Dear Credit Card Adviser,
Continue Reading Below
I've been paying a monthly credit card fee on my American Express. I never agreed to it, and I thought I had no choice in the matter. But now, they just wrote me to say they're discontinuing the fee. What gives? What is this fee?
You have run into a hot topic. American Express' account protector service is considered an add-on product offered by credit card companies.
This particular service promises to pay a small portion of your credit card balance if you experience a major life event such as a job loss or disability, according to the American Express website. The service costs 85 cents per $100 of your total outstanding balance each month. If you carried a balance of $2,000 each month, for example, your monthly fee would be $17.
Now American Express has canceled the service, so you don't have to worry about paying that extra money. But here's the kicker: It was always optional even though you thought it wasn't and never agreed to it.
Continue Reading Below
This is where the controversy comes in.
The Consumer Financial Protection Bureau, the year-old agency tasked with protecting U.S. consumers, recently ordered Capital One and Discover to pay back hundreds of millions of dollars to credit card consumers for deceptively selling add-on products. The bureau said issuers misled consumers into thinking the services were free, withheld eligibility requirements for benefits of the services and enrolled some consumers without consent. The bureau, along with other government agencies, also levied tens of millions of dollars in fees on the two issuers.
Shortly after Capital One landed in hot water with the CFPB, Bank of America stopped selling these add-on products. It now seems that your issuer, American Express, has stopped these services as well. Company spokeswoman Leah Gerstner confirmed that American Express stopped marketing the account protector service earlier this year and will discontinue it altogether by the end of the year.
"It was not a priority for our card members -- and it was not a core line of business -- therefore we decided to discontinue the product," she wrote in an email. Gerstner said if a cardholder has a concern with the product, he or she should contact the company's customer service.
So where does that leave you? You've paid an unnecessary fee every month you carried a balance on that card. But there's some good news, too: Your gripe is the issue du jour. I would call your issuer and ask for the fees to be refunded since you never agreed to the service. If that fails, contact the CFPB and submit an online credit card complaint. The agency is looking into these add-on products already, so your complaint may get a closer look. You may even get a refund for those fees like those 5.5 million Capital One and Discover credit card holders did.
In the meantime, try to pay off your outstanding balance to avoid paying unnecessary interest and losing more money. Good luck!
Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.
Ask the adviser
To ask a question of the Credit Card Adviser, go to the "Ask the Experts" page and select "Credit Cards." Read more columns by the Credit Card Adviser. Follow Janna Herron on Twitter.