American Express Co (NYSE: AXP) offered its business clients with low currency conversion rates before raising its prices without notifying customers about the changes in an attempt to increase revenue and employee commission, said the Wall Street Journal Monday, citing people familiar with the matter.
Sources say that the Company’s foreign exchange department frequently raised conversion rates without properly notifying its customers. This practice has been dated back to at least 2004 and continued for over a decade, until earlier this year. The Company’s agents intentionally did not inform customers that its margins, a markup that it adds on to the base currency exchange rate, was subject to increase without notice, reported the Journal.
To find out if rates were increased, customers would have to manually log in to their AmEx accounts and compare the rate the Company offered to the market exchange rate at the time of the transaction.
“The client can see the rate online, and if the client agrees, we will complete the transaction as instructed,” said AmEx spokeswoman Marina Hoffmann Norville. “[We] believe that our transactions are completed and reported in a fair and transparent manner at the rates which the client has authorized,” she added.