Citi Credit Card Rejects Firearms Industry

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I got the form letter back, too and responded...

This was my response to their form letter...

Thank you very much for taking time from your busy day to answer my email.
I appreciate that very much. I also appreciate your pointing out
inaccuracies in the info going around, and I will pass that along to some in
the firearms/shooting hobby community.

You may know this already, but I would just like to point out that your
company's position is un-necessarily exclusive, in that the Federal
Government and the BATFE do not require face-to-face transactions as you do.
Specifically, there are many "Curio and Relic" firearms that are legally
sold, and then delivered via UPS or FEDEX, by various firearm retailers to
people who have been assigned C and R licenses by the Federal Government.
It is also quite legal for these retailers to ship ammunition, holsters, and
other firearm stuff. I think it is a shame that they not be allowed to do
their completely legal and harmless transactions via your credit cards. I
fail to understand Citi's concern about this matter, as it is not
reasonable, and as other credit card companies have not taken your position.

Again, thank you for your email.

Everyone should keep on emailing them, and talking courteous and intelligent talk. Maybe they will get the message.
 
Has it been stated by Citi what the other "industries" that they ban are?
I'm thinking embroidered Evlis Presley curtins imported by 3rd world child laborless law countries, you know the ones that add lead to the toy paint....
Seems as though they have stepped in it and are trying to CYA.
 
Myself and my family will not be signing up for their credit cards. My wife was eroneously signed up for one of their cards in the past and we will never know why and will never have another.
 
Citi Merchant Services and First Data do process firearms transactions. Our policy restrictions address only the sale of firearms in a non facetoface environment. Non facetoface transactions occur when a cardholder is not present in front of a merchant and includes mail order and online purchases. It is our policy not to service merchants that make non facetoface sales in a number of industries, including firearms.
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It is interesting that First Data and CTI offer no explanation as to the rational behind their rejection of non face-to-face firearms sales, not do they name any of the other (supposed) industries that are similarly restricted.

Ostensibly they are concerned over the possibility of fraud, or the delivery of a firearm to a prohibited person using a stolen credit card or credit card number. This could be a legitimate concern, except for the fact that the buyer does not receive the purchase directly through a commercial delivery service. Unlike any other online business or retailer that deal with non face-to-face credit card transactions, firearms are delivered to federally licensed firearms dealers or licensed curio & relic collectors. C&R license holders do not sell to the general public, and federally licensed dealers do not deliver firearms to individual consumers except through face-to-face transactions where the buyer is required to comply with all applicable federal, state and local laws. This latter transaction, completed before the firearms is released to the buyers custody, insures to the best possible degree that the firearm is not falling into the wrong hands, and in the unlikely event that there has been some kind of credit card fraud there will be a monumental amount of evidence concerning the identity of the criminal to assist investigators in finding and arresting the culprit.

No other business that I know of offers this kind of security to the credit card issuer, the cardholder, or the retailers that are involved.

On the other hand a more likely target for non face-to-face transactions involving fraud might be a company selling expensive consumer electronics over the Internet, which could be easily delivered to a dummy address, sold through local fences or other brokers of stolen property, and do not require the buyer to provide photo identification, or for that matter identification of any kind – especially if the merchandise is left sitting on the front step. For the criminal this sort of scam is relatively risk free.

Yet First Data and CTI chose to ignore this obvious fact and instead concentrate on firearms transactions that are much more secure. In doing so they are likely to cause their clients substantial losses when individuals and business move their accounts and/or cancel credit cards to move them elsewhere. Apparently they believe there is nothing we can do about it.

To their grief, they may find out otherwise.
 
<tinfoil_hat_mode>
It occurs to me that this may be a blessing in disguise. Citi and First Data are clearly organizations run by ignorant antis. One might wonder what ignorant antis may do with all those records of firearms sales in the future. Or what they're doing with them now.

I always pay cash for firearms and firearms related merchandise. I'm not a big fan of generating electronic paper trails everywhere I go and with everything I do. Especially when it comes to firearms.
</tinfoil_hat_mode>
 
no[r] do they name any of the other (supposed) industries that are similarly restricted.
Click to expand...

I bet I can name one: food service. I bet they won't accept non face-to-face transactions from a restaurant. :rolleyes:

Whole thing is a good example of why everyone should be a little paranoid.
 
So if I understand this correctly they are just refusing to set up credit card processing accounts with businesses that sell firearms in a non face-to-face setting.

But does this mean that one can't even use a Citi MasterCard to purchase a firearm from an out of state dealer?
 
Zundfolge: It isn't "just refusing" to set up accounts, they are closing larger / corporate accounts.

Further, based on my experiences with online processing (see my earlier posts) in this thread, they would probably specifically dislike CC transactions between an individual and an out-of-state dealer.

With this kind of transaction, the shipping situation is a "drop-ship"--that is, the firearm is paid for by one party and shipped to another. Drop-ship transactions have long been flagged as being used in CC fraud--e.g., acquisition of someone else's credit info to illegally buy something. See Old Fuff's comments a few posts back.

Given the millions of transactions they process daily, this means that the 'special processing' subroutines are taking a significant amount of mainframe time, or something like that, and generating lots of 'spitouts' that have to be reviewed by human eyes.

The NSFF's letter above perfectly addresses the issues--given the maximizing profit / minimizing risk mentality of these kind of bankers / businessmen, I'll be very curious to see just how they respond.

Has the Brady Bunch been at work again, cranking up more FUD? Are there 'relationships' between Citi's / First Data upper management / executives / board members and various GC fronts, from the Joyce Foundation on down to local action groups?

Jim H.
 
Two scenarios:

1. FFL "A" needs to order a bunch of items from FFL "B". This is a low risk to FFL B's merchant account because FFL "A" is well-identified by their FFL (which is on file).

2. Customer X wants to buy from FFL "C", out of state, using local FFL "D" for the local FFL transfer. Low risk to FFL "C"'s merchant account because for customer X to take possession of the gun, he has to provide government ID and various and sundry details on the 4473. He is well identified and the risk of fraud is low.

Compared to both of these scenarios, buying a 50" plasma from Buy.com or a mail-order place is an extreme risk, but a typical merchant account.
 
It may be that Citi/First Data is just being very cautious in trying to avoid liability if a non-face-to-face transaction turns out to be illegal - for instance if an FFL fails to verify the license of the party he's shipping to.
 
presuming for a moment that when they say face-to-face, they mean handing the CC over in person, and will apply this restriction to all purchases, not just firearms ones .. then they will restrict a lot of online business too.
 
Cti, as well as some other big banks are in deep trouble. If gun owners and businesses start canceling accounts and cutting up credit cards those losses would even get worse. As this gets out to the mainstream media and business papers I don't think that Wall Street - which after all is only interested in money - is going to be pleased. So long as Cti and First Data don't do anything about the big Internet businesses such as Amazon.com while picking on relatively small firearms dealers and stiring up trouble for no useful purpose somebody in the money business is going to detect a stink. Questions will be asked. Not about guns so much as about losses - real or potential. Now is the time to hit 'um where it hurts.

Citi, Merrill on Hunt for More Capital January 11, 2008 7:10 AM EST

NEW YORK - Two of the biggest names on Wall Street are scrambling again to secure major cash infusions from foreign governments to offset billions of dollars in losses from risky subprime mortgage securities, analysts said on Thursday.

Citigroup Inc. and Merrill Lynch & Co., the No. 1 U.S. bank and largest brokerage house, are facing potentially $25 billion worth of losses when they report earnings results next week.

Both companies - led by new CEOs eager to make their mark - are expected to turn overseas for another injection of capital.

Wall Street's biggest banks and brokerages have been lining up investments from foreign governments to cushion against losses from bad investments in subprime mortgages, which are made to people with less-than-stellar credit, or in securities back by subprime mortgages.

Sovereign wealth funds, which are investment pools backed by governments, already have invested about $27 billion in Merrill, Citi, Switzerland's UBS AG and Morgan Stanley.

The fact Merrill and Citi are going back for seconds indicates that the credit crisis might be taking a bigger toll on Wall Street than initially expected.
"The bottom line is that their losses are much more sizable then first thought, and they need capital to shore up their balance sheet," said Richard X. Bove, an analyst with Punk Ziegel & Co. "It's why they're out there looking for more."

Spokesmen for Citi and Merrill did not immediately return calls seeking comment.

The search for more foreign cash infusions by Citigroup and Merrill was disclosed Thursday by The Wall Street Journal.

This time around, Citi is said to be looking for about $10 billion worth of capital, The Journal said. Abu Dhabi's state-run investment fund in November agreed to buy a 4.9 percent stake in the bank for $7.5 billion.
Merrill Lynch is looking to arrange up to $4 billion of new capital, most likely from a Middle Eastern government, The Journal said. The brokerage previously secured a $4.4 billion investment from Singapore's state-run Temasek Holdings.

"Writedowns and losses will continue to mount," Goldman Sachs analyst William Tanona said in a research report about financial institutions, adding that getting more money from sovereign funds will be "capital raising for some, preservation for others.
"
Citi's board was expected to meet Monday to discuss cutting the bank's dividend in half. Though the bank has denied speculation about cutting the dividend, analysts said it could save about $5 billion.

Layoffs at both Citi and Merrill also have been bandied about Wall Street during the past few weeks.

Staff reductions, along with the sale of non-core assets, are among ways analysts believe Citi CEO Vikram Pandit and Merrill CEO John Thain can shore up their balance sheets.

Both institutions have said they expect big writedowns, but analysts now think the losses might be bigger than originally anticipated. Citigroup, right before ousting CEO Charles Prince, projected an $11 billion writedown - though some analysts say it could be as high as $20 billion.

Merrill Lynch did not make any predictions about how much it might write off during the fourth quarter, though analysts project it could be up to $11.5 billion. Stan O'Neal, the brokerage's former CEO, was ousted shortly after the company took an $8.4 billion writedown.

The New York Times reported on its Web site late Thursday that Merrill Lynch is expected to disclose a $15 billion fourth-quarter writedown. The report cited unnamed people who have been briefed on the company's plans.
Global banks have booked almost $110 billion of writedowns since last year because of bad bets on subprime mortgage securities, and the ensuing credit crisis.

The additional foreign investment could provoke more scrutiny in Washington, depending on its size. Generally, passive ownership stakes that don't include board seats or other levers of control and that are below 10 percent don't require approval by a federal government panel that reviews foreign investment for security concerns.

Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, said Thursday he supports foreign investments in the United States "so long as they do not compromise our national security or pose a threat to our economic stability."

The committee may hold hearings on the subject later this year, a Senate aide said. The aide spoke on condition of anonymity because she wasn't authorized to speak on the record on the subject.

Dodd's committee spearheaded legislation last year that strengthened the foreign investment review process. The action came after several high-profile deals, including a planned investment in U.S. port operations by a Dubai government-owned company, sparked major controversy.

Shares of Merrill Lynch rose $1.55, or 3.1 percent, to close at $52.03, while Citi added 62 cents, or 2.3 percent, to $28.11.
---
AP Business Writer Christopher S. Rugaber contributed to this report from Washington.
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http://my.earthlink.net/article/bus?guid=20080111/4786f7d0_3ca6_1552620080111-988930506
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Now that I know this, I'm transferring what balances I have AWAY from Citibank to USAA, and then closing the accounts. I won't do business with them and I plan to tell them why. I encourage you vote with your feet but don't forget to tell them why.
 
Asking someone to remove your own letter due to accuracy problems in the letter has to be a new level of chutzpa.
 
It may be that Citi/First Data is just being very cautious in trying to avoid liability if a non-face-to-face transaction turns out to be illegal
Click to expand...

Has any bank ever been held liable for processing a credit transaction they couldn't possibly know was for illegal purposes?
 
It may be that Citi/First Data is just being very cautious in trying to avoid liability if a non-face-to-face transaction turns out to be illegal
Click to expand...

I don't think they can be held liable unless it could be proven that they knew, or should have known, that the transaction was illegal.

But if that was the case, wouldn't they decline all non face-to-face transactions? :scrutiny:

And firearms transactions are the safest of all, because the merchandise is not delivered directly to the buyer.

If you buy a HDTV set from an Internet vendor or auction do you have to pick it up from a third party, provide photo I.D., fill out a form with extensive personal information - and sign it, and finely go through a background check before you can take your TV home?
 
transactions

how do they know its a firearm.the dealer does not tell what he sells.I deal with CDNN but not for guns.the citi card tells the dealers id and the charge.does not say anything about what it was.I must be dumb.as far as I can see its a mechant transaction not an id of what it was. :uhoh::confused:
:)
 
citi they are starting to get upset over this. Even if they resended their actions many folks will stop doing bussiness with them. Bythe end of the shot show they will have lost many dollars in future bussiniss with the backing of at least the nssf.
 
cancled my card last night, probably take it to the range to zero in the scope on my AR, and mail it to them with the remainder of my balance:barf:

they seemed to know exactly what i was talking about, because they directed me almost instantly to someone in the know
 
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