Do Not Know Thy Customer

  • JJ Hornblass
  • August 18, 2009
  • 1

It’s never a good sign when your vendor has no idea who you are.

But that’s the case when it comes to American Express, apparently. I got a call this morning from someone at American Express, who offered this company “help with its account payables.” When I asked what that meant, I was told “corporate cards” from American Express.

The thing is this company already has two American Express cards.

I asked the cold-caller why it was that she didn’t know this company already had two American Express cards. She told me she worked for a district manager and he “doesn’t know who has cards already.” Her job, she explained, was just to set up meetings for the district manager.

From there we got into a “Who’s on first”-type back-and-forth on whether our American Express cards were “corporate” cards or “business” cards. She could not explain the difference.

Just yesterday the Treasury Department released data that showed American Express increased its credit originations by 41.4% last month, or $1.38 billion. In a formal filing with the Treasury Department, the company attributed the increase to a rebound from a steep decline in originations in May 2009, but that is not necessarily true. On average, American Express has been originating about $1 billion of new card loans since the start of the year. May was certainly lower than the average at $979 million, but April originations were even lower at $629 million, so June was truly a departure from recent origination practices for Amex.

So what’s going on at American Express? That same Treasury filing explains the company’s lending standards and terms as such: “Especially in this difficult economic environment, our intent is to strike the right balance between accommodating our cardmembers’ spending needs and prudently managing credit risk. We are committed to providing creditworthy cardmembers the capacity to spend.”

If that call I received this morning is any indication, there may be less “prudently managing credit risk” at American Express, than the company would like Treasury to believe.

  Like This Post

JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at or 212-564-8972.

  • googleplus

One thought on “Do Not Know Thy Customer

  1. John, fair point. You’re a stronger consumer advocate than I!

Leave a Reply