BANKS SEIZING CREDIT CARD FUNDS FROM Y2K COMPANIES / LUMEN FOODS IS LEGIT

Essay by the Y2KNEWSWIRE.COM staff

Yesterday's report on WorldNetDaily.com set off a flurry of speculation about banks, merchant processing companies, and Y2K companies. If you haven't read the story yet, check out:

http://www.worldnetdaily.com/bluesky_exnews/19990414_xex_banks_seizin.shtml

This essay attempts to add important information to the developing story. First: Lumen Foods (www.soybean.com) is legit! As the WorldNetDaily story reported, they were categorized as a company to investigate (by the merchant bank) out of suspicion of possible fraud. The story does not intend to suggest, we think, that Lumen Foods is fraudulent. In fact, Lumen Foods is one of the most highly-recommended suppliers of storable foods. They offer excellent products, fast ship times (currently 3-4 weeks) and the best soymilk we've ever tasted.

Greg Caton of Lumen Foods (www.soybean.com) confirmed their account was under review and that the review ended peaceably, with the funds eventually being released. This is, in fact, part of the point of the story: that Y2K companies are having their accounts held up / seized during these review periods. Even though the funds are eventually released, this is not fair treatment from the banks.

The World Net Daily mention of Y2KNEWSWIRE.COM merchant accounts is absolutely true! U.S. Bank merchant services seized $38,000 in credit card charges and refused to release them until they conducted a so-called "review" of our account. This review has no apparent deadline (they won't tell you exactly when it will be completed) and U.S. Bank refused to pay us interest on the money during this period. They even called our customers -- an activity we consider harassment -- and asked if the charges were legitimate. All of it is true.

U.S. Bank eventually released our funds after we threatened to change merchant banks. We're sure there are some banks out there that want to treat honest Y2K companies with integrity, and we were determined to find one. By the way, we did find one. It's a local bank, owned by real people with real names and real phone numbers... people you can reach. We are recommending that all Y2K companies drop their merchant accounts from banks that seize your funds and move to a local bank that's willing to consider your personal integrity. Walk into a local bank, meet the president, tell them what you do and how you do it. Explain how you work with customers, how Y2K sales go up and down like a roller coaster. Chances are, you'll find at least one small bank president willing to listen. And they probably won't be seizing your funds, either. Goodbye, US Bank. Hello, Bank of Smalltown, USA.

THIS STORY IS JUST GETTING OFF THE GROUND

This story isn't over, by the way. The bank seizures are true. Companies are being punished simply because they're selling a lot of products. Y2K company owners feel they're being targeted. Some are even pushing a conspiracy theory, saying that they believe the orders came down from "above" to hurt these Y2K companies. We don't know whether that's true. Right now, it's just speculation. It might be hogwash or it might be a coordinated plan to smash all Y2K preparation companies. Right now, there's no proof either way, but there is a pattern that's starting to emerge. This story is going to take more investigation.

To the merchant banks out there: watch yourselves. If you are engaged in a coordinated effort to shut down Y2K companies, and you're discovered, the backlash could contribute to a bank run as the public finds the banking industry engaged in a true-to-life conspiracy. If you're following standard procedure on merchant accounts and equally applying it to all companies, that's fine. But if you're singling out Y2K companies, that's fraudulent on your part.

This story is still developing, and it's a hot one. Watch for exclusive reports from Y2KNEWSWIRE.COM. And if you have any hard evidence to add to this story, or you want to go on the record to either accuse or defend the merchant banks, contact us right away. We're working to get to the bottom of this. E-mail webmaster@y2knewswire.com. Anonymity assured. If you want to remain anonymous, just state so in your e-mail. And yes, we want to hear from people on both sides of this story. We want to report the truth, even if it isn't an anti-Y2K conspiracy.

We're not conspiracy theorists, by nature, we're just skeptics. And right now, we're skeptical of the explanation that all these seizures are just coincidence.

-- Andy (2000EOD@prodigy.net), April 15, 1999

Answers

Can anyone explain why y2knewswire.com cannot be accessed? I've been trying for what seems like an hour, and so far all I get is:

HTTP/1.1 Server Too Busy

Why now, at 4 am est? Seems odd to me. I never had a problem going there before. And I didn't get that alert you posted either! I just checked. They rarely come later than 3 am. I miss my paper!

-- J (jart5@bellsouth.net), April 15, 1999.

J, what a coincidence... :)

-- Andy (2000EOD@prodigy.net), April 15, 1999.

J - I was able to get to the Y2Knewswire website, no problem. It's 10:45pm here (still April 14th here, so I'm communicating with people in the next day. That appeals to my sense of the absurd).

Beat me to the post, Andy. I find this beyond "suspicious". Does anyone have info on other Y2K vendors who *may* be victims of special attention by the banking industry?

-- Sara Nealy (keithn@aloha.net), April 15, 1999.

Having done a fair amount of financial auditing and taxes and securities for corporations in my life, my take on all of this is just a little bit different.

You note in the first article, one business owner mentioned that they were even asking for his *personal* financial records -- and of course, they all want the business financial records, to prove the sales (and therefore dollars) are legit.

You guys don't get it? I have heard half a dozen totally separate-place, separate- person, first- and second-person accounts of employees at Sam's Club (like a Costco or Price Club) saying the FBI came in asking for the names of people who had bought large quantities of food products. This is easy because all those stores -- and now many grocery stores -- use those nifty "discount cards", jack up the price if you don't get the card, because then they can track you better -- and then they can punch a few numbers into the database query and get a list of names/addresses of the purchasers.

You guys, if they're checking the financial records of these companies (I mean, if they're doing anything more than simply verifying with some of the customers that the purchase is legitimate), does that mean, as part of the billing records, that they may be getting customer data?

Methinks I am overly paranoid and surely they are not. But if they were -- well -- this would be a great way of getting a listing of food-stocked sources. Since they can't track people buying from soybean.com like they can people shopping at COSTCO, this would be a really great solution.

PJ in TX

-- PJ Gaenir (fire@firedocs.com), April 15, 1999.

I should have added that the argument, "they already have the data in the form of the card purchases" doesn't work, since that info wouldn't include check/cash buyers and ship-to addresses.

For my peace of mind I hope Y2KNEWSWIRE can confirm with its sources that the financial data asked for does not include, as part of having to present your numbers, customer data.

PJ in TX

-- PJ Gaenir (fire@firedocs.com), April 15, 1999.

PJ,

According to csy2k yesterday the banks were ringing up and hassling customers to see if the transactions were valid - I THINK THIS ANSWERS YOUR QUESTION AND THE WHOLE THING STINKS.

Good points you made - very crafty if that is what the banking shills are up to.

-- Andy (2000EOD@prodigy.net), April 15, 1999.

See response here

-- Hoffmeister (hoff_meister@my-dejanews.com), April 15, 1999.

Hoff -

After seeing your response on the other thread, it would seem to me that what you are inferring here (reporter apparently didn't verify sources/info) is EXACTLY what we have been complaining about with all the whitewash that came out of the Senate Y2K Report and various and assorted other governmental pronouncements. What the press said was not what the report actually said - reporters just quoted Dodd and Bennet who "read" between the lines and spun and didn't verify by reading the report, checking what the actual FAA test and what it was in Denver - etc. etc. etc.

-- Valkyrie (anon@please.net), April 15, 1999.

Based on WorldNetDaily's replies when I checked out their original source and original reporter - the article (and quotes, and basic premise of all underlaying facts) is correct.

Other suppliers (other than the companies originally quoted) have verified they too were harrassed and had assets frozen.

You may recall that as early as last September, the LA Times quoted the FBI's Chief of its Domestic Terrorism Office - that they (the FBI) were going to investigate people preparing against Y2K troubles this spring, and were deeply wooried about the threat from "survivialists" and "armed ... fundamentalists ... locked behind closed doors."

-- Robert A Cook, PE (Kennesaw, GA) (Cook.R@csaatl.com), April 15, 1999.

I was still trying to reach y2knewswire.com at 11 am est and even had a friend try through work. Same answer, server busy. I did get the alert at 5:10 am though. Finally, at around 11:30 it connected. No mention of the Lumen Foods reply yet!

-- J (jart5@bellsouth.net), April 15, 1999.

Jeez, people, is there some rule that you must check your common sense at the door when you come in here or what? Sudden, drastic pattern changes *always* raise flags, and for very good reasons.

OK, say you're a credit card company. One of your clients suddenly starts running up charges at a rate *far* above normal. Almost invariably, this means the client is in the process of pocketing a whole lot of your money and planning to vanish soonest. Should you check it out? Duh!

Or, say you're a merchant. One of your long term customers starts spending at a rate *way* above normal, for goods *way* outside his normal buying habits. Almost invariably, this indicates a stolen wallet and someone grabbing all he can while the ID and credit cards are still good. Should you ignore this, or might it be good business to check with the customer to make sure he really is responsible? Duh!

Or, say you're a banker and a little old lady who's had a savings account slowly growing there for decades suddenly wants the *entire amount* in cash. Almost invariably, the lady is being victimized by a con artist. Should you talk with her to find out what's going on? Duh!

These procedures are all excellent preventive medicine against CROOKS! I suppose if you really want to find a conspiracy, you could argue that we conspire against criminals. It's true! Are such anti-crime measures worth the implicit violation of our freedoms? Or would you prefer Sam's Club to tell you, "Yes, we knew your ID had been stolen, but we didn't want to violate your privacy by telling you about it, so pay up!"

-- Flint (flintc@mindspring.com), April 15, 1999.