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#1391168 - 05/14/10 03:41 PM Credit Card Pinless Cash Advance
Anonymous
Unregistered

We have been alerted that a local institution is forcing pinless debits to post directly to credit card accounts rather than to a checking account.

When a merchant attempts a pinless ATM network transaction using a credit card number, the transaction is approved through the network and applied to the card as a cash advance. The charges are posting as "Bill Payments" and subsequently the card holders are being charged cash advance interest.

Is this a violation of any Visa, MasterCard, or federal REGs?
Is this practice being used at other Financial Institutions?

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#1391812 - 05/17/10 01:48 PM Re: Credit Card Pinless Cash Advance Anonymous
Georgia Plum
Unregistered

If the card is attached to a checking account, how is it 'forcing' them to post to a credit card??

If it is indeed a credit card (not a debit card), and they are getting cash, then it is indeed a cash advance and should be charged according to what has been disclosed.
Last edited by Georgia Plum; 05/17/10 01:51 PM.
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#1391852 - 05/17/10 02:52 PM Re: Credit Card Pinless Cash Advance
Anonymous
Unregistered

The card is not a debit card. It is strictly a credit card. Here is an example which will hopefully make this more clear:

The customer attempts to pay her telephone bill with the VISA credit card. The phone company processes the transaction as an ATM network transaction without a PIN number, rather than as a normal VISA transaction. The transaction is then approved and applied to the credit card as a cash advance instantly in the way that a checking "debit" would process. The cash advance does not have any kind of finance charge grace period which is causing problems for the customer.

We've been digging and haven't been able to find any information on this occurance and whether is is allowed. Everything we have found pertains to PINless debits using a debit card.

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#1391891 - 05/17/10 03:25 PM Re: Credit Card Pinless Cash Advance Anonymous
Anonymous
Unregistered

That sounds like a choice by the telephone company on how they process them, in essence it sounds like they are processing them as a debit rather than a credit transaction. By doing so they are saving themselves money because they don't have the transaction cost of using the Visa or MC network. You should contact Visa or the credit card company and ask them about it. They should be able to provide more information.

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#1391946 - 05/17/10 04:00 PM Re: Credit Card Pinless Cash Advance Anonymous
Anonymous
Unregistered

Originally Posted By: Anonymous
That sounds like a choice by the telephone company on how they process them, in essence it sounds like they are processing them as a debit rather than a credit transaction. By doing so they are saving themselves money because they don't have the transaction cost of using the Visa or MC network. You should contact Visa or the credit card company and ask them about it. They should be able to provide more information.


Yes, we believe this to be the case. The situation feels wrong to us, but we haven't found anything in writing saying that it is.

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#1392140 - 05/17/10 07:14 PM Re: Credit Card Pinless Cash Advance Anonymous
BetsyS Offline
Gold Star
Joined: Jun 2009
Posts: 471
Can you tell which network the transactions are settling through? I would doubt that it's Visa or MasterCard. More likely one of the ATM/POS networks like Star, Pulse or NYCE, which is why they're coming in as cash advances. If so, it's probably a violation of the rules of that network.

It may or may not be a choice by the telephone company. It may be either a glitch in their set-up with their merchant bankcard processor, or even something with the way your credit card BIN is flagged on that particular network.

I would suggest calling the telephone company to see if they're aware of credit card transactions going through as debit card payments. If you don't get a response,I would contact your card processor and let them know what's going on. They should be able to determine if it's a BIN problem or rule violation and hopefully get it resolved.
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#1392144 - 05/17/10 07:18 PM Re: Credit Card Pinless Cash Advance Anonymous
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
I believe the only way for you to prevent such an occurrance is to contact your card processor and have them remove that ATM network gateway from your card base. This will force the transaction through VISA/MasterCard as a purchase.
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#1392216 - 05/17/10 08:09 PM Re: Credit Card Pinless Cash Advance BrianC
BetsyS Offline
Gold Star
Joined: Jun 2009
Posts: 471
Quote:
"...have them remove that ATM network gateway from your card base"


Which will also eliminate ATM Cash Advances on that network for your cardholders as well. If you do, you may want to check your card agreement to see if the network is disclosed in it.
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#1392336 - 05/17/10 09:53 PM Re: Credit Card Pinless Cash Advance BetsyS
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
If it bypasses the Visa network, isn't it also removed from the zero liability option? I wasn't a Visa bank, but I thought applicable transactions were those through the network.
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