I’m from Texas — you can’t charge me that fee!

By | April 5th, 2017

When Al Wolstein tries to use his two American Express Prepaid Cards, he finds that monthly maintenance fees have reduced the balances to zero. But those fees should not have been assessed. Can we help him get his balances back?

Question: I acquired two American Express Prepaid Cards with $80 balances as rebates from a Tiger Direct promotion. But when I tried to use the cards months later, I found that the balance was zero. A monthly maintenance fee of $4.95 had been charged against the balances. I did not realize that American Express charges a fee against these balances because it was not disclosed on the face of the cards.

I wrote to Doug Buckminster, President of American Express’ Global Consumer Services Group, who is listed in your executive contacts for American Express, asking that the balances be restored to my cards. I’m a holder of the Hilton HHonors Surpass Card and tried to use this as leverage in my request for reinstatement of the balances. Buckminster hasn’t responded.

Also, I called American Express’ customer service number for these cards to ask that the balances be restored. My call was routed to the prepaid card resolution unit, where I spoke to a representative and a supervisor. However, no one in the unit responded to my request after taking note of it.

Can you help me get my balances back so I can use the cards? — Al Wolstein, Temple, Texas

Answer: It’s very disappointing to acquire cards and then find that the balances aren’t there when you try to use them. We’ve published stories about gift cards with missing balances, so this seems to be a plastic phenomenon.

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American Express is no longer issuing these cards. It began assessing the monthly maintenance fees in October 2015 against existing holders of the cards, apparently as an inducement to get the holders to close their accounts. This may be part of the reason why you didn’t get a response from the prepaid card resolution unit.

The terms of your cards indicate that there is a maintenance fee assessed every month. But buried in the fine print of the card member agreement is a provision that the fee does not apply to residents of certain states — including Texas.

As a fellow resident of Texas, I can sympathize with your wanting to get your balances back since the fees should not have been assessed against your account. Unfortunately, it appears that when you tried to self-advocate your case, you went to the top executives before calling the prepaid card resolution unit. An important lesson imparted by your case is to start at lower levels and work your way up the corporate hierarchy when filing a complaint, rather than starting at the top as you did.

You contacted our advocates for assistance, and American Express confirmed to us that because you live in Texas your card numbers are not subject to the maintenance fee. However, you would have to call the prepaid card resolution unit yourself to have the balances reinstated. But when you made the call, you were told by the American Express agent to whom you spoke that the cards were issued by a third party called Afligo, about which she could give you no information.

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Since then, you’ve told us that you plan to cut up your American Express card and send it with the two gift cards by certified mail to Ken Chennault, the CEO of American Express, with a letter about your experience. While I doubt that this will get back the money you paid for the cards, it will certainly convey to Chennault not to mess with Texas.

  • MarkKelling

    How is this a Problem Solved? It does not appear the money was put back on the cards.

  • Reporter1

    “While I doubt that this will get back the money you paid for the cards. . .”

    He didn’t pay for the cards. They were issued as rebates.

    “I acquired two American Express Prepaid Cards with $80 balances as rebates from a Tiger Direct promotion.”

  • sirwired

    I wonder if the geographic limits on the law applies to the end-user of the cards, or the purchaser? The purchaser of the cards is the rebate company, not the customer that bought the product being rebated.

    In other news, ATM withdrawals are a good choice for some of these cards. I got a BofA stored-value Visa once (participation in a research study) and I noticed it was good for fee-free BofA ATM withdrawals. I just drove past my nearest BofA branch, and pulled all $200 out of it in one go and tossed the card in the trash. (PIN was the last four digits of the card number.)

  • deemery

    I think I’ve seen terms on some of these that say “cannot be used at ATMs.” But that’s certainly worth trying!

  • Daddydo

    This applies to debit card rebates, not store gift cards.
    It is so easy for companies to issue gift / rebate cards today. Once they purchase $50,000. worth for let’s say Tiger Direct, they have the rebates as an easy deductible item. You fill out the form, you get a card. Many of us are so excited that we immediately register them per instructions, then put them away for a rainy day. BIG TIME ERROR! There a many rules and regulations
    Either register them and use them, or hold them back without registering the card and fees should not apply as the computer cannot see the money yet. Many Cards have an expiration date on them. PAY Attention TO THAT DATE!.

  • LeeAnneClark

    I have to agree – I don’t consider a problem solved when the customer didn’t get back his money.

    I’m not sure I understand what the difference is between AMEX pre-paid cards given as rebates vs any other type of AMEX pre-paid card. And I have no idea who Tiger Direct is. But I don’t see anything in this article that indicates any kind of funny business, which we sometimes see in other articles about gift card purchases. So IMO, this guy got ripped off.

  • Alan Gore

    Tiger Direct is a major electronics retailing site.

  • MarkKelling

    There are many rebate AmEx cards out there. I get one every so often from a dining site. The cards are bought in bulk by the merchant at a discount from AmEx to distribute as they want (even though they are not actually made until distribution time which is why they usually have your name on them when issued to you through this process). AmEx hopes you will use them at merchants where they get a good interchange payment rate from so they end up covering their discount and make money too. Or, like in this case, don’t use them so that they expire and they get to keep all the money.

  • LeeAnneClark

    Yeah, I’ve received AMEX cards as rebates before – mainly from Verizon, when I bought a new phone that came with a rebate. I got the rebate in the form of an AMEX card.

    I usually use them up quickly, just to get them out of my wallet…but if I discovered that they were dwindling due to “monthly fees” I would be livid! That doesn’t even seem legal – and clearly the State of Texas (and some other states) agree.

    I’m not an expert on the various types of cards – I like to keep my use of plastic to a minimum. And this story is a good example of why!

  • Rebecca

    The OP is mistaken. He did not exchange cash for the card he received. Therefore the laws he is citing do not apply.

    NOTE: Any card received as a rebate is NOT subject to federal and state laws concerning gift/prepaid cards. The holder of the card did not purchase the card. These regulations do NOT apply and the company issuing the cards may create restrictions that would violate gift/prepaid card laws.

  • Rebecca

    It’s actually very simple. The protections apply to the purchaser of the card. The person that exchanged cash to purchase it. The rebate company/retailer is the purchaser, not the end user. They can thus create their own redemption rules that aren’t subject to federal and state laws/regulations.

    The OP here is wrong. I don’t know why this isn’t addressed. He’s flat out wrong. Someone should really tell him.

  • LeeAnneClark

    Well then. I’m glad I’m aware that these rebate cards could possibly end up worthless if I don’t use them within a month.

    I still think it’s scammy. If I purchase something that claims I’ll get a $100 rebate, and I submit all of the appropriate paperwork to get this rebate, and then get a card supposedly worth $100, then that card should be worth $100 regardless of when I use it. It shouldn’t disappear over time.

    Knowing that this is legal says to me that I need to avoid buying anything that seems like a good deal due to the rebate.

    And it all sounds like slimy shenanigans. In the end, somebody is getting that $100…and if it’s not me, I got screwed.

  • polexia_rogue

    80$ divided by 5.00 is 16. The card was not used for 16 months!

  • Rebecca

    100% agree. Slimy is the right word. Its using a technicality to get around the law. I realized how snarky both of my comments sounded when I just looked at them again. I’m just crabby today, honestly!

    But I think it does a disservice to anyone reading to imply prepaid card laws/regulations imply. They don’t. Usually you get 90 days, sometimes even less.

  • PsyGuy

    This is easy peasy lemon squeasy, file in small claims court and request a jury trial.

  • PsyGuy

    So what if they aren’t used for 16 months?

  • PsyGuy

    Yes it is, who says that state and federal regulations don’t apply?

  • PsyGuy

    I don’t think they can.

  • Lindabator

    actually, quite a few DO allow it

  • LeeAnneClark

    No worries – I agree with you! The whole situation seems ripe for screwing over customers and benefiting slimy companies. And with the current administration feverishly dismantling customer protections as fast as they can, I don’t see any hope for any kind of legal or regulatory solution.

    Our only option is to try to be as educated as we can, but it sure is hard. I have learned my lesson – rebates are a scam! Knowing what I know now, I will never factor in the supposed rebate into the price of anything I’m buying, because there’s no real assurance that I will get that money.

  • Rebecca

    I dated a guy that worked for Circuit City in college. He said redemption rates are about 35%. Granted this was over 15 years ago, but I can’t imagine it’s changed much.

  • LeeAnneClark

    I’m not at all surprised. I myself have been guilty of forgetting to send in the paperwork to obtain the rebate. I recall years ago I bought a printer that had a $50 rebate, and I just flat-out forgot to send it in. By the time I remembered, somebody had thrown the receipt out.

    And there’s another reason people don’t take advantage of them as well…a more sinister reason: they make it too damn hard! It’s not uncommon for the process to obtain the rebate to be so absurd and onerous that it’s almost impossible to get it.

    I bought a cellphone once because the $100 rebate made the deal sound really good. But in order to get it, I had to send in two different receipts, plus cut off a piece of the box that contained some kind of code. But the instructions were very confusing…they handed me REAMS of receipts for the phone, the plan, etc…apparently the part I was supposed to send in had a section where I was supposed to fill in some information, which I didn’t do. And the box had several different codes on it in different places – I wasn’t sure which one to send in! So I cut them all out and sent them all in, along with all the receipts, and I got an email that they rejected it due to “missing information”.

    I marched down to the store, and somehow they managed to get it approved so I got my 100 bucks. But what a pain! Most people would have just given up. It seemed pretty obvious to me that was the whole point – make the process so complicated that most people won’t be able to figure it out.

    Scammy scam scam!

  • Rebecca

    “While rebate cards resemble gift cards, they aren’t governed by state laws and a new federal law that limit fees and quick expiration dates on gift cards. The Credit CARD Act of 2009 prohibits gift cards from expiring before five years from the date of purchase or when money was last loaded onto the card.”


  • jsn55

    Poor AmEx, they just can’t do anything right. Chase has been eating their lunch for years. You’d think they’d wise up and acknowledge that they’re no longer any big deal in the CC biz. The Sapphire Reserve has far better benefits. I still have faith in AmEx, tho, and think they just might come through on this problem.

  • PsyGuy

    “CreditCards.com” is your authoritative source. That’s BS.

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