Originally Posted by seat17D

Note: The following is what has happened to me. It may or may not happen to you. For all you know it may never have happened to me. It should not be considered legal advice or anything other than data points that may or may not be truthful from some interweb idiot you've never met. I take no responsibility for any actions you might take in your attempts to prove you are a bigger idiot than I am.

It's a bit more complex.

There's the whole concept of risk. It's both the likelihood of something happening AND the impact caused should it actually happen. I'd go so far as to say you could even break impact into two components: short term and long term. And maybe even by which 3rd party is taking the actions against you.

I'll leave the "frequency" debate to others, except maybe to say that it's hard to determine ahead of time. Both in terms of whether it will happen and when it will happen.

There is a lot of unfounded speculation on impacts. Frankly, the potential impacts are both more and less than you have alluded to.

I will speak to only the impacts and actions that have been taken (or threatened) to me personally over the years

1. Account closure - always got my money back. Moderate frequency. Little to no long-term impact UNLESS my wife was the first one to find out when her card was declined in public setting

2. Blacklisted by an FI - lower frequency. Short- to medium term impact. Eventually the FI's greed heals all wounds.

3. Blacklisted by a governmental agency -- lower frequency. Variable long-term impact as governmental agencies never actually forget, they just don't take action (see below)

4. Banned from a retail establishment -- threatened, but never actually banned. Mostly just pointed discussion from a misguided manager. Low-medium frequency.

5. Banned from an online establishment -- lower frequency, generally lower impact. Generally permanent, at least for me so far.

6. Cashback forfeited or clawed back -- generally happened to me as part of a credit card shut down. so far only forfeits and not clawbacks, but they are possible

And then there are the things law enforcement can and has done
1. Executed a warrant to subpoena my banking and other financial records without my knowledge
2. Contacted my FIs to inquire as the nature of my financial relationship
3. Frozen the portion of my assets that were currently involved in the activity they were investigating
4. Visited my home -- when I was not there -- to "interview" my spouse, etc. regarding their knowledge and involvement ... and to attempt to obtain additional documentation not already obtained by the subpoenas
5. Threatened to seize my assets. Not just the ones frozen. Not just those I currently possessed. But all assets they deemed as ever having been part of the criminal activity. (Think every GC, MO, etc. you have purchased over the past 3-5 years)
6. Threatened one or more felony charges. (Consider having to explain THAT to your wife or boss.)

And that all was for something that was completely legal, once the 'splaining was done.

Of course once LEO opens a criminal investigation, it never actually closes unless they take you to court and fail. So even though I was cleared of the charges, the original case file is out there ready to be dusted off.

In the end, my biggest concern is the extent to which something will permanently impact my marriage or ability to enter into financial contracts (felony charges would be one example). Fortunately once the initial shock of LEO's investigation wore away, both my marriage and financial relationships were intact. Very thankful both she and a few key FI's stood by me.

When you MS, you are running with scissors.