Two years ago, up-and-coming Atlanta businessman Kevin D. Johnson was simply making his way through the stack of mail that had accumulated while he was away on his honeymoon.
When he opened an envelope from American Express, the Morehouse College graduate began an unexpected journey that turned him into a consumer advocate and eventually a candidate for public office.
The notice from American Express was simple: It informed him that his credit limit was being reduced, something that struck Johnson as strange since he said he had a high credit score and perfect payment record with the massive credit card issuer. What was disturbing to Johnson was one of the factors the company listed to justify its action: “Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express.”
Johnson was flabbergasted. They were cutting his limit because they didn’t like the places he shopped? He wasn't in the habit of visiting strange stores. He had used the card at the same places most people pull out the plastic: Amazon, Ruby Tuesday, Wal-Mart, Starbucks and Federal Express. How could simply shopping at these stores make him a risky customer?
Johnson decided to go public. He first told his story to The Atlanta Journal-Constitution, which featured him in a front-page article. The story quickly captivated all sorts of news outlets. He was prominently featured on "Good Morning America" and written about in numerous newspapers -- including The New York Times. He was on CNN and interviewed by Macleans, Canada's high-profile newsweekly. Johnson, chief executive of a marketing and communications firm, also started speaking before groups and blogging about his experiences on a site he created to get the word out: newcreditrules.com.
Johnson said the interest in the story was "huge."
He said a range of actions taken by credit card issuers at that time -- from lowering credit limits to jacking up interest rates -- angered consumers, especially since many of the credit card companies were affiliated with banks that had gotten federal bailout money.
"People were frustrated and fed up with a lot of things going on," Johnson said.
At the time, American Express confirmed that it examined shopping patterns and used that data as one way to measure risk and help keep escalating default rates under control.
On Friday, Marina Norville, an American Express spokeswoman, told the AJC that the company stopped using its analysis of shopping patterns. She said that the variable was never the only reason someone's credit limit was decreased, and she said the way the message was worded on statements "was confusing our card members."
"Our risk models include hundreds of variables," she said.
Norville declined to explain exactly how American Express had used its analysis of shopping patterns, saying the models are proprietary.
Norville said she could not discuss the details of Johnson's account because it would violate privacy protections. But she said that the most important factor is a customer's debt level in comparison to financial resources.
In its notice to Johnson at the time, American Express said other factors used in its decision to reduce his limit were debt level, repayment history and length of credit history. Johnson said his record on those factors did not justify any reduction.
Johnson said he still has an American Express account, but he has no credit card debt whatsoever. "I use my credit cards only to avoid the bank closing them because of inactivity," he said.
Johnson said people continue to be fascinated by his experience. "I think the biggest thing that resonates with folks is the Big Brother, Orwellian aspect of it," Johnson said.
Johnson, 31, said he was initially inspired to go public with the issue because he is a solid consumer who was in a strong position -- he worried that other consumers who were having financial struggles or other problems wouldn't be able to take the company on. "When you have such a story, or a situation as this, you're almost compelled to go out there and try to effect change," he said.
The experience even prompted Johnson to run for a seat in the General Assembly. He lost in a tight special election contest last year, but he has no regrets.
"It was wonderful experience," he said. "It enabled me to see in a clear way how I can help consumers as well as people in my district."
Johnson said he hasn't ruled out another run for office. "I think I still have a lot to offer my community and my state."
These days, the entrepreneur is focused on growing the communications company he founded 10 years ago. He splits his time between Atlanta and Savannah, where his wife is a television news anchor.
And he said he uses his conflict with American Express as part of his business, when trying to explain the importance of corporate communications.
"I use it to let folks know how to handle a situation," he said. "They should have called me immediately. That's what I would have done."
Johnson said he's an avid reader of business books, which always advise that during any kind of crisis with a consumer, it's important to reach out and let the customer talk. Johnson said an American Express customer service representative did eventually contact him, but didn't offer a specific explanation and did not restore his credit limit.
"Sometimes people want to be heard," he said. "If you ignore them, the problems fester. Anyone who has been in a relationship knows that."
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