American Express sneakily raised rates on biz clients without notice: report

U.S. financial services company American Express was under fire Monday for reportedly raising prices on business clients without telling them.

American Express recruited small and midsize businesses by offering low rates to convert currency and send money abroad, but slowly raised those rates without telling the clients, The Wall Street Journal reported on Monday, citing people familiar with the matter. Salespeople would tell potential clients that the company would beat rates offered by competitors for its cross-border payment service, but fail to tell them that the margin was subject to increase without notice, The Journal reported.

The company’s foreign-exchange international payments department is said to have regularly increased those rates for more than a decade, as it attempted to boost revenue and employee commissions. Sources told The Journal that when clients did notice the change, salespeople would blame a technicality and lower the rate. Some rates rose as much as 3 percentage points.

In a response to an inquiry from FOX Business, an American Express spokesperson said its offered foreign exchange rates “are not based on a contractual pricing commitment or spreads agreed to in advance with a client.” The spokesperson also said the company believes its transactions are completed and reported in a fair and transparent manner.

American Express’ foreign-exchange international payments business accounts for less than half of one percent of its overall revenue, but as The Journal pointed out, it involves many small businesses. American Express has increasingly been looking toward its small business segment as a potential area for growth.

Small businesses were said to have been targeted specifically by salespeople using this practice because they were perceived to be less likely to notice.

Shares of American Express were trading lower on Monday.

Ticker	Security	Last	Change	Change %
AXP	AMERICAN EXPRESS CO.	293.00	+5.29	+1.84%