(Reuters) - American Express Co (AXP.N) raised currency conversion rates for business clients without notifying customers in an attempt to boost revenue and employee commission, the Wall Street Journal reported on Monday, citing people familiar with the matter.
The practice, mainly within the forex department, was occurring until early this year and dates back to at least 2004, the Journal reported.
Shares of the company were down nearly 3 percent at $100.75 in midday trading.
The practice mostly targeted small and midsize businesses, where a salesperson would tell potential clients that AmEx would beat the price they were paying banks or other financial institutions to convert currency and send money abroad, the Journal reported.
However, the salespeople did not inform customers that the margin, a markup that AmEx tacks on to the base currency exchange rate, was subject to increase without notice, the WSJ reported.
To spot the change, customers generally would have to log in to their accounts and compare the rate AmEx was offering to the market exchange rate at the time of the transaction, it added.
AmEx spokeswoman Marina Hoffmann Norville said the company would be conducting a review with an external party in order to determine whether all of its standards are being met.
“We take allegations like these very seriously ... If we find that we fell short of the mark, we will fix the problems and take appropriate actions to make sure it doesn’t recur,” Norville said.
AmEx’s forex unit accounts for less than half of a percentage point of its total revenue and has a training, control and compliance oversight, the company said.
Reporting by Nivedita Balu in Bengaluru; Editing by Shailesh Kuber and Anil D'Silva