely “Academic” biz category.

sdsearch
sdsearch

Their example is 2000 “unused” points. But what if you’re using this card for “pooling” points from Freedom, etc, and you’ve got a big amount you were planning to transfer (but you hadn’t figured out yet where you wanted to transfer). Will they force you take a $4000 credit because you had 400,000 points accrued (but not yet transferred) and thus “unused”, even if most of them were earned with other cards?

This letter seems to assume that all such cards are “stand-alone” cards where the points are only earned with the card and often redeemed, but that’s not how everyone use UR points cards. Many people have UR business cards paired with UR personal cards.

And what if the people who are considered by Chase to be “government entity clients” have partner cards (Marriott business card or United business card or Southwest business card), what then? The examples so far seem to only be with “generic” (non-partner) Chase business cards.

Frank
Frank

Hopefully they’ll cash out the Marriot points at 1 CPP since that’s what they are worth (per Amex)

sdsearch
sdsearch

They wouldn’t be cashing out partner points (such as Marriott), because the moment they’re earned (only computed at statement time), they’re transferred to the partner. So there are no Marriott points for Chase to convert back, except at most any pending points from the current statement in progress, if they convert you between statements..

But there would be owed benefits (like a 15 elite night credit if that’s only the Marriott card you have) and annual free night cert that could be lost depending on the timing of the conversion.

Also, it makes me wonder: Because converting a partner card would mean you lose partner benefits (not Chase benefits), I wonder if they need permission from the partner to forcibly convert you from the partner card to a non-partner card? So could it be that in the case of a partner card they’d simply cancel the card on the spot maybe, rather than deal with mess of issues of converting it?

Yoni
Yoni

sdsearch
Great question. Was outta town when DW biz cards received letter.

My question is one if them is a CIP and we included a $95 AF. Thought about SM about refund as 2nd year AF is coming up soon- but doubt I will -80K for $95 is a deal esp paired w/CSR.

Also curious about the 0% for 12 months on CIC and CIU cards as we’ve been using the arbitrage for small 2+% apr on about $30k.

Will just eat the AF for past year and may have close the CIP after change before AF and share “Gov’t entity” as reason, and then later have DW apply for a CIP again under her other side Biz down the road, possibly set her up with an EIN.

FWIW: wasn’t education it was under Public Administration – National Security – which honesty makes more sense for the reasoning – but it’s fine as she has since discontinued this line of work and is focusing on other side biz.

Jr
Jr

Who cares. It affects nobody in this forum. And if you are a government entity, the points belong to the government. I should know.

Yoni
Yoni

Not necessarily the case for all, my wife did work in Gov’t arena (Public Admin. -> National Security ) but not contracting with Gov’t. No form of compensation from Gov’t.

Politico
Politico

My org is a political campaign, and we got the letter. That’s closer to a “governmental entity,” though the point of having separate independent political committees is to keep the campaigning separate of the governing. Losing all ability to get Chase biz rewards cards for my org would stink.

Borkus
Borkus

I see one for my wife’s business as well in Informed Delivery. Her company provides management consulting for political campaigns, so I listed her company as “Political Campaign”. Oops… I should have listed Management Consulting. In any case, definitely not a government entity.

Snorlax
Snorlax

Definitely appeal if you can.

MoreSun
MoreSun

Ouch. Do you know how you classified that on the app? William Charles potentially new classification than education in this DP

Dustin
Dustin

I received one of these letters in the mail today. I definitely am not a government entity client. I may have picked educational services when I first applied for the Ink 9-10 years ago as I was tutoring on the side but I am not sure that I did. I sent a SM to Chase hoping to get an answer.

LBC
LBC

I got two of these letters today for CIP #1 (SSN) and CIP #2 (EIN). Sole proprietor, educational services for higher ed. My side gig income is indeed from public colleges so I don’t appear to have any recourse here.

I did NOT get a letter for the CIC I received two weeks ago. If I get a letter, what exactly will happen as far as the signup bonus? I guess I could race to meet MSR this week but that wouldn’t exactly be easy.

Also, all my UR points are pooled on my CIP #2, including UR I earned from personal cards. If I transfer all the points to a personal card can I avoid being forced to cash any of them out?

The only silver lining is both my CIP annual fees will be refunded, according to the letter.

JEM
JEM

FWIW, got the letter yesterday. Called Customer Service and was told to ignore it since I’m not a government entity client. CSR was dreading the onslaught of calls they were going to get.

Shawn
Shawn

Just spoke to a supervisor, she said there is no opt out and that if you received the notice then it’s happening to your account. Absolute BS I’m a public school employee but my business is completely non-related. Quite infuriating.

MoreSun
MoreSun

Someone on Reddit got one for a CIP of colleges/universities public but not for their 2nd CIP where they selected Educational Support Services- so far at least. https://www.reddit.com/r/churning/comments/ar7v0x/comment/eglo388

Dustin
Dustin

After receiving the letter, I sent a secure message to Chase. They responded ” I understand that you are stating your business is not associated with a government entity. Regrettably, we
are unable to cancel the changing of the new card for the account. ” I responded back with I am sure there is some way to make this right. Otherwise, I will be forced to file a CFPB complaint. They replied with we will research this and get back to you in 2-3 days.

Nate
Nate

So anyone know how this impacts sign up for cic that was product changed? I did cip to cic and would like to keep it for 5x. Am I eligible to re-sign up for cic and get bonus too?

Yoni
Yoni

Nate I would think so (sign up again) – you could also probably start a another new side gig -or apply as a “business” and if you don’t have an EIN. I would say wait 90 days after the change and close the changed accounts.

As to the sign up bonus – long ago transfer UR to a personal card. I think they could face legal issue if they clawed back esp if business wasn’t a Gov’t entity. I doubt they will as the bonus is less than .75/hr of a local white shoe legal firm, that wouldn’t even cover reviewing the case – much less litigation.

So I wouldn’t sweat it, but then again Corp
often do things that make no finical sense.

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