Credit card companies doing virtually anything that they want…thanks to Congress and an OCC that says “generally, yes” they can.

A MSNBC article by Joel Grover entitled, “Don’t Leave Home; Your Credit Card is on Hold,” portrayed a situation with an American Express account holder that I find disconcerting in this day and age of identity theft.  I also find myself uncomfortable for other reasons, such as what has happened to American jobs (relative to outsourcing) at a time when we are struggling with a recessionary economy.

It seems that an Amex customer, Cathy Jones, had her account placed on hold “while the company did a financial investigation to make sure she could pay her bills.”  Let’s see, she’s been an account holder who ”can’t remember being late on a payment” since 1989 — that’s two decades; twenty years of ups and downs relative to the economy, and I assume life and/or career stages that are typical of most people.  Yet, her account merits an “investigation?” 

Nevertheless, she was apparently willing to comply, except that she learned that Amex wanted to access copies of tax returns that would thereafter be reviewed overseas (according to an Amex representative who was in New Delhi, India).  What’s the problem?  Mr. Grover’s piece also provided this quote:

There is a big risk in having your private information viewed by anyone abroad, according to Jay Foley, of the non-profit Identity Theft Resource Center. He says most foreign countries don’t have strong privacy laws, like in the US, that prevent someone from selling your private information, like your social security number.
 

Based on the above, I would not want my information sent overseas, either.  I’ll bet that at least some of it already is, unbeknownst to me and millions of other account holders with numerous credit card companies, nevertheless.  Because of outsourcing and globalization (in the absence of laws in foreign lands to protect us), our information is probably somewhere else in a less than secure (legal, geographical, or technological) environment, waiting to be hacked, stolen, or misused.  As Vito asked in a comment on the ChangeInTerms.com site, who regulates software used by banks?  

According to a Federal Trade Commission (FTC) report published in February 2008, “Consumer Fraud and Identity Theft Complaint Data: January – December 2007,” credit card fraud was the most common form of identity theft (in the FTC’s Consumer Sentinel database), and even tax returns themselves may be used to commit fraud (e.g, a fraudulent tax return is filed; see the table on page 13, “How Victims’ Information is Misused”).  Further, since “electronic fund transfer-related identity theft continues to be the most frequently reported type of identity theft bank fraud during calendar year 2007,” I find it difficult to side with Amex’s apparent practice of outsourcing relative to providing access to such highly sensitive data to a foreign country.

Unlike the situation with Kevin Johnson, whose account Amex does not seem to want to restore despite a substantial amount of media coverage, Joel Grover seems to have gotten some results for Cathy Jones (after some apparent stonewalling; either that or a show of extraordinary ignorance on the part of an Amex PR spokesperson).  As Mr. Grover related: “At least for Cathy Jones, this story has a good ending. Only after I questioned Amex’s PR woman about Jones’ case, the company did an about-face. They simply asked her a few questions over the phone, and removed the hold from her cards.”

It’s too bad that those of us who are battling Chase have mostly received coverage from reporters who have either been duped by Chase* or who are less effective at helping consumers (and small business owners) enjoy a similar “good ending.”  If you have read widely enough on this site, then you may remember that I have declared, “If Chase wants peace, it can issue a press release” (rescinding its despicable, and allegedly highly illegal, change in terms notice).

Mr. Grover noted that the Amex PR person had “spun the story very differently” than the Amex representative in India with whom he apparently also had spoken.  I will acknowledge, these credit card companies — especially Chase – seem to be very effective at disseminating ”spin” (and lobbying, and doing virtually anything that they want, as long as they give at least 15 days notice that you’re going to be tricked, coerced, lied to and abused — thanks to virtually no protection from Congress and an OCC that says “generally, yes” they can).

*Anna Werner with CBS 5, San Francisco, needs to be called out as an exception; not only has she not been fooled by Chase, she and her colleagues are actively engaged in investigating and airing the truth.