HKG_Flyer1

I've posted here before about Amex's taking advantage of cardholder ignorance and poor disclosure policies to "pad" the exchange rates used in charge U.S. cardholder accounts for foreign currency denominated transactions. When I have audited such transactions in the past (this takes a lot of work, requiring the building of a spreadsheet with historical exchange rates, faxing it to Amex, and then negotiating), I have been refunded exactly what I asked for, but now they have changed the cardholder agreement to eliminate any definitive conversion methodology.

Well, I stupidly, stupidly, used the card on a recent trip, and now find myself looking at an average unexplained add-on of 8-10%, in addition to the disclosed 2% mark-up.

If my own experiences (repeated instances in multiple countries over several years) are indicative, it strikes me that Amex may be generating a substantial portion of its profits through such activity. Imagine the total dollars involved if Amex is padding the foreign currency-denominated charges of its entire U.S. customer base by 8 - 18% (based on my own personal experience). I gave them a "pass" before, but I now am observing a pattern that is spread over multiple years and multiple countries.

I think this is serious enough to warrant criminal investigation and was planning on contacting Mr. Spitzer's office. Any thoughts?

As an alternative (or perhaps in addition), I'm considering auditing my entire account going back several years, detailing the over-charges, and retaining an attorney to represent me in obtaining a refund (it my case, it seems the magnitude of the overcharges would easily be enough to justify the expense of such an effort).

I'm interested in the thoughts/experiences of other cardholders with similar F/X related problems.

[This message has been edited by HKG_Flyer1 (edited Mar 22, 2004).]

Steve M

Do you live in New York State?

QuietLion

I think it would be great if Mr. Spitzer focused on something other than on-line gambling.

QL

HKG_Flyer1

No, I live just up I-45 from you. However, I suspect that Mr. Spitzer, should he decide the issue will help him in his future campaign for political office, would have no difficulty finding a similarly situated Amex cardholder in his region to act as the nominal injured party.

rothsteg

If the overcharges are that egregious, wouldn't it make sense to contact a class action lawyer. The aggrieved class (all Amex customers who have FX transactions) would seem to be large enough to make it worthwhile for the lawyer to take on the job at no cost to you.

Snowcap

Sorry for the lack of clarity here but, apparently, a class action lawsuit is either in the works or is about to be settled by Amex. I remember reading in the WSJ a few days ago that Amex is about to settle a case for around $33 million regarding lack of disclosure notices for foreign exchange rates. Sorry I don't have more information.

Snowcap

Ex Amex Card

That's interesting. I used my Amex in a number of countries a few years back and the exchange rates were reasonable, even for currencies like the Vietnamese Dong.

Which currencies did you get hit with the 8-10% on?

HKG_Flyer1

The most recent example is Thailand. I did another test transaction (which I have yet to check) in Hong Kong (in the past, Hong Kong has been an exception to the problem, with Amex using reasonable exchange rates). The example I cited in which I got Amex to rebate the overcharges was Argentina (where the mark-ups were something like 18%).

The strange thing is, they can never cite any explanation for what is happening. At one point, I was told that "this is the rate Amex's treasury department tells us to use." I literally had to walk them through the cardholder agreement, pointing out that the cardholder agreement actually required them to use the market rate. Then, I had to send them the actual exchange rates on the dates in question transaction by transaction, etc. before they ultimately credited my account.

I find it really hard to believe that a large international financial insitution like Amex is making a bunch of "mistakes" when it comes to making currency conversions... especially when the mistakes are in their favor 100% of the time. Yet, this is the way they have tried to portray it in their dealings with me.

I have a friend who is a class action lawyer and I'll discuss it with him when I get back to the States.

Ex Amex Card

Hmm, looking through my statements from a 3 month holiday in Thailand, New Zealand and America, you are right - they did consistently overcharge me by an average of 2.9%. One Euro transaction I made was overcharged by 4%

This is inspite of their terms and conditions (UK issued card) not mentioning anything about a loading of foreign exchange transactions. A bit annoying since the lack of loading was one of the reasons I got the card. Where do they get their rates, I wonder?

I now use a UK issued Nationwide VISA for foreign transactions, this doesn't have any loading and I have checked the rates to confirm this...

HKG_Flyer1

[quote]<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Ex Amex Card:
Hmm, looking through my statements from a 3 month holiday in Thailand, New Zealand and America, you are right - they did consistently overcharge me by an average of 2.9%. One Euro transaction I made was overcharged by 4%

Anecdotal evidence (conversations with a couple of friends who hold non-U.S. cards also confirmed some overcharges, but not as egregious as the U.S. card padding).


The U.S. terms & conditions used to reference a standard methodology... a reaonable person could assume that with Amex's daily f/x volume they get the best rates. I used oanda.com to get historical rates for purposes of disputing Amex and they accepted my calculations.

As an aside, I was first alerted to this problem by the "owner's rep" at a five-star hotel with substantial international traffic. When out on the town to dinner one night, I went to pay with Amex, and he insisted that if I really wanted to pay, I use Visa. He then told me that the hotel's management had been besieged with complaints from hotel guests who thought that the hotel had been responsible for the overcharges. He told me that the hotel had attempted to intercede on behalf of their guests with Amex, but that Amex wouldn't budge (so I was evidently more successful than others in resolving my problem).

grupie

I am extremely interested in this thread. Thanks for delving into the topic. Going back into my statements, it seems that my starwood amex charged me LESS than 2% in Brazil. For example, the following charge appeard on my statement for February 13:

70.00 BRASIL REAL BILLED AS
24.63

That is a rate of 0.3518571(rounded to 7 decimal places). According to oanda.com (thanks for the link) the interbank +2% credit card rate for that day is: 02/13/2004 0.3523080.
Using that rate, I should have been charged $24.66 not 24.63. Thus, it was actually BELOW the 2% rate. On other days is was between 2 and 3%
On mastercard it was between 2 and 3.5% for various days. I assume that they don't have the exact same rates as oanda.com. Although not much different. Any reason why Brasil would not get the whopping fees that others have been getting here?

[This message has been edited by grupie (edited Mar 25, 2004).]

[This message has been edited by grupie (edited Mar 25, 2004).]

grupie

I just noticed that the amex travels tools currency converter has slightly different numbers than oanda.com. (I am talking in the 4th decimal place and on- not earth shattering).
What's interesting about this is that Amex's site says "powered by oanda.com"!!

Ex Amex Card

Just checked the exchange rate posted on Amex's web site for that day and they actually loaded the rate by 4.25% on the Euro transaction.

Folks, if you make big money charges to your card in foreign currency then you want to check this out.

You can get the exchange rates from Amex

http://travel.americanexpress.com/tr...sources/oanda/

I-flybynight

Count me in for any class action cases against AMEX.

About 5 years ago I took AMEX to court in Australia and won my case on the steps of the court house. Had a very substantial win, In fact AMEX paid me exactly what I was seeking.

Regards,
Robert

Flyaway

Good thread!

I am looking at my Feb. 04 Amex statement (I have a CAD$ card)....

Jan. 14 Transaction Date
Jan. 15 Posting Date
Foreign spending USD$19
Amount in CAD$24.75

Now according to Amex Canada, The American Express treasury system has used conversion rates based on interbank rates (selected from customary industry sources) from the business day prior to the processing date, increased by a single conversion commission of 1.6%.

Based on this statement and Oanda.com, didn't AMEX over charge me?