Recovering Membership Rewards Points

A reader asks the following question:

I have a business Amex card that I have accumulated over 800,000+ miles on.
In January, I transferred over 400,000 to Delta sky miles. Approximately 1 month ago, I looked at the Delta sky miles account and realized that the miles were never transferred and showed that the transfer was pending on the Amex membership rewards site. The problem now is that our business is in the tanks and our account has been put on a payment plan and is temporarily inactive. I called and told Amex the situation and asked to transfer miles immediately. I have been given the run around and have been told they will not honor the previous points until the card is paid.

I have spent well over two million dollars on this card, not to mention over 15 million through merchant accounts at 3.0% that my business runs through.

Can they legally pull back points that have been paid for and accrued over the last 3 years?

Is there any legal course of action I can take?

Thank you,
JP

JP,

I am sorry to hear of your predicament.   This must be upsetting as 800,000 Membership Rewards Points has substantial value.   Even at the minimum 1 cent per mile value, just the points you attempted to transfer represent about $4,000 dollars worth of travel on Delta, any time, anywhere.

Unfortunately, American Express’s Membership Rewards program is tied directly to your credit card account.   With most other reward cards, the loyalty program is merely an affiliate of the bank, and problems with your credit card have no bearing on your status with the loyalty program.   For example, had you accrued Delta SkyMiles directly through an American Express Delta SkyMiles card, you may not be awarded miles for a particular statement that was delinquent, but previously accrued miles would be untouchable.

With the Membership Rewards program, when you are in default, they reserve the right to freeze your accumulated points for late payment.    Those rules are spelled out here in surprisingly simple terms:

POINT FORFEITURE FOR LATE PAYMENT

1. If the amount due on any Linked charge Card Account is not paid in full within one month of the closing date on the billing statement for that Linked Account, points accrued in the program for that Linked Account for that month may be forfeited.

2. For any Linked Card Account for which points have been forfeited, once the Linked Account returns to good standing, the forfeited points may be reinstated for a $29 fee for each month of points reinstated.

Slightly more complicated are their rules for Point Forfeiture in the event of account cancellation.

What I am missing is the sequence of events.   If your account was in good standing in January, at the time that you  attempted to transfer your Membership Rewards points, Delta and American Express should honor the transaction.    As with any financial transaction worth thousands of dollars, you should have kept adequate records to prove the transaction took place.   If you have a screen shot of the transaction confirmation, or a confirmation email, I have a hard time seeing how Amex can retroactively void the transaction.   This assumes that your account was in good standing at the time you attempted to make the transfer.

Unfortunately, you are in a very bad position to make demands from their customer service department, as your recent problems have made you an undesirable customer to retain, to say the least.    Ultimately, your only resolution may be to take them to small claims court, depending on the limits of claims in your jurisdiction.   If you documented the transfer request, and the fact that your account was in good standing at that time, hopefully the threat of legal action should be sufficient for American Express to fulfill their obligations.

Even if you were not current in January, you may still redeem your points in the future by becoming current.   The rules are vague, but it seems like if your account is reinstated, you may be able to pay a fee to have  those points returned.   Since you say that your account is “temporarily inactive”, the reinstatement of your account might allow you to recover some of those miles.

The key provision here is as follows: “If any Linked Account is not in good standing, your enrollment in the program may be canceled or the points accrued in your program account forfeited.”

Since you seem to have negotiated a payment plan, I would have recommended that your Membership Rewards points be included in that negotiation.    Even now, it may be possible to contact whichever part of American Express you negotiated this payment plan with, and ask if your Membership Rewards points can be reinstated once you have fulfilled your end of the plan.   That person will have an interest in encouraging you to pay off your debt, and may be willing to work with you on the subject of your Membership Rewards balance.

Good Luck!