Before I start, I would like to state that I am in no way actually planning to scam the credit card companies.
That said, I am a sophomore in high school and have never had a credit card or have much knowledge of declaring bankruptcy. But I have recently discovered that my parents
(who are avid credit card users) have many credit cards which added together, total around $400,000 worth of potential credit.
In theory, wouldn’t it be possible to cash advance this money and give it away to a friend or something. Then having no money to pay the $400,000 in credit card debts, declare bankruptcy or (if bankruptcy is impossible from such a standpoint,) move out of the country and pocket the money?(or some such thing) Anyone know why this scam wouldn’t work? Or ways to change the scam slightly to get
around the problem?
I thought of the idea when writing a story for school, but I thought the idea wasinteresting and (possible) enough to investigate.
Well, if it’s an intentional scam, you’d probably be prosecuted for fraud. If you are in another country, you could be extradicted back to the US.
If you simply waste the money or at least convince your creditors that you didn’t commit fraud , you can declare bankruptcy, and only have to pay back what you can (I believe in at least some jurisdictions a house cannot be siezed in a bankruptcy case, even if the house was purchased solely to avoid paying). Of course, if you have a $400,000 bankruptcy on your credit report, you will never be able to borrow money again, more or less.
However, if you get $400,000 in cash advances, and then don’t make any payments, they will probably suspect fraud fairly quickly. And they will most likely prosecute you, and win. I would imagine that it would be worth several million to the various credit card companies to make an example of you, if need be.
Yeah, it’s probably possible to hide out far from home, with a fake identity, but no one wants to do that.
I’d also suggest that anyone else responding avoid answering the question about how to make the scam work better, as giving tips on how to commit credit card fraud in GQ is one of those things that really annoy manhattan.
Not only can you try to do this (but you will find out you can probably only cash advance about half), but you can get yourself free room and board till you are 40 for your efforts. The room is small, but you only have to share it with one other person! They have everything you need there, so you will not need to leave until they let you move. Your mother can come visit you.
By posting, even under a user name, you have revealed that you either truly do not wish to try this, or are so stupid that you will certainly get caught.
Now, if you really want to make a lot of money legally, start your own company and make a public offering. Printing stock certificates is like printing money, without the risk of a counterfeiting conviction.
Don’t be so narrow minded…I’m sorry if that post seamed at all weird. I’m trying to finish my story in a plausable way and (also just out of curiosity) No self respecting scam artist would post needed advice for a real scam on the internet.(i think) And Im sure any attempt to do this would have a huge chance of getting cuaght and subsecuent jail time. And it should not be really attempted.
Back to the story…what if you really did blow the cash advanced money…say in vegas? Then with adaquit proof wouldnt it be legal to declare bankruptcy?
How would they know if you were with drawing from several credit card companies to only let you cash advance half the credit? And a credit card company can have you extradicted back to the US for not paying your credit card debt? Anyway how can a credit card company get you put in jail at all (assuming you dont declare bakruptcy) I’m not following this logic at all
Anyway how do you guys know all this, has it been done or something? I’ve never heard anything about it. I Really did think it was a new idea, to put in my story…Im really sorry if this post in any way incourages any credit card company scam atemps. Im sorry really don’t post ways to try and scamm the credit card companies… but try and answer my other qeustions.
Oh im sorry i wasnt refering to using anyone elses’ credit cards but your own…hence would it even be fruad if you did somthing legitamit with the money…but not having it, declare bankruptcy or somthing…
Like i said this is mostly out of curiousity if this is somehow offending please feal free to shut this thread down at anytime.
Trust me you are not the first to think of this idea, if you have the intent not to pay it back it is illegal and you will be extridited by the government when the cc company sues you. Declaring bankruptcy will not admonish you from your debt if you planned to declare bankruptcy. And don’t you think robbing a bank would be a better attempt at theft at least you aren’t signing your own name on the receipt when you leave the bank.
Max out the cards on the cash advances, but do it in Las Vegas. Squirell the money away somewhere, then tell them you lost it all playing nickle slots.
First, like DPWhite stated, the cash line on a credit card is a percentage of the credit limit. You can not take out your full credit line in cash.
Second, cash transactions will flag the security system, whether done at atms, banks or casinos.
Third, to take out the full cash line at once would require a f2f transaction at a bank. You would have to show the teller a photo id, making it much harder to deny you did it.
Fourth, when it comes to fraud, credit card issuers work together. I have contacts at every major issuer and even though we may be competitors, I can call them and ask them it the see anything fishy going on. All I have to do is pull your credit report and call your other creditors.
It can’t be done. You will get stopped before you get very far.
On the scenario you described, you would be commiting a fraud on the credit card company, which is how you could become liable for jail or extradition.
If you take out money on your credit card with every intention of paying it back, get into finacial trouble, and end up declaring bankruptcy, that wouldn’t trigger criminal charges. Credit card companies have to budget for the fact that some of their clients will go bankrupt.
However, the scenario in your original post is an intentional scheme to defraud the card companies. You’re taking the money out with no intention to repay. You try to hide the money, use the bankruptcy court to clean your record, then move out of the country and get the money from the friend. That’s plain old fraud, with an added bonus of bankrupcty fraud tossed in. If you really did scam $400,000 this way, the police would be interested in tracking you down and extraditing you.
(Debt collector hat on)
-You could run up the cards to a point and then use cash advances to pay the minimum payment due on each card.
-When that option quickly runs out, you can see which credit companies will let you settle the balance for a fraction (sometimes 1/4) of the balance. After they’ve destroyed your credit though. Some will see that you’re in over your head and scramble to get what they can out of you before you declare bankruptcy.
-Other companies don’t offer that option, will probably collect more aggressively until you’re sent to a collection agency.
-When you fail to pay the collection agency, they will start garnishing wages or putting tax leins on your property (which means when you sell your home, you get minus that lien money back from the buyer. It’s automatic through the title company.) -The companies will also do repossessions where possible. Some will decide to be nasty and send it to the IRS as Your undeclared income and let them deal with you.
-So before you even get to fraud, there are some nasty things to contend with. Not the least of which is the bill collectors. They will call every number they have ever gotten on you.
I know someone who actually did this. He got his “free room and board” for five years, ending up owing the credit card company a six figure sum, lost his credit rating and his house.
I recently found out that if one pays his credit card bills on time, there is no interest. First of all, is this true? I am very skeptical since it seems that the credit card companies would make no money on most clients (or at least those that are responsible). So, I wonder if one could postpone any payment indefinitely by using one credit card to buy something, then using another credit card to pay off the first. Then, the first credit card (now relieved of any balance) could be used to pay off the second. Assuming there is no interest, then the balance would never increase and the payment could be delayed until any later time. The benefits of this are obvious; after a long period of time, inflation could probobly pay for the purchase. My questions concern the plausibility and, of course, the legality of this practice. Thank you.
Most cards that I’ve had do have a grace period - if yu pay within a certain number of days, no interest. But, that’s only been for purchases. Cash advances always bear interest, from the moment you take them out. So, taking out money against the second card to pay the first will trigger interest right away.
Thankyou all, that will make a fine ending to any CC scaming story…getting caught and extradicted in Zaire, after spending the better part of $400,000. Of course, for a better story we will assume the offender can get past the huge array of CC defences, up to that point, that are now in place.
In a Dilbert, Dogbert suggests getting all the cash advances and using it to fund a lottery prize. When you get the revenue from the lottery tickets you pay off the advances and pocket the rest.
My only problem is: Why do you need to have the cash on hand to set up a lottery? Why not just use the lottery proceeds to pay the prize? The only thing I can figure is that it is illegal to not have the money in the bank when you promise a lottery prize, since you do not know haw many tickets you can sell.
One more fictional scenario for your story would be to take out a cash advance (the maximum you could get without f2f) and tell the cc company your wallet had been stolen. They’ll clear your debt incurred after the reported theft. Drawback: you could only scam a limited amount that way, and if you pull that trick with more than one card they’ll notice you’re up to something fishy. But is there anything to prevent the fictional perp from getting away with a modest amount just once?
The only sure-fire way to scam the credit card companies is to charge them all up to the limit and then die leaving no estate. (I mean NONE…no assets, house, anything.) My husband’s father accomplished this with much success but keep in mind that those you leave behind will be plagued by collection agencies attempting to get some sort of payment anyway, and you will seldom be thought of fondly afterward.
Also remember that most credit card companies will charge a transaction fee for balance transfers–almost certainly more than whatever monthly interest you would have saved.
