Wells Fargo Shut Me Down!

Well, it was bound to happen. The ride lasted longer than it would have with most banks. But sure, this is only my second bank shut down.

Let me explain. As readers here may know, I travel for free, or nearly free through the accumulation of airline miles and points. What improves this is points and miles are not taxable. So it can be quite enticing and addictive to amass points and miles to take exotic trips.

If you read my series starting here:

https://www.kirkstravelstories.com/post/how-i-travel-for-free-or-nearly-free

You know that part of my strategy involves manufactured spending (MS). This involves buying Visa or Mastercard gift cards at merchants to accumulate credit card points for travel. Then I purchase money orders with these cards because they are actually debit cards. I then deposit the money orders in my bank account to use to pay off the credit cards.

This allows me to accumulate miles and points without really spending any money. It is perfectly legal. It's really up to the credit card companies if they want to award miles and points for this. Some companies, like American Express, are more strict at denying points than most.

Anyway, the pattern of depositing high volumes of money orders mirrors the activity of money laundering. Criminals look to take illegal monies they receive and deposit it in their bank accounts using similar methods. Although MS is legal, it can give the appearance of impropriety.

For that reason many banks will terminate their relationship with you if you do this at significant volume. I apparently reached the risk threshold with Wells Fargo after several years of leniency. I received a letter in the mail informing me that in two months they were shutting down all my accounts, including my CD and credit card.

I was actually grateful they gave me two months to get things in order. The only other time this happened I was given only a few weeks.

Oh well, I read somewhere on a blog that if you do not occasionally get shut down by banks for MSing, then you aren't doing enough of it. I understand the advice, but it still never feels good to be shutdown.

I noticed my credit score drop by about 30 points as well, bringing me right at 800. Still a great credit score, but 30 points is a significant drop. I haven't researched if that was the reason for the decline yet or not, but it is suspicious.

This will likely cause me to slow my activity for awhile, but I really wanted to slow it anyway. This game can be quite addictive as I have become accustomed to flying in first class or business class, and getting all those hotel perks including free room upgrades to suites. But currently I have huge balances in many airline and hotel programs and the balance is growing. I expect my travel will slow over the coming years so there is no need to continue at current volumes.