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Old Aug 17, 13, 1:12 pm   #1
 
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Manufactured spending = wire fraud ?

I'm new to the idea of manufactured spending and love the potential benefits, but I have some concerns. Could someone with legal expertise offer their opinion. Could the case be made by a government agency that manufactured spending to gain credit card points be considered wire fraud or fraud of another sort to defraud the issuing credit card company of points? Ordinarily, most consumers won't have any attention being paid to them by an agency. But, if an agency wanted to prosecute someone for any reason whatsoever, could this be a prosecutable action?
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Old Aug 17, 13, 1:27 pm   #2
 
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Some "other fraud" discussion here: Suspicious Activity Reports to the IRS when buying or depositing money orders.
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Old Aug 17, 13, 1:33 pm   #3
 
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Quote:
Originally Posted by flyerred View Post
I'm new to the idea of manufactured spending and love the potential benefits, but I have some concerns. Could someone with legal expertise offer their opinion. Could the case be made by a government agency that manufactured spending to gain credit card points be considered wire fraud or fraud of another sort to defraud the issuing credit card company of points? Ordinarily, most consumers won't have any attention being paid to them by an agency. But, if an agency wanted to prosecute someone for any reason whatsoever, could this be a prosecutable action?
First, an internet forum is a terrible place to get legal advice. Second, where is the fraud? If this were a serious concern, I guarantee you a lot more people would have been prosecuted during the Mint days. The bigger conern is abuse that a particular financial institution decides is sufficient to justify closing an account and taking back points. If the institutions really believed that such actions had amounted to fraud, they already had the identity of the account holder and could have prosecuted. I'm unaware of an example of such a prosecution.
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Old Aug 17, 13, 1:37 pm   #4
 
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Why are you specifically only worried about wire fraud?

Anyways, wire fraud is one of the most ambiguous, broad, murky crimes that can be charged against someone. It's part of the reason why you rarely, if ever, hear of anyone being charged with "Wire Fraud" anymore. Most prosecutors and judges can't even come to a firm decision on what constitutes a "wire" or what classifies as fraudulent use of a wire. Prosecutors aren't going to risk their career attempting to send someone to trial, and attempt to set precedent for the sole charge of "Wire Fraud."

The Federal government cannot even come to a firm decision on if the internet is a "wire," if wire fraud can be considered for intrastate matters, or if certain activities are excluded from being prosecuted under the wire act.

With all things on the MS forum, do what you are comfortable with.
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Old Aug 17, 13, 1:44 pm   #5
 
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Why are you specifically only worried about wire fraud?

Anyways, wire fraud is one of the most ambiguous, broad, murky crimes that can be charged against someone. It's part of the reason why you rarely, if ever, hear of anyone being charged with "Wire Fraud" anymore. Most prosecutors and judges can't even come to a firm decision on what constitutes a "wire" or what classifies as fraudulent use of a wire. Prosecutors aren't going to risk their career attempting to send someone to trial, and attempt to set precedent for the sole charge of "Wire Fraud."

The Federal government cannot even come to a firm decision on if the internet is a "wire," if wire fraud can be considered for intrastate matters, or if certain activities are excluded from being prosecuted under the wire act.

With all things on the MS forum, do what you are comfortable with.
My interest is in finding out if manufactured spending, in any of its varied forms- amazon payments, money orders, or gift card buys and deposits, can be prosecuted at all. If not under the umbrella of wire fraud, then another felony? There are probably thousands of flyertalkers who are already engaged in this activity. The financial records are permanent and readily available to government officials if they're interested. Perhaps a credit card company were particularly annoyed by a specific high volume individual, the credit card company could encourage/ request criminal prosecution. Is there grounds at all, even by stretching the letter of the law, to prosecute someone for manufactured spending?

Last edited by flyerred; Aug 17, 13 at 2:04 pm.
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Old Aug 17, 13, 2:40 pm   #6
 
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If one day all gift cards / prepaid cards (cash equivalent) purchases will be coded as cash advance by all credit card banks, will that be end of points manufacturing industry?
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Old Aug 17, 13, 3:03 pm   #7
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1. Contrary to other posts in this thread, wire fraud is one of the most comonly charged federal felonies.

2. Here is a piece of free advice: don't rely on anonymous internet sites for legal advice.
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Old Aug 17, 13, 3:11 pm   #8
 
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1. Contrary to other posts in this thread, wire fraud is one of the most comonly charged federal felonies.

2. Here is a piece of free advice: don't rely on anonymous internet sites for legal advice.
+1 on point 1
+100 on point 2

If you're scared go to church.
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Old Aug 17, 13, 3:27 pm   #9
 
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As a cardinal, I can give you the church's official position - you are going to hell. We can book your flight there on Ryan or Spirit.

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+1 on point 1
+100 on point 2

If you're scared go to church.
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Old Aug 17, 13, 3:44 pm   #10
 
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Are you stealing anything?
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Old Aug 17, 13, 4:04 pm   #11
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Quote:
Originally Posted by flyerred View Post
My interest is in finding out if manufactured spending, in any of its varied forms- amazon payments, money orders, or gift card buys and deposits, can be prosecuted at all. If not under the umbrella of wire fraud, then another felony? There are probably thousands of flyertalkers who are already engaged in this activity. The financial records are permanent and readily available to government officials if they're interested. Perhaps a credit card company were particularly annoyed by a specific high volume individual, the credit card company could encourage/ request criminal prosecution. Is there grounds at all, even by stretching the letter of the law, to prosecute someone for manufactured spending?
Please point out to us where the fraud occurs. Here are two definitions of fraud -- show where manufactured spend meets either definition.

1) A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.

2) Wrongful or criminal deception intended to result in financial or personal gain.

I make purchases with a CC and gain points by doing so. That I am able to buy GCs and then MOs with the GCs which I can then deposit has entirely to do with the rules and practices of the CC companies, the retailers and the banks. There is no fraud. I am merely taking advantage of favorable conditions.

Last edited by PaulMSN; Aug 17, 13 at 4:13 pm.
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Old Aug 17, 13, 5:51 pm   #12
 
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Let me amend my earlier answer. So long as you are earning points solely as yourself, I see no issues with fraud. If you're one of the folks here who likes to brag about multiple accounts set up through your wife, children, friends, etc., then you sure better have the consent of these folks to use their names, SSNs, and other personal information in making an application, and you sure better not be making applications on behalf of dogs, cats, or those who might have been able to vote despite their deceased status in elections in certain districts in this country when political machines were a lot more formidable.

Yes, there might be little chance of detection of those activities, but there's no question about their fraudulent nature.
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Old Aug 17, 13, 5:55 pm   #13
 
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As a cardinal, I can give you the church's official position - you are going to hell. We can book your flight there on Ryan or Spirit.
If Ryan or Spirit doesn't put the fear of God into you, nothing will.

Please not Spirit - not $3 for a bottle of water.
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Old Aug 17, 13, 6:36 pm   #14
 
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Manufactured spending = wired fraud ?

I think this is a fair question but definitely the wrong place for advice. In my opinion, which is pretty much of no value to you since I don't have a law degree and don't have your back... Many people on this board are actively commuting fraud, but it would be difficult to prove and closing someone's account is the easier solution.

Many people think it is perfectly fine to lie and deceive stores and credit card companies. They do so on recorded phone lines and in written communications. I think someone wanting to avoid crossing the line should avoid these activities. I've found the truth works well. "Why do you buy so many if these cards?" "I get a ton of points from my credit card for free trips". Seem easy enough to me.
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Old Aug 17, 13, 7:21 pm   #15
 
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Quote:
Originally Posted by TheChallenge View Post
Why are you specifically only worried about wire fraud?

Anyways, wire fraud is one of the most ambiguous, broad, murky crimes that can be charged against someone. It's part of the reason why you rarely, if ever, hear of anyone being charged with "Wire Fraud" anymore. Most prosecutors and judges can't even come to a firm decision on what constitutes a "wire" or what classifies as fraudulent use of a wire. Prosecutors aren't going to risk their career attempting to send someone to trial, and attempt to set precedent for the sole charge of "Wire Fraud."

The Federal government cannot even come to a firm decision on if the internet is a "wire," if wire fraud can be considered for intrastate matters, or if certain activities are excluded from being prosecuted under the wire act.

With all things on the MS forum, do what you are comfortable with.
There is nothing to this; it is all incorrect. Nearly every RICO claim alleges mail and wire fraud. There is scarcely ever agreement on the exact scope of activities that are intended to come under the ambit of a federal statute. Indeed, RICO was intended to be broad so as to reach organized crime activity--see the legislative history. If anything, that something is "ambiguous, broad, murky" makes it more dangerous; it certainly does not mean that it is ignored or unused.

That said, the government is not going to sue you for "ripping off" a bank that made it out of the financial crisis relatively unscathed. More fundamentally, I know of no "manufactured spending" technique that is fraudulent. It is arguably a violation of your contract with Chase, but it is axiomatic that a simple breach of contract is not fraud. Similarly, Chase would not even bother arbitrating a claim against you (you are, of course, subject to mutual binding arbitration), they would simply close your account and mail you a check for the points at $.01/each.

Last edited by LAX88; Aug 17, 13 at 7:27 pm.
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