[ScottBurson]

Wait, I don't get this. The Amex agent called the old phone number on the account. The person who answered gave some indication of being the account owner, but didn't answer quite as many questions correctly as the thief.

So what scenario is the agent hypothesizing? The person at the old number was actually the identity thief, and used the account for maybe several years without any challenge, before the actual owner changed the number back? That makes not the slightest bit of sense to me.

I think if the phone number has recently been changed, and you call the old number, and the person who answers can answer any question at all about themselves, you have to figure that's the account owner. Who else could it be???

[timv]

While I agree that AMEX should have just locked the account for fraud, one possible explanation that would create this scenario is a relationship breakup.

Man breaks up with his partner, and moves out of their shared home. He changes his phone number to be his new home.

Amex calls the old number, gets the old partner who is particularly vindictive and decides to answer the questions as well as he can.

When I worked in banking we had all sorts of issues about how we handled change of address with respect to relationship breakdown.

If a husband and wife share and account and share an address do you send them separate statements, or combine them? If the husband tells you he has changed address, do you assume the wife has changed too or assume that she's still at the old address? If he's on the phone, you can ask him but do you assume he's telling the truth?

If one member of a relationship chooses to change their mailing address, for security reasons, you might want to send a notice to their old address in case the change was fraudulent - but if they've changed their address because they're fleeing an abusive relationship then you can't send anything to the old address that indicates what the new address is. And just because someone at the old address raises an objection to the change that doesn't mean it was wrong, just that you need to do more investigation.

Those sorts of incidents were rare, but our procedures needed to plan for them. And in this case, the correct action would be to lock the account and escalate to a superior.

[stephengillie]

> If a husband and wife share and account and share an address do you send them separate statements, or combine them?

Don't allow people to share accounts? That seems to solve a lot of problems. What problems does it create?

[mcherm]

The problem it creates is that you lose customers.

People want the ability to have joint accounts. A joint account generally has a credit limit set by the income of the higher-paid (or wealthier) of the two but allows both people to have a card and make payments. Imagine a simple scenario: one spouse works, the other does not; the one who doesn't work often does the shopping.

[stephengillie]

How is this different from a business account with 2 cofounders?

[timv]

Others have mentioned the importance of joint savings accounts for married couples, and for businesses.

They're also very important for mortgages. If the mortgaged asset is jointly owned (and that's typically the case in a marriage) then you, in practice, need all owners to be a party to the loan. The house is security on the loan - if I only own half the house then I can only borrow against my half. And my wife can borrow against her half. But if I default on my loan, then how does my bank foreclose on me and sell their asset when there is another owner who may not wish to sell.

There are other solutions, but the easiest, and the one that banks will typically insist on is a joint asset requires a joint loan

[adebtlawyer]

People rarely think of this in advance, but joint debts of any kind usually become a problem in divorce. One former spouse will stop paying and ruin the other spouse's credit, to say nothing of causing foreclosures. It doesn't matter what the family court orders (this spouse will pay that debt, etc), because that won't change the underlying obligation as far as the creditor is concerned.

Joint credit cards, which aren't attached to any asset, don't have much benefit compared to this downside. What people are typically told is happening is that the credit card still 'belongs' to one spouse, but the other will be also authorized to 'use' it. While this is possible, the paperwork presented to sign often makes the other spouse jointly liable for the debt instead. I'm convinced even the bank representatives don't know they are setting up things this way and are just following a script. You have to read the paperwork to see what it does.

[stephengillie]

This is exactly where I was leading with my questions. Joint accounts might simplify the sharing of cash between household partners, and thus simplify household operations, but it complicates everything else.

I suppose a temporary convenience now is worth a very complicated situation in the future. Thus is also why we traditionally forego prenuptial agreements.

[hvs]

When you're married, a shared account is pretty important.

[stephengillie]

Having never been married, I can only guess. Is it for quickly transferring funds between the married individuals?

[coldpie]

No, it's for having a shared pool of money. Both regularly deposit some amount of money into it, and it goes for shared expenses like food, house maintenance, gas...

[bargl]

I'm going to add that it's also really nice for budgeting. If you want 2 people to get on the same budget you have to show the benefits of the budget.

Also I don't pay 1/2 my mortgage and my wife pays the other 1/2 we pay it all together (from the one account). We actually turned down an account with Plastic because no shared accounts.

We each have an individual credit card but that's more for tracking if we are meeting our own budgeting goals. But those are still linked to the other person.

Also, joint accounts make a situation where something happens to your spouse MUCH easier to handle. If something were to happen to me I'd want my wife to still be able to pay for Daycare, Mortgage, etc for as long as our savings would allow.

This is part of why divorce is hard on so many levels. The paperwork alone is crazy.

[kijin]

Possible scenario:

Cardholder changes his phone number, but telemarketers keep calling the old number. The person who now has that number receives a bunch of calls asking for the cardholder, collects a fair amount of information about him, and figures he could impersonate him.

Yeah, that sounds a bit far-fetched. But remember that when people change their phone number, they usually don't remain available at their old number for long. So someone at the old number claiming to be the cardholder could have been a red flag, too.

In fact, in the couple of years since I've had my current phone number, I've managed to learn a fair amount about the person who had that number before me, mostly via telemarketers. Where they lived, where they were planning to relocate to, where they used to shop, what their interests were, etc.

Anyway, Amex should have called the new number on the account to see if they get the same person. Unfortunately, they seem to have trusted caller ID too much, even when it was obvious that at least one of the people they were talking to was an impostor.

[mizzao]

I think underlying all this is the assumption that they actually called the old number on another line. This was asserted by Dmitry; however there's no evidence that it wasn't just the typical put-you-on-hold repeatedly scenario where the rep keeps going to the supervisor. Maybe he just mentally over-remembered the situation?

[jfoster]

Also, identity thieves will always be asking for transactions to go through. Genuine customers will be arguing the opposite.

If the only ask is "please don't let that transaction go through," it makes sense for a bank to comply.

[Alterlife]

While Amex clearly dropped the ball there: It wasn't a computer making the decision, it was a person. It shows how powerful this guys personality must be to have that kind of effect on a persons judgement.

[Natsu]

That jumped out at me, too. I assume the person must have simple-mindedly assumed that the best answers win (or maybe they had some dumb policy to that effect)?

[DiabloD3]

I suspect it was policy as well.

[antihero]

I'd like to think that if there was any ambiguity there they'd call me into a branch to present ID or whatever.

[emir_]

American Express doesn't have branches, but I'm sure there are plenty of ways one can verify his or her identity without going inside a branch.

[ghufran_syed]

yes, why wouldn't you just freeze the account, and mail out something to the last address of record (assuming it hadn't just changed)? crazy...

[kijin]

If they freeze your account and wait for you to receive a piece of paper, they lose the opportunity to profit from your purchases for the next couple of weeks. If you get pissed off and/or take it as an opportunity to start using another card, they might even lose all of your future purchases.

If they don't freeze your account and end up with fraudulent purchases, they probably won't lose any money anyway -- they can either charge it back to the merchant or have insurance pay for it.