The Dark Side Of Earning Credit Card Points; PSA: Don’t Swipe For Others!

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Everyone loves earning points and miles, and they should. It’s allowed me and many others to travel the world in first class and stay in five star resorts for free. The memories created from those trips as well as once in a lifetime moments like throwing out the first pitch of game 7 at the World Series in my hometown are truly priceless.

But depending how you earn those points, some people end up paying a very high price.

5 years ago I wrote about a couple of scams that were being discussed on DDF. I was sent threats for writing about it, but something had to be done before others fell for scams like Sungames that promised impossible returns from a flimsy business plan and credit card farms that paid a lump sum for all of your personal information and the right to open credit cards in your name.

I followed up on them 2 years ago after Sungames went up in flames, but sadly people kept on getting financially ruined by credit card farms after handing over the keys to all of their personal information. Once again I reminded readers that the promise of a financial windfall is never worth the potential damage that can be caused by someone else with all of your personal information.

The latest scheme that people are falling for is allowing others to charge your card and getting paid back after a few weeks in order to earn miles. DDF moderator Chaikel first wrote about this years ago, but over the past few months there have been multiple cases involving tens of millions of dollars each of money that has been stolen.

One DDF member with thousands of posts was too embarrassed to post under his regular forum name, so he opened a new account to share his experience. In short, he allowed businesses to spend hundreds of thousands of dollars on his cards each month and enjoyed getting the points. The business paid back everyone monthly for years, but they now owe between $15MM-$18MM to people and they say that the money is gone. The DDF member is personally out more than $300,000, and many others are in the same boat at risk of losing their life savings or having to face bankruptcy and more than 7 years of not being able to get credit.

Another DDFer with thousands of posts also opened a new account to share that he fell prey to a different but similar scam and lost hundreds of thousands of dollars. I’ve received emails from several other people as well that asked me not to share their names, but to please make a post about this so that others don’t fall for the same scheme.

It’s no simple matter to just dispute that kind of charge if you gave permission for your card to be used as that does not qualify as a fraudulent charge. Claiming that a charge is fraudulent when it is not can get you into legal hot water. Courts can look into your records to determine if you authorized your card to be used and false claims can take you from a scary personal bankruptcy case to a far more scary criminal case.

If you’re in such a case you would be well advised to find a good lawyer to help you navigate your way out.

As I’ve said at every DansDeals Seminar, do not open a credit card if you are going to go into debt for it, as that will quickly eat up any gains you made. If you can’t treat your credit cards the same way as you do cash, then shred them today. That applies equally to spending beyond your means and lending your credit card line to others. It also applies to buying groups. You should never lend more than you can afford to lose, no matter what the scenario.

A business that uses your credit line or takes your goods without paying upfront can be run by seemingly honest people for years and then suddenly default on everyone’s payments with checks that bounce or by just ignoring you. It’s this simple: If you wouldn’t hand over a briefcase full of cash to someone, then don’t hand over your credit card or goods that you paid for, that you can’t afford to lose.

There’s a reason a business is asking you for credit. If a bank won’t give them the credit they need after doing due diligence, then common sense should say that you shouldn’t be either. It doesn’t matter if it’s a big business, or a trustworthy neighbor, friend, or relative, the same rules must apply. A loaning scheme may start off innocently, but once things start to go south it can force a business to default on loans, even when its operated by the most honest people.

The mileage system is all fun and games until you start to let it control you. It’s time that people stop thinking of miles and points (as well as anything else) as a get rich quick scheme, as that has led too many down a dangerous path. It’s great to optimize your spending to earn lots of points if you can properly track everything and not let things get out of hand. But it’s time to take a step back when you reach a point where you are handing over thousands (or hundreds of thousands!) of dollars of your credit line or goods when you would never go to a bank and hand over your life savings to anyone.

I’m sad that I have to write this post and say this, but it’s not a game folks, it’s your future. Never give anyone your personal information and never give anyone access to your credit line or to goods that you paid for unless you realize that it is the same as cash and can afford to lose it all.

My heart goes out to the victims here and I’m not here to assign blame, they have a hard enough pill to swallow. But hopefully others will take their hard learned lesson to heart and act in a financially responsible manner.

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257 Comments On "The Dark Side Of Earning Credit Card Points; PSA: Don’t Swipe For Others!"

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Yair

I lost $2200 from these buying groups and I’m banned from Best Buy!!!!
HOPE THEY GET WHAT THEY DESERVE

Marissa Siegel

How did you lose money with buying groups?

aj

You pay for the item and ship it to their address. If they don’t pay you back, you don’t even have the product.

chaim

yep, happened to me. they claimed it wasnt received even though was signed by same person who signed previous shipments they admitted was received….

Geust

I understand how you got scammed , but why were you banned from Best Buy?

Noname

Does this include those offers to buy coins from the US mint posted about in the past?

mike shava

Never been a truer article on this site. A friend told me about such a company that even had an official-looking website and all. I decided to stay away and im glad I did. Thanks Dan

Heard another biggie was brewing

Someone might just get a couple of years in the slammer for credit card fraud

SBS

I won’t hide behind a new name. I will just post my story.

In short, when I was a bochur I was approached by a friend of one of my siblings who asked me for my CC. He already used my brothers’ CC and always paid on time. I later found out he would buy electronics, smuggle them into a certain country, sell them to a local distributor and then pay back. For over 2 years it worked fine. On average he swiped about 18k a month and then paid back after the CC closed.

Came the day when one of his containers was seized by customs, and he lost a lot of money, and didn’t have how to pay back.

I was stuck with 18k CC debt, none of it my own spending. I was paying minimum payments (had no money, kollel salary), and waiting to see what will happen.

The guy never ignored my calls, but he also did not have money. He also got married, got a job and barely made ends meet.

I found an ad in one of the religious newspapers for “angels of debt”, they took the case, told me what to do, I settled all the CC’s for 25/30%, fried my credit for 7 years, I borrowed from my parents to pay it, and over the next 5 years I got paid back from this guy whatever the settlement amounts were (i was not going to charge him a penny more than i paid, nor was i going to dispute a charge which was legally made).

Today i still cannot open CC’s with chase, Citi and Barclays, they have me blacklisted, only Amex and Capital One.

I wasn’t scammed. But I learned my lesson. And I did not end up losing too much BH.

Joel2

Thanks for sharing!

AK770

+1

Shmilfke

At least the guy was a mensch about it

TGIShabbos

A mensch wouldn’t do something against the law, such as smuggling illegal products pass customs. An unfortunate chillul Hashem

Not quite the mensch

Since when does a mensch steal?

Liam K. Nuj

He didn’t say the guy was a mensch. He said he handled the situation like a mensch. The guy had other choices and chose one of the better choices.

S209

What about in the Soviet Union?

reader

Wow
Thanks for sharing

Jakey

If he paid you back any of the interest you had to pay it would also be ribis ketzutza dioraisa!
People don’t realize but they can only pay you back the amount they swiped and if interest has to be paid the owner of the cc can’t demand it back if he does it’s a issur dioraisa!
Another reason not to let others swipe!

Yos

Thank You Rabbi Jakey…
You should ask you LOR in my opinion. There’s a lot more to the sugya than i think you realize

Ricola

Thank you for this very important reminder. I have a friend who just finished with a lawsuit against herself and her husband. They had a good friend who borrowed their credit card regularly- not for points but as a favor to a friend. After many months of paying them back every month, he racked up a bill of many tens of thousands of dollars and fled the state. They never saw him again. The credit card company did. It did not take kindly to their contesting the charges and tried to take them for everything they had, including their house. B’chasdei Hashem, they wrapped up the lawsuit after 4 years and were not responsible for the bulk of the charges. But the legal fight took a tremendous toll on them- as did their loss of innocence and friendship. You never know what someone else is truly capable of.

Yossi

even if you let people swipe your cards, be on the lookout for red flags such as a company charging their own company to generate cash. this is a sign of bad times ahead as was the case in this particular story

AM

I have been using a buying group in CH for a little over a year now, and I must say that depending on what you do there’s almost no risk involved. Whenever you drop off your stuff or have your stuff picked up, you receive a check on the spot, I must say that I have felt very safe until now with this method and I’m not sure if a group like that poses a risk at all.

No risk

FDIC insured too, right?

Anom

At the very least, you can go on craigslist or other selling platforms and sell the goods without taking a loss, if something goes South.

Meira

A check in hand makes you feel secure and confident? What if it bounces?

CSS

First they will gain your confidence and then suddenly they deceive and run away.

Jay jay

Wow! We’re these people strangers to the CC owners?

Joel2

Thanks @Dan very important for ppl to understand that a CC is like cash…

Joe

Thank you Dan for this post and the responsible way you went about it. Its tragic what’s going on in our communities people can’t control themselves.

A B

Wow. Glad I didn’t fall to victim. My heart goes out to the victims who fell in to this nasty scheme. This should teach us an eternal lesson.

Mordy

Completely agree with this post here but worth pointing out that many buying groups are not interested in your line of credit as much as your retailer household limit quota.

M

When it comes to holiday season that comment is 100% false. Other times it could be yes or no and you can’t take risks.

BG

What in the world are you talking about? It’s a risk anytime of year.

Victim 200k++ with id lighting

Victim here from idlighting, stuck with excess of 200k… guy swiped my card for 2 months and wants me to use transmedia, I’m sure many of you reading this have seen or heard of him, stay away from those people, this is totally illegal- bank fraud collusion etc… so please stay away from them and seek legal advice like dan said..
Thanks dan for sharing!

Eli

What is Id lighting?

Victim 200k++ with id lighting

Irrelevant at this point, google it if your that interested.

Leo

I had a story with trasnmedia and somone using my card I thought I was the only one!

Yoely

Stay away from transmadia.
זיי זענען חיות רעות
They work foe the merchant not for the cardholder.

Victim 200k++ with id lighting

So true, wish more victims would know this

Transmedia

Agreed transmedia bunch of ganvimim, they will kick you so hard and kick you again

Biggest animals

Merchant

As a merchant who had fradulant disputes of over 30k. Meaning a Heimisha guy swiped over 30,000 by me and I provided him the products and after a month all of his charges got disputed and I was left with the loss and with a an almost closed merchant processing account. Than someone told me about Transmedia and they where able to successfully reverse all the charge backs (For a big cut) . So I am not sure why people here are complaining about Transmedia. They basically work for merchants to fight disputes.

Leo

Transmedia?

Transmedia victim

Yes! The do fraudulent refunds/chargebacks

Leo

He works for merchants though so what’s your story on them?

Yoely

Exactly, So Who is the merchant here ? Toner.com. And all the victims are the kolel yingerleit who are left with Maxed out credit cards and there is nothing they can do. Because transmedia is protecting the “ merchant” the ganev ( for 30% fee) from the poor people who are trying to get thier money back.

jack

seems like this guy has a private agenda with Transmedia and has nothing substantial to add here, except to bash them

Yoely

If you would have been involved in this scam then you also would have a “private agenda” with them.

Manny

Toner.com is also pushing all his victims to transmedia and they are fearing everyone to dispute.

Joe

I have used Transmedia in the past for a similar matter. They were very successful in recovering for me almost 75% of my loss. They are true experts in the card regs and successfully litigated for me compliance rights which held the merchant responsible for all money owed by the merchant. They referred me to an attorney who advised me of my rights and concerns there may be. The whole process was handled very professional and they advised me upfront of all my rights. In my experience, they never promise anything and does not want to be involved with anything that is questionable legally. Its true they normally work for merchants, but they also sometimes assist cardholders on selective cases they feel there is a legal remedy. It’s wrong and unethical to bash honest people just because you took a loss on someone else. You’ll be surprised to learn – there are legal rights available in a lot of the cases, don’t be stupid and take losses you can legally recover. Be wise and before you mess up your credit consult a knowable expert such as Transmedia or another attorney. When there is no legal rights available, I’m sure they will tell you not to dispute, but when there is, why lose?

chana k

I’ll assume you work for Tansmedia and feel like you do valuable work.

Yoely

Don’t fall for them. Don’t cooperate with them. Seek other legit council

Davidthebest

Couldn’t be said any better.
As a side note, I borrowed my CC for a friend for his business, long story short he did pay me back when the statement BUT then I got flagged by amex and shut down, after getting to know that his business was blacklisted by amex.

Victim 200k++ with id lighting

Yes, amex Chase cap1 all closing people down associated to these fraudulent swipes…

Davidthebest

It was not a fraud swipe, he just used my amex card to pay one of his wholesalers. But they have there ways how to flag it . Then the rest is history

Avraham Gee

You lent your friend… You friend borrowed from you…

Achshell

Wrong! He BORROWED from AMEX via CC for his friends business. ( There’s always a twisted way out of grammar mistakes )

Mandy

I had one of the biggest buying groups in Lakewood bounced a check on me made out to CC company. The CC company immediately shut all my accounts.

Yankel

Irrelevant to this discusiion

Yosef

I leave it to everyone to ask their local orthodox rabbi but it is my understanding that there is also a ribbis problem involved with using someone else’s credit card (even if it is paid back on time). Another consideration in this discussion.

SS

No it is not. It is only an issue if there is interest accrued, then it’s like two loans: CC holder to borrower, and bank to CC holder, so the CC holder has to do a heter iska with the borrower to be able to have him pay the interest.

Hunch

The ribbis in question is the points being earned on the loan.

SBS

That’s not an issue at all. I think i posted a shiur on this topic in the forum back in 2015

SpeedyRamsey

My local orthodox rabbi said there isn’t a problem.

(My local rabbi is from Oregon. So maybe the tri-state Rabbis disagree.)

LOR

Did you tell your LOR that you are aiding and abetting credit card fraud?

Yblackstein

No ribis. You are giving money to HIM, and he is paying it back. Points are not ribis, I have asked several rabbis.

YB

My Rosh Yeshiva says it DOES create a Ribis problem.

gubevo

He is wrong. The points are from a 3rd party not the borrower therefore it isnt ribbis. It becomes ribbis when there is interest accrued. Then there is an issur gammur to pay the interest to the CC holder. Even if you want to you are not allowed to without a proper heter iska.

Yerushalmy

Looks like your Rosh Yeshivah doesn’t understand how credit cards work.
It’s רבית צד שלישי, that’s not a problem

Rosh Yeshiva

Looks like you didn’t tell your Rosh Yeshiva the whole story. That you are aiding and abetting credit card fraud.

Yankel

@Dan – With all due respect, how can you write a post like this waring people about buying for buying groups and swiping etc… but at the same time post a sponsored post for a coin deal?

I know you’ll defend it by saying that you know him personally and is trustworthy, but so were all these people that defaulted. There were people that would swear by their integrity, but yet here we are talking about this.

Jds

Your wrong! Someone else’s choices are not dans problem. Dan has a website and if someone wants to place an ad, there’s nothing wrong with him posting it. It’s at the consumer’s discretion to buy for the advertiser.

john

I disagree. Thats like rebuking someone for selling food to people even though they are allergic to it. Buy at your own risk. Dan is still a business man, and there are people who can afford to take this risk of buying coins and benefiting from it. So Dan has every right to adversities for them. Be honest with yourself before opting in for a deal and make sure you are not “allergic” to it.

davids

I think the coin deal is different, and not because I know him- I don’t. The U.S. mint limits the number of coins each household can purchase. So the buyer isn’t (necessarily) making purchases through other peoples’ credit cards because he can’t get the credit on his own. But Dan has clearly said to only charge what one can afford.

Jeff B

Dan had them put money in an escrow account

TGIShabbos

I think the ad disclosed that there is an element of risk (not 100% sure). Secondly, at least you are acquiring an actual product. If that coin company ran out of town, at least you’d have coins which you can sell to someone or somewhere (perhaps at a loss to you).

YoniPDX

PFS offerings for BU and Uncirculated mintings of precious and semi-precious coins.
Worse case you would get market value of the underlying metal (20-40% loss over the premium for BU from a local coin dealer, where as the dealer might be able to recoup amount paid or more. But PMs are about the only true store of value that survive floods, fire and natural disasters (economic disasters less so and also market manipulation). Yet you also loose on the spread with dealer.

So the risk remains but potential losses and risk are known and somewhat easier to control and predict. Insured delivery and forwarding (small risk). US mint small risk on the occasional small purchase flagged by issuer or fraud dept, and unless Amex decides to retro code as Cash Equivalents purchase for MSR post MSR period or charges CA fee retro like the Clawbacks on offers last year, seems like risks are negligible but again as Dan has repeated stated only risk what you can afford.to loose.

Mootkim

What are you talking about? You have the exact same circumstances with buying ipads or watches etc. that are also actual products for these groups. The items also have a value that you can technically turn around and sell for market value just like the coin. The risk associated with all these (including the coin) is that you give them the product without receiving actual cash. You don’t anymore have the product to turn around and sell because you gave it to the buying group. You always run the risk of them bouncing your check unless you get cash at the time of exchange.

Tzadik

Another note I didn’t see mentioned .. I have a cousin who was shut down by chase just because chase got the hang of the fact that he was spending for buying groups.. everything got shut down including checking and savings accounts…

S

Checkings and savings got shut down, and he lost the money in the accounts?

Mootkim

No they discontinue their relationship with you and make you withdraw your money and are unable to have an account with them

Jake

Studies show that we spend more when using plastic than cash (not difficult to believe), so the LEAST we can do is treat it like cash.

micha

the other problem is the people that took the credit card were well to do people and had others wanting to invest with them . It’s another typical Ponzi scheme just with credit cards

KTC CONCIERGE

The new story is heartbreaking, so many people in our community unfortunately going to be affected. Thanks for publicizing Dan.

Dave

Thank you Dan for posting, this is so important for people to read. It is so terribly sad what is happening. So many people are suffering TREMENDOUS losses, all for points. My heart truly goes out to them. I have suffered significant losses in the past, albeit not to such situations. They should all have a yeshuah!

Avi

Not long after i deposited a large check from a buying group into my chase checking account, Chase shut down my checking account and 9 business and personal credit cards that I had with Chase.

S

Shut down your checking account and you lost any money that was in the account?

Dave

A bit off topic but still on the subject of is it worth it??- I have two other issues that irk me with the whole CC/points game. Dave Ramsey quotes studies, many of them, that show that people spending on CC’s spend 18% more than when paying from their bank acct/debit. I just wonder; do I really come out ahead earning the points?? I ONLY place my own spend on CC’s.
B. My main points earner is the gift cards (Ink Cash x5). I use it for my main spending. I just wonder when I will lose hundreds in GC’s by losing some cards, not realizing there was still $ left on one…….etc. It’s not easy keeping track of so many GC’s!! All in all; is it really worth it?

TGIShabbos

I admire Ramsey, and used to have time to listen to him more frequently. I agree with his thoughts on credit card spending, and I believe it when the stats show that many Americans owe thousands in CC debt. Many of my bills on the CC are fixed monthly expenses (such as phone bill, rent, internet, insurance, etc) which I would be obliged to pay anyhow. Pay in full.

Dave

Yes, I pay down in full as well. I am extremely tight on my wallet, by nature; I do not spend extra. And I still believe that if I sat down and crunched the #’s, I am sure we are spending more because it’s not coming right out of our bank account. And I think this is near certain reality by ordinary people. It’s just human nature. And yet- the points are tempting to me too 🙂 But I really wonder, is it worth it? I don’t do buying groups, no MS etc, just real spend. But it is nice to get back some 8-10% in travel value. Then my other point about keeping track of countless gift cards! OMG, so yeah, I’m just confused. B’h, I only have this small problem!

S

It really depends on you. Me personally – I treat a card the same way as cash.
Also, Dave Ramsey’s crowd is a little older. With younger generations, we tend to start thinking the opposite way – we see our money as the numbers in the bank, so when we have cash, we don’t mind spending it, because it’s not coming out of our bank numbers.

Dave

I guess I’m still “young” at 39 🙂 because I do think the same way a bit. However; I did not mean cash literally- I just meant anything coming out of my bank account, vs a CC. Until a few years ago, I only used debit cards, ZERO CC. I firmly believe one spends more when using CC’s, almost regardless of how careful they try to be. Trust me; I hold onto my wallet tight! It’s just human nature, hard to fight it. And we’re not even discussing our wives 🙂 and my wife is quite good in this as well but still….
I may be young but I think we all stand to gain alot by listening to the “older” style Dave Ramsey 🙂
Financial responsibility has been lost in a huge way today, with people living well beyond their actual earnings, taking out pricey leases etc etc . But we’re goin off topic! Good night

Lesterk

Not sure how some one can be so naive and fall for this.. nothing on this world is free.

Yossi

its not naivete. ppl knew what they were getting into. it was worth the risk for them

ckmk47

Most never measured the risk. They never thought about the swiper defaulting on payments.

mds

Thanks for this post. As a victim of more then 55k for two years i cannot begin to describe the stress it created. Honest people trying to use cash flow for dying amazon buisnesses while being overloaded with irresponsible debt. STAY AWAY!!

Bookeeper for Business

Hi ,

I know personally many of these people that have lost money to these types of purchases. The Businesses that went under were legit but were not making a profit after expenses. People think that if you are selling millions of dollars worth of goods that you are making that profit as well. Therefore when that company approaches you with a favor or promise you points etc… you cannot trust them. Even if they show you their books I would not trust them as the books may be inaccurate. This is especially true for companies that sell on Amazon, Ebay or other 3rd party sites. The reason being is because 3rd party sites bookkeeping are extremely complicated and there are always fees and costs that are unexpected. Even when someone has a personal website there are many costs and fees that are not accounted properly. People selling on websites are slowly figuring out that if you are not making a minimum 20 percent profit then you are losing money. Many businesses have gone under recently due to the fact that amazon is cracking down on manipulation, going in competition on products that are best sellers and many more businesses are going online. Therefore if you are giving out your cc the STOP before it is too late. If you get paid back on the spot (coin people) then that would be a different story. Tell them you will give them products etc… as soon as you get the wire in your bank account. I know many people in court, Beis din over this. I am agreeing with Dan DON’T DO IT.

NoMoreVictims

Well said. Most Amazon businesses are just plain washing machines. And no one know how to do bookkeeping. All the Heimishe accountants admit they don’t know what’s flying in Amazon fees. Normal to pay $1, sell for $5, and have a deposit of $.80. Amazon takes insane ad and storage fees. Only Bezos makes money. Even C+A, once a top 10 seller, is Oif Gehakte Tzuros these days.

Abka

I disagree. If you have an Amazon business, I can help you do the math properly. With the right tools, you can drill through the reports and get accurate reporting.

NoMoreVictims

No you can’t, no one can. There is no way to break down Amazon reports, the numbers change every hour.

martyg

Sounds like your bitter you couldnt run an amazon business

NoMoreVictims

Or thrilled I was never scammed/fooled into investing in one.

TheTravelDude

Really?!?! someone is pissed they weren’t listening during math class…

NoMoreVictims

Yup BH I missed the class where they explained that turning over other peoples money for 2-3% returns (at best) is a career worth pursuing.

TravelBloggerBuzz

Can’t wait for such a post to appear at The Points Guy lol.

Thanks for nicely laying it all out. There should be more posts like this but…wait for my zinger in my post tomorrow 🙂

TGIShabbos

No zinger

Agmmm

Thanks dan for posting I know to many of them and breaks my heart every time I hear what they going through to resolve it may take years to clear and I beleave we need to keep on reminding every so on about it to get it to the new younger generation to be aware unfortunately in this new store its half kollel yingalet

Brian

I lost all of my AMEX accounts and points when a buying group bounced a check made for my AMEX account.

YB

Yep. My father went over 75k under when they guy stopped paying…

I actually did it first, and my wife insisted I stop after a few months. My father continued with a maximum of 35k per month agreement. The guy then missed a payment deadline and charged the next month’s 35k anyway, leaving my father 75k after the interest and late fees.

Every few months my father calls him, and he tells my father he’s going to pay him back VERY SOON. It’s over six years already.

TGIShabbos

How these types of people come into you kippur is beyond me. I really wouldn’t have the courage or chutzpah to go into Shul in YK if I had such a Geneiva record on me.

Mike green

Dan you can’t be more right then you wrote.
there is a saying את כספך לא תתן בנשך for this few good feelings of points don’t give away your principles

yosefsv

Thank you Dan!
This post is long overdue. I know personally Kollel Yingerleit who gave their CC for a Yeshiva to earn points and lost much more then they earned. I hope that this message will reach to the Kollel Yingerleit who don’t necessarily read DD and are just excited to earn some – so called – easy cash.

BKSR12

I asked a friend to swipe 5k to get a bonus.. he swiped 50k. Didn’t pay on time.. I made him crazy and finally got it paid at 89 days overdue. Amex told me that if I don’t pay within 90 days it will be sent to collections.. BH it did not affect my credit. I asked a well known Rav if I have to pay him back for the interest.. he said no because it was stolen money.

Mitch Cumstein

You didn’t pay him back for the interest?!?! The money wasn’t stolen. You gave him your credit card and he paid you back. Who was this rav? Must have been Shmuley Boteach, lol.

Ckmk47

He gave permission for 5K. The rest was stolen. The OT paying by the due date was stealing.

TGIShabbos

He didn’t profit from the interest. The CC company profited from it. Agreed that it was stolen money

BKSR12

It doesn’t matter if you or the credit card company profited. You are responsible for the interest unless you have a “Heter Iska”. In this case it as different bec was stolen money.

Mo Dorfman

Who was the Rav?

yisroel

he should pay him back for the interest for 5k not the rest, the 45k is not an halvoah, its Geniva. even if he did earn on it it doesnt change the fact that he didn’t loan the money.

Shea

You should only lend to a Freind as much you would take with you to the casino tonight.

jake10

As they say, “pigs get fat and hogs get slaughtered”

Harry E Tiq

Maybe Yeshivas should devote as much time teaching seichkel as they devote to teaching chochma

harryless

chochma is siechel anyone that learns gets gifted with a glatte kup and a straight head screwed on straight and does not need to read those self help books or other things

Gary

Hmmm

Yehuda Nachmani

What what about ‘Credit farms why are they dangerous / dishonest ? Even though you give them personal information they do seem to work No??

scam

I want to make everyone aware here on this site and to the klal about [redacted] and his brothers They recently defrauded over 150 people from our dear community, they knew that they are going to go bust and continued to defraud people by taking their credit cards and promising to pay each individual either by paying the bill or with merchandise. Even after all this he continued to promise that every penny will be paid back, when questioned how, he continues to ignore everybody. Please be careful of these brothers as they will continue to try to defraud others to make up their loss. Please pass this to everyone.

Joel f

its A simple Ponzi scheme. Those businesses are paying almost 3% on those credit card transactions every month. After 12 months they end up paying 36% and after 24 months it’s already 72% so it’s impossible for them to pay it back. That’s why it’s a simple Ponzi scheme.

Ponzi-ish

Ponzi has a bit of a different definition

Manny

I am a victim myself here and all I can say is this. People swiping credit cards to their own merchant are people who are doing bad in business, the interest they pay is Unfeasible for any business, therefore you’re lending for a business that is not legit. Please don’t ever do the mistake I did.

AB

I started using my credit card for my boss, I was getting points and a commision, for the first year the boss paid in full every month and everything was amazing. Then he started paying just a fraction of the bill and I had like 70K outstanding on a few cards. I also had inventory which I had purchased and immidiately stopped delivering and had to sell myself (which took a few years) BH, I drove him crazy for the next six months to keep paying down the balances and we got it down to zero (he would ignore some of my calls). Some of the commision he owes me he still hasnt paid up like 5 years later. My point is, when all is going well, its very hard to put the breaks on, and once the payments slow down you will just get shocked into hell, so beware!!

TGIShabbos

I assume you left that job? If you haven’t, please give your notice today! Be ready to downsize for the next few months until an honest job comes your way. It’s not worth it

Jewkugel

Btw it’s not just laying out your cc’s to others. It’s also using your own credit cards to fund a business such as Amazon FBA without a good business sense and with sub-par bookkeeping. As mentioned by another comment it is very hard to properly properly keep books for third party sellers as there are many different fees.

!

I am familiar with a couple of people that got defrauded in the latest scheme and know a few that do not want to come out about it. i”m surprised this is such a common problem based on the comments here, people should come out with their stories and not stop to repeat them to create awareness were talking about millions
as always thanks Dan

James

Clearly Dan has stirred up hornet’s nest w this post. One day people will hopefully get normal degrees & jobs, & not have to resort to desperate measures to pay for their kids tuition & diapers etc. Miles are nice side thing for a quick getaway etc. but some folks seem to live their lives in this casino. RETARDED. Use ur brain. W all due respect of course

Hwr

You think none of the victims had “normal degrees & jobs”? I have news for you…

James

People that have normal degrees & jobs don’t give their SS# & personal info to strangers. Only desperate people do that. These stories break my heart but clearly there is a lesson on to be learned here. If you have a normal job w a decent salary they wouldn’t have to do this. For example I work in IT & I’m buying computers,routers, switches etc & I rack up points on the side. Nice hobby. NOT A JOB.

Gary

If someone was swiping $500k/m on your cards that’s $80k+/yr in points. You may be a wealthy individual with a well paying job, but some poor people consider that kind of money more than a hobby. It’s not necessarily a financially savvy move to make, but to say that this isn’t lucrative and only desperate fools would get sucked in is naive. There’s a reason many intelligent people were victims here too.

TGIShabbos

Gary, I hear you and I understand accidents and mistakes happen. But, I’d like to challenge your last statement. How intelligent could those victims be to have gotten themselves into such a situation? (This goes without saying that I only wish those in trouble to find success and no more stress or pain from this point forward)

James

Never said they aren’t intelligent…only desperate people take desperate measures. I’m not an outsider I know this well. These folks are jus as intelligent as anyone..just the culture doesn’t allow for them to do something “real”. We’ll keep it at that.

@sbs

@abs, Consider yourself lucky that you didnt get scammed by Angels Of Debt, he is a Decieving Crook. He has messed up more people than he helped, be aware!!!!.

NoMoreVictims

This is a BP Willi Lakewood problem. Educated people don’t fall for this garbage. As someone mentioned earlier, Amazon businesses do not make real money, they are just washing machines. Over the next few years more and more of them will go under. Only Bezos makes the money. Everyone should get an education and make an honest living without borrowing from the banks, the world, and the neighbor. GN of Lakewood swiped $70K of his own brothers money 48 hours before he went bust. CS of BP makes Chasunah Balabatish and lives in a $4MM house. All are thieves. Whoever has money invested at this time by an Amazon biz or by someone UNEDUCATED, should take it back and run (best of luck).

Hwr

You think all the victims are uneducated? You BIGOT!!

James

Do educated people fall for these crazy scemes?! NO! BEC they don’t need to give their personal info to make a measly 3-4k

moses

Only “EDUCATED” ppl had the PRIVILEGE to “INVEST” by MADOF

NoMoreVictims

And now you’re comparing Madoff, a lifetime Wall-Streeter, to some guy in BP who can’t read or write property?

moses

A lifetime WHAT??????????????? a Lifetime EDUCATED CRIMINAL and the EDUCATED ppl invested by him even though all uneducated ppl no that 12 % a year GUARANTEED is a scam

NoMoreVictims

Obviously there are scammers everywhere. Madoff was a scammer for educated ppl, and GN & CS are for non-educated ppl.

The difference?

85% of Madoff investors got their principal back (and where able to take a loss if necessary as the where Accredited Investors), while GN & CS investors will never see a dime.

NoMoreVictims

The victims are mostly uneducated about basic financial concepts, for example calculating risk vs reward. The perpetrators are all uneducated.

Yossi

100% this. But Chas veshalom the kids should aspire to be surgeons or lawyers.

Gary

That’s a pretty stupid blanket statement to make. Plenty of amazon businesses make nice money. The issue is that any business deal has am element of risk, and when you’re highly leveraged a small loss can wipe you out and send you into a death spiral.

A better statement would be that anyone swiping money into their merchant account is obviously on pretty unsteady financial footing at the moment. Leave the loans to the loan sharks. Even though there are many exceptions, there’s a reason that the profile is considered non credit worthy by standard financial institutions.

NoMoreVictims

No Amazon business makes returns that justifies the outlays necessary, other than Amazon itself.

Dovid Black

Trash

NoMoreVictims

Post your financials and I’ll pick it apart right here and show you you’re sinking/barely covering.

Abka

@NoMoreVictims, you are talking nonsense, PERIOD.

Yes, I have a proof of very successful Amazon seller aacounts, but you do not deserve it.

NoMoreVictims

No I am not. Amazon Business’s are Washing Machines. Whoever is invested should take out their equity and whatever else they can before the next round of Amazon fees finish everyone off for good.

Yossel

You have proof of very successful Amazon sellers. I also know of some very successful sellers on Amazon. BUT, I know even more UNsuccessful sellers on Amazon. It is so hard to make a nice/justifiable profit and to actually “know” the exact numbers. Yes, I have used tools (including propriety software) to keep tabs and to know and figure out which items to order more of, but these tools can only help that much.
In addition to not knowing what’s going on with the finances, there is also the possibility that some other seller will start selling on your listing for lower (and keep lowering the price), and then what?? Even if the ASIN (item listing) was created by you, even with a registered trademark… And if you contact Amazon about this – um, they simple don’t care.

Yossel

I forgot to mention that I had 3 successful years on one Amazon business and one successful year on another Amazon business. I closed shop when I realized the business is not earning much. I was actually running out items that were at one point making decent profit. I BH didn’t “lose” any money.

Mark

Do you sell on amazon?

NoMoreVictims

NO!

harryless

the teaneck passaic new rochelle woodmere problem is many educated people cant think past their guaranteed salary of 150 thousand, kids see parents with no sheifos and then they dont aspire to have goals in ruchnius etc lets criticize you

TGIShabbos

Harry, I’ve seen a mixture of incomes in those communities mentioned. The issue with BP, Lakewood, and Monsey is that there are many “normal” and regular careers there too, but typically the only places where these shady businesses occur are in those localities. There aren’t Med school graduates in Woodmere playing these games. Lastly, I can’t speak for all, but the ruchnius of many of these 5 Towns doctors, accountants, lawyers impress me, as I see them at Sunday morning kollel, father son learning, etc.

NoMoreVictims

Exactly

NoMoreVictims

harryless, 150K is low-balling for an educated professional. Go ask these people how much they really make. Halevai your kids should look like those erliche honest hardworking people.

moses

Go ask those ppl how much they are paying for kids collage and for weddings and vacations

NoMoreVictims

Yup, interestingly enough they are the crowds who can afford it year after year, I wonder why those who need to give out their CC’s can’t.

moses

sure. just go check their collage loans! 3 kids doctors, lawyers, =1M in debt. there is everything everywhere

NoMoreVictims

Ever heard of scholarships? And there’s a reason student loans are low interest: The feds/banks doling them out know that educated people can pay them back.

moses

Sorry! but for $200,000 tuition to become a doctor there is no scholarships and no interest free loans except maybe for the first 20k

NoMoreVictims

Huh? There are both merit and needs based scholarships to any med school in the nation. And I said LOW interest, not interest fee. Remember the feds/banks who write these loans are betting on kid in their 20’s who has 0 assets. Pawn shops throw out these king of people. Yet they will lend you at 6-7% to pay your tuition because their underwriting proves that EDUCATED PEOPLE MAKE MONEY and pay back their loans.

TheTravelDude

How about $5m a year PROFITT…..

NoMoreVictims

A guy who makes $5MM in profit a year:

A) Doesn’t have time to post on DansDeals.

B) Knows how to spell the word “profit”.

C) Doesn’t brag about his ability/affinity to travel.

yy

I’ve read stories about educated people who’ve been scammed by Nigerian “princes.” When it comes to getting something for nothing, many people are blinded by greed.

NoMoreVictims

Community College educated lol

Totty

Racist

IZZY

@IZZY….that’s funny

anonymous

only bp willi and lakewood y did u pick these 3 places

NoMoreVictims

I’ll throw in Monsey for you too. The wannabe’s of the tri state area who have the skill sets of a grocery-shelf-stacker.

Eli

Hello my friend. You made some valid points here, but now your arrogance and ignorance had gone over my nostrils already.
There are HUNDREDS of “heimishe” multi millionaires in the tri-state who haven’t got any sophisticated education, and yes they have reached astonishing record breaking success! They have tremendous success in real estate (just take a glimpse in the Real Deal) and in other successful legitimate businesses they established, generating great incomes for many other heimishe companies, and yes, also throwing a nice chunk of Parnasah for many educated professional people you admire so much.
I even know some of them who can’t even spell correctly a single text message, and yet they earn 20 times the amounts of the highly educated people they employ.
In the history of Klal Yisrael there wasn’t so much Tzdaka given in such enormous amounts like we hear and witness today, and mostly from within these uneducated communities. Nearly the entire frum Torah communities and institutions in Israel rely and is being funded from the financial success of the frum and uneducated Yiden in The US and abroad.
Smartness, ambition, talent, creativity etc. are qualities we are B”h blessed with, and it is not being thought in any school or collage, and saying that these people just have the skills of a grocery shelf stacker, shows that you’re just a bigot, Amigo.
In essence, There is real people with a great deal of success, and there is a great deal of success opportunity, in our frum uneducated communities. In the same time we all hope, that the few failed wannabes, should indeed cause “no more victims”.

NoMoreVictims

Obviously there are those who have great success, even while being uneducated. I was talking about those who give over their CC’s, which is the subject of this post and all the comments, are all uneducated.

NoMoreVictims

More proof: CS of BP sells under “Super Deals” on Amazon. A quick google search shows he’s spot 358 of all Amazon sellers. Yet he needed loan sharks and peoples CC’s. RUN AWAY FROM AMAZON!

Victim of EL ponzi scheme

Hi,
I have unfortunately fallen victim to a case like this where a Frum guy supposedly had a business that was buying mainly electronics would swipe my cards monthly. For the first few months he paid back hundreds of thousands of dollars and then stopped paying and disappeared. I have been left with hundreds of thousands of dollars of debt, lost all my points and had all my accounts shut down. All the money went through a charity organization which seems to be a fraud. This guy turned out to be Running a large ponzi scheme and ruined many people’s futures. I’m not sure how I will recover from this. Nobody thinks they will ever be in the position that I am in. All I can tell everyone is just because you think you can trust someone because he seems honest or is from the same religion as you you have to do your research into people and businesses when your “investing” that much money. When something is too good to be true it’s probably too good to be true. Watch out for these scams the points you get are not worth it.

TGIShabbos

Thanks for sharing your story. I’m sure it wasn’t easy to share, and I’m sorry to hear of all the trouble you are in. I know the word “trouble” is probably too small of an adjective to describe how you feel. Regarding those that say they are from the same religion, from a charitable organization, a big Rabbi, a nice person- those are all wonderful criteria to have as a friend to invite for a shabbos meal, offer a favor to drop off at the airport, go to a ballgame with- but NOTHING beyond that. No large sums of money, no borrowing credit cards, or no co-signing on a loan. Not mentioned above are even the dangers of loaning one’s car out or sub-leasing. I know stories of those in yeshiva (decade+ ago) where cars were loaned out or subleased, became involved in collisions, DUI, property damage, hit & runs, driving without a license, etc- and the owner of the car became involved in some of the awful stories involved above similar to ‘Credit Card loaning’.

Agent

I’m used to be a agent for a large credit card processing company and was always wondering what will happen to these companies, unfortunately there’s 100s of local business relying on other peoples credit cards.

Chaim

C.M.S from boro park should be ashamed of himself. Swiping millions of dollars for his toner.com business. Guy is still living in his 3 mm Mansion, driving his upscale car, summer home, a bunch of assets that are worth millions of dollars. While all the victims who have no money are left to deal with all this by themselves. Guy ignores every phone call, and text and just lawyered up to protect himself. Him and his lying brother Y. who is a bigger ganav then he is, about to make a huge expensive wedding

NoMoreVictims

They have no real assets other than the house in BP. Summer home is a joke, and they don’t have a lot of “real estate”. Don’t count on it, everyone will be left with 0.

TGIShabbos

“NoMoreVictims” agreed. I was thinking the same thing. Many may be enjoying the opulent lifestyle today, but it’s a matter of time till the floor cracks beneath them. I’m not even talking about the World to Come.

Shmuel D

Most of all, they are very big image people, always have been and always are (its all about the image with them) they lawyer-ed up because they care about themselves and not the victims, very sad, I guess they don’t care about the world to come. There will be a big price to pay for them one day. They also screwed their own kids/family members so if there are any “assets” (which I am highly doubtful there are any) left here you can be sure it will go to them.

l

unfortunately they may pay the price soon in this world to

Eli

Great post, Dan.
Is it foolish to allow others into your account to use your points? What if they pay you for the points even before you give them access?
Thanks.

ckmk47

Strangers in your airline frequent flyer account is probably safer than strangers in your bank or credit card account to access the points.

just wondering....

@dan there is a company out there called fundera that help you find business cc are they also a scam

Yossi

If you have financial government assistance and you let people use your line of credit, you can potentially be in trouble if they audit you it’ll be very hard to argue that you borrowed the card to a friend

JJ1

If you use a buying group and they “lost” your package delivered to their warehouse. Is there any legal recourse available? If they say they never received the package despite tracking information saying otherwise can you file a claim against it or could you sue them?

Jake

Long time follower first time poster, I own a couple amazon businesses and I am familiar with these buying groups (I do not use other peoples CC, We have A bank line of credit) . I love this thread, as it is extremely important. I believe @Dan should create a list of vetted scams to avoid others from getting hurt. I know too many people who naively got scammed by others seemingly honest people.

In addition, as others have mentioned, it is extremely hard to operate A successful amazon business. Bezos makes billions as we slave away just to hopefully get by, while unfortunately most fail after realizing their cash flow ran dry. The only way to be successful, is if you have A ‘connection’ to procure inventory well under any other retailer.

Many amazon groups white wash the reality, painting this rosy opportunity on Amazon, I believe these ‘consultants’ should be more transparent.

Jay

Great post, Dan. I only hope it squarely hits those people who always say, “Yeah, I do it, but I’ll be okay, I can manage this.” it’s almost always a tragedy just waiting to happen. I hope your folks take it to heart. I always figure that any deal that sounds too good to be true, generally is.

Yankel

Yes! I’m a victim almost $100K
Also thought that’s it’s a good friend of mine, he will never ruin my life. Unfortunately my life is not the same…

I’m happy that now I came across this post.
At least others will not fall into such a scams

Dont get Scammed

Do not get fooled by another yids honesty. Even though if he uses all the catch phrases and remarks and lingo that a yeshiva guy uses.
Skyoach, Good shabbos, Etc
and all of these ridiculous lines which assuage any worries and fears because how could he not be trustworthy? Hes another yid
and he sounds like a heimishe guy?

Its all nonsense
Do not get scammed even if your close friends is recruiting you to “Make a lot of money really quickly and its totally safe”

stay away

Mattis

Hello

A Victim as well Why no body speaks of the brothers YL and ZL that defrauded GN of lakewood is beyond me

One of them is a admin of a yeshiva with a so called Rabbi

This story will be the next eye opener

Yair

Is this langsam from CH

HAPPENED TO ME

I lent someone my card, I knew and trusted him and he used it. Worked well for a couple months, got lots of points, was great! The last time he used it, he spent 25K (on multiple cards), and the payment bounced leaving me with a big headache. It was a month after my wedding and I was now 25K in overdue payments. BIG STRESS. Lucky for me, he ended up paying me back after a few months and I only got scarred in the fact that both AMEX and CHASE shut me down, and I cannot get anymore cards with them (at least for now). As well as it hit my credit score a little.
My father in law wasn’t as lucky as he innocently lent someone his card for 50K (for the points) and they never paid back… He got the bank to agree to 25K and he had to pay it off, which was very hard for him. MORAL OF THE STORY – DONT LEND TO ANYONE!!! NO MATTER WHO OR WHAT!

intgesh

I don’t know anyone that lost money with Sungames by swiping a credit card. I know several people that swiped a credit card for Sungames, some for as much as $100k, and were able to dispute the charges, given that they never delivered the promised goods…

Buying group owner

I run an electronics buying group and im very proud to say i have put thousands upon thousands of actual dollars (not points) in almost every single one of my longtime friends and buyers pockets and this is a huge opportunity for people to make good money on the side

BUT as so many pointed out of course there is risk involved just like any business venture and its your decision to decide how to invest or leverage your credit/money

*But as dan said it is wrong and irresponsible to risk more than you can afford to lose period*

If you feel that you can afford to lose 10k max in a worst case scenario then make sure you drop off or ship less than that and wait until money clears before continuing to do business, just like in any business DO NOT risk more than you can afford to lose

On a side note in response to missing packages

if youre making good money per year off purchasing for a buying group then the one or two lost packages is a simple business expense , try your best to recoup the loss but if not move on
Its a simple risk vs reward calculation

Obviously if you feel the buying group
Is stealing your packages on purpose then Theres clearly no trust so if you continue buying for that group youre simply an idiot
By sending products to someone you dont think is honest

Very sad to hear all these stories
This article definitely brought alot of attention to a sore topic that needs to be
Discussed

David

Dan,

This sounds like a very important post but simple folks like me don’t know what you are referring to.

Without mentioning names can you please spell out the sort of scams and schemes that you’re referring to? It would be very helpful.

Thank you

Sam

Dan, I love how the comment section on this article essentially became a platform for every (Jewish) credit repair company to advertise there services for free.lol

Dinstel

I appreciate the info here. We currently help my brother in law, who is trying to get back on his feet after his divorce. He sells on Amazon and has paid back every penny he ever borrowed. I did not realize how risky Amazon could be.
After reading here, I discussed with my husband how we can help without risking our credit. So thanks for opening my eyes.
I also never considered that there could be halachic issues with ribis, though we haven’t needed to deal with that, thank G-d

NoMoreVictims

At least get your equity out. He should open his own CC’s for swiping purposes. Hatzlacha!

Regret

We once gave our information to one of those companies that open cards and do the spending “for you”… and immediately regretted doing so. Their first checked bounced but the second went through… but nothing worse than that. Real question is- what should I be looking out for now that there’s someone out there with all our information?

neil amstrong

you could have your SSN locked and frozen by the credit bureau’s (experian, transunion etc.) like this banks are not able to pull credit and credit cards cannot be opened, you get a pin to unfreeze it when you need it,
also, you have a monitoring option to monitor and get notified when there is any activity on your personal info.
have a lot of luck!

YGX

What is really scary to me is how many people here have been suckered. I’m really surprised by the numbers, and that people aren’t more careful.

Yossel

There’s a sucker born every minute.

Alan Tepfer

I run a small company (Dispute2) that assists victims of online scams to recover their funds. The type of situation that Dan wrote about is among the most difficult type of “scam” to actually recover funds from.

When it comes to credit cards, most people here are pretty savvy about what you can and can’t do with them, and that includes filing disputes/chargebacks. Cases like this, where the cardholder gives their card details to a third party are unable to be disputed as fraudulent transactions (which can only be used for genuinely unauthorized transactions). The merchant will have documentation that they use to verify communication (and often delivery of goods/services). This would allow them to successfully challenge any type of fraud dispute.

Additionally, since actual goods services were purchased and delivered (which the merchant can verify), it would be difficult if not impossible to raise disputes based on services not provided, or not as described.

I would suggest that if you choose to let someone use your card for anything substantial that you have a contract in place with them. This way, if they do not pay, you would have legal recourse outside of trying to fight with the issuing banks.

Hope this is helpful to some of you out there.

Questions and comments are welcome.

dave

hey @Dan what do you say about those credit repair companies/building your business credit (the ones that claim that they can get you big credit lines)are they safe or better to keep away?Thanks.

Steve

@dan would you say it is safe if the “owner” of the company quickpays you right away? or is that still dangerous?

YoLaViajera

Greed makes even highly intelligent people lose their minds. Moral of the story: don’t be greedy.

Ab

What are the options available for me? I have swipes over $200k for this toner scam

No more cards

After my brother in law was using my cards for couple of thousand dollars monthly and paying on time for nearly 10 years. My brother in law built a Bais Medresh and a million dollar house. Took from me 230k paid minimum payments 12 months when all was still 0% apr. Than he had to take out a mortgage to pay back. Didn’t happen. Drives 2 fancy cars. Building now a Brand new Mikva. Raising 250k through online comp. while it costs him less than 100k and its sponsored. Marriang off his kids like the biggest גביר. He is 3 years late. I’m in deep deep debt. I don’t have a card for my name. Banks and lawyers run after me with lawsuits and all. He even called police on me in front of my kids and his kids a year ago when I rang his bell after he didn’t answer my phone calls. The family is ripped apart. Why? Because I was stupid. Oh i forgot to mention i earned couple of thousand dollars yearly from the points. Lol.
נישט דא ווער עס זאל לאכן.

Joel

Oiy bashefer!

Joe

Crazy story.
Why don’t you bring him to bais din ?

??????????????

whats the name of the shul and where????????????

wpDiscuz