PenFed has sent out an e-mail regarding new rewards program rules. On November 1st they are adding a new section to the terms labelled ‘Account Abuse/Misuse and Fraud‘. They provide the following examples of abuse/misuse:
- Using your Account in an abusive manner for the primary purpose of acquiring Points
- Using your Account other than primarily for personal, consumer or household purposes
- Point redemptions that you didn’t authorize
They also provide some examples of actions that can be taken:
- Taking away the Points you earned through abuse/misuse and/or fraud
- Stopping you from earning Points
- Suspending or closing your Account
- Taking legal action to recover Points redeemed because of such activity and to recover our monetary losses, including litigation costs and damages
Our Verdict
Seems like all cardholders are getting these e-mails so I wouldn’t panic if you received one. They do offer a card that earns 5% back on gas, so I imagine that would be the card most would be manufactured spending on. Remains to be seen how strict they will be, but this doesn’t look good.
Hat tip to readers Julian B, T – Diggs & elegua
How in the world do they use the words “abusive” and “litigation” to talk about people who only use the cards to maximize points? In what world would that hold any weight in a courtroom?
I mean, if you read the fine print most cards have similar language about rewards abuse.
I remember one (Chase?) even called out “churning” as prohibited.
Sheesh, sounds like this bank consists of bunch of seriously clueless idiots. Chasing away existing customers from a clearly mediocre to poor product with blanket threats of legal action even for people that never MS’d…. What are they thinking? It’s like this john kelly evp just learned what MS is and freaked out. Dumb dumb dumb. Did they consider that they only offer credit cards to get swipe fees and hopefully interest? Certainly not as some noble convenient service to consumers. So they’re mad at the consumers that use their credit cards primarily for points, calling them abusers, when in reality they’re just getting the most of the system these banks created to lure them in.
Vague email. I wonder what kind of abuse is occurring?
I don’t mind them cracking down on obvious improper behavior in order to preserve the 5% cash back. Hopefully such cracking down would be done in a fair manner.
I have PenFed Pathfinder got it this year, sacrificing a slot of 5/24 & had a hard time getting 100$ annual airline credit , had to spend 3-4 times before it actually was picked and credited. Between was thinking of using it for Plastiq, has anyone used?
They don’t have big sign up bonuses why even with this rule.
I still haven’t redeemed the 29k points that I got from signing up for the pathfinder card. Is there any way that I can get cash out of it? Other than redeeming for a gift card then reselling it…
lol I’m in the exact same boat
Likely not. The portal was crap a year ago and very likely still is. Might want to check the DoC list of gift cards you can move to an app for safekeeping.
Time to close, their rewards program is not very good anyway.
What were you using the card for that they may consider abuse/misuse/fraud?
I used to actively promote PenFed but no more. I have the 5% rebate on gas card. The other cards I never use because PenFed stupidly expires cc points a la Wyndham Rewards, etc (a practice common in hotel/airline loyalty but nearly unheard of in credit card circles), their portal was (presumably still is) on par with something written by a dev who was a C- student at DeVry, and now they just want to generete more reasons to arbitrarily deny some benefit to their “members” (remember, this is a credit union, not a for profit, publicly traded bank).
What exactly does “Points redemptions that you didn’t authorize” mean? If a cardholder didn’t authorize it, why would PenFed come after that cardholder?
Obviously, I’m misunderstanding something. That part of the email means something different than what I’m thinking, but I can’t guess what the actual meaning is. Does anybody have any clue what they mean by that?
Whatever the meaning, I don’t use my PenFed card (for any reason). So I have no reason to be concerned. But I’m just curious as to what they actually mean by that.
I thought the same thing. It’s very odd to punish someone that got defrauded.