TTT103

I travel extensively on business, and have months where my credit card bill is many times more than my salary. Granted, if all of your charges are at Simon mall, that’s a different story.

TyPo311

living the credit card optimizer's dream if you get to keep the points

TTT103

Yeah, but I also have to travel, which gets a bit old after a while.

radonc1

We presume that credit card companies don't follow our spending but that is just not true. AI is more than able, without human eyes, to differentiate spending due to travel (such as airfare, hotels and rental cars) from other forms of expenses such as dining and personal items such as purchases at malls.
So while your spending may exceed your salary many times over, the CC company knows the categories where that money is gong.

Furthermore, many times, the CC company is actually reporting the spending to your companies travel agent or its ilk. It takes no time at all for this information to be categorized and reported as non-suspicious.
OTOH, cycling your credit to the tune of hundreds of thousands of dollars a month on the same sort of expense such as grocery stores or shopping malls will definitely raise a red flag, especially in someone with a credit line of $20K and an annual income of $60K.

TyPo311

Granted I'm not the OP but to say "CC company is actually reporting the spending to your companies travel agent or its ilk" is a bit presumptuous. How do you know he/she is not spending on a personal card and then reimbursed?

bigshooter

Also not OP, but If CC companies were actually reporting spending to my company and including additional info then I'd be more apt to use my corp AMEX.... when I use it today I still have to go and add receipts, biz purpose, etc...

and when i use the corp card I don't get to keep the points

iahphx

So I have not been shut down, but a national bank called me the other day to tell me that they've detected "manufactured spending" in my account because they've noticed I've been depositing money orders into that account. They told me I can't do that because the regulators don't like it, and that I should stop. I obviously will stop. I didn't actually deposit "that many" MOs into that account, probably about $1000/month for a few years, although in the weeks before the phone call, I had deposited around $2000, all online. This makes me worry that ALL banks are now devoting more effort to monitor money order deposits, and that this will be the ultimate "problem" with doing credit card MS. I mean, if depositing $2000/month in proceeds is "a problem," how the heck are the heavy hitters playing this game without problems? Do you have to find a "stupid bank" that you don't care about and just hope they don't notice your MO deposits? And if a bank does notice, do they share this information in any way with other banks, or with regulators? It just feels to me that the risks of doing this totally legal activity how now increased, even for folks who just buy a few MOs a month to meet minimum spends.

danpeake

$2k does seem rather low to be a problem. Large banks have the manpower (and IT) to detect these things and meet regulatory requirements, small banks are generally exempted from a lot of regulations; it's really medium-sized banks that can't keep up with government regulations in these areas.

Did they really use the term "manufactured spending"?

808traveler

I agree. I deposit ~$30-40k/ month at my local bank without issue (knock on wood).

radonc1

I imagine that it depends on what your relationship with the "national bank" is.
Are you using them strictly to deposit your MOs and then either withdraw the money to somewhere else or worse, pay off credit card bills? I suspect that your relationship with that bank is quite superficial and you use it for your MS activities. In that case, you know that at some point you are going to get shut down but it appears that this bank is giving you a heads up. (Psst! don't believe it for a minute. I suspect that the next communication you will get from them with be the infamous 30 day letter telling you to close the account).

In any event, to answer your question, big hitters hit their bank big and expect the axe to fall. They then just move on to another bank and start over.


The best way to avoid shut downs is to avoid appearing that you are doing nothing more that shuttling funds from MO---Bank---CC payoff. Having a substantial presence in the bank wouldn't hurt either

danpeake

I'd second this. I've been called by banks to ask what was going on and they seemed to understand the MSing I described. It never mattered; the ax always came.

MaxVO

I assume you deposited a photo of the MO, uploaded to a website or mobile app -- and your usual process was to take physical MO's to the bank or ATM, right? In that case I suspect the deposit method was the trigger for the warning. I vaguely recall other DPs suggesting that such "remote" deposits are regarded with more suspicion and are not helpful in maintaining low profile.

soy

Remote deposits trip way more alarms than ATM or teller deposits

GundamWing01

can you give us more details of this "national bank"? 2k/mo is super low. i assume its either a small CU or something else triggered. even for remote deposit, 2k is low, but i have definitely heard of shut downs by local CUs for 2-3k/mo MO depo. some banks are more sensitive than others. thats why its always a game to find banks that "allow" much higher.

Xephyr

Not sure if I'm shut down by Citi but my CL didn't reset until 10 days after paying the card (been cycling CL this month). Went to SM to get more GC and got declined. Called Citi the next day and informed me that I need to call their high risk management department. I'm assuming they'll be asking me about my recent spending behaviors. Anyone have DP on whether this will lead to a shutdown?