WARNING - Don’t use RewardPay/Amex to make a personal SMSF contribution.

[theblank]

I filled a formal complaint with Amex when I came back from overseas. I received their response last week (> 4 weeks). Their response is:

(a) It's against RewardPay terms and conditions section 18 (and they supplied me with a multipage printout of same)
(b) it's a prohibited Amex transaction and quoted the charge card terms and conditions. (despite me using a credit card)

"use your card to obtain cash from a merchant for a charge recorded as a purchase;.

It would appear to me that RewardPay encourages breaches of its own Terms and Conditions by promoting the payment of Superannuation (or ATO). In fact it appears to be Reward pays main feature that they use in marketing.

From Section 18 - it is very clear tthat neither the ATO or SuperFund is a "supplier of goods and services received in the general course of conducting Your business".

Its no surprise that AMEX would be taking issue with this, and is probably actiively pursuing large transactions paid to Reward Pay. I would say that AMEX has no case to answer, and that your complaint should be directed to Reward Pay.

You must not use RP’s Payment Facility for transactions other than bona fide payments to Your suppliers in relation to goods and services received in the general course of conducting Your business. This means that You must not use RP’s Payment Facility to make payments that do not represent bona fide purchases of goods or services from Your suppliers, e.g., payments to Your own establishments by You, or Your family members, or employees, or any other person contrived for cash flow purposes.

 

[LittleFokker]

Its no surprise that AMEX would be taking issue with this, and is probably actiively pursuing large transactions paid to Reward Pay. I would say that AMEX has no case to answer, and that your complaint should be directed to Reward Pay.

Well, the question is then how many other people have been hammered by Amex for paying their SMSF via Reward Pay? I haven't seen any other complaints around on social media. I'd expect they'd have to be a few on this site at least.

Don't forget this started this FY for me after I received a marketing email from Amex saying, hey! don't forget to make your superannuation payments with the Reward Pay service.

I'm pursuing Amex to explicitly say "SMSF payments via RewardPay are prohibited". Couldn't be clearer then.

From Section 18 - it is very clear tthat neither the ATO or SuperFund is a "supplier of goods and services received in the general course of conducting Your business".

Amex do encourage people to pay the ATO with their business credit cards. I received another marketing email encouraging me to "get the Gold Charge card which pays 0.5pt per $ when you pay the ATO."

 

[daft009]

I use it to pay employee super but not to my own SMSF, have left that to EFT.

No issues for the last 3 quarters

Or see if you can register you SMSF to one of those super clearing houses then there would be no way to tell

 

[edy4eva]

Here's my 2 cents. All this happened while I was overseas.
I've been with AMEX for almost 15 years. Never missed a payment. Put through hundreds of thousands easily. Referred a dozen of people. All of this down the drain.

All I did was send 3 payments via PayPal to my s.o., she did the same. First time ever doing such a thing. And we did this because we were looking to buy a car but had the cash tied into a loan and did not want to redraw, so thought why not just do this (gives us time until next month) and earn points along the way -dealer did not want to touch amex btw.

I get a poorly worded - think Engrish, email from Account Services to call. I did so to be drilled about the transactions and be told that the accounts will be all cancelled. All reserve/qff/plat charge)!!

The agent wouldn't explain why these transactions contravened the terms and conditions. I asked her to quote the specific line and all she did was promise to send an email (she later did but attaching a totally irrelevant document).

I pressed the agent hard and asked to be lodge a dispute as per the IDR process guidelines (FOS imposed/lingo). After ignoring the request a couple times, she went ahead with it. And was promised a response within a day or two (never happened).

Upon following up the second day (cards now all cancelled btw) I was given the cold shoulder and told to write to the executive team whoever that is. And that the dispute/complaint was rejected - cancellation stands.

I spent that afternoon preparing the language for a FOS complaint (seeking reinstatement of accounts, fee refunds and compensation) which got picked up early this week. Now waiting on response from AMEX.

My wife's account got suspended just this week. She is still overseas. Dreading having to jump through hoops again. Who has time?!

One thing that agent said that I found interesting: 'several of our clients are doing this (whatever this means) and we're cancelling their accounts.

BTW, contrary to what the accounts services team claim that the Exec team can only be reached via snail mail. Their email address is actually listed on the FOS website. Also a note to others, contrary to what an agent might say, there are options to complain/dispute the account suspension/closure.

And while searching for similar experience, I came across this from 14 years ago: Warning - You Can't Rely on your American Express Card

Seems like AMEX is a dinosaur when it becomes to business processes, almost nothing has changed since then...

 

[LittleFokker]

While your transactions are different to mine, your experience dealing with Amex is almost exactly the same.

 

[edy4eva]

Quick update:
I received a bunch of mail yesterday.
2 letters from AMEX, the first 'telling' that my accounts are cancelled and to cut the cards in half. The second is from the Exec Com team saying they received the complaint through from FOS and they will be 'reviewing the concerns raised'.
And
2 letters from ECOLL, lumping amounts together and asking me to 'immediately make full payment within 10 days' to avoid legal action and bad credit report etc.

The funny thing is, I have already made payment couple days ago (about 40% of the total amounts) as I had it set up as per the due date on the previous statement.

My s.o. account remains suspended. She chatted with them online and was told to call a 1300 number which is said to be open 7am to 8pm (contrary to what the Engirsh email stated). Upon calling she was told: no, have to call between 9 to 5 Sydney time. We're working on the language to send to the Exec Com team. Will refuse to deal with their account services department as they are utterly hopeless. They deal with accounts not customer/people.

Will await on the outcome of the FOS process as well. Given AMEX stamped out a letter the very next day FOS took up the complaint.

The bottom line is, do NOT wait for them to send letters from the collectors. Act immediately when they cancel/suspend the accounts, and write to FOS. I waited a day too long.

 

[Eh520]

You're just playing with words here. It's pretty clear that it's a breach of T&C to pay YOURSELF SMSF via your own Amex card... Yes, you can be registered as an employee but after all, if it's paying YOUR own super.... I don't really see your argument point being valid if you try go any higher with ombudsmen or any relevant bodies. Just my 2 cent. Who knows - the legal system is a joke, if you can find a loop hole with wording here and there then you'd have a chance. Criminals can get away quite easily nowadays, and you could get away with it too

 

[LittleFokker]

You're just playing with words here. It's pretty clear that it's a breach of T&C to pay YOURSELF SMSF via your own Amex card... Yes, you can be registered as an employee but after all, if it's paying YOUR own super.... I don't really see your argument point being valid if you try go any higher with ombudsmen or any relevant bodies. Just my 2 cent. Who knows - the legal system is a joke, if you can find a loop hole with wording here and there then you'd have a chance. Criminals can get away quite easily nowadays, and you could get away with it too

Perhaps you can quote me the specific Amex terms and conditions that say paying your own smsf via reward pay is prohibited?

 

[edy4eva]

As a final update, AMEX refused to compensate, opting for a pro-rata refund of the annual fee. They also cancelled my partner's accounts out of the blue and referred the recently charged balance of the annual fee on one of the cards to the collectors.

Only after complaining to the FOS, showing proof of written communication to AMEX asking for the fee to be reversed, that AMEX agreed to rectify that matter. Received a refund of credit which on the account (prior to the charging of the annual fee).

My dispute went to the final stage with FOS, they sided with AMEX quoting a rather surprising clause which was added to the terms and conditions in July 2017, that AMEX can at any time and without any warning or advice, and without giving justification, to the card holder immediately suspend and/or cancel all accounts and demand payment of all outstanding amounts.

A weird argument the FOS made at one point was that AMEX cancelled my account because it was considered in default as a result of the suspension!!! (AMEX cancelled the accounts on the very first call, they had been suspended for like 4 hours).

 

[LittleFokker]

I can also update my journey with Amex and SMSF payments. As mentioned up top, I had my cards suspended last year after attempting to make my superannuation guarantee payments to my SMSF with the RewardPay service.

Despite having made similar payments in FY16 with no problems, AMEX now consider it a prohibited payment.

I took the matter to FOS and after 3 or so months finally received a finding from them last week. The bottom line was that FOS’s interpretation of the card terms and conditions is that Amex can pretty much do anything they want at anytime. A transaction can be valid one day and deemed invalid the next - the t&cs allow for this!

I accepted this finding as I can’t be bothered taking it to court - the inconvience I experienced doesn’t justify it.

However AMEX did offer me (via FOS) $750. I took it and ran.

TL;DR FOS confirms that Super payments to your SMSF via RewardPay are prohibited transactions.

 

[blueythecat]

Interesting. Thanks for the update.

 

[albyd]

I’m wondering given the otherwise ‘easy’ availability of MR points for up to $25k tax deductible super contribution for the self employed whether setting up a square or similar merchant facility in the name of the fund trustee where there is no easily identifiable name link eg bloggs super Pty Ltd where te member is Jane Smith or might it get on the wrong side of Square, etc if our member ‘Jane’ used Amex card in her name to make the payment and is also the main contact on the merchant facility. Keen on any thoughts.

 

[daft009]

already tried, square won't let you register a dongle against a SMSF or ATF
Anyone want a $19 square dongle?

 

[albyd]

What about if you’re registering it against the corporate trustee ie joe bloggs pty Ltd (trustee for bloggs super Fund)? Then just use the company name in your banking details but point it at the super fund’s nab & account details?

If this has also already been tried unsuccessfully, I’ll leave it at that don’t want to have any issues with my amex cards I use them too much for other spending.

 

[daft009]

I can't remember now exactly, but will attempt again when I get a chance

 

[Matt_01]

All I did was send 3 payments via PayPal to my s.o., she did the same.

If you do not mine me asking, was via a business card or a personal card.

 

[Isochronous]

As a final update, AMEX refused to compensate, opting for a pro-rata refund of the annual fee. They also cancelled my partner's accounts out of the blue and referred the recently charged balance of the annual fee on one of the cards to the collectors.

Only after complaining to the FOS, showing proof of written communication to AMEX asking for the fee to be reversed, that AMEX agreed to rectify that matter. Received a refund of credit which on the account (prior to the charging of the annual fee).

My dispute went to the final stage with FOS, they sided with AMEX quoting a rather surprising clause which was added to the terms and conditions in July 2017, that AMEX can at any time and without any warning or advice, and without giving justification, to the card holder immediately suspend and/or cancel all accounts and demand payment of all outstanding amounts.

A weird argument the FOS made at one point was that AMEX cancelled my account because it was considered in default as a result of the suspension!!! (AMEX cancelled the accounts on the very first call, they had been suspended for like 4 hours).

I can also update my journey with Amex and SMSF payments. As mentioned up top, I had my cards suspended last year after attempting to make my superannuation guarantee payments to my SMSF with the RewardPay service.

Despite having made similar payments in FY16 with no problems, AMEX now consider it a prohibited payment.

I took the matter to FOS and after 3 or so months finally received a finding from them last week. The bottom line was that FOS’s interpretation of the card terms and conditions is that Amex can pretty much do anything they want at anytime. A transaction can be valid one day and deemed invalid the next - the t&cs allow for this!

I accepted this finding as I can’t be bothered taking it to court - the inconvience I experienced doesn’t justify it.

However AMEX did offer me (via FOS) $750. I took it and ran.

TL;DR FOS confirms that Super payments to your SMSF via RewardPay are prohibited transactions.

The FOS is industry-funded so they have an incentive to be biased. However, FOS is not a court and one should not expect legally robust decisions from them - their claims handlers are mostly graduates of pseudo-TAFEs who lack the intellect and drive to succeed in private practice.

It is well-established at common law that contractual discretions (like the ones referred to above) most be exercised reasonably and not arbitrarily or capriciously. There is a duty to afford procedural fairness.

Such terms may also be void under the Unfair Contract Terms Act. I suggest you test this at VCAT.

 

[Bell21]

Thanks to everyone contributing to this discussion - without it, I probably wouldn't have thought about the risk of paying SMSF via Rewardpay, given it would've been via a pty ltd company. Sorry for those who have been bitten by it. When I called AMEX to discuss it, they explained that any potential related-party payments are likely to get your account 'flagged' for a thorough review and best to avoid it, which sounded sensible to me, especially given some of the experiences of other members.

 

[potm]

I think AMEX in these cases could show a bit of leniency, especially for good long term customers who would clearly not repeat the same types of transactions once warned.

They seem to adopt a no tolerance policy on what appears to be against cash extracting transactions that are recorded as purchases.
The SMSF contribution one is a bit more specific scenario which probably does not occur too often.

Sending yourself or friends/family money through paypal to generate points is well a known no-no and I'm not surprised that cracked down on that.

In terms of trying to get an outcome from FOS, you're only likely to achieve success when they have not fulfilled some promise or commitment. They have no obligation to provide you with ongoing credit card, so purely canceling your account is not sufficient, regardless of the reason or lack of one.

 

[cove]

Always sad to read about someone who has difficulties with a credit card. Next year I will have had an Amex card for 40 years and I am still learning things. I avoided paying the quarterly taxes on our Superfund by credit card as it could be deemed to have put us over the contribution limit for the year.