Every day, people from all over New York travel to the ATM at the East 22nd Street branch of KeyBank in Manhattan and wait more than two hours for their chance at the machine. Why? One reason is to avoid the fees they'd get hit with by withdrawing their unemployment benefits from many other banks' ATM. Unemployment benefits are distributed via KeyBank debit cards sent to residents; unfortunately, there are only two KeyBank branches in NYC and one of them is closed due to the pandemic. There are other fee-free options — including direct deposit or non-KeyBank ATMs with lower withdrawal limits — but apparently scores of people didn't read or understand the fine print, or the bank didn't clearly communicate. From the New York Post
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Some said they endured the line and rolled the dice on their health to avoid getting gouged with surcharges at out-of-network banks. Others said the KeyBank machine was the only one where they could get a daily maximum withdrawal of $1,500. And some simply didn’t know that the bank was part of a network of 1,000 ATMs — because neither the state nor the bank told them when they sent the “Key2Benefits” cards.
“It’s crazy, but we have to do it,” said May Adams, 73, who withdrew $500 for rent. She walked across town to the East 22nd Street branch from her home in Chelsea.
Eric Kwan, 40, a former Food Network “Chopped” champion who is now out of work, said he biked from Chinatown to save $3[...]
A new proprietary online payment system for WhatsApp, Instagram, and Facebook launches today, exactly two weeks after all the payment companies dropped out of Libra. Read the rest
Ten years ago, Chase was forced to withdraw the binding arbitration clauses in its credit card agreements as part of a settlement in a class-action suit (the company was accused of conspiring with other banks to force all credit-card customers to accept binding arbitration) (one of the things binding arbitration does is deprive you of your right to join class-action suits!). Last May, the company stealthily reintroduced the clauses, and gave customers until August 7 to notify the company in writing if they do not agree to binding arbitration. You have ONE MONTH LEFT to opt out.
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Every Monday, some poor "brand ambassador" at Chase has to post a "Monday motivation" tweet aimed at convincing people that one of America's largest, most rapacious banks is actually a cuddly, responsible business whose $12 billion bailout from Uncle Sam was perfectly justifiable and sure to be put to excellent use.
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The US credit card industry was a very late adopter of security chips, lagging the EU by a decade or so; when they did roll out chips, it was a shambolic affair, with many payment terminals still not using the chips, and almost no terminals requiring a PIN (and some require a PIN and a signature, giving rise to the curiously American security protocol of chip-and-PIN-and-swipe-and-sign).
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Consumer Reports is arguably America's most trusted source of product reviews -- published by Consumers Union, a venerable nonprofit with a deserved reputation for scrupulous care and neutrality -- and for years it has been wrestling with how to address privacy and cybersecurity in modern products (disclosure: I have advised them some on this).
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Gary Cohn is Trump's chief economic advisor. He's a former Goldman-Sachs banker with a net worth of more than $250,000,000. In his latest appearance, the quarter-billionaire explained to the press that Trump's tax-plan (which will transfer billions to the wealthiest 1%, e.g., Gary Cohn) will save two-child families earning $100,000/year about $1,000 and that they can use this money to buy "a new car." Read the rest
A prepaid debit card company's lobbying efforts in Washington are paying off. Congressional Republicans are seeking to repeal limits to the amount banks can charge customers in overdraft fees. The company is Total System Services, and it stands to make tens of millions of dollars when the GOP starts letting it charge exorbitant overdraft fees. And Total System Services only had to spend $270,000 to make the GOP do its bidding. What a great investment!
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Last week, Georgia Republican Sen. David Perdue introduced a resolution in Congress, alongside other Republicans including his fellow Georgian Johnny Isakson, to throw out a new package of rules for the prepaid debit card industry.
The rules, finalized by the Consumer Financial Protection Bureau in October, include limitations on overdraft fees, which have become a significant source of consumer complaints about the financial industry — and an important revenue stream for Georgia-based financial firm Total System Services, whose NetSpend unit is the country’s largest manager of prepaid cards, according to a 2015 financial filing.
The vast majority of prepaid debit cards don’t come with overdraft fees, but NetSpend’s do, and the fees accounted for 10-12% of its overall revenue in 2016, or $80-85 million, the company told investors in October. Its parent has spent big on lobbying and political donations in a bid to kill the rules: in the last three months of 2016 alone, it spent some $270,000 lobbying Congress.
The company’s political action committee has also given its home-state senators Perdue and Isakson $37,500 in campaign contributions since 2010, according to data from the Center for Responsive Politics.
In Does The Online Card Payment Landscape Unwittingly Facilitate Fraud?, a new paper in IEEE Security & Privacy, researchers from the University of Newcastle demonstrate a technique for guessing secruity details for credit-card numbers in six seconds -- attackers spread their guesses out across many websites at once, so no website gets enough bad guesses to lock the card or trigger a fraud detection system. Read the rest
Cybersecurity firm Symantec said today a second hacking group has been trying to rob banks with phony SWIFT messages. That same method nabbed $81 million in a high-profile attack on the central bank of Bangladesh earlier this year.
Jim Finkle at Reuters reports:
Symantec said that a group dubbed Odinaff has infected 10 to 20 organizations with malware that can be used to hide fraudulent transfer requests made over SWIFT, the messaging system that is a lynchpin of the global financial system.
Symantec's research provided new insight into ongoing hacking that has previously been disclosed by SWIFT. SWIFT Chief Executive Gottfried Leibbrandt last month told customers about three hacks and warned that cyber attacks on banks are poised to rise.
SWIFT and Symantec have not identified specific victims beyond Bangladesh Bank. Symantec said that most Odinaff attacks occurred in the United States, Hong Kong, Australia, the United Kingdom and Ukraine.
Symantec promises to share technical information about Odinaff with banks, governments and other security firms involved in the SWIFT system. Read the rest
A "death put" on a certificate of deposit means that the bond matures immediately upon the bearer's death, rather than when its term runs out: they're used as a form of life-insurance, cushioning the blow to loved ones from unexpected death, and they can be held jointly, so that the bearer's heirs and a third party get a payoff on death. Read the rest
The economic orthodoxy of austerity means that governments facing recession can't just spend their way out of it by creating New Deal-like stimulus that gets the economy moving again: instead, they handed trillions to banks and then watched in dismay as the banks failed to lend any of that out to small businesses and entrepreneurs. Read the rest
Hardware hacker/security researcher Samy Kamkar is legendary for his legion of playful, ha-ha-only-serious gadgets that show how terrible information security is, and now he's turned his attention to the American Express company, which turns out to be a goddamned train-wreck. Read the rest
Over the holiday weekend, The Detroit News published a remarkable analysis of what happened in Detroit's foreclosure meltdown. One block on Greensboro Street saw 33 of 38 homes go into mortgage or tax foreclosure in the last ten years. Read the rest
Why isn't our currency this gorgeous now?
Matt Taibbi is touring the States with his new book, The Divide, which is on my must-read list right after I finish Capital in the 21st Century. Rick Kleffel caught up with him for his San Francisco NPR show and posted the interview, along with his notes (which includes links to his previous interviews with Taibbi).
Taibbi was, until recently, the best reason to read Rolling Stone: a finance writer for the 99%, whose incandescent and meticulous columns were terrifying and enraging by turns.
05-12-14: A 2014 Interview with Matt Taibbi
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JWZ's law states that "Every program attempts to expand until it can read mail." A corollary is that every complex system expands until it becomes a bank. Yesterday, I wrote about how a chatbot for organizing coffee orders became a full-fledged bank.
Now, here's a 4chan post explaining a dumb/clever way of using Gamestop stores as fee-free banking institutions by pre-ordering (and pre-paying) for games, then cancelling your orders and getting a refund (to make a withdrawal), and ordering new games (to make a deposit). It's fee-free, and as a pre-orderer, you get all the bonus stuff (your bank pays you!).
This is probably more of a reflection of the total dysfunction of banking, where low interest rates and hidden inflation, as well as high fees, conspire to bleed out savers to pay for reckless speculation, but it's still a pretty clever way of getting fee-free banking from an institution with more branches, and better hours, than many banks. Read the rest