AmEx Plans External Review in Wake of FX Price-Hike Allegations
(Bloomberg) -- American Express Co. said an external party will conduct a review of its foreign-exchange business after a report said employees boosted rates for some business customers without notifying them.
“We take allegations like these very seriously,” Marina Norville, a spokeswoman for the company, said in an emailed statement Monday. “If we find that we fell short of the mark, we will fix the problems and take appropriate actions to make sure it doesn’t recur.”
Shares of American Express dropped 3 percent after the Wall Street Journal said the pricing practice had been going on for more than a decade and affected mostly small and midsize businesses. The FX International Payments business accounts for less than half of one percentage point of overall revenue, Norville said in the statement.
Current and former employees told the newspaper that AmEx’s commissions-driven culture encouraged the practice. Customers were recruited with low initial rates, but weren’t informed that those prices were subject to change without notice, according to the Journal.
Norville said the company believes currency transactions “are completed and reported in a fair and transparent manner at the rates our customers have authorized.”
The company began to scale back on the practice after media reports of a similar strategy at Wells Fargo & Co., according to the Wall Street Journal.
American Express fell 3 percent to $100.74 at 12:37 p.m. in New York trading. That was the second-worst performance in the Dow Jones Industrial Average, behind Visa Inc.
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