American Express Open Small Business is a Personal Account

By: convoyduel

I was a co-owner of a small business. We received a solicitation to our business by mail for an Open small business AMEX account. We returned the application in the businesses FEIN. As part of the application, we had cards issued to each of our employees so that they could charge fuel and operating expenses.

We closed our business at the end of 2006 and wound up carrying a balance on the OPEN account. The account was always paid on-time and well more than the minimum, although it was usually paid off. We closed our business after being stiffed on a lot of money after our biggest client defaulted on payment. We continued to pay down the AMEX bill with personal funds in good faith for 18 months. AMEX continued to raise the interest rate from 9.99% to 24.99% even though the bill was always paid on-time and above the minimum. We called to protest the laughable rate and made an offer to close out the account. AMEX insisted that the account was a personal account and began to threaten our personal credit. When we protested such an outrage, they informed us that the terms of the account changed once the card was used and the cards became personal cards. Even though all of the charges were by the employees, they linked the charges to "my" card. They offered to settle at 80%, but "Mr. Manheim" of AMEX demanded immediate payment. If we didn't pay immediately, the account would be declared "distressed" and would immediately go to collections against me personally. I told him that it would take a day or two to get the money to them as I wasn't going to wire transfer money out of necessary accounts over the telephone. He said that I had to pay in that phone call or the offer was rescinded and collections would start immediately. I told him to take a hike. After consulting a very good attorney, paperwork was requested and AMEX did in fact bury changes to the terms making it a "personal" account instead of a "business" account.

They reserved the right to go after any cardholder or all, regardless of who made the charges on the linked account. After a month of wrangling, AMEX offered settlement at 75%, payable in 30 days. After we paid it, we received a notice that they were reporting it against my personal credit and that I was receiving a 1099-MISC income statement in the amount of the write-down. The also informed me that if I ever applied for another AMEX card of any kind, they reserved the right to re-apply the write-down balance to my account immediately plus interest. That's an easy one to handle.

This bait and switch was never knowingly agreed to by me or any of our employees. Thankfully, the resources were there to pay off the account and the resulting tax hit from their games. This company is crooked crooked crooked and appears to do anything in their power, legal or illegal, to change the terms in their favor after the fact. I would have never knowingly agreed to personally guarantee the accounts of a business. Shame on American Express. The only way to beat their rigged game is to not play it at all.