TProphet

It's likely causing them a huge hassle with FinCEN. Undoubtedly, they have to file a ton of suspicious activity reports (because the bar for having to file these, if you're someone like AMEX, keeps getting lowered) and this means a major amount of compliance headaches. It's also quite likely a waste of law enforcement time and resources. Imagine you're the FBI, trying to track down criminals and money launderers, and AMEX keeps flooding you with reports about travel geeks who have figured out a clever way to rack up miles. You end up doing a bunch of investigations that lead nowhere except to perfectly normal and law-abiding (although decidedly nerdy) middle-class Americans trying to save money on their vacations.

It seems like AMEX knows exactly what we've all been doing, which is why they updated their user agreement (section 22d) 3 days ago to specifically address manufactured spending. And today, the hammer fell. I hope the FBI will not be beating our doors down any time soon, although AMEX's specific word choice of "structuring" (which is a crime) makes me assume that this is how the activity appears to their systems, or perhaps is how the government may (incorrectly) view it.

My biggest worry is whether this will trigger an AMEX FR on other accounts. I suppose it doesn't particularly matter - I'd likely refuse it and close my accounts anyway, because both Fidelity and Costco are ending their partnerships with AMEX and these are the only AMEX products I use.

TProphet

This is entirely a risk management decision on the part of the bank. If you're dealing with a smaller bank or credit union and they know exactly what you're doing (and have coordinated with law enforcement agencies to whom they must report), then it's not really a problem. After all, it's not illegal to deposit a lot of money orders. It *is* illegal for the bank not to report it to FinCEN if they don't know why you're receiving these.

One thing that is really fuzzy lately is how the Department of the Treasury and FinCEN view money orders and preloaded cards from a "cash" perspective. There are some very specific laws about cash transactions, in particular that you can't engage in these in amounts more than $10,000 without filling out a Currency Transaction Report (CTR). Any attempt to get around this is a crime called "structuring," which is a serious federal crime that comes with federal prison time (and you also forfeit any money that wasn't reported). Given the very real problems with terrorist funding and money laundering, the government has really lowered the bar for suspicious activity report filings. The best thing to do, if you're working with a small bank and doing a lot of this activity, is probably to make sure they know *exactly* what you're doing, and ask them to make regular filings on your activities with law enforcement in the most conservative manner possible. That will almost definitely trigger an investigation, but law enforcement has a category in their system for people who engage in large cash transactions regularly. If they're satisfied that what you're doing is legit, they are likely to assign you to that category. This could backfire horribly though, and trigger an IRS audit, so your mileage may vary. Given the current legal climate, I wouldn't personally want to be pushing a lot of MS activity through my accounts right now.

OnTheRocks

Just as a data point for everyone I had my 4 BB's shutdown all of which were used at WM for VGC loads. Mostly in Oct and Nov got busy in dec and had no activity. I did have one serve account that had absolutely no activity for the past 5 months but was being maxed before this at WM every month, this was not shut down.

styxfire

Congratulations WWads, this whole "event" reeks of security breach rather than mis-use. (Although the prima-donna in me thinks that abusers who pushed the limit--every month, for years, on multiple accounts--needed to be stopped.)

Amex COULD'VE said "you're account is frozen" but they didn't; instead they said keep spending. Your money is still yours to spend.

Amex COULD'VE said "we closed your account" but they didn't; instead they said please close your account when you've exhausted your funds. They've given people the option to self-close, so your credit score remains intact.

Amex COULD'VE said "due to suspicious loading we've blacklisted your SSN"... but they didn't. Some who were targeted have other accounts still fully-functional.

All this makes me wonder if it's a security issue rather than a behavioral issue. They didn't target the user, but instead targeted something about the loading/usage. They are stopping accounts in THE MOST DELICATE WAY for customers. Something is being hidden.

mikeyb45

Another positive is no longer having to worry about whether I'm being conservative enough with PP MyCash to avoid shutdown.

mad cow disease

Thoughts on whether this shutdown may trigger FR or other actions on those of us with multiple AMEX accounts? I have a BCP which I have been hitting hard to take maximum advantage of the 6% at supermarkets...

silver6054

a) Amex prepaids don't appear on credit reports and have no impact on your credit score
and
b) Even if they did, close by consumer vs closed by credit granter also has no impact on credit score. (On manual review, too many of them may raise questions, but the score is the same either way)

KDCAflyer

I only do it to meet signup bonuses, and to make sure that I hit the Delta Amex waiver (and the Reserve 15K MQM bonus).

I've done a lot more than $500 in a month in the past, but that's my net average over the last six months.

OHijAAzi73

My BB was not shutdown yet, but my wife's Serve account was...., used purely for MS of course....Is a second wave of shutdowns coming soon?

Also....Dear (fill in the blank) bank....please watch some soccer will ya? A nice yellow card after a (foul) play by your beloved customers will make sure most of them use your financial products (as intended).....why the heavy handed and mass shutdowns which included customers who were using these products (as intended)....

calwatch

One of my BBs was not shut down (opened four years ago, same as mine). This was a spillover card which also saw some Amex Offer use (but no other spending). Dumped the remaining VGC at KATE today and am going to hold off a bit before adding more money to it.

mwglobetrotter

I was just mentioning in another thread that there seemed to be some crazy stuff going on with gift cards & MS in a relatively short period of a few weeks. In a relatively short period, In the order I experienced them:

1) a few weeks ago, got a notice that GoWallet (which is owned by Black Hawk) is shutting down for good
2) a couple of weeks ago, went to load my BB at a WM register (since Kate was down) as I have done several times in the past and suddenly the cashier asked to see the card I was loading and upon noticing that it was a gift card began to spaz out and act as if I had Ebola, wouldn't touch the card and balked at me refusing to load it. After a bit of inquiry on my part, she told me as of November, they had some new policy regarding gift cards. I said whatever and went to the money center and loaded it there, no problem.
3) bluebirds get shut down (including mine)
4) noticed evolve is getting the ax 2/1 (not that I ever used it but.... Yeah)

I don't think these are coincidences....

kenbks

Well, isn't the first rule of making blacklist is never to admit there exists such a list? I don't think they will tell you (at least not easily) that you are blacklisted; you just have to find out by testing them (which I think will happen in days ahead...then we'll see if we are blacklisted or not.)

I don't think it's security issue, because they are targeting people with specific usage/load patterns, not a blanket warning/action about their product. I did think it was weird that they are not closing the accounts, but maybe they thought that it's just too costly closing the accounts and mailing out checks. After all, this way people have continued access to their funds and can choose ways to deplete the account. Immediate closure and hold on the fund for many days would've made people a whole lot angrier.

nittanylion1

My BB is still alive (hubby's, too). I haven't done a single thing with them in 2015 due to buying a house (wanting to protect credit and available cash) and then my favorite WD no longer stocking VGCs. Figured I'd take the year off, hit it hard in 2016.

Here we are... WD has VGCs back in stock and now I'm afraid to use the BB. Dang it. *holds hat in hand*

I miss Amazon Payments.

ETA: In 2015 I just about maxed out every month.

FlightNurse

I'm wondering for all of you who got shut down, how much were you MSing with your AMEX CC (ie SPG or PLT cards)? I haven't done very much with my AMEX cards, most if not all of my MSing was with my CSP, Citi AA card or Barclays AA card.. I haven't recieved a letter... Just wondering out loud about this... I also held the money in my BB or Serve account for a couple of days before paying the bill off.

FlightNurse

THis isn't new, big dicsussion about this last year, that WM told the money center folks to see the debit card because they weren't suppose to take VGC. But I never had a problem using the cashiers, usually would do it at the busy time, this way they wouldn't hold of the line. One of the bloggers just talked about this, the closes WM wont load VGC, so he goes to one further from his house and has no problem I really think its YMMV.