American Express to refund $85 million to customers

[Dan Druff]

It's funny, I used to think American Express was an honest company.

http://money.cnn.com/2012/10/01/pf/a...und/index.html

That's why I was shocked when I actually had to use one of their benefits in 2004, and I ran into a department that existed solely to deny my rightful benefits.

I had rented a car using American Express, which comes with complimentary CDW coverage -- basically the same collision coverage that rental car companies offer for $9-$20/day, but for free.

An unlicensed, uninsured driver hit me in Las Vegas, so I called American Express to cover the damage. It was only $1100. I couldn't believe it when I got denied due to a ridiculous reason. In fact, the reason they gave contradicted their own website's terms. For 18 months, I fought unsuccessfully to get paid. This was blatant fraud, and I couldn't believe it was being perpetrated by a huge company like American Express over a matter of $1100.

Finally a collection agent for the rental car company helped me. She was so familiar with American Express' CDW scam that she knew the name of the person I was dealing with before I told her. She said that she knew how to force them to pay, and sure enough, 7 days later I got paid.

Needless to say, I now use other credit cards when paying for rental cars for the free CDW coverage.

Anyway, the CNN story above doesn't surprise me.

Funny enough, American Express' primary marketing tactic is portraying themselves as very customer-friendly. I guess that means they smile while ripping you off.

[Yebsite]

it's business not personal druff...

[Dan Druff]

it's business not personal druff...

What does that mean?

I didn't think they were doing anything to me personally. I just was surprised to see that a huge company like American Express was perpetrating blatant fraud against individuals over relatively small money.

[Hockey Guy]

Credit card companies or banks cheating their customers? Hard to believe.

[mulva]

i use amex @ enterprise just because of that reason.


tell me more about this cdw scam.

[michael]

it's business not personal druff...

"Everyone's a person though, right? How else are they supposed to take it?"

[WillieMcFML]

it's business not personal druff...

"Everyone's a person though, right? How else are they supposed to take it?"

he gotta gun, he gotta gun, everyBODY'S got guns

guy is GOD, almost makes up for the killing of Jimmy Darmody

[Dan Druff]

i use amex @ enterprise just because of that reason.


tell me more about this cdw scam.

The scam is pretty simple.

They offer free CDW as a benefit to cardholders who rent cars using the Amex card.

If nothing happens (which is common), you never have to use it and believe you were totally covered the whole time, and likely use Amex again next time.

If something does happen, and they have to pay to fix the car, there is a department assigned to find any possible reason to deny your claim, including bogus ones. Even if you call them on what they're doing and get very aggressive with pushing them to pay, they will dig their heels in and refuse. You know how persistent I am, and they refused for 18 months. Somehow that collection agent (who had dealt with them many times before, which was just a coincidence) knew the right thing to say/threaten to force them to pay. I was a few weeks away from filing a lawsuit when this happened.

Not only was I in the right, but their own website backed my position. It listed the "only four requirements" to qualify for the CDW coverage and payments, and I clearly satisfied all four. They were just trying to stall me for as long as possible with bullshit until I gave up.

The fact that an unrelated collection agent knew about both this scam and the woman in charge of managing it proved that this wasn't just an isolated incident.

[Anal_Hershiser]

i use amex @ enterprise just because of that reason.


tell me more about this cdw scam.

The scam is pretty simple.

They offer free CDW as a benefit to cardholders who rent cars using the Amex card.

If nothing happens (which is common), you never have to use it and believe you were totally covered the whole time, and likely use Amex again next time.

If something does happen, and they have to pay to fix the car, there is a department assigned to find any possible reason to deny your claim, including bogus ones. Even if you call them on what they're doing and get very aggressive with pushing them to pay, they will dig their heels in and refuse. You know how persistent I am, and they refused for 18 months. Somehow that collection agent (who had dealt with them many times before, which was just a coincidence) knew the right thing to say/threaten to force them to pay. I was a few weeks away from filing a lawsuit when this happened.

Not only was I in the right, but their own website backed my position. It listed the "only four requirements" to qualify for the CDW coverage and payments, and I clearly satisfied all four. They were just trying to stall me for as long as possible with bullshit until I gave up.

The fact that an unrelated collection agent knew about both this scam and the woman in charge of managing it proved that this wasn't just an isolated incident.

That doesn't sound like a scam. That's how ALL insurance policies work. Someone offers you insurance. You accept insurance thinking you are covered. You are in an accident that is not your fault. The insurance company looks for any reason to not pay. What do they have to lose by not paying out? Maybe 1/100 people are as persistent as you. Most people would eventually just say "fuck it" and move on. Hell, even if 10% say "fuck it", that still makes it a profitable strategy. If you think this is a "scam", you must have close to zero experience dealing with insurance policies.

[Dan Druff]

The scam is pretty simple.

They offer free CDW as a benefit to cardholders who rent cars using the Amex card.

If nothing happens (which is common), you never have to use it and believe you were totally covered the whole time, and likely use Amex again next time.

If something does happen, and they have to pay to fix the car, there is a department assigned to find any possible reason to deny your claim, including bogus ones. Even if you call them on what they're doing and get very aggressive with pushing them to pay, they will dig their heels in and refuse. You know how persistent I am, and they refused for 18 months. Somehow that collection agent (who had dealt with them many times before, which was just a coincidence) knew the right thing to say/threaten to force them to pay. I was a few weeks away from filing a lawsuit when this happened.

Not only was I in the right, but their own website backed my position. It listed the "only four requirements" to qualify for the CDW coverage and payments, and I clearly satisfied all four. They were just trying to stall me for as long as possible with bullshit until I gave up.

The fact that an unrelated collection agent knew about both this scam and the woman in charge of managing it proved that this wasn't just an isolated incident.

That doesn't sound like a scam. That's how ALL insurance policies work. Someone offers you insurance. You accept insurance thinking you are covered. You are in an accident that is not your fault. The insurance company looks for any reason to not pay. What do they have to lose by not paying out? Maybe 1/100 people are as persistent as you. Most people would eventually just say "fuck it" and move on. Hell, even if 10% say "fuck it", that still makes it a profitable strategy. If you think this is a "scam", you must have close to zero experience dealing with insurance policies.

Yes, insurance companies love to attempt to deny claims, but this is different in a few ways.

First, this is an additional benefit that they throw in for marketing reasons, but it's far from the reason that most people get an Amex card. While they clearly save short-term money by denying nearly all claims (including very valid ones), they are opening themselves up to fines, class action lawsuits, and bad word-of-mouth (especially if the media grabs hold of the story).

Second, this goes beyond just strict application of their policies and attempts not to pay. They apparently were just blatantly denying CDW claims from a large number of people, without even a good cover reason for doing so. This is different than a home insurance company trying to deny a fire claim on your house when they find out that you added some outside lighting and did the work yourself.

[Anal_Hershiser]

That doesn't sound like a scam. That's how ALL insurance policies work. Someone offers you insurance. You accept insurance thinking you are covered. You are in an accident that is not your fault. The insurance company looks for any reason to not pay. What do they have to lose by not paying out? Maybe 1/100 people are as persistent as you. Most people would eventually just say "fuck it" and move on. Hell, even if 10% say "fuck it", that still makes it a profitable strategy. If you think this is a "scam", you must have close to zero experience dealing with insurance policies.

Yes, insurance companies love to attempt to deny claims, but this is different in a few ways.

First, this is an additional benefit that they throw in for marketing reasons, but it's far from the reason that most people get an Amex card. While they clearly save short-term money by denying nearly all claims (including very valid ones), they are opening themselves up to fines, class action lawsuits, and bad word-of-mouth (especially if the media grabs hold of the story).

Second, this goes beyond just strict application of their policies and attempts not to pay. They apparently were just blatantly denying CDW claims from a large number of people, without even a good cover reason for doing so. This is different than a home insurance company trying to deny a fire claim on your house when they find out that you added some outside lighting and did the work yourself.

It's no different at all. They save "A" by denying claims. They pay out "B" in fines, lawsuits, and bad word of mouth. I guarantee you that "A" is always going to be higher. Do you think they started that program to lose money? And a CC company screwing over it's customers isn't gonna raise any eyebrows. It happens everyday. You think this story would make the national evening news? Of course they have departments blatantly trying to deny claims. Every insurance company in America has those. If you want to say that "insurance" itself is a scam, fine. But I don't see the difference between Amex's policies and any other company that offers insurance.

[Dan Druff]

Yes, insurance companies love to attempt to deny claims, but this is different in a few ways.

First, this is an additional benefit that they throw in for marketing reasons, but it's far from the reason that most people get an Amex card. While they clearly save short-term money by denying nearly all claims (including very valid ones), they are opening themselves up to fines, class action lawsuits, and bad word-of-mouth (especially if the media grabs hold of the story).

Second, this goes beyond just strict application of their policies and attempts not to pay. They apparently were just blatantly denying CDW claims from a large number of people, without even a good cover reason for doing so. This is different than a home insurance company trying to deny a fire claim on your house when they find out that you added some outside lighting and did the work yourself.

It's no different at all. They save "A" by denying claims. They pay out "B" in fines, lawsuits, and bad word of mouth. I guarantee you that "A" is always going to be higher. Do you think they started that program to lose money? And a CC company screwing over it's customers isn't gonna raise any eyebrows. It happens everyday. You think this story would make the national evening news? Of course they have departments blatantly trying to deny claims. Every insurance company in America has those. If you want to say that "insurance" itself is a scam, fine. But I don't see the difference between Amex's policies and any other company that offers insurance.

I didn't say it is going to make big news.

This is very different than insurance companies denying claims because their rate of denial is much higher than insurance denials. Furthermore, they're not an insurance company. They are offering a "benefit" that doesn't really exist (or at least, not the way people expect it.)

That's where I feel it crosses the line from shady denial practices (common among insurance companies) into scam territory.

The vast majority of insurance claims get approved.

The same can't be said for the Amex CDW claims.

They get away with it because it's just a side benefit to the card, and nobody is directly buying the CDW insurance from them.

[Anal_Hershiser]

It's no different at all. They save "A" by denying claims. They pay out "B" in fines, lawsuits, and bad word of mouth. I guarantee you that "A" is always going to be higher. Do you think they started that program to lose money? And a CC company screwing over it's customers isn't gonna raise any eyebrows. It happens everyday. You think this story would make the national evening news? Of course they have departments blatantly trying to deny claims. Every insurance company in America has those. If you want to say that "insurance" itself is a scam, fine. But I don't see the difference between Amex's policies and any other company that offers insurance.

1. I didn't say it is going to make big news.

2. This is very different than insurance companies denying claims because their rate of denial is much higher than insurance denials. Furthermore, they're not an insurance company. They are offering a "benefit" that doesn't really exist (or at least, not the way people expect it.)

3. That's where I feel it crosses the line from shady denial practices (common among insurance companies) into scam territory.

4. The vast majority of insurance claims get approved.

5. The same can't be said for the Amex CDW claims.

6. They get away with it because it's just a side benefit to the card, and nobody is directly buying the CDW insurance from them.

1. You implied it when you said it could damage them by negative word of mouth. But it won't because it's extremely common.

2. Do have any facts to base that on? Or are you just assuming that's true? Do you have a source? "The lady told me that" is not a source. I'd be willing to bet you $ that Amex's rate of denials is no higher than State Farm or All State. It doesn't matter that they aren't specifically an insurance company, they are offering car insurance just as any other insurance company would. Not sure why you keep calling it a "benefit" as if that somehow negates it being an insurance policy. It's an insurance policy provided by a CC company. But an insurance policy none the less.

3. No.

4. Again, you are speculating.

5. More speculation.

6. They get away with it because all insurance companies get away with it.

I don't know how many times you have been involved in auto accidents, but I can assure you that your assumption that "the vast majority of insurance claims get approved" is just simply not true. You have to fight, bite, scratch, and kick to even TRY to get them to settle. When that inevitably fails, you must hire a lawyer to take care of it. It will get settled eventually, after you threaten with a lawsuit. Which is EXACTLY what you had to do. This is not a scam. It's a garden variety insurance policy that will not be paid out unless they have absolutely no choice.

I guess if you FEEL like you were scammed, there is no argument against that.