Originally Posted by
RedSun
Banks would not want to wait until fraud happens. They have the risk department to monitor potential and possible risk to happen. This is risk prevention. That is clearly a risky behavior.
Also, what normal people can accumulate millions of MRs and bring them to the bank to cash out??
Schwab didn't award the MRs--AmEx did. There's no risk to Schwab in fulfilling its terms with AmEx and cashing them out at the contracted rate.
What's "normal" is a matter of opinion. (Remember Young Frankenstein's brain A. B. Normal?) And it's irrelevant.
You have no evidence for your guess of Schwab's reason. I have no evidence for my guess. My guess is that Schwab doesn't like paying out on MRs earned by spending on non-Schwab AmEx cards. It agreed to do so, but it has no compunctions about reneging on its promise to do so if that becomes unprofitable.
Again, there are better ways to limit its costs. Lying and false advertising is not right. Schwab could easily say that only MRs earned through spending on Schwab cards are redeemable, for example. It hasn't done that. It just kills accounts of people who aren't profitable. It's not a question of risk at all.