American Express ($AXP) Reassures Regulators That $13 Billion In Suspicious Transactions Earned Substantial Delta SkyMiles

NEW YORK — American Express ($AXP) reassured federal regulators that $13 billion in suspicious transactions had not slipped through the compliance cracks, but had been carefully tracked to ensure every dollar was eligible for Delta SkyMiles.

Responding to an enforcement action by the Office of the Comptroller of the Currency (OCC) concerning failures to sufficiently detect and report suspicious activity, the company submitted a corrective action plan showing that the affected accounts were now close to complimentary companion travel.

“We understand the concern about where the money came from,” said Jamal Young, vice president of cardmember risk experience. “But we would ask the board to remember that we recently raised full year EPS guidance.”

An internal review found that compliance staff had repeatedly flagged the transactions, only for the alerts to be reclassified as opportunities to deepen savings account and Centurion Card engagement.

The company defended its review process as rigorous, citing a 46-page dossier establishing that any suspicious businesses had paid their annual fees and, in some cases, received hand written 'Thank you' notes.

“We didn’t ignore the red flags,” said compliance director Leticia Brown. “In each case, a relationship manager was able to explain how the funds qualified for travel benefits.”

Executives noted that freezing the accounts would have interrupted record interchange revenue while unfairly penalizing customers who had already planned on using SkyMiles points for a sweet vacation.