It’s been a week and a half since the first report of the recent wave of American Express shutdowns surfaced, and a week since the culprit became clear. No new shutdown reports have been reported since Friday — presumably because it’s been a long holiday weekend and the teams involved have had three days off. I’ve had several of you write me expressing your concern about being shutdown and there’s been a ton of discussion online about it too. I do want to talk about what I would do if I were currently very concerned about a shutdown, but before we dive into that let’s chat a bit more about new discoveries in the last week.

New Details

I’ve been able to confirm with an inside source that the shutdowns are coming from the American Express Legal department, and the return address for physical letter notifications of shutdown reference AmEx’s General Council and the subject “Organization Litigation Investigation”. My speculation is that the reason the legal department is involved is that the shutdowns are related to an investigation started in early 2020 based on a whistleblower’s report on the Small Business Credit Card Team at AmEx. We know the investigation currently involves the FDIC, Treasury, OCC, and the Federal Reserve and is ongoing. Quoting the linked article:

In March of 2020, The Wall Street Journal reported on the “strong-arm” practices that American Express employees were using against small business owners to boost sales. Part of the story alleged that American Express employees misrepresented card rewards and fees or issued cards that customers had not sought.

I can say that I’ve seen several emails from Adam to various small business owners, and my non-legal interpretation is that the above paragraph is probably more correct than not.

We’ve also been seeing mixed reports of shutdowns from people who used targeted, no-lifetime language mailers, though I’ve as of yet been unable to confirm that any of these have actually occurred with anyone I know personally (compare with the fact that I’ve been able to confirm dozens of shutdowns from trusted people for using Adam for applications). I’m not saying for sure that they’re not happening, but at this point it feels a lot like a red-herring without a dependable source to confirm and it could be a single rumor that grew wings and muddied the waters. Certainly I hope that’s true.


Are you concerned that you still may be caught up in the shutdowns and the axe might hit any day? Personally, I’m not very concerned at this point because I didn’t have dealings with Adam Winslow and I’m currently dubious about other recent shutdown reports possibly being result of a giant internet game of “telephone“. But, not everyone is me (obviously). If I were concerned I might be shutdown, here’s what I would do:

  • Cash out all of my Membership Rewards, or transfer them all to travel partners. For the latter, the most valuable in my opinion would be:
    • AirFrance/KLM Flying Blue (if you value business class to Europe)
    • Delta (if you live in a hub city and want domestic travel)
    • British Airways (if you want great availability to Europe or short-haul AA works really well for you)
    • Aeroplan (for star alliance awards with reasonable pricing and low fuel surcharges)
  • Cancel every single one of my American Express cards

Why would I do this? Well, the first bullet point should be obvious: get anything of value out of your rewards account while it’s still there. The second bullet though is probably less intuitive. I think there’s a very decent shot that if you closed your accounts and didn’t have a current relationship with AmEx, the team involved will just pass right over you without consequence. Then, in a year or two, you could (hopefully) open new American Express cards and fly under the radar of the current big-bad.

There are caveats here: first, this isn’t guaranteed to work (though I think it’s likely to do so); and second, if you have retention offers or new spend offers that require you to keep a card open for 12-13 months and you close the account before that time is up, you may get those bonuses clawed back and you may get into some sort of American Express penalty box that makes you ineligible for new sign-up bonuses (I wouldn’t worry very much about the penalty box though, after a year or two I’d open a new account and spend $20k-$30k on the card which historically has typically gotten people out of the penalty box).

As always, stay safe out there friends!

The OG big-bad: American Express Legal’s lead council.