American Express Fraud Cancellation Fraud

AmExCardWe received an email the other day.  It read:   “We’re writing to confirm your request for a replacement card on your account. Your card replacement has been processed.”    But here’s the thing:  we didn’t ask for a replacement card. In fact, we didn’t want my card replaced.  Instead,this “replacement”  followed a call from American Express’ Fraud Department.  They sent us a Fraud Protection Alert indicating that charges had been made on my American Express card that we may not have authorized.   We called back and told them that the charges were unauthorized and they cancelled the card, licketly-split.  A $919 charge to Walmart.com had been made that day and we hadn’t any part of it.   In fact, we’d never purchased anything ever from Walmart.com.   We’d be hacked!  We’d been compromised.  We’d been violated, in a credit card kinda way!

Here’s the thing.   This is the third time we’d been hacked in less than a year and the second time I’d been hacked in just 1 month.   In one year, our card number had been “stolen” and my card “replaced” by those intrepid American Express investigators.    Now here’s the thing again:  we rarely use my AmEx card.   It is one of those Costco Amex cards and we only use it for Costco and Amazon purchases.    So how did it get stolen three times in one year?

The truth is that we have no idea.   Our concern is that it isn’t us, at all.   American Express is supposed to be protecting this card and, from what I can tell, they certainly are good at detecting fraudulent purchases.   But their ability to protect the card information against fraudulent purchases seems to be less impressive.   This is now the third time in one year that we have to create a new account with new numbers and a new Costco membership number.

The question that we (and others)  want to know is what’s going on here?  Is it that American Express can’t protect its cardholder data?   Is it us or is it American Express?    So many questions, so few answers.   Let us know if you’ve been a frequent victim of American Express fraud.   Is it us or is it American Express or is it Costco or is it Amazon that is failing to protect our card numbers?   All we know is that of my many credit cards, this is the only one that seems to have difficulty keeping its virtual pants on.    What’s going on?

15 replies
  1. Dale
    Dale says:

    I never ever have used my Amnex card from COSTCO except the first day. Today I get a charge from Starbucks for a $ 25 online order. COSTCO or Amnex has been hacked for sure. I cancelled my card. what a headache I don’t need.

    Reply
  2. Akwomble
    Akwomble says:

    Mine was just used in Columbia. I was notified of a possible fraudulent purchase by Amex via email and called the number on the back of my card to confirm that it was not authorized. The charge had already gone through and while I was told I wouldn’t be held accountable, I was told that I would have to call customer service again when I got the bill to have it removed. I would have thought they could have taken care of it with one phone call, but nothing is ever easy. Since I only use the card at Costco, it’s easy to see, but still a pain. I have another American Express card and have never had a problem with it.

    Reply
  3. Ralph Jeffords
    Ralph Jeffords says:

    I just had my Costco Amex compromised for purchases in Renton WA and North Bend WA. Although that is my home state, I haven’t been out there since last Xmas and to neither of those cities—I live in Virginia. This is the 3rd time that this has happened in the 10 years that I have had a Costco Amex account. Strangely enough, I recall that the last time I was compromised was several years ago, and likewise the thieves made bogus purchases in Washington state. I told Amex then, and now that their credit card numbering scheme is flawed as all Costco accounts have the same prefix and only the last 5 digits are different.

    Reply
    • admin
      admin says:

      That’s a very interesting observation, Ralph. Thanks for that. Just last week, AmEx sent out an email blast touting their “fraud prevention” benefits. We think that they are getting complaints from customers about card cancellations and are trying to turn that into a “positive”. For anyone following this blog, don’t let AmEx off the hook for what seems to be (anecdotally) an unusually high rate of fraud on Costco cards.

      Reply
  4. Houston
    Houston says:

    A few weeks ago I received an email “out of the blue” from Costco AmEx saying my application had been approved – but I have never applied for their card. I did not think much about it, figured it was a spam although it looked like a proper email and address. This morning I received another email telling me my card had been mailed. All the links look appropriate, address, etc. So now I am waiting to see what shows up, if anything. I have not been to a Costco in well over 15 years. It seems like someone may have used my credit somehow. The joys of the modern world!

    Reply
    • admin
      admin says:

      Let us know if the credit card shows up. By law, a credit card company cannot open a credit account without your authorization. If you receive the card, you should notify the Consumer Financial Protection Bureau (www.consumerfinance.gov) and complain that it was not an authorized card issuance. If not, you will need to contact AmEx and cancel the card, as it was probably the result of identity theft.

      Reply
  5. rn
    rn says:

    Yep, never EVER had any problems with identity theft until I begrudgingly signed up for an AmEx card to use at Costco since they don’t take other cards. Now AmEx is out $10,000 because I am always checking and immediately informed them. Convinced Costco has someone on the inside selling information. Cancelled my membership and my card…don’t need that. AmEx claims they will prosecute to the fullest extent of the law.

    Reply
    • admin
      admin says:

      Thanks for your comment RN. Not sure what the problem is, but based upon all of the comments and traffic going to this topic, there is clearly a mini-epidemic of Costco AmEx authorized transactions going on. This one article has been the most heavily trafficked of all of the pages on this website over the past 10 days. So, folks, it’s not you!

      Reply
  6. PV
    PV says:

    I just had my Amex number stolen while I was at Costco. So either someone is sitting in the parking lot with a skimmer or the register I went to was compromised. I seldom use my Amex card outside the house except for Costco. They had the nerve to go to the Lowes near the Costco I went to. So this leads me to believe it was someone nearby!

    Reply
  7. JJ
    JJ says:

    My Costco AMEX card was also recently just used for a fraudulent purchase. I rarely use the card and was notified by the AMEX fraud dept. I also recently received a call from a strange number 854-000-7889 on my cell phone since this happened. I wonder if they did get hacked and now what other personal information of mine may be at risk or identity theft…..oh great.

    Reply
    • admin
      admin says:

      Yes, what remains to be seen is whether the Costco AmEx got hacked and isn’t divulging whether it is sheer coincidence that Costco AmEx customers are being subject to card fraud disproportionately. I’ll continue to track this matter and welcome anyone else’s experience.

      Reply

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