Where is the abuse taking place here ? I mean MBNA Billpay allows you to pay off other credit cards and some of us simply take full advantage of that. There was no violation of terms & conditions here. Sure we use it to have some extra grace or float period, but there is no "intent to deceive or deliberate trickery" here. I do not see any rip off or defraud here. Maybe MBNA had intended for people to transfer their balance to them and not pay it off completely, but that is not a requirement. Maybe we are simply taking advantage of the "loophole". They should close the loophole if they do not want people to do that.

As an analogy, a store offer sale items to draw people in. Buying just the sale items does not justify abuse or fraud. That's just taking advantage of the promotion. I am sure most companies do not like it if everyone just buy the sale or "loss-leader items". That is definitely not profitable. So does that mean they can kick you out of the store or "blacklist" you from the store because you are known to have a habit of doing that ? Now, many do prevent people for taking complete advantage of the sales, many stores will limit quantity or set certain conditions (i.e. with other purchase or coupon or minimum purchase etc.) Now if one circumvent the conditions then that would be abuse or fraud.

So back to the case with MBNA, I want to know where is the fraud committed. Maybe MBNA should have some purchase requirements to use Billpay and require you carry a balance etc. Closing your account because you are simply taking advantage of their offer is like a store closing its door to customers buying just sales items (following the terms there of) without making other purchases or doing something to generate profitability for the store. Some stores like Bestbuy or Staples may try to do that but I believe that is poor business practice and maybe not legally sound. It would be so much better to define the condition of the offer and not offend even the non-profitable customers.

dolmar said:76hhma said:


How is abusing a bank bill pay considered a "good deals" I dont understand how people or anyone would be shocked that there account was closed because they abused a company policy. If you defraud or abuse or rip off a company do you not except them to cancel your account? If you owned a retail store and someone abused one of your store policy wouldn't you ask them to please not come back? That is all MBNA did.

Fraud is defined as : something intended to deceive; deliberate trickery intended to gain an advantage.

Now while saying the person defrauded MBNA is nearly impossible to prove. It seem a lot of posters here come real close to comiting fraud or consider a good deal one which lets you take advantage of a company for personal gain which really looks close to comiting fraud. If your are legitmately using a "GOOD DEAL" there is no inherent risks/cost involved. The only time there is an inherent risks/cost involved is when you are deliberatly abusing a promotion or service to your advantage which by no means can be consider crimial fraud but still is wrong.

I agree that MBNA did not intend for people to use bill pay for the sole purpose of extending their grace period, but not to the extent that doing so is abusing their service. It's like the store's intent to have a sale is for the purpose of attracting people in ...hoping that they buy non-sale items as well, but buying just the sale items is not abusing the store policy...just like paying your bill off vs. making monthly payments. Better yet, is it fraud if I use my credit cards because they offer 20-25 days of grace period and I pay off my bill at the end of every month ? I don't intend to carry a balance and the reasons I use my credit cards are to earn reward points and I get a short free grace period. Should credit card companies cancel all my accounts because of that ? NOT! That's within the scope of the policy.

Your analogy to the electronic store is a good one. I mean if I use MBNA to pay my Citibank bill and use Citibank (assuming if they offer a similar billpay service) to pay off MBNA month after month, then yes that is abusive like your store analogy or returning the same item every 28 days. ( Worse off, I know some people who is doing that for the sole purpose of having a brand new item to use every 30 days) But I dont think that is the case, probably because there're not too many other credit companies that allows this. Most people I assume take advantage of MBNA billpay to get an extra 30-45 days of grace period. So I still don't see where is the near-fraud. It's taking advantage of the promotion or service.

Similarly, stores like Costco often have free samples in hope of promoting the products and not feeding the hungry customers. However if I am hungry and just want some food without any intention of buying it, is helping myself to free samples near fraud ? How about going to some of the timeshares presentations with the intent of getting some cheap vacations or other perks without intending to buy anything no matter how persuasive it can be ? Like with MBNA case, I would be merely taking advantage of the offers although not following the orginal intention of the program.

I also think that opening and closing accounts ONCE for the sole purpose of obtaining bonuses is not committing fraud, but doing it every 3 months or more than once is close to it. That's like taking the multiple samples or the whole box when other customers want to try them.

Another interesting scenerio is returning something to buy it again because of a sale. I mean if a store has a 30-day return policy and they have a sale a week after you purchase the sale item, is it fraud to return it and buy it back again at the sale price ? I would say not... Now if you know that there is a sale and you are buying an item early because it may run out, you return and rebuy it when the sale is on, would it be fraud then ? Well, most stores have some sort of policy that if there is a sale they will pricematch and give you the price difference. They also either have to carry adequate stocks or offer rainchecks the prevent the latter scenerio. These policies would prevent the "abuse" even though the intent of the sale is not for customers to do the above but to promote additional purchases.


dolmar said:

MBNA considers people who use there bill pay just for the sole purpose to extend there grace period to be abusing there bill pay service. Poor choice of words I ment to say it would hard for MBNA to claim the person commited fraud. What I said it seems lots of posters come close to commiting fraud because they only consider a good deal if they can take advantage of a promotion with the orginal intent to make a company loose money. While this is near impossible to prove and I dont think any company or DA would even consider charging anyone who opens and closes accounts for sign up bonus to have commit fraud it really does come close to it.

As far as my store example. Lets say you own a small electronic store and you offer a 30 return policy. You go in every 28 days return it the item on 1 credit card and rebuy it on another credit card. So you dont ever have to pay for the item. If your orginal intent was do this from day 1 then it could be consider fraud. Not saying anyone going to arrest your or charge you with fraud. But your intend was to abuse and defraud the store from ever collecting the money for the item as you plan was to constantly float the item on your credit card. If the store asked you please not to come back because you abused there return policy why would you be shocked? Did you think that what there return policy was intended for? I dont think Best Buy or Staples or any retail stores says you cant do that but lets be honest do you think it right?

What is the differnce between doing that doing the same thing via bill pay system? No they did not write you cant do it. And they not going to arrest you for doing it. And no they wont charge you with fraud. But they might close your account. It commen sense.

Lately I have seen many people post "I open a new Scwab account ever 2-3 months for the bonus" or "I open a new Citibank PP Eliete every 2-3 months for the bonus and convert it to after I get the bonus to no annual fee version and get my annual fee refunded" Well I think that is coming pretty close to defrauding them. Your intend was to do something that if you told them upfront that you where going to do it you would not get the bonus. You got to admit they intended to cheat Citibank out of the extra points offered by the PP Elite over PP card. That as close as it gets to fraud. I have seen many people brag about doing this lately.

when people post "For all "good deals", there are inherent risks/cost involved; the better the deal, the higher the risks/cost. I spoke from experiences as well. "

Reason the person posted that was he know what he was doing was wrong. If it was not wrong why would there be an inherent risks? Just because the police dont arrest you because they cant prove a vitial part of fraud intent does mean you are not defrauding a company.

I'm sorry to hear about your account closing, but I did learn something. I didn't know that BillPay was not considered a cash advance so you don't get charged a percentage and start accruing interest immidiately. Now I know how to get a short-term interest free loan (until they cancel my account).

From their perspective, I can see how they would lose money on your account based on your "spending" pattern.

As usual, didYOUsearch is correct. OTOH, there's no "fraud" in using billpay to pay other credit cards, OTOH, MBNA is within their rights to close accounts where activity is consistently unprofitable. That's all that's going on here. Sure, the smarter move would have been to modify the feature to limit the exploitation that can occour within the TOS. But since when have CC companies consistently done the smart thing in such situations?

In light of these closures, the smart user would cut back on their float-extending billpay activities, and also intersperse them with fee-generating (for MBNA) purchases. MBNA CSRs have informally confirmed DYS's claim that this billpay feature will cease once the merger is complete. Given that pushing the envelope on this feature during the last couple months of that feature's existence will jeopardize the credit line's existence, the risk-reward ratio for doing this is poor, and the prudent FWFer would act accordingly.

I'm going to go against the grain here.

People who pay their bills on time and in full to credit card companies are generally unprofitable. For those using rewards cards, the cost of the rewards program plus the cost of servicing the card is approximately equal to the commission fees earned by the credit card company. Nevertheless, credit card companies will continue to service cards for those who pay their bills in full and on time. Why? Because the companies know that there some of these people who will run in to an emergency, overspend in one particular month in the future, or be forced to use a card when they would otherwise use cash. When that time comes for those people, they will carry a balance and the credit card company will collect on interest charges.

The same is true for MBNA bill pay, but without the rewards and without the merchant fees. One day someone in this thread will put a months worth of bills on their credit card and end up paying interest on that amount for a few years. MBNA knows this, and is betting on a certain percentage of people who will carry a balance. MBNA also knows that there are people who may never carry a balance, yet if they exclude those people from using the card, then they never get the opportunity to charge interest in the future when the balance cannot be paid.

In some respects MBNA Bill pay for other credit cards may even be more profitbale. I use AMEX, which gives me up to "5%" Cash Back. If I rack up 10K worth of charges, AMEX pays me $150. Then I use MBNA bill pay to get the float on the balance by paying off the 10K on AMEX. Then I lose my job, but find a lower paying one. Now I have a 10K balance on MBNA that I can't fully pay off. MBNA has "saved" the cost of the $100 or so in rewards they would have paid(but also has not gotten the merchant fees). Now, however, they have the prize 10k balance.

Bottom line is whether the interest payment experience is the same, better, or worse for bill pay customers versus credit card purchase only customers. My guess is that it is about the same. I think that MBNA will keep credit card billpay.

76hhma said:How about Charter One GCs, It started out as a nice way (OK, not a good deal) to get cash out of credit cards (with rebates) as hs originally stated. But people were ordering hundreds of $500 GCs and cashed them out like crazy. At some juncture, people were crossing the "line" due to greed and were "abusing" the feature. But not all of them (or us) were abusing this feature. Some still were prudent to draw the line for rationality. Sorry DYS for this OT example.

Yes I agree with you Maybe the problem is define abuse. I am not saying everyone on here does it. Just saying I dont really understand people who misuse a service or feature to a point where a company can consider abuse. Then get upset when the company closes out there account.

I dont think any credit card could consider charging and paying off your bill abusive. I charge over $60K a month on my credit cards and pay them in fell always. I have never had a card canceled me for it. Like wise people on here have played 0% balance transfer game with credit cards and have hard there account closes. Like the person who got free no fee BT promo with ATT Universal card which earned a $5 rebate per $1500 BT. I remember the person posted he keep BT $1500 and paying it off just to gain $5. Would that be fraud no but it would sure be abusing ATT Uninversal Card system. And If ATT canceled your account why would you be shocked. When people say they are exploting a loophole in MBNA bill pay that is basically saying they are abusing MBNA bill pay system. Maybe saying you are possible defraud MBNA was going to far but I was just trying to make a point. If you doing something that you consider a loophole chances are the company considers it abusive.

Can we stop talking about frauds here? There is no fraud from such activities, i.e., using MBNA Billpay. Is using Billpay and take the advantage of the extended grace period considered abusive? Nah! MBNA set up the rules and we follow the rules. There is no fraud, no abuse.

I can only think of 2 reasons why OP's accounts are closed.

1. The intent of OP's accounts are only to Billpay other CC accounts. He never charged his MBNA CCs and carry any balance. MBNA consider his accounts are non-profitable and thus closed them. No fraud here. Abuse? Hell no! OP only billpays $10K off his $60K credit line. That's 1/6 of his credit limit. Definitely no abuse here. MBNA closed the OP's accounts only because they are non-profitable.

2. MBNA does not feel comfortable continue to do business with OP coz he billpay $10K every month. $10K x 12 months = $120K annually. OP did not provide any proof of his annual income which is the way more than he billpays annually. As a result, MBNA closed his accounts. Fraud here? MBNA may think so but no way to prove it. Does MBNA have to prove it? No. They don't and they won't coz it costs them to prove any fraudulent activities. They can just close the account whenever they feel uncomfortable with.

It would be more useful to focus on precisely what usage patterns have caused account closings, rather then speculate about what MBNA wants, or debate the fine points of whether certain usage is "abusive."

Here's a specific question. How high has closing balance been on accounts that have been closed? If folks are carrying large balances into another billing cycle, that WILL get reviewed by someone. If it turns out those balances are all billpay, earning little or no revenue, it's easy to see how that account wouldn't look attractive.

I use billpay heavily, but always pay down the account to 0 on the closing date of the billing cycle. I've had several MBNA analysts tell me my usage pattern "looks wonderful." I don't know how much the former is connected to the latter, but if someone else is doing what I'm doing and has their account closed anyway, that'd be a good argument against this conjecture of mine...

Edit Should add I also make a number of charges on my MBNA cards, along with the heavy billpay usage.

DaveHanson said:Thanks for posting OP.

BlkSnday, thanks for your experience too. If you could provide more details (when they closed your accounts, whether you made any purchasers, etc.). that would be helpful too.

Any other information any of you could provide on similar situations would be most helpful. This is certainly a worrisome trend, effecting many FW readers, and any info on what's caused it thus far would be appreciated by many.

After the balance transfer promotion end, I paid off accounts and dont use the card for anything except generate multiple one time use numbers.
I think they mentioned something about they were trying to contact me on my home phone, but usually I dont answer home phone for too many telemarketing (even I registered do not call), and that's the main reason they cancelled my accounts.

76hhma said:Assume that there is $10K cc bills each month. At the exact due date of each bill, one pays it with MBNA BillPay... Thus all 10K is delayed by at least a month (MBNA grace period) thus the one-month interest for 10K.

One repeats the process each month continually for twelve months; thus it is just like $10K for twelve months (should be slightly more with the compounding). With a 4% annual interest, it is $400 annually.
While this strategy does result in the $400 savings in the above example, it assumes you have $10K in credit card bills each month. I don't know about you, but I can imagine saving a lot more than $400 by looking carefully at what exactly I was blowing $120K a year on in expenses .