December 09, 2009
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Mint Coin Offer Goes Sour, Pt.2
Not the right thing to do.The U.S. Mint received over 40,000 direct shipment orders since the program began in 2008. Of that, the Mint estimates that less than one percent of those orders came from credit card customers involved in the miles reward scheme. One credit card customer said it was the easiest way he ever earned reward miles. He placed his order and no questions asked received his coins. Another individual on the “chasethemiles” online forum stated that the coin deal was a deal that came along “once in a great while.” The Mint sent letters to approximately 75 cardholders who made the largest purchases on their credit cards and asked them for an explanation as to their intentions for the large purchase. The Mint said that a few of the card holders that received the letters had very good explanations for their large purchases; however nearly 20 letter recipients have responded to the Mint who did not have a legitimate reason for the large purchase. Those individuals have been barred from any further purchasing.
The scheme was cleverly devised to scam the credit card companies; however, the real losers are the banks that purchase the reward miles points from airlines to offer as card rewards as an incentive for using their branded card. Bank of America, one of the nation's largest credit card companies said they had become aware of the scam and was in the process of investigating when the story was plastered all over the internet.
Tom Jurkowsky, a spokesman for the U.S. Mint said that no laws were broken; however, the scam was “not the right thing to do” and it was never the intention of the government to have the program involved with reward miles. Credit card holders will be prevented from scamming the banks in the future. The Mint has devised a plan to fix the problem. According to Jurkowsky, all future card purchases will be processed as a cash sale. Lenders do not reward miles for cash advance transactions.