American Express has disclosed it terminated employees for making improper sales pitches to business customers about the tax benefits of using its wire payment services.

According to AmEx, the employees “positioned certain products inappropriately, specifically with respect to tax benefits,” with the issue primarily involving Premium Wire, a product that enables businesses to send wire payments globally.

“This misconduct should not have happened,” AmEx said in a news release. “As a result of an internal investigation, we terminated employees and disciplined others, made product changes, adjusted our sales compensation plan, required additional training, and reinforced our permitted sales practices and policies.”

The company said that from 2018 through September 2021, the products associated with the pitch accounted for about one-half of 1% of its total network volumes and less than one-quarter of 1% of global revenue.

But The Wall Street Journal, citing people familiar with the matter and documents it had reviewed, said the pitch helped AmEx generate billions of dollars of transaction volume since at least 2018.

“Current and former employees say the strategy grew out of AmEx’s efforts to increase transaction volume over its network” and it “gained steam after AmEx cracked down on misleading sales tactics in its foreign-exchange business, causing sales in the unit to fall,” the Journal reported.

AmEx sales reps reportedly focused on business customers whose vendors didn’t accept AmEx cards, telling them they could deduct wire transfer fees of between about 1.77% and 3.5% as ordinary expenses and also earn reward points that they could convert into untaxed cash using the AmEx Platinum Charles Schwab card.

However, in guidance released in 2002, the Internal Revenue Service said it wouldn’t challenge taxpayers who redeem miles earned from business travel for personal use but that protection does not apply to cash conversions.

“If people are doing this as a way of charging their business expenses, taking the deduction for the full invoice price and then pocketing on the personal side for the cash rewards, I think they’re violating the guidance from the IRS,” said Christopher Hesse, an accountant at CliftonLarsonAllen.

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