I started an AOR/BT around the 4th of July. Since then, I have deposited (via checks and BT to credit card/cash advance) around $100k in a USAA Performance First Index account. My accounts are currently frozen (credit card and Performance first with USAA) and I am being investigated for kiting. USAA has requested that I provide the account numbers and contact numbers for the banks from which the transaction originated. They suspect that I am kiting while using 0% offers from other banks (which doesn't make much sense to me). What should I do? I'm concerned that if I provide the account information requested that USAA will negatively impact my relationship with the other creditors. I'm also concerned that USAA may hold the money indefinitely (or at least for the foreseeable future) while this gets resolved.
Has anyone encountered a similar situation? Any advice would be greatly appreciated.
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DO NOT use USAA credit cards to 'cash out' balance transfers. Cash advance /*first*/, then balance transfer to cover the debt seems OK. For now.
[Mod Edit: Inappropriate content edited out.]
Message edited by: VBMcGB on 2007-08-05 17:27:17 CDT
LESSONS LEARNED: 1. Always have a backup in case something goes wrong (do not send your funds to only 1 funding source). Luckily, I sent one BT to another bank account from which I have been drawing to make payments. 2. Do NOT create negative balances on USAA cards. 3. DO NOT CREATE NEGATIVE BALANCES ON USAA CARDS. 4. DO NOT...you get the point 5. Do not hide anything if you are being investigated. There is nothing illegal about the BT/AOR game. If a bank doesn't want this kind of activity, then take your business elsewhere. 6. Using a bank you trust might not be a bad idea. I chose USAA (even though they offered much lower rates) because I have had a long and productive financial relationship with them. Although the entire process was stressful and unnerving, I don't know if I would have achieved such a successful resolution elsewhere. 7. Don't get too greedy. This is tied to the idea of not creating negative balances. Taking a cash advance before the BT hit the account would have diminished my overall returns (ever so slightly), but would have likely saved me a significant amount of trouble. Remember, the BT/AOR game is about achieving interest income with little to no risk and trouble.
Message edited by: abracadabra11 on 2007-09-26 08:58:14 CDT
Kiting while using 0% offers? How exactly do they mean? From what I understand kiting was the old practice of writing checks for amounts you don't have, and then taking advantage of "float" to deposit the funds later. If you are having BT funds sent to them, how is that kiting?
Xenius said:Kiting while using 0% offers? How exactly do they mean? From what I understand kiting was the old practice of writing checks for amounts you don't have, and then taking advantage of "float" to deposit the funds later. If you are having BT funds sent to them, how is that kiting? According to what I've read, you are exactly correct about kiting. So, the two are complete separate practices. Kiting being illegal and credit card arbitrage not.
Exactly, kiting does not apply to your situation. If you took the 0% money and deposited it into this account, and everything cleared fine, I'm not sure what the problem is. I would call USAA and scream until you get a supervisor to clear this up, as thier reason is not valid at all. If that doesn't work, then give them one bank to call and verify the funds from BT are ok. Don't give them all the contact info unless you absolutely have to. Know any good lawyers?
Are "we" perhaps reading into this a little bit? Did a bank rep. actually use the work "kiting"?
Chances are more likely that you made a large deposit, and USAA is asking for proof that you are the owner of the other account. FNBO did this to me one. You fax them a copy of your statement, problem solved.
Why not ask USAA exactly what they mean by kiting?
If they think you are making short-term BTs from one card to another to hide debt, you can simply present some documentation that you have 0% 12-month offer, and find one CC that you BT money out of that is willing to say that it is OK from them if you use the BT proceeds in a checking / savings account.
The first time I ever BT-ed money out of BoFA was at the suggestion of the rep. When I told them I don't need the money, because I earn enough to cover my ongoing expenses, he said - do you have other projects, like a new car you want to buy, or a vacation you want to take, or an investment idea, like stock market. I said yes, to which he said that he will transfer my money directly into my brokerage account.
I read the USAA thread and it looks like the transfer might have been CC-to-CC, creating a negative balance, so my suggestion might not work. Sorry.
ChumChurum said:Why not ask USAA exactly what they mean by kiting?
If they think you are making short-term BTs from one card to another to hide debt, you can simply present some documentation that you have 0% 12-month offer, and find one CC that you BT money out of that is willing to say that it is OK from them if you use the BT proceeds in a checking / savings account.
The first time I ever BT-ed money out of BoFA was at the suggestion of the rep. When I told them I don't need the money, because I earn enough to cover my ongoing expenses, he said - do you have other projects, like a new car you want to buy, or a vacation you want to take, or an investment idea, like stock market. I said yes, to which he said that he will transfer my money directly into my brokerage account.Gotta love those BOA reps, they sure do like to shovel the BT $ out right to any account you want I managed to get an uncapped 3% BT fee waived before I did the BT with thier business card last night. They are only too willing to help.
OP, it seems that USAA is no longer credit-balance friendly. For others looking to launder BTs using USAA credit cards, be sure to ask for a cash advance BEFORE the BT hits.
I'd be willing to bet this was the biggest factor that initiated their investigation.
OP, it seems that USAA is no longer credit-balance friendly. For others looking to launder BTs using USAA credit cards, be sure to ask for a cash advance BEFORE the BT hits.
I'd be willing to bet this was the biggest factor that initiated their investigation.yep thats it.
OP, you should know from reading FW that USAA was involved with a massive fraud concerning the VA about a year ago and became very unfriendly to the games played in this forum. If the funds are already in the index account, earning interest, you should be fine whether they have placed a hold or frozen them or not. Youll still earn interest.
No, the lesson is that issuers don't like credit balances. Credit cards were meant to be debit, then payment, not vice versa. It really is as simple as that.
With regard to kiting I'm not sure that the people at USAA know what that means. I have overdraft protection that charges my credit card for a CA if I am NSF in checking. I wanted to know if they'd get upset if I exceeded my credit limit in a cycle, so the example I used was 'write a check for the credit limit on the card. Pay it off with cleared funds, then write another check' would I get in trouble. The answer that I got back was that I would be 'kiting checks'. Hogwash, I had the funds to cover the first check. Just because I draw on a LOC to cover doesn't make it kiting. Anyway, I just decided to stick with my credit limit as a max for each cycle.
VerbalK said:Are "we" perhaps reading into this a little bit? Did a bank rep. actually use the work "kiting"?
Chances are more likely that you made a large deposit, and USAA is asking for proof that you are the owner of the other account. FNBO did this to me one. You fax them a copy of your statement, problem solved. We are not reading too much into it. I was specifically accused of kiting by the individual in charge of the investigation. I had to have the term explained to me since I had not heard it before then.
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I managed to get an uncapped 3% BT fee waived before I did the BT with thier business card last night. They are only too willing to help. 
