Credit card confusion after American Express mistakenly warns of account closures

While new customers from the Channel Islands have not been able to sign up for an Amex card since ring-fencing rules came into force in 2019, existing customers were able to keep using theirs. Credit: PA

Some American Express customers in the Channel Islands and Isle of Man have mistakenly been told their credit cards will be cancelled from October 2023, as they are not associated with an address on the UK mainland.

Since 2019, new applications to many lenders have been rejected as the Crown Dependencies are not part of the United Kingdom, but existing customers have mostly been able to continue to use their credit cards.

It comes after a similar false alarm in April when Barclaycard customers were given a month's notice that their credit cards would be cancelled, only for the lender to backtrack and apologise for the incorrect information.

Since the ring-fencing laws were introduced in 2019, hundreds of islanders have struggled to obtain a credit card as Jersey, Guernsey and the Isle of Man are different jurisdictions.

ITV News has been contacted by several American Express customers in the Channel Islands after they were informed cards without a mainland UK address would not work after Monday 2 October, when new terms and conditions from the company come into effect.

While the new policy does not explicitly address the Crown Dependencies, it does state that account holders without an address in the United Kingdom may be given two months' notice of their accounts being terminated to settle any outstanding balance.

When customers contacted the credit card company seeking clarification, messages seen by ITV News show Amex representatives confirming that cards registered in the Channel Islands would be cancelled.

American Express staff told islanders their cards "will be cancelled" by October when the lender's rules will change. Credit: ITV Channel

However, the information given appears to vary from customer to customer, as when others queried the new policy, they were told existing accounts would not be affected.

What is ring-fencing?

Financial institutions operating across multiple jurisdictions often choose to segregate parts of their business, keeping assets aside for a specific purpose.

For example, keeping UK and offshore banking operations within the same business separate.

This can be done to comply with various local tax regimes or to protect assets from losses incurred elsewhere in the business.

Six months ago, the Jersey Consumer Council called for legislative changes to make serving the island a more attractive prospect for UK and international lenders.

The group's Chairman, Carl Walker, said: "This is yet another example of a credit card company not properly understanding the Channel Islands and its relationship with the UK.

"Putting out misinformation does nothing but confuse the situation, it causes concern, unwanted attention for that company, and negative publicity."

An American Express spokesperson confirmed to ITV News that some customers were given incorrect information: "There are no upcoming changes for our existing Cardmembers living in the Crown Dependencies, who we will continue to support as usual."

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