First National City Travelers Checks stepped up its advertising was yesterday against rival American Express. And the travelers check giant wasn't sure what to do about it.

The travelers check offensive was launched last Thursday when First National City ran full-page newspaper ads claiming that its rival's commercials were deceptive by implying that travelers checks other than American Express could not be refunded. The ad asked, "Is American Express running deceptive television commercials for its travelers checks?"

Yesterday, in more full-page ads First National City supplied its answer: "Yes, those TV commercials for American Express travelers checks are false and misleading."

The body of the ad continued that "misleading the public -- indeed frightening the public -- is a wholly unnecessary and irresponsible way to sell anything." All along American Express has denied the charges. "We are certainly concerned about this tactic," said Jess O. Gregory, a spokesman for American Express. "We're looking at the possibilities."

American Express said that it had offered to modify its commercials to say that of course, other travelers check companies give refunds if the checks are lost or stolen. Gregory said that should have satisfied First National City.

"The money might be better spent on advertising for their product," rather than attacking American Express, gregory said.

The commercials in question depict vacationers who have just lost their travelers checks, and they don't know what to do. The moral is always use American Express cheques.

Gregory said that so far there has been no impact on sales of American Express travelers cheques, as a result of First National City's counter-ads, although it may be too early in the battle to determine the casualties.