American Express has terminated some of its employees and disciplined others stemming from the sales staff’s positioning of products “inappropriately,” particularly related to purported tax benefits, the company announced in a statement on Monday (Nov. 22).
The issue mainly focused on Premium Wire, the company’s global wire payments product, according to the statement. As a result of an investigation commissioned by American Express, the company has stepped up employee training, modified its sales compensation plan, emphasized allowable sales practices and policies, and discontinued the Premium Wire service, as well as eliminated the membership rewards component of the working capital solution.
From 2018 through September 2021, Premium Wire and the working capital solution accounted for roughly one-half of 1% of the company’s total network volumes and less than one-quarter of 1% of American Express’ revenue globally, according to the statement.
Beginning in 2018, American Express’ sales staff reportedly told business customers in emails, phone calls and in-person meetings that they could use an Amex card to pay employees and suppliers, that the rewards accrued on their cards could be converted into untaxed cash, and that transaction fees could be deducted for tax purposes.
A whistleblower alerted the Internal Revenue Service in July, telling the agency that Amex representatives essentially swayed business owners to underreport their earnings and taxes, as PYMNTS reported.
Related news: Amex Lured Business Customers With Fraudulent Sales Pitch
The IRS could have more power to track bank accounts under a Biden administration proposal that’s getting a second look. Initially, plans called for the IRS to be able to track accounts with more than $600 in annual transactions. An updated proposal issued by Senate Democrats and the White House last month would raise the IRS tracking threshold to $10,000 in annual transactions.
See also: Biden Pulls Back on IRS Bank Account Tracking Proposal
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