Say It Ain’t So
Some shutdowns are not a complete surprise. If you’ve read this blog before, you likely know that I’ve had a fairly lengthy rap sheet of big bank shutdowns associated with loyalty rewards earning credit cards. Shutdowns are not a source of pride believe me; they are a touch of embarrassment combined with regret. Not long ago a points group and as goal for the year, a relatively new member to the rewards community posted to “have one shutdown”. I thought it was lunacy. In this most recent case, the warning signs were flashing neon, but unfortunately this recent shutdown was still a surprise.
A rash of Amex shutdowns have occurred recently. At first look, it doesn’t appear to be covered by some of the major points and miles blogs. I’d guess that the larger points blogs are aware of what’s been happening in the past week or so, but so far no verbiage about it. I should also say that the two blogs I linked are blogs that I follow, enjoy, and respect, but nonetheless there’s no content on this issue. The odds that the major points blogs aren’t aware of what’s been happening with Amex seem nearly impossible. Knowing that nearly all major points blogs that I can think of are linked with sponsorship dollars from Amex, this particular issue would be a pretty awkward post. With that said, I assume that this lack of reporting on this issue is to protect a (very) lucrative relationship with Amex. However, I could be wrong too, but even if it is linked with the almighty dollar, it’s at least partially understandable. That’s part of the dilemma of having such tight linkage with big banks and other travel “partners”. There’s a certain level of intellectual neutering that has to take place. If I’m wrong, I’m happy to admit it, I just want to know how and where I’m wrong.
A Razor’s Edge
Basically there are some (as in more than one) Amex employees that were essentially rubber stamping approvals for certain credit cards. From all I know, they are incentivized based on approvals and new accounts. That seems to make sense, as nearly every industry has similar incentives. Roughly several months ago, there were large no lifetime language offers on the Business Platinum card. The sign-up bonuses were pretty generous, ranging from 100k – 150k Membership Rewards if I remember right. If you had the card already for an existing business, getting a second (or more) card for that business might be an issue. But calling the “right” Amex rep could effectively smooth the path to getting another card for that same business.
Enter Dr. Dark (Adam “Amex” in Phoenix)
Although there were multiple Amex employees doing the same thing, or likely getting carried away with approvals, only those applying with Dr. Dark were put in the toaster oven and burnt. What’s worse is Dr. Dark apparently still has his job with Amex, yet those stuffed into his approval toaster are definitely burnt. I’m obviously one of those people, but plenty of others managed to get linked to him in one way or another. To be transparent, I wasn’t aware there were multiple Amex employees providing a well lit path to multiple business platinum approvals. Mostly from naivety, I thought Dr. Dark was the only dark horned unicorn in the Amex approval process. I had never met Dr. Dark and also had never met the person who supplied the contact as a unicorn approval source. Like many who invested with Bernie Madoff, I felt lucky to have a direct Amex contact working “with” or even “for” me in a serious way. I also assume that person who gave out Dr. Dark’s information was just doing it to help others. I highly doubt there was any malicious intent involved in the referral.
I called Dr. Dark within 24 hours of getting his contact info, applied over the phone, and sure enough, was instantly approved for another business platinum. It’s worth pointing out that during the call, there was no mention of a pop-up saying I had already had the card/bonus before either. I shortly after received my new (and multiple) Amex business platinum in the mail, met the sign-up bonus. Everything seemed pretty fantastic.
It’s odd though that Amex is okay with shutting down some accounts, or those associated with Dr. Dark, but let others doing essentially the same thing through other of their employees pass go without issue. Doesn’t seem fair? There’s a lot in this ‘hobby’ that doesn’t seem fair. Right now the hammer has come down and Amex, from all that I know, doesn’t reverse that hammer….ever.
My shutdown rap sheet isn’t as notorious as others. Miles per Day has a pretty lengthy (and self admitted) shutdown history. Others within elevated levels of spend and risk within the points and miles community have even more shutdowns than that. However, often those (heavy hitters) have many more options than just their own shutdowns. Player 1 & 2 options (often a husband and wife) are not the only options for rewards that they have. A shutdown for the primary account holder, or even a second player, may not be the total end of a relationship with a bank and program. For me though, there isn’t a player 2, or 3, or 10 for that matter; it’s just me. Put in another way, there’s no safety net, just a perilous free fall. So shutdowns are more severe for me than others with more options. Those with additional options are like the human version of points and miles cats; they have multiple lives. If one life, or account in this case, is taken away, there are others to follow. The future could be different for me and might possibly include more players. For now though, I’m Hon Solo (alone in this journey).
An Amex Shutdown does hurt, there’s no denying it. It hurts more than my Barlays shutdown, and more than my Bank of America closure too. Oh, almost forgot the Citibank axe as well. Capital One and I don’t speak much either, although we don’t have a formal no contact order. The Amex shutdown will be costly next year, but it’s also a bit of fresh air. I’ve been thinking of the hundreds of thousands of dollars in (obligated) spend that I’d need next year to max out all of the rewards cards that I have. That kind of spend isn’t as easy now as it has been in the past, but I was committed to meeting it.
I’ve cashed out my Membership Rewards (MR’s) regularly. I had very few MR’s in my account before the shutdown as to be negligible. There were some pending MR’s that would have elevated the shutdown stress slightly higher, but just barely. In short I haven’t trusted Amex, considered my account to be ‘high risk’, and potentially destined for the guillotine on any given day. Amex is a weird bank in that you can literally buy millions of dollars of prepaid debit enabled gift cards of various sorts, do massive volumes of electronic bill pays, or huge dollars in reselling, and the bank doesn’t blink. At worse you might not receive your points for a particular statement or be blacklisted for future points on a card. However, if you do a self referral to a rewards credit card, for example, and you’re probably toast. It’s just bizarre.
So many new victim terms have been coined over the past several years. I think “shutdown equity” or “account closure justice” could be a new rally point for the credit card oppressed like me 🙂
The shutdown today was shocking at first, but not as much as past shutdowns. I guess previous experience has lessoned the blow. I thought the shock would last around 48 hours, but it actually was limited to several hours. I had been under the impression over the past few to several years, that unlike most other big banks, Amex shutdowns are likely not lifetime in nature. A non-lifetime ban also lessoned the emotional blow of the axe. However, after talking with some others who are quite knowledgable about all things Amex, they believe a shutdown would be lifetime. At best a shutdown would be roughly 7 years. Either way there’s a lot of uncertainty. My information came mostly from hearsay; people who were shutdown and knew of others who got back in with Amex. Those people are also solid points and miles enthusiasts, so it’s hard to know what information to go with. Hearing the lifetime ban possibility increase though in the past 24 hours has really brought my optimism for the future with Amex down several notches.
I assume I or others pursue a legal battle against Amex, any chance at a non-lifetime shutdown (leniency) is probably not happening. I’d guess a full on lifetime ban is more likely. I’ll also be soon under the Chase 5/24 mark too so that’s also encouraging. However, access to programs like Hilton via Amex are likely not an option going forward….at all. That doesn’t sit well with me either.
Envy seems to be a natural sin in life. It’s easy to go to a point and miles meetup, conference, or read a blog and have envy for what someone else is saying, doing, or portraying. More reselling, manufactured spend (MS), or secret scheme that brings in massive rewards or cash. It’s easy to look around and see and hear about others that seem to have everything working in their favor and a seemingly unlimited points waterfall flowing in. I’ve had those feelings too, and I’m aware that I’ve done well on the spend and rewards front. But there are also downsides to new (and enlightening) information. In my case, I would never have gotten carried away with bill pays that likely led to previous shutdowns. I basically had a strict aversion to bill pay but changed tune after learning about other’s prowess. I would also never have known about Dr. Dark in Phoenix who was the source of this shutdown. Obviously there are positives from new information and outside groups too, that can’t be discarded. Knowing what side of the line to stand on though, as evidence of the pretty widespread shutdowns of experienced points and miles hackers via Amex, isn’t always easy to understand. What I’m trying to say is do what you can and do what you’re comfortable with. Also try and improve your repertoire, but repeat the previous sentence when in doubt. The rest is just excess chatter.
I’ve said it before, but if tomorrow it all ends, it’s been a good ride. I don’t need points and miles in my life to be happy. At the same time, the rewards game has done a lot for me though, and I’m very aware and grateful for that, even in the shadow of a big shutdown.