Banks are keeping a closer tab on your reputation than ever before — and it may explain why one cardholder mysteriously had his account shut down by Chase (JPM)


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Over the past year, stories have piled up in online communities of credit-card super users suddenly having their accounts shut down by JPMorgan Chase.
The case of Bryan Sequeira seemed similar at first, but upon closer inspection proved particularly unusual and confounding.
Sequeira, who has a strong credit profile and doesn’t game the points system to maximize rewards, was informed this summer that his accounts would be terminated by Chase.
But even after appealing, the company not only declined to reinstate him, they also refused to disclose why his account was being closed in the first place.
Unspooling the mystery behind Sequeira’s shutdown shines a light on the broad power credit-card companies have to cut ties with customers, as well as how banks, amid steep fines and intense scrutiny from regulators, are using technology to keep closer tabs on customers’ reputations than ever before.

Over the past year, stories started piling up in online communities of credit-card super users suddenly having their accounts shut down by JPMorgan Chase, one of the country’s largest card issuers.

It opened up fervent analysis among the growing community of credit-card enthusiasts over the calculus used by card companies to sever ties with customers.

A seemingly similar tale of woe surfaced in the Facebook group “Chase Sapphire Reserve Cardholders,” a closed group of more than 10,000 members that is unaffiliated with Chase.

But upon closer inspection the case of Bryan Sequeira proved particularly unusual and confounding.

“I received a letter that all my Chase cards are being closed. Has anyone else had that happen to them?” Sequeira, a 32-year-old product manager in healthcare IT based outside of Boston, posted on the forum toward the end of June.

“The letter didn’t state a reason. Just that it was closing in 2 months. Waiting for someone from the executive office to call me back,” he added in a follow-up comment.

As other puzzled group members prodded and probed for information, Sequeira revealed nitty-gritty personal details: He kept his credit utilization low, had normal spending patterns, and no credit blemishes since applying for the card in January. He applied and was approved for two other non-Chase cards in subsequent months, and he’d applied for but not yet closed on a mortgage. But otherwise, he had no other recent lines of credit opened in the past two years.

The Sapphire Reserve was a top-of-wallet card for Sequeira, an Indian citizen and US green-card holder who moved to New York for college in 2003 and has been steadily building credit since. And unlike many of the people who have been shut down by Chase over the past year, he wasn’t churning credit cards or gaming the system to maximize rewards.

[Read more: We recently dug into the rise of credit-card super users, the rewards arms race, and the myriad reasons banks can cancel your accounts.]

In short, he appeared to be a model customer, which is why he was so perplexed when Chase sent him letters saying his accounts would be shuttered in two months. Certain there must …read more

Source:: Businessinsider – Finance

      

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