I don't want to start a flame war, emaij, but I don't think the "abusers" have anything to feel bad about.

I did the described transactions for a long time on emoneymail, exchangepath, and then C2it. I noticed a definitive trend.

At first there were no restrictions on effectively sending money to yourself. Any idiot could see what we were doing.

I think there was a need for the managers at the new company or division to show their superiors or investors that the business had a significant number of transactions and that this volume was increasing. There was no incentive to curtail abuse. Not only was there no restriction on sending money to yourself, they emphasized that everything was treated as a purchase, not a cash advance. Emoneymail even listed the transfer of funds between accounts as a benefit of the service.

The restrictions were generally put in place several months after the inception of the service. I believe three things happened to cause the restrictions to be put in place and to be enforced:

1. The "abusers" immediately retrieved the cash they sent to themselves (or relatives immediately retrieved their cash). The service did not earn the "float" interest they desired on our transactions.

2. The credit card companies complained about the cash advance abuse. Even though the CC companies earned transaction fees, as the general public learned about this technique the CC companies worried their business in lucrative cash advance fees would decline.

3. The volume from "non-abusive" transactions might have increased to a level to make the service sustainable (although I doubt it).

Let's not kid ourselves. They knew what we were doing from the start and plenty of those managers were happy to have those paper transactions in the early days.

Just my thoughts. They may not be accurate.