The freshly minted Sacagawea Coins depicting the famous Shoshone Indian guide are the basis for the newest scam surfacing in the credit card industry. Known for her bravery and local knowledge, the Shoshone native assisted Lewis and Clark on their famous expedition west in 1804. In 2000 Sacagawea was making another historic venture with her features minted onto the US Dollar coin.
At the heart of the scam is the Sacagawea coins were being purchased for the soul purpose of trying to gain miles rewards fraudulently. Each time a purchase is made with a card, the cardholder receives a point, or points, which could be used to get air miles or redeemed points for other gifts or rewards from the lending company. Reward systems for card use are popular and each card has a different package.
How They Found Out
The mint was notified that approximately 75 cardholders were identified as having suspicious actions which included fraudulently using the cards for the sole purpose of racking up points. It came to their attention in June 2008 when the mint authorized the purchase of specialty coins. Buyers were allowed to purchase $500 in one-dollar coins which show cased US presidents. Stamped coins with Washington, Johnson, Adams, Jefferson, Madison and Jackson were available and the mint offered the opportunity to the public to buy them.
Also the Sacagawea coin was made available and included free shipping. Enterprising consumers soon figured out that they could order coins, rack up points and then use the coins to pay off their bills and still get the points.
The introduction of the $1 coin was to make the coin readily available and put into circulation at and ultimately be more economical. The mint offered the direct and free shipping option on the Sacagawea coin in hopes that it would boost circulation. Unfortunately, the Native American mintage was the basis for fraud.
Free Air Miles
Card fraudsters and mile mongers ordered more than $1 million in coins which were immediately deposited into bank accounts to pay off the card and get miles. The mint became wise to the ‘goings on’, identified the abusers and cut them off.
Coins were available in boxes of 250 and were delivered free of charge to the buyer via UPS. Scott McCartney at online.wsj.com identified one woman who ordered $10,000 in coins that she promptly took to the bank. The reason; to earn 10,000 miles for free travel or upgrade travel. A software-company consultant ordered 15,000 coins and had the UPS delivery man put them directly into the trunk of his car to take to the bank. He didn’t even open the box.
On FlyerTalk.com, an online group for frequent travelers exchange ideas, one FlyerTalker boasts about having bought $800,000 worth of coins. As added proof he posted pictures of the freshly rolled and sealed money. To not make things too obvious he used several banks and cards to distribute the money. The reason; to boost his status on his American Airlines account to give him a lifetime of platinum-elite status and other perks.
The mint estimates its cost to ship a 250 coin box at approximately $3. If you ordered $10,000 worth of coins that is equal to 40 boxes or approximately $120 in shipping.
The jig was up when the mint started receiving calls from area banks identifying that coins were being deposited into the bank without ever being opened. To help prevent further fraudulent activity the mint has added a note to their site to purchasers that buying coins is a cash-equivalent transaction and is not eligible for miles rewards.
Signatures don’t matchAccording to the report, the sales clerk gave her a hard time because the signature didn’t match the name on the card. Spears apparently talked the clerk into accepting the transaction anyway, saying that since the bodyguard was an employee of her company it was OK.