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Busted! Please help me figure out how to resolve this...

Busted! Please help me figure out how to resolve this...

Old Nov 25, 15, 4:53 pm
  #1  
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Busted! Please help me figure out how to resolve this...

I'm going to try and keep things anonymous and discreet, so please don't ask for specific details as I'd rather not put too much out there.

I recently stumbled upon an out of state credit union offering prepaid VGCs for next to nothing. Reloadable cards with a high balance, at least as far as GCs are concerned. I won't say how many I purchased but it was more than one - not much more than that. The cards can be loaded from any standard C.C. either over the tel. or directly online. I did so numerous times using several cards. Here's where I got sloppy: I called each time and had the balance transferred back to my checking account, thinking the credit union wouldn't care, since I'm not earning any points from them. I gave a different though reasonable (imo) excuse each time. I then transferred the funds out of the credit union to an external checking acct with another bank, and then paid off the cards.

Now I just want to be clear that the I did not make excessive reloads nor carry excessive balances on any of the cards. Apparently, my activity was enough to flag the acct. (fair enough) but it could also have been a reasonable misunderstanding with explanation... were the situation and circumstances different. Before I conjure up an explanation, I want to consult the forum.

Here's the problem - the card was flagged for fraud protection and frozen. The card is carrying a full balance (substantial amount though under 10k). I've received a voice mail indicating that they suspect the GC was used to earn points on rewards cards. They stated that they've reached out to all credit cards involved. I've also just discovered the credit union acct. was shut down or at least it's inaccessible online.

What to do?

If the CU acct is closed out, is the bank not obligated to either release the hold on the prepaid card or return the balance via check? While I understand that there is no obligation on their end to retain me as a member/customer, surely it's not lawful for them to seize my funds when I haven't done anything illegal or fraudulent myself, nor gone against the T&C (technically) of the acct.

How do I get the CU to release the funds from the card? It's not an amount that I'm able to simply write off and I'm very worried.

Thank you and please try to offer helpful advice rather than "proceed at own risk - told you so" type responses, as I'm genuinely concerned and seeing input.

Thanks in advance.


PS - Should I immediately dump all points in associated credit card accts out to travel partners? I've never done any manufactured spend on any of these cards before and always used them VERY responsibly, so I'm doubtful that these accts would also be terminated, but again, I defer to the forum's better judgement.

Last edited by OliverB; Nov 25, 15 at 5:01 pm
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Old Nov 25, 15, 6:01 pm
  #2  
 
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How Do I File A Complaint Against My Federal Credit Union?

First, Attempt to Resolve the Complaint Directly with Your Credit Union

Before you contact NCUA, please contact the credit union directly to attempt to correct the problem. You can do this over the phone, in person or in writing. If you believe the credit union's staff is unresponsive to your inquiry or complaint, address your concerns in writing to the president or chief executive officer of the credit union or the credit unionís supervisory committee.

If you are not able to resolve your complaint directly, determine who regulates your credit union using the links below.

I'm not sure if my credit union is state or federal: In this case, use the Find a Credit Union link to search by name and look up the credit union's charter number. Federal Credit Unions have charter numbers under 60000 and State-Chartered Credit Unions have charter numbers greater than 60000.To use Research a Credit Union, click here.
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Old Nov 25, 15, 7:37 pm
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They won't confiscate your funds. They may have a holding period before they refund the money back to you. Both times I was shutdown, the company held on to my funds for 90 days.

If you cannot float the funds for 90 days then I guess you kinda screwed up.
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Old Nov 25, 15, 8:06 pm
  #4  
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Once they figure out that the money really is yours and not part of a direct fraud, they will release it. But, that may take a while.

I would start planning on having the issuers they reach out to, shutting down your accounts as well.
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Old Nov 25, 15, 9:05 pm
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Originally Posted by OliverB View Post
Here's the problem - the card was flagged for fraud protection and frozen. The card is carrying a full balance (substantial amount though under 10k). I've received a voice mail indicating that they suspect the GC was used to earn points on rewards cards.
Just call and ask when they will be sending a check out.
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Old Nov 25, 15, 9:10 pm
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Hey what CU? PM is ok





Good luck, OP
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Old Nov 25, 15, 9:33 pm
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Thank you everyone.

I don't think Chase will shut down my account over this as I've put so much legitimate spend through the card over the past two years and the m.s. was nominal in context. I only ever put 4 transactions through (btwn 1 and 5 K) on any prepaid. I'm sure it will be far easier to resolve with Chase than the credit union. That said, it's reassuring to hear that they will eventually reimburse the funds. I was concerned that they'd simply chose to not act at all, which would essentially leave the money floating in limbo since the card is no longer active. I can carry a balance for 90 days if necessary, just so long as it eventually comes back to me. I'm shocked that the credit union actually contacted all of the card issuers. I really hope that my Chase account isn't shut down as a result. I've transferred all points out to UA just to be on the safe side.
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Old Nov 25, 15, 9:48 pm
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I would think the CU contacting your credit cards is some kind of privacy violation?
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Old Nov 25, 15, 11:36 pm
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Originally Posted by Fly1Away1 View Post
I would think the CU contacting your credit cards is some kind of privacy violation?
I was wondering the same thing. That's why when you call Chase, they ask your name, CC #, billing address, etc.
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Old Nov 26, 15, 1:50 pm
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Originally Posted by pwd847 View Post
I was wondering the same thing. That's why when you call Chase, they ask your name, CC #, billing address, etc.
Um no. The CU is the merchant. That's how they knew every credit card OP used.
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Old Nov 26, 15, 2:53 pm
  #11  
 
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I would have left the money in the CU account and bill paid from there. You at least give the CU a chance to earn interest on the deposits.

Treating it like a Pony Express way station, depositing and immediately withdrawing is wrong IMO.

This is how I use my CU.
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Old Nov 26, 15, 5:38 pm
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So the OP found a potential golden goose and managed to choke it to death in short order.

1. The advice in post 4 is correct. You will eventually get your money back. Expect getting money back from any bank account (checking/savings) to be way easier than funds on the prepaid. If the CU proves difficult after 30 days, follow the advice on contacting the NCUA.

2. You mentioned conjuring up an explanation. I suggest telling them the truth. A conjured explanation will not assist in convincing the CU that all is well.

3. The next time you find something like this, reach out to people who are more experienced with MS, even if you resort to PMing random people. Honestly you did a lot wrong here and the end result is not a surprise (end of preachy comment).

4. Good luck, I do hope you get your $ back quickly.

Last edited by ctbarron; Nov 26, 15 at 10:25 pm Reason: Added info
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Old Dec 1, 15, 11:37 pm
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Just a quick update to say that I spoke with card services today and was able to resolve this. The CU was very polite and accommodating; no accusations were made although they did explain the reason for flagging the account and used the specific term "manufactured spend", which apparently they learned of through the card provider ie. Visa. The woman I spoke with even went so far as to claim that the popularity of the product has been really good for the CU but that they've been forced to terminate the product as a result of m.s. All cards should be terminated by Feb. at the latest. The woman that I spoke with asked if I would prefer to have the card unlocked so that I could use the remaining balance or have a check mailed out and I of course chose the latter. It turns out my account was not flagged for loading and unloading (as mentioned, it was only fully loaded/unloaded twice) but because I used MULTIPLE funding sources... more than one credit card to load the prepaid. I was specifically asked why I used two different cards to load the prepaid, and responded that I have numerous cards and I don't recall any specific reasoning or rationale other than what plastic I had in my pocket at the time. I wasn't pressed on this and the person genuinely didn't seem to care one way or another, it sounded like she was forced to go through the motions, all the while making pleasant small talk about the weather and local sports teams. I'm annoyed that I emptied the balance of my Ultimate Rewards account into UA prematurely, but I suppose it's much better to be safe than sorry. So all that said, the issue has been resolved and it turns out to have been a lot of worry for no reason. If ever I happen upon a similar product that enables similar opportunity, I'll be a bit more cautious and less direct about unloading as well as using multiple cards as funding source. It sounds like all of the small credit unions are getting hip to this though and there probably won't likely be these kind offers in future. I kind of regret not being able to keep up the gig up until all cards are cancelled in Feb. but I'll be thankful to pay the $ back to my Chase card. The person that I spoke with did ask me quite directly if I would be loading the prepaid up again... in fact, she phrased it more along the lines of, "you aren't planning to, are you?" I got the picture.
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Old Dec 1, 15, 11:57 pm
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Ah load her up one last time. What the hell
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Old Dec 2, 15, 7:16 am
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Thanks for the details OP. It gave me an insight of what to expect with some of the CU prepaids I have that I've been loading and unloading without issues for several months now.

From discussions in our group, it seems like even while following the T&C to the dot, our accounts may be heading for shutdown in a few months. Its not new to us though, there's 2 that shut us down but fortunately, we liquidated funds immediately at WM soon as we read there was a sweeping shutdown. For a couple of us, we didn't have to go through begging for our funds back, in a day or two, we saw the status as CLOSED in our accounts. No love lost, we started a new search

I thought that after the hammer fell on those 2, there'll be no more. From out of the blue, through constant networking and research, 4 geese came up for fattening; might also end up in the chopping board but it was, least to say, easy armchair MSing.

Don't lose hope, there's still plenty out there you'll find especially if you're searching with like minded people.
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