An Alternate Payment Plan for Deposits Overseas
 

OK, my DH and I came up with a brilliant idea this weekend, or so we think. I need all of you to tell me: 1) is it feasible, will it work and 2)help me iron out any glitches 3) does anyone see any legal issues that might arise.

Many of us rent apartments overseas and I am sure vise a versa, especially through VRBO. Often the landlords do not except credit cards or pay pal which leaves us wiring money once or twice with a $35-50 charge each time and/or trying to take out large sums at the atm the first day to pay the balance. The banks also give the worst exchange rate on this transaction. I have often rented apartments from hotels because of this problem.

There just has to be an easier way. What I am going to suggest might just be it. At this point you would be wiring money to the person so I have to assume that you trust the person and believe the apartment exists!

Coco from Dijon has helped me work out some of the details and says it would work for her.

I would open a NEW free checking account with the minimum amount (25-50)and get two atm cards for it.

I would send one card(snail mail) to the landlord and keep one for myself.

When they received it I would email them the pin and deposit the amount agreed upon .

Depending how much the deposit is, they might have to go to the back a couple of times to withdraw the funds, but, they could check the balance to see that the amount was in there.

They would keep the card for any further deposits and for the final payment, which would be deposited at the appropriate time.

I would then have the account closed or change the pin.


What do you think?

Interesting ploy!

My only thought would be that you might need to inform your bank that you intended to withdraw funds from an overseas ATM. My particular local bank could care less, as they don't track such things, but some larger ones might.

BTW, my bank makes no additional charges for foreign ATM withdrawals, other than the 1% that Visa tacks on, so this method might be a real winner for me, if we can ever again afford an European trip. I have yet to stay at Coco's flat in Dijon, so perhaps ----

:-)

>:D< Dick I'd love to try that system with you if you think it is worth it!

I would love to hear how this works out for anyone who tries it. Have had the same experience with sending money for apartments as Susanna. pp

<b>Brava!</b>

I don't see why it wouldn't work. Real outside-the-box thinking there.

Possible glitch: if you don't have sufficient funds in the account to provide for currency fluctuations, the ATM withdrawal transaction might get rejected, costing you an overdraft fee. Ask me how I know. :&quot;&gt;

Of course I would love to try that method for staying at your flat, Corrine! The only problem I see would be that it appears you are getting fully booked, now that folks have found out how nice the place is.

I guess I will just have to book early.

:-)

Really interesting idea!

I am currently frustrated because I have to send a deposit TODAY to Rome for an apartment and they only accept two ways: Send them my charge card info (including the security #) or wire it. I'm going to wire it but, because of transaction costs, I'm going to wire it all, which doesn't make me happy, but the apartment is great and a good deal. We need to pay the balance in Euros on arrival. This time it will work out because Rome is our last stop in Italy so we'll have time to gather the money before arriving.

In January we had to provide the balance on our Paris apartment in cash (Euro's, of course) and it was awful! No bank would give us enough at one withdrawel from our debit card (I had gone thinking I could present our charge card at the bank and they'd take it and give cash-WRONG!). We ended up going to the bank three days in a row and leaving that day's cash in the microwave where the owner could come by every day and pick it up. GEESH! Never again.

Most of the time, we were just asked to send a US check for deposit to a US address, then send the balance by US check 30 days prior to departing.

It sounds feasible to me, as long as you understand your bank fees on foreign ATM withdrawals. A lot of people don't, actually, from reading posts on here. Mine now does charge a 3 pct surcharge on ATM withdrawals abroad, and I know some other banks do, also.

Personally, going to all the trouble of opening a new bank account, etc., would not be worth the cost of my time just to rent a vacation apt. and save a wire fee or get some money on arrival at the ATM. YOu plan to close the account, also, which is more trouble and time. I hate dealing with banks, and avoid it whenever possible.

OOPS, in my previous post I said I was going to wire all the money (and also said I was going to pay the balance on arrival-duh) I got confused between a Venice and Rome apartment. Paying all the Venice by one wire.

Sounds likea cunny plan - as the expresion goes.

The method that I have used in the past is to put cash in an envelope and mail it. I was prepared to take the slight risk that it might go missing.

It's a great plan and well worth the effort to try it but I kinda agree with Christina about it not being worth MY time to do it for a rental. Do you have to do this every time you rent an apartment...i.e. opening and closing bank accounts? Even doing it just once a year is IMO, a pain in the a##@, what more if you need to do it twice a year or more??

In any case I sent out wire transfers to Europe 4 times this year alone, and luckily my bank did not charge me at all for outgoing transfer. Two of the wire transfers I have to pay for THEIR bank charge so I have to wire a bit more than the amount required.(I think &euro;12 more, which was not a big deal).

Has anyone used one of those prepaid Visa/MC cards I see on the checkout counter at Walgreen's?

If their fee structure isn't exorbitant, and if they're not rejected by ATMs in Europe, it seems they'd be a good way to implement susanna's plan. Also a good backup to a bank card as a source of travel funds.

Personal to wombat7: I don't think the adjective you applied to &quot;plan&quot; means what you think it does. I suggest you consult a competent dictionary.

Maybe you meant &quot;cunning&quot; or &quot;canny&quot; - but that's not what you wrote.

I too am tired at losing time and money when renting apts in France and Spain.I did convince one owner to use Paypal for at least the deposit.
My frustration is with the owners wanting their balance in cash.Last June I arrived with a large amount of US dollars and then used the American Express office at the airport to change it to euros.Dreadful exchange rate but they rewarded me with a pen! Awful feeling having that amount of cash even though it was only from the airport to the apartment.
From what I have learned,the owners want cash because of taxes! They avoid paying/reporting their profits from the rentals since their banks don't get involved!!!!

Robes - many thanks for pointing out the typo - I did of course mean a &quot;cunning plan&quot; - No need to consult a dictionary - competent or otherwise.

ooops - I did consult the dictionary. I suppose that is one way to increase your vocab!

A staff member at my bank got very upset when she found I had let a trustworthy family member use a bank card when this person was not on the account. Apparently this violates the terms and conditions. So while it would likely work fine to do as you suggest with the new bank account, I'd be leery of complications.

The cheapest method I have found, if credit cards or PayPal cannot be used, is a bank draft. In Vancouver, I can get these for a fee of $5 plus 1% over the interbank rate, here:
http://www.vbce.info/

Thanks everyone for your great comments. I would also be interested to hear from our landlords here on Fodor's and what they think about being paid this way.

Comments on a few responses.

Personally, I wouldn't close the account, I would just change the pin which can be done over the phone very easily. This would be a dedicated account for this kind of thing which I do about twice a year. My bank also does not charge for a withdrawal abroad but it does charge 1% of the transaction.


I think that it would be easy to figure out the amount you would have to transfer to cover the exchange rate and avoid an overdraft. I also would not have overdraft protection on this account.

The Visa card is also a great suggestion, will have to look into that.

I don't think that I could put cash in an envelope and hope it gets there, too risky for me..
Love the microwave solution though.

I'm sure there is something about using the card by someone who's name isn't on it, but who's to tell? This way they get cash, which is what they want, I get a good exchange rate, we would all be happy.

Now, my problem is how to explain this to a French/Italian/Spanish person with limited foreign language skills.

Here's a twist.

Don't close the account each time. Just leave enough in it to keep it open -- $50-$100. That is your loss limit.

Have the landlord leave the card in the apartment or mail it to you if they are an agent.

Change the PIN.

Do it all over for the next rental.

The basic idea works well. When our daughter was a student in Scotland, she and her mother had cards for the same account. We deposited in Boston in dollars, and she withdrew in sterling in Edinburgh.

This is not a direct reply to the alternate payment plan suggestion but I am curious why people are not offended that the landlords demand cash because they want to evade payment of taxes and/or leaving a paper trail and so we become part of their&quot;scheme&quot;.All we seem to have is the extra expense and inconvenience of getting the payment to them!
Am I alone in being offended by this way of doing business?

Chapla, I live in France and I take cheques and transfers from French guests and Europeans in general since there are no charges. I pay my taxes and also include visitor taxes in my rates (I know some owners who make you pay for the VT at the end of your stay)

What I don't want is to pay something like 30 euros on a transfer to get the money, and if my guests don't have to pay on their side, I'm happy for them too.
I don't trust Paypal (because of the phishings I receive)and I can't accept credit cards because I'm a private owner. Voil&agrave;! :-)
((S))

...........yeah,right!

Chapala
The OP clearly states that this arrangement was to save her money. The landlord was prepared to take a wire transfer but that would cost her $35-50.

We rented a house in Provence through VRBO. The owner requested that we wire the money for the down payment. This kind of transaction is very expensive in the USA--40.00 or more. I asked him if his bank would accept a certified check in dollars(the equivalent of the euro amount). He checked it out; his bank OK'd the transaction, and we mailed him a certified check. Hopefully, we will find other landlords who will allow us to make deposits this way.

The original post was regarding service charges for international money transfers, it has nothing to do with paying or avoidig taxes.

Don't attribute larcenous thoughts to Coco or any other poster please.

Wow-word of the day-larcenous.....!!!!!!!Have aglass of wine please,it's only Monday and pay your taxes!

I think it might have been your second post on this thread that was the issue. It is one thing to speculate on whether people are asking for cash to avoid tax, but it is quite another matter to post a disbelieving &quot;yeah,right&quot; in response to a well reasoned post from a very respected Fodorite (hope you don't mind being called a Fodorite Coco!).

No for me to have a glass of wine - the G&amp;T hit the spot quite nicely

oops last piece should have been &quot;not necessary for me&quot;!

Susanna-it's an interesting premise, but I wonder how many landlords would be willing?
Personally, I wish more accepted Paypal.

Coco-if you don't mind, I'm curious as to why you don't trust Paypal? Your comment was almost identical to the one I received from a B&amp;B owner in Grande Bressac. She wanted us to wire a deposit of 50 euros which would have cost me $30! Thankfully she allowed us to send a USD check for deposit which she will give back once we arrive.

I have a paypal account which I've used many times to both make and receive payments via ebay. My understanding is that the phishing is nothing more than Spam which can be ignored. As long as you only log into your Paypal directly (as opposed to any emails you receive) there should be no problem. You would have to pay an extra percentage (about 4%) to be able to accept credit cards however.
If you have a website for your business, you might be able to accept credit cards via a checkout basket as well, depending on the type of site you have and what your site hosting allows.

I know if all things were equal, if I could pay by CC, I would be more likely to rent that place over one where I could not.

For our upcoming trip we have organised Travellers Cash Cards and loaded foreign currency onto them. Why not use those? thereby you are not opening an account as such but just sending a card with the deposit loaded on, then when final payment is required load that amount on for them to draw and you then determine the exchange rate you pay as well. These cards are not linked to any bank account so are safe and can be replaced if lost.
We are in Australia but I assume they are available in the US too.

Interesting concept.
A risk with leaving the account open is that, after the landlord gets his deposit, he abandons or otherwise enables a third party to have it. Said third party would then be able to &quot;hack&quot; the pin number, using software; thus, when the account next had money, he could &quot;re-hack&quot; the pin and take the money intended for landlord #2. You might then be at risk for assuming #2 got the money, and arrive at an apartment leased to someone who paid normally.

I have not heard of Travelers Check Cards, will have to look into that too.

Tomboy: thank you, that is just what I was looking for. Ack mentioned having the landlord give you the card back when you are staying in the apartment after they have taken all the money so I would think that would take care this problem.

Great suggestions, keep them coming!

I too think it is an interesting idea. But what would happen if the ATM 'eats' the card? There would be no way for the landlord to get it back as it would have your name on it.

Tom

<i>Said third party would then be able to &quot;hack&quot; the pin number, using software...</i>

A bank card PIN is not written anywhere on the credit, debit, or ATM card. It is in the bank's computer. When a customer enters it into the keypad on the terminal, it is encrypted and sent to the bank for verification. Hacking it &quot;using software&quot; would be infinitely complicated. Read: impossible.

I designed software systems using IBM's Transaction Processing Facility that underlies most banking networks, so I know whereof I speak.

A word from a house owner:
We accept bank transfers, bank drafts, and PayPal for our houses in France. We don’t accept credit cards, as we, like Coco and many of the people you will be dealing with, are not a business.

Each of these has some difficulty for us.

Bank transfers attract a lot of charges, for the sender and the receiver. Your branch, the main branch, the receiving/correspondent bank here, and our branch, all take their cut. We usually accept our own bank’s charge, and credit people for the original amount we received, which is often less than they sent – not a great way to start a relationship! The highest charge we saw was for 50 Euros, on an Australian transfer – all before the payment reached us.

Theoretically a bank draft/cashier’s cheque in Euros should be better, and it is, if it’s drawn on a French bank. Foreign (i.e. North American) banks normally have a relationship with a correspondent bank in Europe. Although Europe now has a single currency, it does not yet have a central clearing bank. If your bank is connected with a French bank, we pay no extra charges. If however its correspondent bank is in another country we pay over 20 Euros in charges. Not a lot on a large rental, but on a small deposit, of about 200 Euros, a hefty percentage.

Regarding payment by bank cheque in Dollars, we really don't like those, as there is often a charge to clear the cheque PLUS an exchange charge. Although we accept charges that our bank assesses, we don't accept the exchange charge - I know it's not your fault, but it's not mine either, and this county's currently is not the US dollar.

We signed up with PayPal because these approaches seemed to be getting more and more difficult. We actually lost bookings because it was costly and too difficult for some of our customers to find a way of sending us payment. It was the only way I found to accept credit card payment, although it does mean that we pay almost 4% on every credit card transaction. We accept that, but I certainly know people who wouldn’t. We signed up before the latest round of 'phishing' and have had no trouble. As someone else mentioned, as long as you go directly to your account you should be fine. However, I find that some of my French friends are still leery of dealing through the Internet - could be because they are older and more conservative.

I'm still not sure how I feel about the original proposal. It still seems fairly complicated for someone to set this up just to rent an apartment. It shouldn't be more complicated for me as an owner than taking a cheque to the bank, but somehow it does. I think that many French owners would not understand what you are trying to do, and be suspicious. However, it’s certainly an interesting approach.

It is one way to do it, but seems rather a lot of effort for $35.

The person on the European side would not be able to check the bank balance with the card. Not that they need to anyway. Foreign ATM machines know nothing about what anybody has on their account, just whether or not there is enough money (or credit line) for the requested withdrawal.

Robespierre:
&quot;Hacking it &quot;using software&quot; would be infinitely complicated. Read: impossible&quot;
The PIN need not be written on the card. The software could find it.
Said software's available on the internet, going price ~$150. Small price to pay if one is amoral enough to use it. If it's a 4 digit PIN, that's 10,000 combinations, about 1/x of a second for a 2 MHz chip. True, there are counter-measures, but given the skills of a devoted hacker, and the apparent ease of penetration these people often have, I wouldn't leave the account open.

I have sent a personal check to pay for something in Europe. I figured out as close as I could with the exchange rate and made it out in dollars and mailed the check. No problem.

You could always do that and if it was more or less figure it out when you paid the balance.

<i>Said software's available on the internet, going price ~$150.</i>

I doubt if a brute-force attack on the PIN would work very well - systems don't stand around while 10,000 attempts take place.

Would you please post a description of what this $150 software does? TPF systems are bulletproof - if it were actually possible to crack one for that kind of money, ATM crime would be pandemic.

And for a real tool that was useful, $150 is way, way low. I used to see satellite TV hacks that cost in the thousands.