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MoneyGram Shutdowns on the Horizon
3 Oct. 2019
MoneyGram Shutdowns on the Horizon

Shut (It) downs

This isn’t going to be a long post, but just a few words about some troubling trends.

There have been some reports over the last several weeks about occasional manufactured spending (MS) shutdowns linked to Moneygram.  I’ve been aware of shutdown scenario before it hit blog print, but initially chose not to write about it.  However, Moneygram shutdown reports are increasing, and that that is definitely troubling.  I don’t have hard data on shutdowns, but it’s definitely a snow ball that has gained in size, and it’s a little terrifying.

Bad Good News

Simon Mall’s recent decision to allow $1,000 personal Visa gift cards to be purchased (up to $25k daily) at its malls nationwide has been a boon for many people trying to accumulate rewards.  It’s reduced their cost likely by half and in the process doubled the liquidation amounts possible per visit (at Walmart).  In short, it’s created a much more efficient liquidation stream.  However, what the low volume or occasional MS’er might not be considering is that larger liquidation amounts ($3k+) come at a cost.

Money order purchases over $3,000 at Walmart will automatically trigger an MSAR (suspicious activity report).  When an MSAR happens, customers are prompted to enter their social security number into the pin pad and occupation is also captured shortly after.  In the beginning of the transaction, ID information is also captured, so Moneygram already has a wealth of information about you that they can track.  Although I know alot about Walmart’s Money Center, I don’t know where the MSAR reports go and how they are utilized.  However, you could think about it another way.  Picture someone who looks like they just held up a liquor store and wanted 15 money orders in exchange for $15,000 in cash.  They would almost certainly have an MSAR done on their transaction(s).  My point is that MSAR’s aren’t a positive step in the long term liquidation process.

When Walmart most recently changed its money order policies in October/November of 2018 and began collecting ID information for money orders over $1,000, the consequences of all of that information seems to be coming to a head, roughly a year after it was imposed. I hear people minimizing ID capture and MSAR’s at Walmart, but it’s having an effect.  Heck there are even legitimate reports of MSers being visited by police for manufactured spending.

Contrary to some rumors, it’s not just ‘heavy hitters’ that are being shutdown from Moneygram.  Worse yet there doesn’t seem to be a fully recognizable pattern to the shutdowns.  There’s been a few shutdowns in my local area too, and from those, my guess is that trouble might be occurring at least in part to multiple people doing more than $8k in money orders (MO) a day from the same address.  Currently Walmart and Moneygram allow a maximum of $8,000 in money orders a day.  Having multiple people do more than that amount could be a big red flag.  That’s just a guess based on the information that I know from those who have been shutdown, but it could also unfortunately be just a part of the pie.  I’d guess that those people typing in false social security numbers to try and minimize their detection and exposure could also be more likely to be on the chopping block.

Alternatives

If and when a manufactured spender is added to suspicious financial activity to one of the largest consumer financial processing companies in the world, it’s not a good thing, and those consequences appear to be ramping up right now.  Personally, Moneygram shutdown scares the hell out of me, but I’m not changing my liquidation approach.  Fortunately, only a portion of my liquidation is money order dependent right now, but who knows if that would hold long term.

For those living in areas that have money order liquidation options via Monogram and Western Union (WU), I would definitely favor WU and consider letting the Moneygram drama unfold before jumping into water that you don’t really know how deep it is.  Better yet, finding other liquidation methods that don’t involve money orders or other points schemes that can earn en masse would be even better paths than manufactured spending right now.  There’s also bill pay through Walmart, but if you’re not tuned into which banks allow what, that can easily lead to a bank shutdown.  However the masses will still gravitate to VGC liquidation via money order liquidation.  For those sticking with Moneygram only liquidation, I’d guess that MSing amounts of less than $3,000 at a time are much likely to lead to shutdown.  But we are in open, uncharted water right now.

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