durberville

Looks like I'm going under FR. There's little information about the FR process in Canada. I had a phone message (9-5, will call back tomorrow), and my accounts are all frozen online saying "Your Card account has been suspended. Please call the number on the back of your Card if we haven't already spoken with you."

What did it is probably the $5,000 purchase I made on a new card with Square to meet minimum.

Any Canadian experiences? What should I expect?

jerryhung

Wow, I hope it works out for you, keep us posted

I wouldn't dare it myself for the 40K welcome bonus
I don't want to lose AMEX MR balance, ever

drwilliams

The $5k square purchase on a new card is most probably the very red flag that went off in the system.

May not be a financial review, but if the square charge is not a 'real' transaction, they will almost certainly close the account, I would guess.

durberville

Turned out not be a FR, but they closed all accounts. No recourse, not much of a discussion: "all accounts closed, pay off immediately."

FML.

jerryhung

ALL of your AMEX accounts, like Gold or Plat (if you have them)?
Did they let you transfer out the AMEX MR points, or other program?

Wow, I hope they don't block your future application = no churn

Sorry to hear that

durberville

All, AMEX Plat, Gold, Aeroplan Gold, and AMEX Gold Biz.... lesson learned :/ I got the MR points out before. They better prorate the AMEX Plat fee :/

I also hope no blacklist.

heraclitus

Just out of curiosity, if Amex gets paid their fee from the Square, what do they care how someone rings up their bill? What is it about that transaction that Amex doesn't like?

To the OP, my sympathies on this turn of events, but thanks for sharing your valuable experience with us.

Reid

Was the square account registered to your name. If so, if would be obvious to them that you're basically pulling a cash advance without the cash advance fee, and getting a boatload of points for doing so. I can see where Amex might be ticked off.

FlyerAl

Charging $5000 to a brand new business card with a P2P merchant like Square (whose average transaction in Canada is $120) would immediately raise a red flag with any bank's fraud prevention department.

They suspected you were making fake purchases to obtain cash. It doesn't matter if the Square account is registered to a different individual. This type of fraud usually involves maxing out numerous cards through merchant accounts, taking the cash and then not paying the bill. It's a common fraud involving organized crime groups.

Although in your case you weren't engaging in that fraud and were obviously going to pay the bill, AMEX corporate security didn't feel comfortable about maintaining a relationship with you and decided to shut you down. 'Abnormal' patterns like multiple card applications, churning cards, cashing out all of your points, etc. probably added to their suspicions. I don't think MS for points was even on their radar. It's unlikely you'll be able to reapply anytime soon - if ever. Maybe try again after these accounts drop off your credit file in 6-7 years.

Bloggers shouldn't be advising readers to use P2P like Square or PayPal to engage in MS. These companies are very sensitive to 'laundering'-type transactions because of the high volume of fraudulent activity they encounter.

westcoastgal

I am sorry to hear this happened but I agree, bloggers should not be telling people to use Square or other systems to MS and I said so in posts and on blogs that touted Square. I am sorry that you didn't see all the negative feedback and posts about Square before ths happened. It must feel pretty awful.

Will these multiple accounts closed by the creditor show on your credit report and affect your credit score? Were you using your own name and credit for these cards? (I recall that you are a student and your churning is very aggressive for a student but what do I know). I wonder if it will affect your other credit card accounts and ability to get new cards from other lenders. This is something I've never experienced or heard of so I don't know what the ramifications are.

It doesn't matter as Square flags anything over $2k and holds anything abnormal, large, a brand new customer, self paying, paying into a personal account and not a business account, etc. I've heard of accounts being frozen and funds held for 180 days or more and by their own T&C and laws, they can do so at anytime without informing the customer or giving a reason.

Square and other card swiping operators don't want people using it for personal use and express that it's for business use. Person to person are frowned upon and may get through at times but Square customer service told me it's not the intended use.

The prime customer for Square is someone who does small dollar amount sales, sporadic sales, is consistent and doesn't have a $200 sale and then a $3000 sale and really, anything over $2000, like I said, with Square can be dangerous. Even legitimate businesses and honest credit card swipes for a sale or service can be reversed or frozen and happens all the time if you read other FT threads, RFD, BBB, multiple blogs and comments online. Just google search.

I am glad that @duberville is being humble and honest and putting this out there to warn others.

I'd recommend removing your referral links from FT and your blog for the Amex cards.

I am truly sympathetic as we all make mistakes.

durberville

Thanks for your replies.

There have been a number of questions probing for more information, but for a number of reasons, I think it's best I keep those details private. Whether or not AMEX used my case as an "example", which wouldn't surprise me considering this is the first time I've heard of this happening in Canada, certainly mediates my response.

Nonetheless, I would suggest that Canadian AMEX users avoid charging against Square, or any other cash-like purchase, to either yourself or to someone in your immediate family.

Thanks for the support, and the criticism (you'd be surprised how many people like to swear at me on my blog!), and I hope my mistake teaches others.

heraclitus

Canadian Kilometres was suggesting Square (with referral links, naturally!) as a means to generate spend on the Amex Gold Business. I have to admit I was considering using that method to get me over the top beyond my usual monthly Amex spend, but obviously I will not be doing that now. Lesson learned.

Cana2013

Thanks for sharing your experience with us. I was attempted to use Square but after reading some negative reviews I decided not taking the risk.

sethb

If they closed a Platinum card, I'd ask for the full annual fee to be refunded.

durberville

They prorated the annual fee, -200$ travel credit we used.