How can homeless individuals protect their earnings from theft?

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Discussion Overview

The discussion centers around the security of earnings for homeless individuals, particularly in light of a theft incident at a Los Angeles homeless shelter where a significant amount of money was stolen. Participants explore the reasons why homeless individuals might keep large sums of money at a shelter instead of using banks, touching on issues of trust, documentation, and the implications of homelessness on financial management.

Discussion Character

  • Debate/contested
  • Conceptual clarification
  • Exploratory

Main Points Raised

  • Some participants express confusion about why homeless individuals would keep large amounts of money at a shelter instead of a bank.
  • Others suggest that lack of documentation, such as a permanent address or identification, may prevent homeless individuals from opening bank accounts.
  • It is proposed that some homeless individuals may have unusual fears or trauma that affect their interactions with banks.
  • Participants question the shelter's decision to hold such large sums of cash, suggesting it makes them vulnerable to theft.
  • Some argue that the shelter could potentially set up escrow accounts for homeless individuals to manage their money more securely.
  • Concerns are raised about the implications of keeping money off the books, particularly for those who may be earning cash through informal means.
  • There is speculation about how individuals could save significant amounts of money while being homeless, with some suggesting they might have odd jobs or panhandle.
  • Participants discuss the potential risks and challenges associated with managing money without a stable living situation.

Areas of Agreement / Disagreement

Participants generally express disagreement regarding the appropriateness of keeping large sums of money at a shelter and the reasons behind homeless individuals' financial choices. Multiple competing views remain on the best practices for managing money in such circumstances.

Contextual Notes

Limitations include the lack of consensus on the reasons for financial behaviors among homeless individuals and the complexities surrounding their access to banking services. The discussion does not resolve the underlying issues of trust, documentation, and the financial systems in place for homeless individuals.

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http://www.mercurynews.com/news/ci_7623081
Thief takes thousands of dollars from LA homeless shelter
The Associated Press
Article Launched: 12/03/2007 04:53:21 AM PST

LOS ANGELES—A burglar stole tens of thousands of dollars from a safe at a Los Angeles homeless shelter.
The cash was taken early Sunday from Union Rescue Mission. It belonged to homeless people who saved earnings from jobs outside the shelter.

Officials say the thief set a fire to cover his tracks, forcing residents to evacuate from the downtown shelter. No one was injured.

The mission's chief executive says one man stored more than $10,000 in the safe while several others had about $4,000 each.

This is very sad. But I don't understand why all this money was being kept at the shelter, rather than at a bank.
 
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Thats a lot of money to be kept at a shelter. It seems odd to me too. I'm also thinking, if someone had 10,000 dollars, why are they in a homeless shelter?
 
Hopefully the shelter had insurance to cover theft?

I guess some homeless people don't trust banks.

It does seems strange that the homeless have that much money, well it's not a poor shelter.
 
hypatia said:
Thats a lot of money to be kept at a shelter. It seems odd to me too. I'm also thinking, if someone had 10,000 dollars, why are they in a homeless shelter?

That seemed strange, too.
I mean, that's enough money to cover at least two months of rent in L.A. :)
 
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Perhaps the homeless people do not have sufficient documentation to get a bank account.

Some/many probably do not drive (or perhaps not legally), and may not have a driver's license. They certainly don't have a permanent address, unless the homeless shelter has become a defacto home.

There is a church near my office, which offers temporary (overnight) shelter. Well, the same people line up every evening for a meal and temprorary shelter, otherwise I see them on the streets in the surrounding neighborhood.
 
Astronuc said:
homeless people ...certainly don't have a permanent address
Yep.
 
But what concerns me is that the shelter would keep that much money on the premises. Seems like trouble waiting to happen.
 
Anyone who puts $10k into a safe in a homeless shelter is a pure idiot. I can't feel bad for someone that stupid.
 
I'm torn between realizing that someone who is homeless wouldn't be able to keep money anywhere else because no bank is going to give you an account without a permanent address, and like others, trying to figure out why someone who has saved up $10,000 is homeless at all? That much money would pay rent for quite a while on a small, shared apartment, which has to be better than sleeping in shelters.
 
  • #10
It is catch 22 with these people, if you do not have an address you can not get a job, if you do not have a job you can not get an address, if they carry any money with them they may get robbed and banks do not give accounts to faceless people, they also know that any rented accommodation will be short lived because of their way of life.
 
  • #11
Some people can have unusual fears as the result of trauma and other medical conditions. What we might consider a normal interaction, they might not.
 
  • #12
I don't see why the shelter address cannot serve as the home address for a savings account applicant - especially, if the person has lived at the shelter long enough to save up $10,000. Surely, that takes a little while.

I'm curious to know if Bank of America would deny a savings account to someone who provided a shelter address for their residence. I didn't think B of A was all that picky, since they are OK with giving http://online.wsj.com/article/SB117133501870406767.html?mod=home_whats_news_us". Maybe I will ask what the requirements are for an account set up when I go into the bank this week.

Far Star said:
Some people can have unusual fears as the result of trauma and other medical conditions. What we might consider a normal interaction, they might not.

Now, that I can see. It may be that it is the wish of the person to have the money within reach at all times.
 
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  • #13
They have a suspect in custody:
http://www.dailybreeze.com/news/regstate/articles/12114881.html

A suspect who had stayed at Union Rescue Mission was detained Monday in connection with a burglary at the mission of about $100,000 in homeless people's money, police said.

Alvin Snyder, 44, was taken into custody about 10:30 a.m. near Fifth and San Julian streets after being identified through the mission's surveillance video system, said Officer Karen Smith of the Los Angeles Police Department's Media Relations Section
 
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  • #14
They kept $100,000.00 in cash on premise?
 
  • #15
That's what I was thinking about, MIH, that if they'll open accounts for people with no SSN, why not one using a shelter address? Just make it a savings account, not a checking account, so they can't write bad checks if they don't have a permanent address, so the bank has little risk of holding their money. Being able to provide a landlord with the name of a bank where you have an account with $10,000 in it will go a long way toward securing an apartment, even if you don't currently have a job. And how are they saving up $10,000 without a job? Is pan-handling that lucrative nowadays? Sounds like they probably do have odd-jobs where they could use those people as references at least, even if it's under-the-table pay.

I don't know why the shelter would take on the responsibility of holding that much money either. They should know it would make them vulnerable for a break-in. And, it's not doing their clients any favors to keep the money where it's off the books, so not helping to establish any sort of credit history toward getting them off the streets.

Is there a way a homeless shelter could set up escrow accounts on behalf of the homeless, if the homeless can't get their own accounts? Just keep a small amount of cash in the safe for when the homeless need to buy something, and put the rest in a bank?
 
  • #16
Evo said:
They kept $100,000.00 in cash on premise?

That's INSANE! I think the people running the shelter are the ones with mental problems if they think it makes any sense at all to hold that much money IN CASH on the premises.
 
  • #17
Another reason that they might not want to put the money in the bank is something you mentioned about not wanting it on the books. If they are panhandling or getting paid illegally, they don't want to draw attention to it for tax reasons.
 
  • #18
No relation to me. No really. Why didn't the shelter put the money in a bank account?

edit - moonbear already asked.
 
  • #19
My wife and I recently changed banks, and we had to go through hours of paperwork just to establish new accounts and close out the old ones. When I withdrew $10,000 in the form of a cashier's check to buy a motorcycle, I had to sign a piece of paper that would go to the government informing that I had taken money out of my own savings account. If you're homeless, undocumented, or perhaps getting paid in cash for day-labor, there are some strong disincentives to dealing with banks.

That said, it was reckless for the shelter operators to keep that much cash around. Unfortunately, setting up bank accounts for all those people could have been a nightmare, and though it is tempting to think that the money would be better off in an interest-earning account, banks have depressed interest on savings accounts to the point where they don't even keep up with inflation. With most banks around here, you've got to put at least $25K in a money-market account with limited access in order to get a paltry 2.5% rate.
 
  • #20
turbo-1 said:
That said, it was reckless for the shelter operators to keep that much cash around. Unfortunately, setting up bank accounts for all those people could have been a nightmare, and though it is tempting to think that the money would be better off in an interest-earning account, banks have depressed interest on savings accounts to the point where they don't even keep up with inflation. With most banks around here, you've got to put at least $25K in a money-market account with limited access in order to get a paltry 2.5% rate.

They aren't getting ANY interest having it sit in a safe in a homeless shelter where it's much more vulnerable to theft than it would be in a bank vault. At least in a bank, it's insured, and has the benefit of more advanced security.
 
  • #21
Moonbear said:
They aren't getting ANY interest having it sit in a safe in a homeless shelter where it's much more vulnerable to theft than it would be in a bank vault. At least in a bank, it's insured, and has the benefit of more advanced security.
You can get a safety deposit box in a bank. You can put anything you want in it, even old shoes. At least the money would be in a much safer place.
 
  • #22
Moonbear said:
They aren't getting ANY interest having it sit in a safe in a homeless shelter where it's much more vulnerable to theft than it would be in a bank vault. At least in a bank, it's insured, and has the benefit of more advanced security.
The threat of having the IRS lock your funds because you apparently have undeclared income may trump the lure of getting 1.25% on your deposit. The vulnerability issue is a big one, though.
 
  • #23
Evo said:
You can get a safety deposit box in a bank. You can put anything you want in it, even old shoes. At least the money would be in a much safer place.
That would have been a safer alternative, with the ability to keep a small slush-fund at the shelter for incidental purchases.