PSA: Don't swipe recklessly for others

[Denverite]

-1 People made lots of money off the points, and they're only risking their Credit. If they have no plan on buying a house... then it might have been worth the risk. People made $15k every 6 weeks.  I would probably risk my credit for that, if I assumed it would go on for months or years.

I know people may not want to post, even with a new screen name but I am curious if the "old timers" (or ones doing this for years) suffered a net loss. Many may have still come out way ahead if this went on long enough (this thread was started 4 years ago). People have mentioned being out 200k from a couple months of non-payment so they were having huge amounts swiped.  Like in a Ponzi scheme, the most recent "new" people definitely got screwed but unlike a ponzi scheme the original cardholders got their principal back every month AND profited from the points.  My brain is too tired...lol...but you could make a simple equation and just figure out how long the swipers would have needed to do this to not have had any net loss.

[CS1]

Twerski said he's involved in $50M of these cases.
Which side is he on in which case?

seems from the interview that he is aware and has spoken to several involved people to know of $50M in 'investments' that creates that amount of loss, however this is not the amount that he is professionally involved with directly as a lawyer.

It seems that he knows that the total sum (of 5-6 separate stories) that he knows about totals in the area of $50M

[Yehuda57]

Namely?

Shrug.emoji. I'll defer to others, but lying about legitimate charges seems questionable at best. I'm not suggesting you issue a psak, just bring up potential questions. Ribis is another one

[knowitall]

I know people may not want to post, even with a new screen name but I am curious if the "old timers" (or ones doing this for years) suffered a net loss. Many may have still come out way ahead if this went on long enough (this thread was started 4 years ago). People have mentioned being out 200k from a couple months of non-payment so they were having huge amounts swiped.  Like in a Ponzi scheme, the most recent "new" people definitely got screwed but unlike a ponzi scheme the original investors got their principal back every month AND profited from the points.  My brain is too tired...lol...but you could make a simple equation and just figure out how long the swipers would have needed to do this to not have had any net loss.

You're assuming 100% of the points earned were sold. I'm sure many of the victims burned a lot of the points on flights and hotels.

[zale]

what would be the easiest way to secure borrowing a credit card lets say for a legit business to use my cards and to pay it when due on a monthly basis is there anyway to secure the money? (lets say a lean  on property)

You would need something of theirs of equal or greater value in your possession.

For example, if they wanted to swipe $15,000.00 and they give you a Rolex watch worth $20,000.00 to hold until they pay you back. You would need to first verify by a professional that the watch is indeed worth $20,000.00.

A lean on property would mean that there is no mortgage or other leans on said property and that the title has been transferred to your name until the money is returned.

If the item is not in your possession you may have to go to court and spend a lot of money to seize that item, and the process can take many months or years.

This is not a transaction like selling chometz. Everything needs to be meticulously detailed and written up by a lawyer. A contract that says "I can seize anything I like if I'm not paid back" can be worthless.

[whYME]

the original investors got their principal back every month AND profited from the points.

Seriously?

[mmgfarb]

The need for financial literacy education.  (he will eat this up like crazy) This doesn't mean learning math, science or economics, but the basic concepts of budgeting, interest, loans, etc.

No no, don't you know you can learn all of that from mishnayos? All we need are better rabeim who know how to teach torah the right way, we don't need to actually teach kids how money works in the modern world, they'll figure it out.

[whYME]

Gotcha. But on the flip side, I'm hearing too many lawyers on the other side advising against disputing. The trick (b'dieved) is probably figuring out what exactly to dispute.

I think the main point is really not to rely on just being able to dispute when things go south.

It might work sometimes but if that's your safety net you might very well get burned.

[Yehuda57]

No no, don't you know you can learn all of that from mishnayos? All we need are better rabeim who know how to teach torah the right way, we don't need to actually teach kids how money works in the modern world, they'll figure it out.

Wrong thread, but that's not what he said at all

[Dan]

I think the main point is really not to rely on just being able to dispute when things go south.

It might work sometimes but if that's your safety net you might very well get burned.

Yup.

[shwarmabob]

The need for financial literacy education.  (he will eat this up like crazy) This doesn't mean learning math, science or economics, but the basic concepts of budgeting, interest, loans, etc.

You might just as well learn math, science and economics while you are at it. Rav Belsky zt"l used to stay for the extra mathematics lessons in Torah Vedaas. I don't understand this aversion to anything "worldly". You see where it can lead. I have never met anyone who's bitachon was shaken because of math.

[Denverite]

You're assuming 100% of the points earned were sold. I'm sure many of the victims burned a lot of the points on flights and hotels.

No, that's irrelevant.  You could easily put a value on the flights and hotels. Goods and services ultimately have a monetary value. Could easily make the valuation based off of what the going rate was for points sold.  It's not the owners issue to tell the cardholder what to do with the points.  I think it's huge stretch or downright untruthful for these owners to call these people investors (and it may hurt their legal argument) because investors profits go up in proportion to the profitability of the business.  Lender does seem to fit though, receiving points in lieu of interest.

Totally not a lawyer but from my one business law class in college, a plaintiff in a civil suit needs to show damages in order to be awarded any.  Are there damages if a person, in totality, profited more than their recent loss?  I don't know, but these are things I'd be discussing with my attorney if I did this.

[Yehuda57]

You might just as well learn math, science and economics while you are at it. Rav Belsky zt"l used to stay for the extra mathematics lessons in Torah Vedaas. I don't understand this aversion to anything "worldly". You see where it can lead. I have never met anyone who's bitachon was shaken because of math.

Wrong thread, and Headlines already did a bunch of episodes on secular education. My point is even according to the shita of no limudei chol at all, that wouldn't apply to financial literacy.

[Denverite]

Seriously?

Did I miss something?  Weren't their credit cards paid in full for months on end?  I did just change the term to swipers, although my auto-correct really doesn't like it.

[zale]

Gotcha. But on the flip side, I'm hearing too many lawyers on the other side advising against disputing. The trick (b'dieved) is probably figuring out what exactly to dispute.

The question is if there is a downside to disputing and trying that method before going the bankruptcy/settlement route. What's the worst case scenario? If you lose the dispute, does that make you ineligible to settle?

There is another thing to consider: In a normal scenario, when a customer wins a dispute, the cc issuer will then debit the balance from the merchant's receiving bank account. What happens when the merchant's bank account is already overdrawn or closed? Correct me if I'm wrong, but presumably the cc issuer will absorb the loss and write it off. Why would they be willing to absorb the loss if they can pin the responsibility on the customer? If multiple customers from a single merchant come forward with claims of millions of dollars the issuer will most certainly not be willing to absorb that.

[TimT]

No, no
That is the misconception he's is referring to, people think you can dispute anything

Very true. The other day I watched someone call the bank to dispute a charge because the store refused to refund his card on something he purchased 2 months ago. He threatened he’ll dispute, the clerk said he has the receipt with his signature on it, he took his phone out & called the bank. I kid you not

[Yehuda57]

Did I miss something?

The difference between lending and investing.

[whYME]

The difference between lending and investing.

Exactly.

[whYME]

I did just change the term to swipers

In that case it should probably be swipees?

Throughout this thread "swiper" has referred to the business/individual receiving the funds.

[zale]

Very true. The other day I watched someone call the bank to dispute a charge because the store refused to refund his card on something he purchased 2 months ago. He threatened he’ll dispute, the clerk said he has the receipt with his signature on it, he took his phone out & called the bank. I kid you not

I once lost a dispute with Pottery Barn over a $100 item purchased with an Amex card. I returned the item and got a confirmation that the item has been returned and that the money was refunded to my card, but it never got refunded. After I couldn't get anywhere with their customer service I chose to dispute. They then told Amex that they sent out a gift card for the return. (I never received that gift card). They showed Amex some transactional receipts etc. and Amex ruled in their favor and closed the case. I reopened the case and lost again. This was an eye opener to me as I rarely dispute transactions and I have always heard that "Amex sides with the customer".

I think that many times disputes work because the merchants don't fight back. Once they fight back the dynamic changes entirely.