March 3, 2006

Whatever you do, don't pay your bill.

Because if you decide to one day pay off a credit card, well, that might bring down the DHS on your ass. Welcome to our safer society. Fuck you, Mr. President.

Posted by jbz at March 3, 2006 1:17 AM | TrackBack


I took a quick look at some of the applicable laws (the Bank Secrecy Act and the Right to Financial Privacy Act of 1978), in an effort to understand what happened here. I think that the man in the article was misinformed by JC Penney's call center (shocking, I know).

What I think actually happened is that JC Penney was required to file a "Suspicious Activity Report (SAR)" with the Financial Crimes Enforcement Network (part of Treasury Dep't) because the transaction was in excess of $5,000 and constituted what JC Penney has determined is "suspicious." The SAR requirement has been around since long before 9/11 -- most people are familiar with the myth that you should do transactions in amounts of "$9,999.99" to avoid triggering some reporting requirement -- but in reality any transaction that "appears suspicious" triggers the requirement, so if you ask for 2 money orders of $9999 each, you are just as likely to get reported as if you ask for one for $20,000.

Further, just because they filed a SAR, there is no requirement that they actually had to delay any aspect of the transaction -- but why would they want to hurry to apply a payment while the principal is still generating interest for them?

This is likely an IT issue (as, increasingly, all things are). Someone making a sudden payment well beyond their monthly minimum probably gets "flagged" by the JC Penney computer for all kinds of reasons relating to marketing (i.e., "quick, raise their credit limit before they cancel the card!" or "send them coupons so they run up a new balance!" etc. etc.) When the legal compliance squad told the IT systems designers that "oh, by the way, we need flag "suspicious transactions", they probably got a list of "criteria" that already existed for testing (i.e., late payments trigger X, Y, and Z; bankruptcy filing trigger Q & R etc. etc.) and, since legal compliance is always an afterthought in IT system design (if a thought at all), they were told to pick from the pre-existing criteria -- so the "definition" of "suspicious" in the JC Penney computer was actually written by the marketing department as an indication that the person is about to cancel their credit card.

Yes, I'm speculating, but that is my educated guess, (based on the laws I glanced at) of what happened.

Posted by: Tobias at March 3, 2006 2:49 PM
Post a comment

Remember personal info?