If you thought credit card companies monitoring your own spending behavior sounded suspicious, listen to this: For several months, American Express developed its own system for tracking spending patterns. The company has been making assumptions about its customers based on the credit of other clientele who shopped in the same stores.
American Express (Stock Quote: AXP) has stated it has stopped the practice of cutting credit card limits based on this unique way of monitoring spending behavior, but for a time many customers saw their credit lines slashed for no fault of their own. The New York Times reports that customers received letters of explanation from the company stating things like, "Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express."
I'm relieved American Express has discontinued using this data to evaluate its customers, but am alarmed that the company was doing this in the first place. What's your reaction? Tell us in comments.
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