Perhaps some good NETeller news down the road?

[shorn7]

January-31-2007,
NETeller Trying to Work Out a Deal with the U.S. Department of Justice...By Hartley Henderson

The recent arrests of John Lefebvre and Stephen Lawrence, combined with the subpoenas issued against some financial institutions, has caused incredible headaches for Americans with money in their NETeller accounts. After the UIGEA was passed in October, NETeller examined their situation and announced they would be phasing out American clients. It was clear the company would stop accepting U.S. accounts in early 2007 but wanted a bit of time to ensure that all accounts could be settled properly and that NETeller could get their affairs in order with regards to the worldwide merchants they still offer transfers to. To most individuals this would seem like a reasonable request, but apparently not to the United States government who is clearly on a witch hunt against anything and everything associated with online gambling with regards to the United States. Consequently, the exact situation that NETeller wanted to avoid has now happened.

Every U.S. banking partner has stopped all association with the company meaning that Americans have absolutely no way of getting to their money. NETeller will not process any withdrawals for Americans, nor will U.S. banks accept EFTs from Americans that come from NETeller, so the money is literally held hostage at this point. NETeller clearly does not want to keep the money, but they are also doing little to help Americans who are stuck. Several non Americans have tried to help out their American counterparts by taking peer to peer transfers from them and then withdrawing the money for them, but NETeller appears to be stopping all of these transactions from being processed. And then to add insult to injury, NETeller is freezing the non American accounts that take the transfers.

Upon talking to some people at NETeller, as well as the p.r. firm representing them, it appears NETeller has no interest in giving more information. The company's only response to numerous emails and phone calls was to tell me that they had nothing more to add. And in one call, an individual at the company actually threatened me if I didn't stop "harassing" them.

Fortunately, the news is not all bad. According to Russ Hawkins, CEO of MajorWager.com, NETeller is currently working with the U.S. department of justice to try and conceive a way of getting the money out for Americans, although more details are not known at this point. It has also been reported on other sites that all of the U.S. player's money is currently sitting in an escrow account at a British bank, although this was neither confirmed nor denied to me by the company. Clearly it is not in the best interest of anybody to have this money sitting in limbo. It does not serve NETeller who just wants to get on with their business, it does not serve the U.S. department of justice who clearly doesn't want to appear as if they are holding their own citizen's money hostage and it clearly doesn't serve the NETeller customer. As well, if the money was back in the proper American bank accounts it could be used for purchase on goods and services which in turn helps the U.S. economy.

I have requested more information from individuals at NETeller in both the Isle of Man and Calgary, as well as from a spokesperson for the company and for the Isle of Man itself. As soon as more details are known they will be posted.

01-31-07
Hartley Henderson
MajorWager.com

[Fat Tony]

I wouldn't count on the US gov't being reasonable and allowing a transfer window so everyone can get their money out.

[khaosanroad]

Someone will initiate a class-action law suit to get the money out.

[Fat Tony]

You know that class-action suits can take YEARS before they are resolved, right? Also, who would be getting sued and on what basis?

[xDiamond_CutteRx]

I still can't believe that they never gave us a grace period to withdraw the money in the first place. I'm still mad at the US gov't first, but Neteller handled this, in my opinion, in the worst possible fashion.

[lwestatbus]

I still can't believe that they never gave us a grace period to withdraw the money in the first place. I'm still mad at the US gov't first, but Neteller handled this, in my opinion, in the worst possible fashion.

I'm not sure what percentage of NeTeller's business is from either non-US users or US users making non-gambling transactions, but I'll bet it is dwarfed by the US gambling business. Given the way the US slammed NeTeller for performing perfectly lawful services in their home country it isn't too hard for me to understand NeTeller's reaction. Their business is probably decimated and they have every incentive to continue racking up the interest on their deposits. The article says that NeTeller has every incentive go get back to business as usual but I disagree.

Note that the NeTeller US Player notice says that every US bank has suspended transactions. The industry may have initiated this but it is also possible that NeTeller initiated the suspension. Note also that NeTeller has suspended peer-to-peer transfers so we in the US can't launder our money through some of our non-US colleagues.

My suspicion is that we'll eventually get our money back but it will be a while. I don't see any incentive for NeTeller to hurry and if I were them I'd be mad as hell.

[Ensano]

they aren't making interest off the money... in an article I read (don't know exactly which one but I linked to it from one of these posts) it states that the money is being held in escrow through a certain bank...

[lwestatbus]

they aren't making interest off the money... in an article I read (don't know exactly which one but I linked to it from one of these posts) it states that the money is being held in escrow through a certain bank...

I gently disagree. One thing is for certain and that is that somebody is collecting the interest and it isn't the customers. If NeTeller doesn't provide for interest to be paid to customers (and I don't think their agreement does) then they are almost certainly collecting the majority of it. Escrow just means that a third party has possession of the funds with instructions not to release them except in certain circumstances. The escrow manager collects a fee for this, of course, but I'll bet the interest itself far overshadows the fee. Distribution of the interest is governed by the agreement between the parties (us, NeTeller, escrow manager).

Consider this, before electronic check clearing it was not uncommon for the large New York banks and financial institutions to load up a briefcase full of large checks drawn on Chicago, California, London, etc., banks and send a courier on a plane to clear the checks. The daily interest on $1 billion USD at 4% annual interest is almost $110,000. We don't know, of course, how much is actually tied up but they've got $200 of my money. Pick your own estimate of how much they're sitting on and do the math.

[flafishy]

they aren't making interest off the money... in an article I read (don't know exactly which one but I linked to it from one of these posts) it states that the money is being held in escrow through a certain bank...

Of course, they're making interest off the money. But that's not really of issue here.