How to Not Get Caught Manufactured Spending

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DCTA had a great post today on how he was caught manufactured spending. As he mentioned, he was using PayTM to earn some points on his credit. PayTM is an app that allows you to pay bills such as tax, tuition, and rent with your credit card. They currently have a promotion where there are no processing fees, which means free miles. Downloadable on iOS and Android, you can get a $10 credit using promo code PTM9462620 when signing up and paying your first bill of more than $25.

Manufactured Spending - PayTM

Manufactured Spending – PayTM

I’ve used this to meet the steep minimum spend on the American Express Business Platinum Card as well as the Starwood Personal American Express which has an improved offer. Few opportunities let you use your AMEX, so it’s a great way to clear the minimum spend on those.

Additional Reading: SPG AMEX Increased Signup Bonus!

With Manufactured Spend, getting “caught” isn’t the right term. Rather, there are many obstacles you may come across in your journey. Here are some of my thoughts – and how to not get caught.

Volume is a Spectrum

One of the most important things is thinking outside the box. That’s how most MS opportunities arise. But one thing that people might not think about is that you’re not the only one. You should consider how many others are doing this. What volumes they are doing? Is that higher or lower than what you’re doing? The more volume you’re doing, the more likely the card companies and other parties involved will notice.

Volume is relative. For example, with face value Mint coins from last year, some readers I’ve talked with did $3000 a month. In reality, I thought doing $20,000 in a week was a fair amount. This was the same thing with the AC Conversion Card. The average person might have done $10,000-20,000 a month. However, I know friends who were doing $10,000-$15,000 with 8 cards going at once. That’s 400,000 points a month.

Additional Reading: MS with the Mint

You want to think a step ahead and picture what everyone else in the community is doing. If you know people are doing 10x the volume you are, then they will be drawing attention, not you. Until the opportunity is completely shut down, it’s likely that the person with huge amounts of MS would be “caught” before you would be.

Risk and Reward

With Manufactured Spending, there can potentially be a lot of money you might have to float. You need to be prepared. For example, if you send a lot of money through to a university you haven’t attended for a long time, that probably will be a problem. It wouldn’t be as easily explainable as your income or property tax bill, where there are many examples of people overpaying taxes not for MS reasons. On the other hand, while the relevant government agencies don’t really care about this behaviour, the bureaucracy means that getting your money back will take longer. All options have both benefits and downsides. It’s a fine balance between getting more points without doing so much that the opportunity gets shut down. That’s with all glitches and mistakes. The more people who know about it, the quicker the offer will expire.

Manufactured Spending - No Description Needed

Manufactured Spending – No Description Needed

Have Your Ducks in A Row

As customers, (theoretically) everyone wants you to be happy. That’s until you’re doing things that make them unhappy. Normally, most companies (e.g. a higher-level institution) is happy to take your money even if you had nothing to do with them ever before. But as soon as you put in tens of thousands of dollars while requesting a refund every $5,000, that wastes their time, and people will be annoyed. Generally, different parties need to hear different versions of the story.

  • The credit card issuer you’re earning the points from: “I’m just buying a lot of [X]! I love your card and I love your rewards!”
  • The company which allows you to use your card to earn points: “I have a lot of [Y] I need to do and your product is fantastic for my needs.”
  • The party you’re getting the funds back from: “Yeah, I just have a lot of [Z] going on and I forgot something/clicked incorrectly/etc.”

Replace X, Y, and Z with whatever the particular situation entails, and this will help you out of a lot of potentially bad spots. This is especially if what you’re saying is true. Remember, there are plenty of (small) businesses that legitimately transact millions of dollars. I’ve told many people that I’m a personal finance and travel blogger, and the things I’m doing are for my travel and for business purposes.

You wouldn’t believe how many people just go “oh, cool! I wish I had your job.” Otherwise, stumbling awkwardly trying to explain yourself is not a good idea. Now, if they can pin down exactly what you’re doing, be as honest as you can. Don’t lie. I think getting caught is not the problem, but It’s knowing what to do when it happens so you can explain the situation.

Details on PayTM

Once you’ve signed up on the app, you are able to pay a bill up to $1500, per day, per account. They are currently waiving 2-3% regular processing fee. It’s worth mentioning that the name on the bill also does not need to match the name on the account, so this presents an opportunity to double or triple the amount you can spend if you have friends and/or family members. This is one of the best Manufactured Spending opportunities available. Few MS opportunities allow you to use American Express, so I would strongly recommend using this to meet the minimum spends on those AMEX cards:

If you total that all up, you need to meet $16,000 in minimum spend (although you do get a tremendous amount of points). With PayTM, you can get that done in less than 2 weeks. If you have two accounts, only 6 days! There are many payees that allow you to overpay whatever bill you have, and then to have the excess refunded via check. If you need assistance, feel free to reach out and there’s more I can explain privately.

See DCTA’s Post on how he got caught manufactured spending.

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  1. I’d definitely like to try this while PayTM is still fee-free. I’m a bit nervous in case one biller decides to not refund you but rather keep the payment as a large credit on your account instead. Can they do that or are they legally required to refund you? Or concerned that the refund takes many months, though having some savings set aside would help with this.

    • They might insist that you ask your bank to recall the payments rather than process the refund themselves. Then you’d have to go through Paytm.

      • It really depends how you talk to them about it. What if you can’t reverse the payment? They can’t legally hold the money if you “can’t” recall it on your end. In any case, that’s why I find taxes easiest. I know with a certainty that I (eventually) will get my money back.

    • I wouldn’t dream of sending funds to a company and expecting a refund. Even sending funds to CRA incurs its own risks, particularly if you get audited for other reasons, or if you have business income that gets questioned. As the author says, MS has its risks and rewards.

    • The large financial institutions are the real parasites. They’ve committed many heinous crimes, which hurt and destroy many ordinary citizens lives both directly and indirectly in society. And don’t forget the reason why they offer the welcome bonuses, that being to parasitically entice people into debt slavery.

      I’ll gladly exploit the opportunity to travel for free from the points (crumbs to them) that the parasitic banks dole out.

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