Failure to respond to KYC resulting in ‘Arrangement to Pay’

thecontrastdude2022

On January 18th 2025, Amex cancelled my British Airways Premium Credit Card after 10 years of being a cardholder. This was due to my failure to respond to the ‘Know Your Customer’ request, as per legislation. I have no issue with the account being closed and have never requested it to be re-opened. I no longer wish to be an Amex customer given how poor the customer service has been.

However, when I called in January to understand why the card was cancelled, I was assured (on a recorded line) that so long as my account was kept up to date, there would be no further impact on my credit file. With this in mind, whilst disappointed my account was closed, I moved on. My account was fully up to date with payments a balance of around 30% of the card limit. 

3 weeks after the account was closed due to KYC, in February, I got a notification from a third party debt collector, asking me to get in touch about the Amex account. This was a huge surprise to me as Amex assured me a few weeks earlier that I just had to continue making payments, which I intended to do.

I checked my credit file and an ‘Arrangement to Pay’ had been lodged on my account. At no point did Amex request full payment of the balance or inform me there was a risk here. In fact, they advised me the complete opposite.

I called them and one of the advisors told me she had worked with the business for years and could not understand why the debt was passed to a third party so soon after account closure and without speaking with me first. I lodged an official complaint as this was never a credit issue, and Amex turned it into a credit issue. This was only ever a KYC issue.

Amex responded to say they were not upholding my complaint and they have done nothing wrong. I checked my credit file and bank statements - my account was always fully up to date until they cancelled the account. They also told me on a recorded line that the account was up to date and it shouldn’t have been referred to debt collection agency.

I have now paid the card off in full, which I could have done at any time had Amex given me the right information. I requested the ‘Arrangement to Pay’ be striker from my credit file, they have declined. I have gone to the Financial Obudsman and am waiting to hear back.

Sadly I was in the process of applying for a mortgage and this has been cancelled as a result. I’ve had to move in with my wife’s parents with my wife and 2 year old as this is impacting my credit file.

What else can I do and do I have a case to fight?

Hoenir

What did the letter say when your account was closed. The terms and conditions of the account will include a repayable on demand clause. How many notifications regarding KYC did you receive and over what time period ? Did you read all of these thoroughly. As to the implications of non-compliance. KYC is taken very seriously. With hefty fines being given out by the FCA.

thecontrastdude2022

The written notice arrived on January 23rd, and referenced a debt collection agency would be in touch. That is why I ultimately I called Amex and was told on the phone that full payment was not necessary. I could have made full payment at that point if I had known it would result in an ‘Arrangement to Pay’. I was told this wouldn’t happen.

How can this be fair?

thecontrastdude2022

I received one email in December about KYC and a final account closure written letter in January

DullGreyGuy

You would really need to post the content of both the letters, wouldnt be surprised if AmEx didnt have a repayment on demand clause and neither surprised if they were invoking it for a failure of KYC - ie you had to pay the card off in full and anything short of the immediate repayment would be a bad debt situation. 

AmEx typically have great service, though it has slipped a little in recent years, but they dont take kindly to those that dont play by the rules etc and are one of the quickest to deal with bad debt situations. 

thecontrastdude2022

Hoenir said:

What did the letter say when your account was closed. The terms and conditions of the account will include a repayable on demand clause. How many notifications regarding KYC did you receive and over what time period ? Did you read all of these thoroughly. As to the implications of non-compliance. KYC is taken very seriously. With hefty fines being given out by the FCA.

Apologies, new to the forum, but have added some other comments to the thread.

i’m not even questioning the fact the account was closed. I didn’t respond on time to the KYC request and the account closing is fine.

i am contesting the incorrect information provided on the phone, the inconsistency in what they said and what has since happened and the failure for them to explain the implications which is having a serious impact on my life.

something which was never at any point a credit issue has become one.

DullGreyGuy

thecontrastdude2022 said:

Hoenir said:

What did the letter say when your account was closed. The terms and conditions of the account will include a repayable on demand clause. How many notifications regarding KYC did you receive and over what time period ? Did you read all of these thoroughly. As to the implications of non-compliance. KYC is taken very seriously. With hefty fines being given out by the FCA.

Apologies, new to the forum, but have added some other comments to the thread.

i’m not even questioning the fact the account was closed. I didn’t respond on time to the KYC request and the account closing is fine.

i am contesting the incorrect information provided on the phone, the inconsistency in what they said and what has since happened and the failure for them to explain the implications which is having a serious impact on my life.

something which was never at any point a credit issue has become one.

Ultimately register your complaint and if you dont like their final response letter (or you dont receive one within 8 weeks) then you can escalate to the Ombudsman. 

If however the letter said either provide the KYC docs else we'll close your account and you'll have to repay in full then you are only talking about a minor element of miss information from a member of staff so a token gesture of goodwill 

thecontrastdude2022

DullGreyGuy said:

thecontrastdude2022 said:

Hoenir said:

What did the letter say when your account was closed. The terms and conditions of the account will include a repayable on demand clause. How many notifications regarding KYC did you receive and over what time period ? Did you read all of these thoroughly. As to the implications of non-compliance. KYC is taken very seriously. With hefty fines being given out by the FCA.

Apologies, new to the forum, but have added some other comments to the thread.

i’m not even questioning the fact the account was closed. I didn’t respond on time to the KYC request and the account closing is fine.

i am contesting the incorrect information provided on the phone, the inconsistency in what they said and what has since happened and the failure for them to explain the implications which is having a serious impact on my life.

something which was never at any point a credit issue has become one.

Ultimately register your complaint and if you dont like their final response letter (or you dont receive one within 8 weeks) then you can escalate to the Ombudsman. 

If however the letter said either provide the KYC docs else we'll close your account and you'll have to repay in full then you are only talking about a minor element of miss information from a member of staff so a token gesture of goodwill 

Thanks.

i registered a complaint, they have said that they have done nothing wrong, so I have escalated to the ombudsman.

however I would fundamentally disagree that it’s a minor element of misinformation from staff.

On phonecall 1 I was told to continue making payments to my account as normal and there would be no impact

phonecall 2 a member of staff told me she felt it shouldn’t have been transferred to a third party in the first place

Ultimately, I’ve taken them for their word on a call and am now left with an Arrangement to Pay on my credit file which has me in a position of not being able to get a mortgage. For something that was never a credit issue. Seems deeply unfair to me 

worth noting that as soon as I realised there was an impact on my credit file, I satisfied the account in full. Which I could have done at any time had Amex told me the implications properly on the phone

eskbanker

If your case is going to hinge on discrepancies between what you were told in writing and what was said verbally in phone calls, have you secured copies of those recordings?

Hoenir

eskbanker said:

If your case is going to hinge on discrepancies between what you were told in writing and what was said verbally in phone calls, have you secured copies of those recordings?

Front line customer services operator is unlikely to be totally knowledgable.  Letters are fact. 

eskbanker

Hoenir said:

eskbanker said:

If your case is going to hinge on discrepancies between what you were told in writing and what was said verbally in phone calls, have you secured copies of those recordings?

Front line customer services operator is unlikely to be totally knowledgable.  Letters are fact. 

Yes, call centre staff are undoubtedly fallible but if, via them, Amex gave OP misleading information, which was acted upon to OP's detriment, then it should assist OP's claim for redress for the consequences if this can be demonstrated.  If it can't be demonstrated then yes, there's nothing concrete via which to challenge what's in writing, which would naturally then take precedence....