Full Version: Pay Down Your Debt, get Investigated
This subject is especially pertinent to me, as I had to refinance my mortgage in order to make some critical plumbing repairs and pay off my humongous vet bill (put on a Visa account). I was planning on sending a rather hefty check to my credit union to pay it off.
Maybe not, in light of this. A friend at work mentioned this happening, and I didn’t believe her. Silly me.
HOMELAND SECURITY has to be notified if you pay down your debt?!
I’m sorry, but WTF???? 
There are so many things wrong with this, I hardly know where to start. Just off the cuff, maybe instead of checking Mr. And Mrs. Average Joe’s JCPenney account, maybe they ought to be investigating all the financial shenanigans in their own back yard. A suspicious charge made to AlQuaida.com I could understand, but a payment to JC frikkin’ PENNEY?
Is it legal for the DHS to put a hold on a legitimate payment between a consumer and a creditor? Can the creditor then charge the consumer late fees for non-payment on the account balance that’s in limbo? What are the consumer’s rights when something like this happens?
Is this a violation of individual privacy?
Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
Maybe not, in light of this. A friend at work mentioned this happening, and I didn’t believe her. Silly me.
QUOTE
They paid down some debt. The balance on their JCPenney Platinum MasterCard had gotten to an unhealthy level. So they sent in a large payment, a check for $6,522.
<snip>
After sending in the check, they checked online to see if their account had been duly credited. They learned that the check had arrived, but the amount available for credit on their account hadn't changed.
<snip>
They were told, as they moved up the managerial ladder at the call center, that the amount they had sent in was much larger than their normal monthly payment. And if the increase hits a certain percentage higher than that normal payment, Homeland Security has to be notified. And the money doesn't move until the threat alert is lifted. SHNS
<snip>
After sending in the check, they checked online to see if their account had been duly credited. They learned that the check had arrived, but the amount available for credit on their account hadn't changed.
<snip>
They were told, as they moved up the managerial ladder at the call center, that the amount they had sent in was much larger than their normal monthly payment. And if the increase hits a certain percentage higher than that normal payment, Homeland Security has to be notified. And the money doesn't move until the threat alert is lifted. SHNS
HOMELAND SECURITY has to be notified if you pay down your debt?!
I’m sorry, but WTF???? There are so many things wrong with this, I hardly know where to start. Just off the cuff, maybe instead of checking Mr. And Mrs. Average Joe’s JCPenney account, maybe they ought to be investigating all the financial shenanigans in their own back yard. A suspicious charge made to AlQuaida.com I could understand, but a payment to JC frikkin’ PENNEY?
Is it legal for the DHS to put a hold on a legitimate payment between a consumer and a creditor? Can the creditor then charge the consumer late fees for non-payment on the account balance that’s in limbo? What are the consumer’s rights when something like this happens?
Is this a violation of individual privacy?
Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
First of all, the Supreme Court has ruled that bank customers have no inherent right of privacy with regards to their transactions with banking institutions. However, many banks extend their customers such rights.
Congress passed a law in 1978 expressly giving people those rights, the Right to Financial Privacy Act of 1978 (RFPA).
In 1979, the Justice Department issued an advisory informing people of their interpretation of the Act which permitted financial institutions to report possible crimes. The Patriot Act amended that to require financial institutions to report "suspicious" activity in amounts greater than $5000.
Section 358 of Patriot Act
Is it legal for the DHS to put a hold on a legitimate payment between a consumer and a creditor? Can the creditor then charge the consumer late fees for non-payment on the account balance that’s in limbo? What are the consumer’s rights when something like this happens?
It's the law, so I guess it's legal. The law says nothing about delaying the transaction, however.
Is this a violation of individual privacy?
The Supreme Court would probably say no. The RFPA was passed to give people a measure of privacy. Of course, laws have exceptions and this is one of them.
Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
Is it spying or is it due diligence? Any cash transaction is excess of $10,000 is automatically reported to the government and has been for a long time. All the Patriot Act did was have the government take a look at suspicious activity.
Don't you think that if someone pays $50 a month for 10 years and suddenly pays $6,000 it's a bit suspicious? Sort of like when an unemployed dropout suddenly shows up driving a BMW. Where did he get that car?
The limit is $5,000. To avoid investigation, just send two checks, each less than 5 grand.
Congress passed a law in 1978 expressly giving people those rights, the Right to Financial Privacy Act of 1978 (RFPA).
In 1979, the Justice Department issued an advisory informing people of their interpretation of the Act which permitted financial institutions to report possible crimes. The Patriot Act amended that to require financial institutions to report "suspicious" activity in amounts greater than $5000.
Section 358 of Patriot Act
Is it legal for the DHS to put a hold on a legitimate payment between a consumer and a creditor? Can the creditor then charge the consumer late fees for non-payment on the account balance that’s in limbo? What are the consumer’s rights when something like this happens?
It's the law, so I guess it's legal. The law says nothing about delaying the transaction, however.
Is this a violation of individual privacy?
The Supreme Court would probably say no. The RFPA was passed to give people a measure of privacy. Of course, laws have exceptions and this is one of them.
Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
Is it spying or is it due diligence? Any cash transaction is excess of $10,000 is automatically reported to the government and has been for a long time. All the Patriot Act did was have the government take a look at suspicious activity.
Don't you think that if someone pays $50 a month for 10 years and suddenly pays $6,000 it's a bit suspicious? Sort of like when an unemployed dropout suddenly shows up driving a BMW. Where did he get that car?
The limit is $5,000. To avoid investigation, just send two checks, each less than 5 grand.
I work for a bank and when we issue a credit card over the phone, we have to read the disclosure. In the disclosure we say "this card adheres to the Patriot Act".
Read your disclosure for your CC. Like anything else, if it's disclosed to you, you have implicitly agreed to its terms.....even if it's in fine print on page 108 of your disclosure.
You know of course that with deposit accounts that banks disclose certain deposit amounts to the IRS (and FBI?) after a certain amount in order to prevent money laundering.
I think it stinks, but working for a bank I know a lot of people are completely in the dark to financial institutions procedures which are second nature to me. The worst is a deposit hold. If I could get a $1 for how many times people deposit a gigantic check in their account, start writing checks off the deposit, only to have them all bounce, I'd be living handsomely.
It never hurts to ask before you do an atypical transaction.
Read your disclosure for your CC. Like anything else, if it's disclosed to you, you have implicitly agreed to its terms.....even if it's in fine print on page 108 of your disclosure.
You know of course that with deposit accounts that banks disclose certain deposit amounts to the IRS (and FBI?) after a certain amount in order to prevent money laundering.
I think it stinks, but working for a bank I know a lot of people are completely in the dark to financial institutions procedures which are second nature to me. The worst is a deposit hold. If I could get a $1 for how many times people deposit a gigantic check in their account, start writing checks off the deposit, only to have them all bounce, I'd be living handsomely.
It never hurts to ask before you do an atypical transaction.
QUOTE(Amlord @ Mar 7 2006, 04:27 PM)
Don't you think that if someone pays $50 a month for 10 years and suddenly pays $6,000 it's a bit suspicious? Sort of like when an unemployed dropout suddenly shows up driving a BMW. Where did he get that car?
Not necessarily. When people retire, they sometimes sell their houses and move into other accommodations. This leaves them with funds to do many things, go on a long desired vacation, payoff bill, etc.
QUOTE(Amlord)
The limit is $5,000. To avoid investigation, just send two checks, each less than 5 grand.
'Cmon Amlord. People should not have to resort to subterfuge to get around the Bush administrations sticking it's overly long nose where it doesn't belong.
QUOTE(Amlord @ Mar 7 2006, 04:27 PM)
In 1979, the Justice Department issued an advisory informing people of their interpretation of the Act which permitted financial institutions to report possible crimes. The Patriot Act amended that to require financial institutions to report "suspicious" activity in amounts greater than $5000.
'Report' I get. 'Delay' seems completely unnecessary.
QUOTE
Is it spying or is it due diligence? Any cash transaction is excess of $10,000 is automatically reported to the government and has been for a long time. All the Patriot Act did was have the government take a look at suspicious activity.
Again, I'm fine with reporting and investigating. It's the delaying that irks me...and not because of the Patriot Act. One of my biggest peeves is that banks all seem incorrectly to operate on the false assumption that your money is really their money.
QUOTE
Don't you think that if someone pays $50 a month for 10 years and suddenly pays $6,000 it's a bit suspicious?
Why would you suspect a terrorist would suddenly decide to pay off a JC Penney account? I'd be much more suspicious of large charges than I would large payoffs.
QUOTE
The limit is $5,000. To avoid investigation, just send two checks, each less than 5 grand.
Which of course is what any intelligent terrorist would then also do. Meaning that its not those who exceed these limits that should be investigated...its all those who aren't that should be suspicious.
Or are we only trying to catch the stupid terrorists? 
I mean, only the stupid ones would pay off their big bills right before committing a terrorist act, right? Apparently, it's OK to go blow people up and all, but wouldn't want to have a bad credit rating in the afterlife? What sort of sense does that make?
QUOTE(Amlord @ Mar 7 2006, 04:27 PM)
The limit is $5,000. To avoid investigation, just send two checks, each less than 5 grand.
I'm not sure if that would work either.
The laws put into effect to monitor for money laundering, as I mentioned above, report the same way. These laws have been around for a long time like the the Money Laundering Control Act of 1986 (MLCA).
It's similar to the Patriot Act.
But banks often will monitor for suspicious deposits, such as $9,999 when the reporting limit is $10,000.
Banks can get snoopy as well and the scheme you suggest may be under as much scrutiny, maybe more.
QUOTE(RedCedar @ Mar 7 2006, 01:38 PM)
I work for a bank and when we issue a credit card over the phone, we have to read the disclosure. In the disclosure we say "this card adheres to the Patriot Act".
Read your disclosure for your CC. Like anything else, if it's disclosed to you, you have implicitly agreed to its terms.....even if it's in fine print on page 108 of your disclosure.
You know of course that with deposit accounts that banks disclose certain deposit amounts to the IRS (and FBI?) after a certain amount in order to prevent money laundering.
I think it stinks, but working for a bank I know a lot of people are completely in the dark to financial institutions procedures which are second nature to me. The worst is a deposit hold. If I could get a $1 for how many times people deposit a gigantic check in their account, start writing checks off the deposit, only to have them all bounce, I'd be living handsomely.
It never hurts to ask before you do an atypical transaction.
Read your disclosure for your CC. Like anything else, if it's disclosed to you, you have implicitly agreed to its terms.....even if it's in fine print on page 108 of your disclosure.
You know of course that with deposit accounts that banks disclose certain deposit amounts to the IRS (and FBI?) after a certain amount in order to prevent money laundering.
I think it stinks, but working for a bank I know a lot of people are completely in the dark to financial institutions procedures which are second nature to me. The worst is a deposit hold. If I could get a $1 for how many times people deposit a gigantic check in their account, start writing checks off the deposit, only to have them all bounce, I'd be living handsomely.
It never hurts to ask before you do an atypical transaction.
Well, shoot, I guess I'm already on the DHS' hit list!
The money was wired directly into my checking account by my new mortgage-holder, so I must be funding terrorists - ACK! And I knew there was something funny about my plumber.... Seriously, RedCedar, thanks for the info. I'll definitely check on that.
QUOTE(Amlord)
Don't you think that if someone pays $50 a month for 10 years and suddenly pays $6,000 it's a bit suspicious? Sort of like when an unemployed dropout suddenly shows up driving a BMW. Where did he get that car?
No, not automatically. Especially these days, when real estate equity is at insane levels. Paying down debt by refinancing is very common. There are also a bunch of people who "flip" their debt by using a check from one account to pay off the other (usually to take advantage of those 0% offers-dangerous, IMHO, but there it is). It's not that unusual...or suspicious.
Edited to add:
I just KNEW those 80-year old nuns were dangerous!
QUOTE
Earlier last month, The Tampa Tribune printed a story about the nuns of the Holy Name Monastery, based in St. Leo, Florida. The sisters said that the monastery's main bank account was frozen without explanation last fall. On November 10, their checks started bouncing without warning, and the account wouldn't accept any deposits, including paychecks from state agencies where some of the sisters hold jobs. Many of the checks they wrote went to pay Visa and utility bills; two of their checks had gone to other charities. The nuns racked up $399.56 in fees, later reimbursed by their local Wachovia bank. During the week that the account was frozen, 22 checks were returned with the unexplained (and slightly morbid) stamp, "Refer to Maker."
Sister Jean Abbott, the monastery's business manager, told The Tampa Tribune that they were informed they were implicated by the Patriot Act because one 80-year-old nun who is a signatory to their account didn't have her photo ID and Social Security number on file ("Clearly an international spy," said Abbott). But in the 116 years that the church has been in business, the bank had never asked for any of that information. Like the Soehnges, they'd been casualties of the Patriot Act's sloppy, ineffectual and abusive banking provisions. Daily Princetonian
Sister Jean Abbott, the monastery's business manager, told The Tampa Tribune that they were informed they were implicated by the Patriot Act because one 80-year-old nun who is a signatory to their account didn't have her photo ID and Social Security number on file ("Clearly an international spy," said Abbott). But in the 116 years that the church has been in business, the bank had never asked for any of that information. Like the Soehnges, they'd been casualties of the Patriot Act's sloppy, ineffectual and abusive banking provisions. Daily Princetonian
Is it legal for the DHS to put a hold on a legitimate payment between a consumer and a creditor?
DHS is not the one that applied the hold, the creditor is, in order for the check to clear. Holds on large checks are common.
Can the creditor then charge the consumer late fees for non-payment on the account balance that’s in limbo?
No, if your payment is received before the cut-off, clearance issues are the creditor's problem, not yours.
What are the consumer’s rights when something like this happens?
Varies by state.
Is this a violation of individual privacy?
The hold isn't, the reporting ..., well, as noted by others, there is no right to privacy in your transactions with a federally chartered bank. If you want to think of it this way, you do have a right to privacy, but the bank does not. (Remember the bank collapse of the Depression....) With the growth of organized crime, money laundering became an issue, and so these laws have arisen as well.
Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
Turn in your local drug dealer, capo, terrorist and money launderer. The reasons the gov't has turned to using tools such as these is because not enough citizens were assisting in identifying criminals dependent on large cash transactions. So, they've decided to "follow the money." Doing so demands that have the tools to follow the money. If everybody turned these types of criminals in, the Fed wouldn't need the tools, and privacy concerns (which are not absolute), wouldn't be overcome by the need.
DHS is not the one that applied the hold, the creditor is, in order for the check to clear. Holds on large checks are common.
Can the creditor then charge the consumer late fees for non-payment on the account balance that’s in limbo?
No, if your payment is received before the cut-off, clearance issues are the creditor's problem, not yours.
What are the consumer’s rights when something like this happens?
Varies by state.
Is this a violation of individual privacy?
The hold isn't, the reporting ..., well, as noted by others, there is no right to privacy in your transactions with a federally chartered bank. If you want to think of it this way, you do have a right to privacy, but the bank does not. (Remember the bank collapse of the Depression....) With the growth of organized crime, money laundering became an issue, and so these laws have arisen as well.
Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
Turn in your local drug dealer, capo, terrorist and money launderer. The reasons the gov't has turned to using tools such as these is because not enough citizens were assisting in identifying criminals dependent on large cash transactions. So, they've decided to "follow the money." Doing so demands that have the tools to follow the money. If everybody turned these types of criminals in, the Fed wouldn't need the tools, and privacy concerns (which are not absolute), wouldn't be overcome by the need.
QUOTE(DaffyGrl @ Mar 7 2006, 03:37 PM)
HOMELAND SECURITY has to be notified if you pay down your debt?! I’m sorry, but WTF????
Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
I’m sorry, but WTF???? Besides removing oneself from the financial systems and stuffing all one’s money under the mattress (hardly practical), how can Americans fight this kind of government spying?
And according to the nightly news, Congress has renewed the "Homeland Security" Act...
According to the notice which has been posted at my Credit Union for a few years now, Homeland Security has to be notified of every loan application filed...
I was browsing with my wife in a tee shirt store the other day, and the clerk told me he was required to ask for a photo ID. I was not even attempting to write a check or make a purchase, I was just browsing!
I personally feel that this White House and its occupants have no concept of what it means to be an American! (I wonder if I can actually post this or if my computer will be shut down when I attempt it...)
This is absurd. Really.
We could write a book called "Terrorism For Dummies".
Chapter 1: Don't make international phone calls and use terrorism buzzwords.
Chapter 2: Don't Use Terrorism Buzz Words in EMail
Chapter 3: Don't Deposit or Withdraw Large Sums of Money
Chapter 4: Don't Try Airplanes Anymore. They're Onto Us.
Chapter 5: Go to www.terrorismtricks.com for an updated list of crap not to do.
Chapter 6: America, suck it.
Does anybody with an ounce of sense think this crap will help catch terrorists? I mean, really?? Aren't these excuses for tracking Americans assuming terrorists are complete retards? It's unbelievable that people are so cowardly, that they could justify allowing the government to monitor every aspect of our lives so they can sleep better at night. A modern day Patrick Henry would say, "Give me liberty unless you are going to hurt me".
All of these steps are acts of cowardice and further evidence how Osama Bin Laden has completely and thoroughly kicked our butts.
We could write a book called "Terrorism For Dummies".
Chapter 1: Don't make international phone calls and use terrorism buzzwords.
Chapter 2: Don't Use Terrorism Buzz Words in EMail
Chapter 3: Don't Deposit or Withdraw Large Sums of Money
Chapter 4: Don't Try Airplanes Anymore. They're Onto Us.
Chapter 5: Go to www.terrorismtricks.com for an updated list of crap not to do.
Chapter 6: America, suck it.
Does anybody with an ounce of sense think this crap will help catch terrorists? I mean, really?? Aren't these excuses for tracking Americans assuming terrorists are complete retards? It's unbelievable that people are so cowardly, that they could justify allowing the government to monitor every aspect of our lives so they can sleep better at night. A modern day Patrick Henry would say, "Give me liberty unless you are going to hurt me".
All of these steps are acts of cowardice and further evidence how Osama Bin Laden has completely and thoroughly kicked our butts.
From the 9/11 Report: Monograph on Terrorist Financing
(emphasis mine)
That is why the rules were changed.
Don't attribute superhuman powers to terrorists. They don't know everything, they aren't everywhere. They can be tripped up by some simple rules.
Banks are already required to report suspicious activity. But how does a bank know what (or who) is suspicious?
The old adage "Follow the money" applies to terrorism. There is always a money trail and it is often one of the best trails that investigators can follow.
QUOTE(Page 6 of monograph)
The plot cost al Qaeda somewhere in the range of $400,000–500,000, of which approximately $300,000 passed through the hijackers’ bank accounts in the United States. The hijackers returned approximately $26,000 to a facilitator in the UAE in the days prior to the attack. While in the United States, the hijackers spent money primarily for flight training, travel, and living expenses (such as housing, food, cars, and auto insurance). Extensive investigation has revealed no substantial source of domestic financial support.
Neither the hijackers nor their financial facilitators were experts in the use of the international financial system. They created a paper trail linking them to each other and their facilitators. Still, they were easily adept enough to blend into the vast international financial system without doing anything to reveal themselves as criminals, let alone terrorists bent on mass murder. The money-laundering controls in place at the time were largely focused on drug trafficking and large-scale financial fraud and could not have detected the hijackers’ transactions. The controls were never intended to, and could not, detect or disrupt the routine transactions in which the hijackers engaged.
Neither the hijackers nor their financial facilitators were experts in the use of the international financial system. They created a paper trail linking them to each other and their facilitators. Still, they were easily adept enough to blend into the vast international financial system without doing anything to reveal themselves as criminals, let alone terrorists bent on mass murder. The money-laundering controls in place at the time were largely focused on drug trafficking and large-scale financial fraud and could not have detected the hijackers’ transactions. The controls were never intended to, and could not, detect or disrupt the routine transactions in which the hijackers engaged.
(emphasis mine)
QUOTE(Page 18)
The financial provisions enacted after September 11, particularly those contained in the USA PATRIOT Act and subsequent regulations, have succeeded in addressing obvious vulnerabilities in our financial system. Vigilant enforcement is crucial in ensuring that the U.S. financial system is not a vehicle for the funding of terrorists.
That is why the rules were changed.
Don't attribute superhuman powers to terrorists. They don't know everything, they aren't everywhere. They can be tripped up by some simple rules.
QUOTE(Page 55)
For terrorist financial transactions, the amount of money is often small or consistent with the customer’s profile (such as a charity raising money for humanitarian aid) and the transactions seemingly innocuous. As a consequence, banks generally are unable to separate suspicious from legitimate transactions. The government, however, may have information that would enable banks to stop or track suspicious transactions. As a result, financial institutions can be most useful in the fight against terrorist financing by collecting accurate information about their customers and providing this information— pursuant to legal process—to aid in terrorism investigations. At the same time, the government should strive to provide as much unclassified information to financial institutions as possible.
Banks are already required to report suspicious activity. But how does a bank know what (or who) is suspicious?
The old adage "Follow the money" applies to terrorism. There is always a money trail and it is often one of the best trails that investigators can follow.
QUOTE(DaytonRocker @ Mar 8 2006, 09:33 AM)
This is absurd. Really.
Well, not really. If some guy named Mohammed was depositing large cashier checks and then taking out large sums of cash, don't you think your bank should inform the gov't?
Beside money laundering, drug trafficing and terrorism, you are also forgetting tax evasion. Banks need to let the gov't know just how much money you REALLY have.
I agree with Bikerdad, they prolly put a hold on the payment allowing it to clear. With my bank, payments are assessed as "paid" on the date received, not the date they cleared. So you wouldn't receive late charges, you just wouldn't have access to the credit until it cleared.
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