Issue Date: Vol. 51, No. 8, August 2011, Posted On: 7/28/2011
Mint Shuts Down Dollar Coin Scam
Mint, U.S. Mint, $1 coin, $1 coin scam, frequent flyer miles
WASHINGTON -- The U.S. Mint has shut down online sales of $1 coins to consumers who use credit or debit cards. The action circumvents a "legal scam" in which savvy consumers purchased $1 coins online, using credit cards, in order to get frequent flyer miles -- then returned the coins to their local banks.
The banks, in turn, returned the coins to the Federal Reserve ... defeating the Mint's effort to boost circulation of the unpopular currency by offering the coins for online purchase.
"While not illegal, this activity was a clear abuse and misuse of the program," Mint officials said. | SEE RELEASE
The scam has been ongoing for at least three years. The Mint said it became aware of the problem in 2008. Government officials originally responded by limiting the number of coins that consumers could purchase online.
The scam is the latest embarrassment for the federal agency, which was targeted earlier in July by a California Congresswoman who called for the Mint to halt production of its Presidential $1 coin series. Storing 2.4 billion unwanted dollar coins in federal vaults is costing taxpayers $300 million a year, said Rep. Jackie Speier (D-San Mateo). | SEE STORY