Cashless society, forced banking, and the War on Cash

I generally avoid credit cards but sometimes rare circumstances make checks or cash inconvenient. A contractor did some work for me. The contractor’s bill was essentially:

• $2500 if paying by credit card (actual result: I pay $2475, he receives <$2425)
• $2500 if paying by other means

It became stark how foolish that pricing is when I saw that I received $25 cash back. Most consumers are easily exploited as they foolishly think they are $25 richer -- without thinking about the big margin the MitM took. It means the contractor paid a fee of at least $25 but likely much more¹. Surely he would have profitted more if I paid by other means, like cash. Why didn’t the contractor offer a discount of ~$25—50 for paying cash? I know some do but it’s not as common as it should be.

The merchant agreement generally bans traders from surcharging credit cards (which govs tend to ignore when they accept credit card and add a surcharge). But there’s a loophole for everyone: the rules do not ban giving a discount for other forms of payment. It’s perfectly legit for a merchant to give a cash discount so long as up-front quoted prices match what is charged to cardholders. They should be doing this more.

When a consumer pays by credit card, it would be good for transparency & awareness to print on the receipt: “credit card fee of $75 paid by Bob’s Roofing”.

¹ ~1% is a fee cap in Europe but in the US there is no cap so fees are often in the 3—5% range. So the US contractor likely paid at least $75 in fees.

(edit) Would someone please ship some counterfeit money through there and get it confiscated, so the police can then be investigated for spending counterfeit money?

A Belgian woman told me she received a gift from a relative for €300 in cash. When she tried to deposit it into her bank account, the bank interrogated her over the source of the money, as if this one-time transaction is some kind of terror or money laundering.

In case no one is paying attention, it’s good to be aware of the extremes the #WarOnCash is evolving toward. Banks have become like police without training.. bullying people arbitrarily.

We are collectively like boiling frogs as cashless people are oblivious to what’s going on. Only cash users see the water boiling.

The article does not state how she paid and got caught, but this should serve as a situation that highlights the importance of cash preservation.

(update) prosecution seeks a 15 year sentence.

Invidious link

The EU guarantees most people a right to open a “basic”¹ bank account. Superficially that sounds good, but of course having a right to open a bank account implies that you can then be expected to have an account. It’s an enabler for the #warOnCash. The right to a bank account is a masquerade of freedom from which oppression manifests.

Anyway, you have to ask: do you really have a “right” to open a basic bank account if the procedure for opening the account is inherently exclusive? That is, if a bank only offers a basic account to people who are online, doesn’t a problem arise when this right to an account then leads to an assumption that everyone has an account?

Some banks take the requirement to offer basic accounts seriously by making the application a static PDF which can also be obtained on paper form. So the only thing you need is a pen (to open the account and presumably to use it). But it’s bizarre some banks put the application for their basic account exclusively in an interactive online format. Are offline people just getting “lucky” if a bank happens to offer a basic account application on paper?

¹ “basic” is not just common language here. It refers to a specific type of account that fulfills specific legal criteria.

The article is normally paywalled but I prefixed 12ft.io/ to it, which worked for me. Google supposedly quit caching websites but old caches are still reachable with 12ft.io.

The UK’s GDPR might make it hard for banks to use people’s purchase data to derive their alcohol & tobacco habits, so apparently banks have to rely on interviews. Still, it would be foolish to rely on the GDPR. There are also stories of banks looking at spending data to deny mortgages, which I would guess is happening in a place without privacy safeguards like the US.

I’ll quote the article here as well:

Homebuyers could be forced to provide detailed information about the amount of money they spend on alcohol each month to qualify for a new mortgage under a new clampdown on reckless lending.

In a sweeping review of the mortgage market published today, the Financial Services Authority (FSA) said lenders needed to be far more rigorous about their financial checks of potential borrowers.

It said lenders should delve deeper into homebuyers’ personal spending including the amount they spend on alcohol and tobacco.

Spending on shoes, clothes and childcare could also be assessed under a new, industry-wide “affordability test”.

At present, the FSA does not prescribe rules about assessing a consumers’ ability to repay a mortgage and practices vary from one lender to the next.

In its document, the City regulator said: “There is clearly a responsibility on all lenders to extend credit only where a consumer can afford it and, in our view, a robust assessment of both income and expenditure is key to ensuring affordable mortgages.

“We propose to require all lenders to assess the level of a consumer’s expenditure in determining the affordability of a mortgage product, to ensure that lending decisions are based on a consumer’s free disposable income.”

It conceded though that there were some flaws with its plan with consumers potentially underestimating their spend or “failing to incorporate past experiences into their budgeting”.

The new measures, which aim to stamp out risky lending that has been criticised for compounding the financial crisis and tipping hundreds of thousands of homebuyers into negative equity, also include a plan to ban self-certified mortgages, dubbed “liar’s loans”, and to stop lenders from exploiting consumers who have fallen behind on their mortgage payments.

It also proposed that the FSA should regulate mortgages for landlords for the first time.

Self-certification mortgages were aimed at self-employed people with irregular incomes. The mortgages, which did not require proof of income, accounted for one third of new loans in 2007.

Their proposed banning was first revealed in The Times last week.

But the FSA stopped short of ruling out “supersized mortgages” by introducing caps on loan-to-value, loan-to-income or debt-to-income multiples.

Such mortgages were typified by Northern Rock which, at the height of the housing boom, offered 125 per cent home loan deals.

Gordon Brown wrote in a newspaper article at the weekend that it was “critical we end reckless banking practices that have left so many people worried about their finances”.

Jon Pain, managing director of supervision at the FSA, said: “The mortgage market has seen extraordinary upheaval over the past 18 months and while it has worked well for the vast majority of borrowers, some have suffered great financial distress. We recognise that we need to bring about a step change in regulation.”

He said there had been a “mutual assumption by too many borrowers and lenders that the good times could not end.”

The new reforms, he said, would ensure firms “only lend to people who can afford to pay back the money”.

But mortgage experts questioned the ease of imposing some of the new measures and expressed concern about the possible impact on homebuyers.

Ray Boulger, mortgage expert at John Charcol, said the new affordability test could prove difficult to implement. “I think it will be very difficult in practice to go into too much detail,” he said.

Homebuyers, he said, often forget the detail of their spending. “They will remember the weekly shop but not the £3 they spend on a sandwich each day.”

Paul Broadhead, head of mortgage policy at the Building Societies Association, said he had “significant reservations about the possible unintended consequences of some of the ideas.”

He said: “We believe that home ownership is something that should be encouraged, and it is vital that lenders retain the flexibility to respond to the very individual financial circumstances of individual borrowers.”

He added that self-certification mortgages were suitable for a minority of people and that an outright ban was “not appropriate.”

The Council of Mortgage Lenders said it was “important that the principle of consumer responsibility is not lost in such a regulatory environment, as it is a basic tenet upon which transactions of all kinds between firms and consumers rely”.

The report said there was a “clear and non-controversial case” for banning self-certification mortgages, instead compelling lenders to insist that customers provide evidence of their income.

“Our analysis shows that self-cert borrowers take out larger loan amounts than borrowers with standard products and fall into arrears much more frequently. To address these issues we propose to require verification of income for all mortgage applications,” it said.

The loans have been vilified as a significant contributor to the banks’ toxic loans problem because some customers have lied about their income. Defaults on self-cert repayments have been at much higher rates than the industry average.

HBOS and Bradford & Bingley were among the biggest self-cert lenders. HBOS was sold to Lloyds TSB in a rescue deal in September last year and B&B collapsed and had to be partially nationalised.

The plan to bring mortgages for landlords into the FSA’s scope for the first time was necessary the regulator said because of the big part the industry had played in “fuelling property price appreciation”

The FSA said: “As well as being a general contributor, buy-to-let funding funding has particularly helped to inflate prices of certain property types and locations such as city centre apartments.

“The overall impact on house prices inevitably has implications for our interest in the sustainability of the mortgage market.”

The market for buy-to-let mortgages has grown rapidly. Gross advances grew from £3.1 billion in 1999 to £44.6 billion in 2007.

The paper has been put out for consultation until early next year with a “feedback statement” to be published in March.

A central bank digital currency (CBDC) is a form of digital currency issued by a country's central bank. It is similar to cryptocurrencies, except that its value is fixed by the central bank and is equivalent to the country's fiat* currency.

Many countries are developing CBDCs, and some have even implemented them. Because so many countries are researching ways to transition to digital currencies, it's important to understand what CBDCs are and what they mean for society.

*Most modern paper currencies are fiat currencies [for details here]

Note: I do not agree with how CBDCs are portrayed here, because it is actually the institutional point of view. Still, I think this article makes it easy to get a first glance on this topic.

from the article:

They are not allowed to avoid this amount by making several smaller payments in banknotes.

What does that mean for salaries? Every salary payment can be seen as a part of an annual income. I would demand more frequent pay days just to get some freedom back -- to be free from forced banking. Of course I would say the paychecks are not part of a whole payment but each are a whole payment for a specific amount of labor rendered.

#warOnCash

The EU has quietly imposed cash limits EU-wide:

• €3k limit on anonymous payments
• €10k limit regardless (link which also lists state-by-state limits).

From the jailed¹ article:

An EU-wide maximum limit of €10 000 is set for cash payments, which will make it harder for criminals to launder dirty money.

It will also strip dignity and autonomy from non-criminal adults, you nannying assholes!

In addition, according to the provisional agreement, obliged entities will need to identify and verify the identity of a person who carries out an occasional transaction in cash between €3 000 and €10 000.

The hunt for “money launderers” and “terrorists” is not likely meaningfully facilitated by depriving the privacy of people involved in small €3k transactions. It’s a bogus excuse for empowering a police surveillance state. It’s a shame how quietly this apparently happened. No news or chatter about it.

¹ the EU’s own website is an exclusive privacy-abusing Cloudflare site inaccessible several demographics of people. Sad that we need to rely on the website of a US library to get equitable access to official EU communication.

update

The Pirate party’s reaction is spot on. They also point out that cryptocurrency is affected. Which in the end amounts to forced banking.

#warOnCash

In a Dutch bar I ordered a few samples (which have no cost and were somewhat generous in size) and drank part way through them all. Then I ordered a full sized beer. I continued working on the samples.

Bartender asked if I wanted to pay now or start a tab. I asked if they accept cash. It feels silly to ask and I almost didn’t ask because the answer is always “yes”, of course. So I was shocked when the bartender said no.

WTF? Surely there would be enough customers who are wise enough to foresee possible consequences of having electronic records of alcohol consumption. It can only work against you, e.g. when the bank, data brokers, and insurance companies see an opportunity to collude and optimise your your insurance premiums using that info.

The GDPR would theoretically protect Europeans from that but bars are open to tourists -- non-Europeans with non-European bank accounts. I mentioned that to the bartender, who said “what’s the GDPR?” Wow. I was shocked again.

I made it clear that electronic payment doesn’t work for me (most especially when alcohol, tobacco, or marijuana are involved). I said: can someone pay with their own account and take my cash? Bartender asked if I have exact change. No, I didn’t but I got close enough that the bartender was able to use the tip jar to give me change.

I later noticed that the menu book (1st page after the cover) says “cash not accepted”. But I initially missed that because I ordered off the posted board. And there’s no guarantee anyway that a customer would see the first page. I often flip straight to the last page to look for drinks. When I left the bar I had a look at the entrance and door. There was no cash-hostile signage like some other shops have.

Questions for Dutch folks:

If the bar had been less reasonable, less flexible, how else might this have played out? I did not sip from the full beer before the conversation, so I suppose the bar could have just treated it like an erroneous beer pour and pour it down the drain.

Suppose I had not thought to ask if cash was accepted. What if I drank the beer and then my cash were refused with both sides standing their ground? There is a practical problem here not just a legal one. The hundreds worth of banknotes in my pocket would be worthless. So would it be no different than the situation of a deadbeat debtor who simply does not pay? Would I be cited and fined? Would I have the option to leave the bar with an invoice to pay by bank transfer, perhaps using the post office? Would I have to leave collateral such as an ID card while running the errand? And what if it’s Sunday or after hours of the post office?

What about the case where someone enters with bank card(s) that are in a broken state, unknown to the card holder? I’ve been in grocery store lines where a customer tries all their cards. Often the last card they try works but I’ve seen a case where someone had to leave all their groceries. I’ve been in situations where a card in good standing is refused for being foreign (despite the rules of the card network). Are these situations legally any different than someone who simply has no cards to pay with?

There is a very wise “EU Recommendation” that cash be accepted on payments towards debts specifically (not necessarily points of sale). I believe if you have a bar/restaurant tab that would be a /debt/, not a /point of sale/. But what are EU recommendations good for? Is it just to guide lawmakers, or is there some courtroom value when national policy deviates from the recommendation?

FWIW, this thread is where I learned that cash acceptance is optional in Netherlands. The original post was censored but that cross-post mirrors it.

In my cash-only experiment, it has been interesting to experience the pathetic responses where the merchant/creditor/gov is unlawfully cashless. They always say things like “don’t you have a friend who can pay for you?” Funnily enough, this is what you’ll hear from utility companies and gov offices. I’m like: seriously? Is that your official policy -- to ask debtors to ask their friends to proxy payments? Last time I checked the law did not require me to have a friend.

I generally respond to that with: “will you be my friend?” Utility companies and gov offices always refuse, but staff at cashless restaurants will often pay your tab from their personal card. It’s important to carry exact change in this case.

This could serve as a practical hack if you cannot pay a bill for any reason, like being poor. Instead of disclosing financial problems, offer cash as a bluff. If they do not accept cash, well that’s their fault and their problem. It can be a great delay tactic. But of course you should be able to pony up the cash if they call your bluff, so it’s a good idea to scope it out a bit first.

It seems almost no one is noticing how cash is being quietly killed off. Once it’s gone, your banks will have absurd amounts of power over you.

Stop being a contributor to the tyranny of convenience as described by Tim Wu, and (as a test) try paying everything in cash. Simulate for as long as you can the life of an unbanked person. And if you’re an activist, of course fight back in situations where cash is denied.

cross-posted from: https://sopuli.xyz/post/13133455

It used to be that you could insert a coin into a washing machine and it would simply work. Now some Danish and German apartment owners have decided it’s a good idea to remove the cash payment option. So you have to visit a website and top-up your laundry account before using the laundry room.

Is this wise?

Points of failure with traditional coin-fed systems:

1. your coin gets stuck
2. you don’t have the right denomination of coins

Points of failure with this KYC cashless gung-ho digital transformation system:

1. your internet service goes down
2. the internet service of the laundry room goes down
3. the website is incompatible with your browser
4. the website forces 3rd party JavaScript that’s either broken or you don’t trust it
5. you cannot (or will not) solve CAPTCHA
6. the website rejects your IP address because it is a shared IP
7. the payment processor rejects your IP address because it is a shared IP
8. the bank rejects your IP address because it is a shared IP
9. the payment processor is Paypal and you do not want to share sensitive financial data with 600 corporations
10. the accepted payment forms do not match your payment cards
11. the accepted payment form matches, but your card is still rejected anyway for one of many undisclosed reasons:
    • your card is on the same network but foreign cards are refused
    • the payment processor does not like your IP address
    • the copy of your ID doc on file with the bank expired, and the bank’s way of telling you is to freeze your card
    • it’s one of these new online-only bank cards with no CVV code printed on the card so to get your CVV code you must install their app from Google’s Playstore (this expands into 20+ more points of failure)
12. your bank account is literally below the top-up minimum because you only have cash and your cashless bank does not accept cash deposits; so you cannot do laundry until you get a paycheck or arrange for an electronic transfer from a foreign bank at the cost of an extortionate exchange rate
13. you cannot open a bank account because Danish banks refuse to serve people who do not yet have their CPR number (a process that takes at least 1 month).
14. you are unbanked because of one of 24 reasons that Bruce Schneier does not know about
15. the internet works when you start the wash load, but fails sometime during the program so you cannot use the dryers; in which case you suddenly have to run out and buy hanging mechanisms as your wet clothes sit.

In my case, I was hit with point of failure number 11. Payment processors never tell you why your payment is refused. They either give a uselessly vague error, or the web UI just refuses to move forward with no error, or the error is an intentional lie. Because e.g. if your payment is refused you are presumed to be a criminal unworthy of being informed.

Danish apartment management’s response to complaints: We are not obligated to serve you. Read the terms of your lease. There is a coin-operated laundromat 1km away.

Question: are we all being forced into this shitty cashless situation in order to ease the hunt for criminals?

Keeping $1k in a bank for 1 year is equal to the CO₂ emissions of flying New York to Seattle. Because banks invest in fossil fuels.

The source of this article is in a walled garden that disrespects our privacy so I will not cite it. But here’s the text, posted here in the free world for all people to access:

The menace of “the War on Cash” is making steady headway across the board.

And that’s whether it concerns big-time international policy-makers pushing for total digitization of financial assets – or individual examples that showcase just how serious this threat is.

Here’s one such case: Elizabeth Dasburg and two others were denied the right to use cash to pay entry fee to the Fort Pulaski National Monument in Georgia, managed by the National Park Service.

It’s turned into, “parks, but no recreation” – because the victims of this violation of US law regulating the use of domestic currency have now opted for litigation.

Plain and simple, Dasburg and the two others believe it is still illegal in the US to refuse to accept the country’s legal tender. Or is it? That’s the question the US District Court for the District of Columbia will have to spell out.

Judging by the filing, the Fort Pulaski employees were equally indoctrinated against accepting cash, as they were trying to be helpful. The visitors were first told in no uncertain terms that only cards are accepted.

We obtained a copy of the complaint for you here.

And then, if – say they had no cards (that they might not want to use them doesn’t seem to have been a consideration) – they were instructed to go to a grocery chain like Walmart and buy a gift card.

However bizarrely and unnecessarily complicated this might sound – all the more ironic, because it appears the “explanation” for this policy is that cards are more “convenient” – that’s what Fort Pulaski wanted.

Cards. Of any sort. Things that can be tracked and tied to a person, in other words.

“By forcing people to use credit cards or digital wallets, under the guise of convenience, the National Park Service becomes a player in the surveillance state, undermining park visitors’ privacy right,” Children’s Health Defense (CHD) General Counsel Mack Rosenberg commented on the case – and the state of affairs.

CDH has decided to put its money where its mouth is and support the defendants’ case financially.

The National Park Service is said to have been working on cashless-only payment options for some years, the scheme now in effect in to close to 30 national parks, historic sites and monuments.

While those behind such things are always happy to present themselves as champions of “equality and diversity,” the reality looks quite different.

“Only half of low-income households have access to a credit card, according to a March 2022 Federal Reserve Bank of New York report,” CHD President Laura Bono said in a letter to the Park and Service CEO.

cross-posted from: https://slrpnk.net/post/7614616

1. The right to be unplugged includes the right to be free from banks as banks increasingly force customers online. There is also a #WarOnCash underway. So even if you make the ethically absent minded decision to pay for your food electronically, the least you can do is pay the tip in cash. (the war on cash is war on privacy)
2. Electronic tips are also subject to siphoning off by banks. When you tip by card, you also tip Visa, Mastercard, or whatever scumbag credit network is in play because their fee is a percentage of the whole transaction. The electronic transaction may be free to you but it’s not free to the business. I don’t know if the restaurant pays the whole fee and transfers 100% of the tip to the server, or if the server shares the hit. But if this is not McDonalds but some small local business, it’s better to give the full amount to the business anyway.
3. Data protection: when you tip electronically, that creates a record not just attached to you but to the server. If you respect /their/ privacy by way of data minimization, you tip in cash.
4. Environmental protection: banks are lousy for the environment. (ref: Banking on Climate Chaos, bank blacklist and Wired article)
5. Terminal tipping is a swindle (esp. in Europe). Tipping is not only optional in the most pure meaning of the word (not expected), but tipping amounts are lower in Europe meant purely to indicate service quality. Even a tip of €1 is a complement. But terminals suggest American proportions (e.g. 20%). It’s a scam. I think I’ve only seen this in tourist traps. The ownership is happy to make their staff happy by pushing a tip request in a way that deceives the public into thinking it’s out of their hands.. that the technology is asking for the tip. This fucked up scam is training restaurant patrons to overtip w.r.t. the culture (a culture that the locals don’t want to drift into Americanism). In the US it’s not exactly a swindle, but you have less control over the amount nonetheless. Sure most people like the math-free convenience but IMO that does not justify it. And certainly the ~15—25% amounts are excessive when there was no table service.
6. Sometimes servers pool their tips to then tip a portion to the kitchen staff who did well enough to make the servers look good. Cash tips make that go smoothly. I was once in a rare situation where I needed to pay by card and I also wanted cash back. The server explained to me they do not give cash back because of that tip pooling that they do, saying that sometimes they do not get enough cash tips to properly treat the kitchen staff.