My Amazon Payments Account Has Been Shut Down…
Amazon Payments Account Shut Down
After using Amazon Payments to “spend” $1,000 a month for the last 2+ years, it seems like the jig is finally up for one of my accounts.
Last week, as I have done for the last 12 months, I set into motion my normal Amazon Payments chain where I send $1,000 to my brother, my brother sends $1,000 to my cousin, and my cousin sends $1,000 back to me.
To maximize Amazon Payments,  I have also created accounts for my parents. I would love to use their accounts in our triangle but you can’t withdraw money to a bank account that isn’t associated with the Amazon Payments user. In other words, I can’t have someone send money to my parents account and then withdraw that money to my personal bank account, as the money would have to be withdrawn to my parent’s bank account.
To get around this, I typically only use my parents Amazon accounts to send money to my friends who then either use Venmo or Chase Quick Pay to send the money back to my bank account.
In total, these 2 strategies allow me to spend around $4,000 a month for free!
The Mistake I Made
This past month, to complete my brother’s $1,000 minimum spend on the his Alaska Card (which would get him a $100 statement credit. Direct link to offer is here), I used my dad’s Amazon Account and added my brother’s Alaska Card under my dad’s name.
Typically, the payments go thru instantly but this time it kept saying “pending” which was weird.
At first I thought maybe Bank of America had flagged the purchase as fraud because it was a fairly large purchase but in 24 hours I got an email from Amazon Payments saying the following…
Honestly I am not surprised that this happened because it costs Amazon quite a lot of money to eat the credit card transaction fees and I literally know no one who uses Amazon Payments for anything but manufactured spend…
Google Wallet last year offered free credit card processing and I got $500 through before Google promptly stopped offering that feature for free after 3 days. Amazon has been offering this for at least 2+ years now, maybe even longer….
The Fatal Flaw
Anyways after doing some research, I think I figured out why my dad’s account was shut down.
Via this post on Dan’s Deals, not surprisingly Amazon more than likely tracks IP addresses. I manage all my family’s accounts, so when I run my manufactured spend cycle every month, it is all done in rapid succession and all from my laptop.
More than likely, Amazon has some automated flagging algorithm that looks for transactions between different accounts that are coming from the same IP.
While you could certainly use TOR or another proxy to mask your IP, the issue is that if your computer’s IP shows up on Amazon coming in from another country, then they really might get suspicious and think you are using Amazon Payments to internationally money launder…
Since my brother’s Alaska transaction didn’t go through, against the potential risk of getting his Amazon Payments account shut down, we again tried to use his Alaska card but this time we used his account to send me $1,000 (broken into 2 odd payments). This time, both transactions went through instantly without issues, even though it was the same card that got flagged last time…
Going Forward
The best suggestion and what I plan on doing going forward, is to designate each Amazon Payment account to a single computer, tablet, or phone.
So I only access my Amazon Payment account from my computer, my mom’s account from my iPad, and make my brother use his account from his own computer.
Additionally, I suggest using odd transaction accounts like 2 payments of $544.45 and $455.55 or even one payment of $890.34. While it is great to manufacture $1,000 a month in fake spend, it might be better to only do something like $965 and fly under the radar. Your mileage may vary…
This “new system” I’m going to use certainly isn’t foolproof and Amazon could catch on pretty easily but I figure I might as well attempt to continue to generate around 1,000 points a month for free until free credit card processing on Amazon Payments is shut down for good.
Recap
Like with all manufactured spend techniques, it is all really just a game of musical chairs.
You keep playing knowing that the music might stop at any time…
While it sucks that my dad’s account was closed, I still have 3 other accounts so I am not too worried.
Going forward I will make sure to try and “fly under the radar” and not use the same Amazon Payment accounts connected to the same computers.
-Parag
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Interesting read. I’m really surprised that anyone like Amazon, Bluebird, etc. continues to allow these transactions for amounts over maybe a couple hundred dollars. It really opens them up to money laundry issues, cost incurred from credit card transactions, etc.
Thanks for the informative post.
That is why they limit it to $1k a month but yeah I dunno why they still allow it…
Wouldn’t the IP address be the same if you use the same wifi router despite the devices (computer, tablet, phone)?
Indeed they would unless, the phone and tablet have separate data plans from the computer or he has some other tool he didn’t mention. I guess he could also take them and connect to wifi in a starbucks or something like that, but then you are likely on an unsecured network.
Yes but I have data plans for my phone and iPad but good point.
The IP address will be the same for any device going through your router. You can VPN or proxy via a USA server, so consider that for future payments.
Good advice!
As SL mentioned, you have to be careful what’s considered the same IP. If you have a modem cable at home with a WiFi router, all devices connected to that router will externally be considered to be coming from the same IP. In your house the devices all have obviously different IPs, but to the outside world they’re coming from the same location.
Now if you were to use your phone and disconnect from your WiFi so that it’s using the cellular network then that would get routed through a different network so you should be good there.
You people ever think about getting a job?
@voice of reason – Ironic because you are probably reading this from your job right now…
Best.Comeback.Ever!
Doing the things you have described is blatantly illegal. Fraud. Breach of Contract. Etc.
And the end result of it: honest frequent travelers like me get screwed. When airlines have tens of billions of miles issued and outstanding every year (and now, far less than half of those miles come from actual butt-in-seat activity), airlines raise the price of awards to reduce the number of floating miles. So for those of us who get our miles through flying and legitimate credit card purchases (read: not manufactured spend), we get screwed because of dishonest people like you.
Frankly, I hope that Amazon catches you every time. And I hope that they refer you to the Department of Justice for wire fraud prosecution.
This isn’t fraud. Do you realize how little money $4k is? And how little impact 4k miles has on the “billions” of miles outstanding? If the DOJ didn’t care about HSBC laundering billions for Iran, drug cartels and terrorist, why would anyone care about 1 amazon account.
What is the difference between a “legitimate” and “illegitimate” credit card purchase?
@Neal – Are you flying just to earn the miles, or are you flying to get somewhere (and the miles just being a cherry on the top)? I am assuming it’s the latter. If you are flying just to earn miles, then I can only sympathize with you. If it is indeed the latter reason, then the amount of miles you would earn should not come in the way of your decision to fly. It could affect the decision of the carrier, but not the decision to fly or not. Even if all airlines were to award you zero miles for their flight, you would still have to fly.
Secondly, if the number of people flying a day theoretically increased 10 times tonight, would you still crib due to all those additional miles ‘outstanding’ in the system, even though everybody else got their miles the same way as you? No, right.
So, if I read it right, you fly because you want to get somewhere and flying is the best way to get there. You don’t really care about the outstanding miles in the system. What you are really mad about is that people are earning miles in a different (and probably easier) way than you are. Instead of venting, why not join the group?
I suspect it was a card being used on multiple accounts or something that caused this.
I send my wife $1000 for rent every month. She drains it to her bank account. We live at the same address, with the same IP, and use the same computers. Perfectly legitimate use of Amazon Payments.
I’ve been doing the same thing for a year with my wife. Same ISP/Modem. Goes to her bank account that I specifically created in her name only just in case. I never have her resend money to my AP account. Interestingly, I e-mailed Amazon before I started all this and asked if paying my wife would be a legitimate AP transaction. They responded via e-mail saying absolutely no problem. Now I have that e-mail just in case.
Just further shows ya how difficult MS is becoming which is why I don’t really bother with it. Luckily I am in a position to buy things for an organization so I get reimbursed.