Company strongarm tactics re: Diner's Club

[IBWino]

My company has issued a policy that requires all company business expenses to be charged to a "company" Diner's Club card. However, it turns out that the card is a personal liability card; I am required to fill out and submit the application, and the card will be my name. My company makes it clear that "all charges remain the sole responsibility of the card holder". The account will be structured so that my company credits reimbursements directly to the Diner's Club account. They are doing this to avoid having to issue reimbursement checks or use direct deposit so as to save some expenses. Is this standard business practice at large corporations?

Frankly, this royally p*sses me off. In my opinion, if my company wants me to use a Diner's Club card, then they should issue me a company card. I don't see how they can force me to get a card in my name that I don't want, and that is going show up on my credit record.

Am I way off base here?

 

[haha]

Am I way off base here?

Depends on whether you value your job above this principle.

Ha

 

[mews]

Hmmm....

Can you, in reasonable amounts, get advances on your expenses?

The salespeople at the last place I worked before my career change did all the time. ( I was part of accounting and all of payroll, so I know )

ta,
mew

 

[WhoDaresWins]

I work for state government, and we have to turn it receipts to be repaid. The last time I returned from a conference, I owed THEM money(it was all the a la carte smoked salmon at breakfast). Had to write a check to fiscal to get them off my back...

 

[IBWino]

Depends on whether you value your job above this principle.

Ha

I hope they value me more than this principle. I've been with the company almost 22 years. I think I will tell them politely that if they will not reimburse business expenses unless they are on a Diner's Club card, then I simply will not incur any business expenses.

 

[bbbamI]

In my last j*b, I issued cash advances to employees that later vouchered their expenses with receipts. Later the company gave out company MasterCards.

I see a problem if a person can not get a credit card for their company expenses in their own name if their credit score is not good enough. How will the company handle this situation?

 

[Westernskies]

I hope they value me more than this principle. I've been with the company almost 22 years. I think I will tell them politely that if they will not reimburse business expenses unless they are on a Diner's Club card, then I simply will not incur any business expenses.

Let us know how this works out for you....

 

[W2R]

I am a federal employee, and I have a government Mastercard for use when I am traveling for work. It has a very official-looking design with an American flag and a bald eagle on it.

It is in my name, but it is not really my card - - in the sense that I am not permitted to use it except for pre-authorized expenses.

Our travel arranger directly bills air fare to the card. After pre-authorizing, I charge my hotel room and rental car to the card. Each month, the government pays off the authorized charges to the card automatically. That's about it. Pretty exciting, huh?

As for BbbamI's question, in our case a credit check is done as part of the security clearance when we are first hired. So, it is not an issue.

I wouldn't worry about your Mastercard. I think it's standard practice these days for organizations to put their Mastercard in the employees' names.

 

[NW-Bound]

Yes, I believe this is common practice. A megacorp I was with previously allowed employees to use the card for personal expenses, and separating these from business expenses was the responsibility of the employees. I do not know if they still allow that. Another megacorp does not want us to use the card for personal expenditure, except while during travel but for personal items or expensive meals that exceed their limits.

I suspect the reason for this practice is that they can easily see what the employees actually spend while on company business. They do not like to reimburse for "cash expenses", because the latter can be inflated.

 

[GoodSense]

I work for a medium-sized company. Our policy is exactly the same as yours. Employees have to apply cards in their own names, and after each expense report, the company pays the expenses directly to the credit card company.

The only issue I have is that sometimes my boss is out of town and it may take a few weeks for an expense to be paid. I don't want my credit record to be ruined because of the dysfunction of my company. Luckily it has not happened so far. There have been late payments, but never more than 30 days late.

 

[Leonidas]

Uncle Sam issued me six or seven cards (gas, telephone, travel, other expenses) and then pulled them all back and gave me a single Master Card that was in my name. We would submit the paperwork for reimbursements right after making the expenditure and generally had the money direct deposited before the MC bill came due - which we paid with a personal check. Not how I wanted to do business, but it's not like they gave me any choice.

All was good until Congress didn't pass a budget on time one year and reimbursements were "delayed". It also happened to be right after I had flown half a dozen times, spent about half the month in hotels in NYC and Miami, and had bought a set of tires and some repairs for the G-ride. Master Card sent me a bill for more than four grand and there was no sign of a reimbursement deposit from the G. The nice folks in the fiscal office at the field division I worked in sympathized with me over the missing reimbursement, but the answer was, "I don't know" and the underlying message was, "and it's not my problem". I decided I wasn't going to send MC a check until the folks in DC reimbursed me.

A few weeks after the bill was late I got a nice letter from Master Card reminding me of the debt. I called MC and explained how I viewed the situation.

Look, I didn't want the damn credit card in the first place, but they made me take it. Congress won't pass a budget and all the agencies are operating on reduced figures from last year. Which means the [agency] is dragging its feet in reimbursing me for the travel I performed as part of my job. All these charges were authorized government expenses and it's the government's responsibility to pay them, not mine. When I get my money from them I'll write you a check the same day. But until then, I'm not about to float the government an interest free loan because it can't pay the bills on time. I suggest you call [agency] headquarters and explain this to them. Oh, and if you guys cause any negative comments to be entered into my credit history, stand by for a lawsuit.

Apparently someone did call headquarters, and eventually I got a call from someone within the agency trying to tell me I had to pay the bill. They got the same response that MC got, because even though I had a fed badge and ID, my paycheck still came from the city. After a couple of tries to get me to pay it they gave in and moved some money from one place to another and my reimbursement money showed up in a couple of days. MC didn't even charge me a late fee.

Edit to add: Just read Want2retire's post that she entered while I was typing this. I wonder if the agency paying the bill is a government wide change since I left, or if it is case by case basis depending on the agency. Some of our travel and expense decisions were made in the field when there wasn't time to get any paperwork done. We always had the ability to use the cards for any justifiable business reason. Justifying expenses, I learned, was a governmental comedy. I spent about seven grand one holiday weekend (helicopter fuel and a block of hotel rooms and meals for a local crew) and fiscal didn't bat an eye. The very next week I turned in a receipt for a $5 shrimp platter and a $2 beer and they made me answer multiple questions by memorandum.

 

[fisherman]

I sure miss my Mega Cr*p!!!

Thanks for sharing this. It is an item that will make ER sweater for you.

 

[youbet]

I hope they value me more than this principle. I've been with the company almost 22 years. I think I will tell them politely that if they will not reimburse business expenses unless they are on a Diner's Club card, then I simply will not incur any business expenses.

They are within their rights. We had a similar situation at my MegaCorp that was in place when I was RIF'd three years ago. While this wasn't my favorite situation, it turned out to be very little hassle and, in fact, until I read your post hadn't thought about it.

If you can live with the minor inconvenience, live with it. If you can't, quit.

 

[IBWino]

The only issue I have is that sometimes my boss is out of town and it may take a few weeks for an expense to be paid. I don't want my credit record to be ruined because of the dysfunction of my company. Luckily it has not happened so far. There have been late payments, but never more than 30 days late.

This is my main concern. My wife and I have a perfect credit record and I want to keep it that way. I have always submitted expense reports and receipts and been reimbursed in the past. I consider this a major imposition, but it sounds like it is common practice.

I'll sleep on it and try to calmly consider it tomorrow.

Thanks everyone for your helpful insight.

 

[bbbamI]

As for BbbamI's question, in our case a credit check is done as part of the security clearance when we are first hired. So, it is not an issue.

I wonder how often a credit check is done after an employee is hired.....

 

[youbet]

This is my main concern. My wife and I have a perfect credit record and I want to keep it that way. I have always submitted expense reports and receipts and been reimbursed in the past. I consider this a major imposition, but it sounds like it is common practice.

I'll sleep on it and try to calmly consider it tomorrow.

In addition to using a similar CC for expenses and having the same concerns as you, I was also responsible for approving expense reports for a few dozen folks. In that regard, I liked the new system. The approval SW, which pre-checked the expense reports, promoted consistency from manager to manager and required overrides and explanations for exceptions to policy. I was sooooo tired of hearing crybabies whine that other managers were allowing their team to stay at five star hotels, fly first class, charge souvenirs/family gifts to their expense accounts, etc., etc., that when the software caught most "little descrepancies" for me, it lifted a great load. It was also amazing at how the same guys who I could never get to turn in their reports in a timely fashion when they were spending against cash advances, suddenly got prompt when they needed a credit card bill in their name to be paid!

BTW, despite being pretty active traveling my last few years with MegaCorp, there was never an issue with late payments to take care of the card. I do recall that, as an approver, if I was going to be on vacation or whatever I set up an alternative. I also believe there was an automatic followup by accounting if charges weren't cleared by some cutoff date. I also liked that everything was on line and I could approve expense reports as easily from Singapore as from my desk in the Chicago area.

Hope it works as well for you.

 

[youbet]

I see a problem if a person can not get a credit card for their company expenses in their own name if their credit score is not good enough. How will the company handle this situation?

The company is actually co-signing the card that is in "your name." There are. as far as I know, no issues with the employee's personal credit preventing him/her from getting a card.

 

[gindie]

This is my main concern. My wife and I have a perfect credit record and I want to keep it that way. I have always submitted expense reports and receipts and been reimbursed in the past. I consider this a major imposition, but it sounds like it is common practice.

I'll sleep on it and try to calmly consider it tomorrow.

Thanks everyone for your helpful insight.

FWIW, my company card never shows up on my credit report.

 

[bssc]

There are three types of card agreements, usually. The most popular is where the employee is responsible for all charges. That way if they spend it on hookers and blow, the company will not reimburse them. Not that an employee would ever abuse their card.
The other is corporate liability where the company is solely responsible for the charges. When I worked for an Internet company everyone had to get a corporate card for travelling. All were personal except for one lady who had a bankruptcy and the company had to take responsibility for the card. The company ran out of money, people didn't get reimbursed and everyone was out except for the one lady. Bankruptcy paid off for her.
There is also joint where both the company and individual are liable but this is rare.

 

[quietman]

Why did they choose "Diners Club" for the mandatory card? I've been plenty of places that take MasterCard or Visa but that do not accept Diners Club. Is that going to be an issue with reimbursements for business expenses?

 

[MichaelB]

I had this arrangement 15 years ago in globo-corp.

Company policy was to use the Diners card solely for business charges – usually airfare and hotel. Company had a solid expense accounting process and reimbursement was directly credited to CC, so it was incumbent upon employee to stay current.

Having worked on all sides of the expense account system – employee using, manager approving, finance function managing and controlling – it is a much better way to manage the process. It deals upfront and directly with a number of expense reimbursement issues – cash advance management, expense reimbursement procrastination, use of company funds for non-authorized purposes being the most critical. Clear audit trails are created and maintained by the cc company.

For the Megacorp Diners has the advantage of being accepted worldwide for most travel-related expenses – mostly air and lodging – but not much else.

 

[gindie]

Why did they choose "Diners Club" for the mandatory card? I've been plenty of places that take MasterCard or Visa but that do not accept Diners Club. Is that going to be an issue with reimbursements for business expenses?

I may be wrong, but I think I heard somewhere that Diners Club is one of the few cards that offers primary coverage on rental cars.

 

[IBWino]

There are three types of card agreements, usually. The most popular is where the employee is responsible for all charges. That way if they spend it on hookers and blow, the company will not reimburse them. Not that an employee would ever abuse their card.
The other is corporate liability where the company is solely responsible for the charges. When I worked for an Internet company everyone had to get a corporate card for travelling. All were personal except for one lady who had a bankruptcy and the company had to take responsibility for the card. The company ran out of money, people didn't get reimbursed and everyone was out except for the one lady. Bankruptcy paid off for her.
There is also joint where both the company and individual are liable but this is rare.

This is a scenario I worry about. It's not that I believe my company is going away anytime soon, and I'm really not worried about being reimbursed. But I don't want my credit record affected by the company's failure to pay.

Why did they choose "Diners Club" for the mandatory card? I've been plenty of places that take MasterCard or Visa but that do not accept Diners Club. Is that going to be an issue with reimbursements for business expenses?

I also wondered about this; apparently it is a Diner's Club card with a MasterCard logo that makes it pretty much universally accepted.

Thanks again everyone for your comments. I'll post back when I come to a decision.

 

[FUEGO]

Could you put a hold or a lock on your credit reports such that the Diners Club could not run a credit check on you, thereby denying you the card? Make up some BS to tell the company about you think you may be the victim of identity theft, and you need to have the credit report locks on for a year or so.

 

[Nords]

I was a treasurer of a very small non-profit for three years. One day it was decided that we needed a credit card to be able to book airplane tickets for contractors. They had to fly to Oahu (usually from California) and they'd usually spend several hundred dollars of their own money before I'd catch up with them to reimburse their airfare expenses. The non-profit board thought that it'd be easier to buy their airline ticket on our credit card.

Our bank was delighted to set us up with a corporate account until I realized that I was personally liable. I deferred to the board and it turned out that none of them wanted to be liable either.

Another exceptionally trusting board member volunteered to arrange the contractor travel on her credit card. (She was motivated by her CC's cash-back program.) Although the CC part went fine, she ended up being a one-woman travel agency for all of these contractors. The hassle was far worse than the putative benefits.

This is my main concern. My wife and I have a perfect credit record and I want to keep it that way. I have always submitted expense reports and receipts and been reimbursed in the past. I consider this a major imposition, but it sounds like it is common practice.

It's also a colossal PITA. I'd avoid taking their card if at all possible. You don't even want to have one, let alone have one and not use it.

Mention of the military's government charge card program still makes me shudder in revulsion. The biggest problem was being required to pay the card balance (or incur interest & fees) before you'd been reimbursed by the military.

A far bigger hassle was the administrative side. Card delinquencies (even for perfectly legitimate issues) were considered inputs to evaluations and fitness reports. 60-day delinquents were special members in the XO's personal-attention club. Everyone with a govt travel card had to attend periodic training. That started as "upon issue" but then became "annual" and eventually "quarterly". A substantial administrative burden was spent parsing the delinquency report and tracking down everyone's reasons why they hadn't paid yet, or submitting proof that they had paid.

Other veterans would be on orders of longer than 30 days. Since they couldn't file a travel claim until they finished their orders, they'd have to file "interim travel claims" every 30 days in order to be reimbursed for the credit-card charges that they were required to pay. This was an even bigger issue with the [-]spooks[/-] special-projects guys who'd disappear at sea for 60-90 days between ports.

Then there was the sailor who retired from the military and didn't turn in his govt travel card. He ran up a multi-thousand spending spree across six states before we figured out what was happening. It's darn hard to transfer a delinquency from the Navy to the DoD's retired pay division. Apparently it's even harder to garnish military retired pay for govt debts. That debt was over two years delinquent before it eventually dropped off our lists.

The corporate side was just as bad as the military side. A shipmate ended up running BofA's data network for a few years in the late 1990s. When they were running the military's credit-card program, he said that at one point they were $66 million delinquent on payments. So maybe Diner's Club has it because no one else wants to touch it.