Rabbonim, Lakewood Poskim, sign letter in response to practice of abusing promotional credit card offers.

Rabbonim, Roshei yeshiva and poskim in Lakewood signed a letter against the practice known as manufactured spending in order to take advantage of promotional offers from credit card companies. The scheme is designed to abuse promotional offers and earn enormous amounts of points from credit card companies. Read more about this on the Forums in Dans Deals. The signatures were only on the hebrew letter not the English one.                      Click on letter to expand

English translation

Text of English letter below




Letter of Explanation:

לכבוד מע"כ רבני ומנהיגי העיר שליט"א

The enclosed letter signed by numerous Roshei Yashiva, Poskim. and Dayanim is in response to the unfortunate development of the proliferation of chemes designed to abuse promotional offers‎ and earn enormous amounts of “points" (and selling those points for thousands of dollars) from credit card companies. It is particularly in response to thea actions of “businesses" that have developed to profit from these schemes on a large scale and have hereby greatly increased the perpetration of these schemes.

We learned that some of those involved in running these businesses are unaware of the problematic nature of their actions and therefore there is a need for some education. The definition of business is the exchange of goods (tangible or intangible) or services for their fair value. "Businesses" that merely find methods to extract money from another party without fair exchange are generally unethical. With that being said, promotional offers are given in order to gain potential customers who will ultimately earn the company more money than was lost on the promotion.

They take into account that there are real people who take from their precious time to open an account (and have to take time to close an account) and if they satisfy spending requirements then they are potentially good customers. Promotional offers are not meant for people signing up through these "businesses" designed to prey on loopholes, and certainly credit card companies and other businesses involved in these promotions are not interested in giving handouts.

In order to fulfill spending requirements, these businesses “manufacture spending”. One of the methods used, for example, is to order plane tickets and cruise tickets using their credit cards thereby acquiring the points. They subsequently cancel the tickets and cruises and have the money refunded to their cards. There are other methods of "manufactured spending" some of which involve the purchase of gift cards in order to gain points. There are other more "kosher" methods of generating spending that are used by these companies such as using retailers or wholesalers to make purchases on their cards and then reimburse them the money. These are just a sampling of methods employed.

Some of these methods have already been discovered by Amex and other companies and have been specifically disallowed. Other methods may have not yet been discovered or are too costly for the companies to guard against and there may also be tricks to get around company policy. However, all methods of manufactured spending are merely means of extracting promotional benefits for people for whom they were never intended and are abusive practices. This is even if private individuals do not apply for business cards when they either have no business or just create dummy companies, and it is even if income is not distorted. Unfortunately it appears that these things are being done also.

It is shocking that some of these "businesses" have the audacity to advertise in our local, and‎ even in some national. Jewish papers. Most people who see these advertisements for free money from credit card companies understand that there is some form of abuse going on and they may assume that these advertisers are Jewish. Therefore, besides the issue of unethical gains of money, there is a definite Chilul Hashem, and it is unfortunately on a large scale.

Even when not advertised, these types of unscrupulous actions are noticed. Recently, American Airlines canceled millions of miles of illegitimate points that were earned by booking refundable tickets and refunding them. We have copies of Texas court dockets of a gentile thief who was prosecuted by American Airlines for gift card fraud. The docket states that the defendant purchased and continues to purchase gift cards with fraudulent intent and therefore American Airlines has flagged these purchases in their system. They have (lagged over 3,000 of these purchases and the document states that "These gift card purchases are all recorded as being made by an individual or individuals in a certain town (yy raon) using names of the same heritage ..." It is not known whether these particular practices were associated with the current "businesses". However, what one can see is that unethical practices net notice