Data Dive

Data Dive: The Yes, No, Gotcha! Edition

Holiday vacations are officially over, and the payments and commerce news cycle is back in high gear. Bitcoin turned nine, and was celebrated by seeing its price per coin exceed $20,000. Rumors circulated that FICO might be losing its monopoly in the mortgage market as the FHFA is considering allowing lenders to consider an alternative. China continued its crackdown on the cross-border exodus of funds, and the world got to meet the middleman and Forever 21 got hacked.

And that was just Tuesday.

Credit Karma said yes to early tax refunds for consumers - for free. The Justice Department officially switched their position on drugs – in the form of cannabis – from a soft “maybe” to a hard “no.” And the world learned that the Nigerian royalty that has been trying to scam them for the last several years is neither Nigerian nor a prince – just a guy from Georgia with a side hustle working for scammers.

Good Tax Lending Karma

Good news for consumers avidly awaiting their tax refund for 2018: Credit Karma Tax is rolling out a new product call Earlybird Advance, an online refund advance service.

The new service will allow consumers who filed their taxes using Credit Karma to take a $500-$1000 advance on their tax refund without an additional fee or charge. Funds can be deposited into a consumer's account with 24 hours of the IRS accepting their fully filed tax return.

“Because filing taxes with Credit Karma Tax is completely free, not only can Americans keep their entire refund, Earlybird Advance can also help them get some money sooner,” said general manager Jagjit Chawla. “It’s our way of helping people who can’t wait weeks for their refund.”

Consumers who file electronically wait, on average, three to four weeks to clear their refund. The wait can be even longer for lower-income consumers who file for the earned income tax credit or the additional child credit. Those who opt to file with Credit Karma and take their refund early will have their funds deposited onto an American Express Serve Prepaid Card. The Serve Card has no monthly fee, does not require a credit check and includes free withdrawals at over 24,000 ATMs nationwide. Additional perks include free early direct deposit and free online bill pay.

“For millions of people, a tax refund can help smooth out finances and alleviate financial stress,” said Stefan Happ, executive vice president of global prepaid and alternative payments for American Express. “We’re excited to team up with Credit Karma Tax as the exclusive prepaid debit card option for refund disbursements and help filers get some of their refund dollars even faster with the Earlybird Advance.”

The funds for the Earlybird Advance come care of MetaBank, a federally chartered savings bank of Meta Financial Group, Inc.

Credit Karma is not alone in this offering in 2018, of course. H&R Block and Liberty Tax Services both offer a similar promotion to get customers through the door, promising early, interest-free tax refund loans of $500-$3,000 for qualified customers. Those loans are a little less free, as consumers must pay a tax preparation fee to receive them – but they are advertised by the extremely handsome Jon Hamm.

The Justice Department (Tries To) Just Say No To Cannabis  

Given his long-standing personal commitment to the clear and present danger cannabis presents to the American people, it probably should not have come as much of a shock when Attorney General Jeff Sessions officially moved to curtail the legalized cannabis industry this week. He did that by revoking the Cole memo (and two other associated memos) that provided a legal framework for the sale of cannabis in the States.

Cannabis remains classified as a Schedule 1 narcotic by the federal government. The Cole memo(s) sketched out an official federal policy of ignoring the sale and consumption of marijuana in states that had voted to legalize it recreationally and medically. Sessions, however, believes that since the Schedule 1 designation is still in effect, it remains up to the discretion of local U.S. attorneys to determine if and how they want to prosecute the cannabis industry.

“It is the mission of the Department of Justice to enforce the laws of the United States, and the previous issuance of guidance undermines the rule of law and the ability of our local, state, tribal and federal law enforcement partners to carry out this mission,” Sessions said in a statement. “Therefore, today’s memo on federal marijuana enforcement simply directs all U.S. attorneys to use previously established prosecutorial principles that provide them all the necessary tools to disrupt criminal organizations, tackle the growing drug crisis and thwart violent crime across our country.”

The memo could be used to crack down on the emerging industry – or it might not, as it leaves the decision to prosecute in the hands of individual states' U.S. attorney generals. For example, the U.S. AG in Colorado signaled his public intention to do absolutely nothing new in regard to marijuana. Instead, that state's intent is to continue to follow Cole memo guidance.

Session’s announcement drew widespread criticism. According to the report, Sen. Cory Gardner (R-Colo.) said on Twitter that the move “directly contradicts what Attorney General Sessions told me prior to his confirmation.” Gardner further threatened to shut down nominations to the Justice Department until this situation is resolved.

“With no prior notice to Congress, the Justice Department has trampled on the will of the voters in CO and other states,” he wrote. “I am prepared to take all steps necessary, including holding DOJ nominees, until the attorney general lives up to the commitment he made to me prior to his confirmation.”

The announcement, however, has further complicated the financial management side. Tune in tomorrow for a PYMNTS talk with a cannabis cultivator and distributor who is concerned that his minimal financial services access is about to disappear.

And speaking of providing questionable financial services …

The Nigerian Prince Is Found (He’s Neither a Prince Nor Nigerian)

The only thing worse than being scammed by Nigerian royalty is being scammed by someone merely pretending to be Nigerian royalty – particularly if one’s Nigerian prince is, in fact, a 67-year-old resident of Slidell, Louisiana.

But it seems that those Nigerian prince emails – claiming that the victim can receive sums of money deposited for safekeeping in their accounts in return for paying the “taxes” or “fees” associated with sending the funds – are actually helped out the door by Mr. Michael Neu, a U.S. facilitator who made sure the money moved from the victims in the U.S. to the scammers in Nigeria.

And those scams, according to an 18-month investigation of Leu and the scammers he worked for – are often pretty elaborate.

Some victims get documents in the mail. Some are encouraged to fly to Nigeria to complete the transaction. Some fraudsters have reportedly even produced trunks or stamped money to try to verify their claims.

“According to State Department reports, people who have responded to these emails have been beaten, subjected to threats and extortion, and in some cases, murdered,” the FTC stated.

Neu is not Nigerian, but the police stated that money acquired by Neu was wired to people in Nigeria. His arrest seems to be in the context of a larger international investigation of the Nigerian price claims.

Neu faces 269 counts of wire fraud and money laundering, having participated in hundreds of scam transactions.

So, what did we learn this week?

Getting an early tax refund this year is the cool thing to do, since so many are offering to do it for free. The outlook for the sale of cannabis remains hazy, and as much as we all loathed getting email scams from Nigerian princes, you have to admit that it’s a bit of a letdown knowing that the real scammer was neither.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.