NETELLER IN THE NEWS AGAIN - AND NOT IN A GOOD WAY

8 June 2007

Canadian customers claim e-wallet handed them over for collection without checking first

Beleaguered e-wallet Neteller was in the Canadian news again this week with a report in the Vancouver Sun that as many as 200 Vancouver area residents could be victims of identity fraud involving false accounts opened with the Calgary and Isle of Man based company.

Neteller, already beset by hassles with the US Department of Justice, frozen US client accounts, the arrest of its founders and suspension of its shares on the London market, will likely not find the latest accusations helpful.

Complainants reported receiving letters from a Vancouver collection agency demanding repayment of $822.75 for debts they insist were never incurred with the Calgary office of Neteller plc. Apparently criminals used the names, addresses, phone numbers and ages of victims, and bogus bank deails to open accounts with Neteller over the telephone last December.

One victim said he was outraged that Neteller gave his name to a collection agency without contacting him first, and is demanding $500 in compensation from the firm for both the time it has taken to resolve the issue and the anguish he has experienced.

Vancouver police told the Vancouver Sun that as many as 200 collection contracts for a suspiciously similar Canadian $822.75 were among 1 600 contracts purchased from Neteller by Vancouver's CBV Collection Services.

CBV executive vice-president Bob Richards confirmed Wednesday that $822.75 is "a strange and consistent number" that the collection agency now views as dubious, perhaps indicating that the accounts opened at Neteller were fraudulent.

"We've had a number of people say that they don't owe this money," Richards said in an interview. "We have gone to check and that appears to be the case." Richards couldn't say how many of the contracts were bogus but said collections activity is being suspended in suspicious cases.

"Identity theft is alive and well, unfortunately, in the city, and it is fairly widespread," he added.

Asked by the Vancouver Sun how CBV ensures that it is not demanding money from people who do not owe it, Richards said the company relies on clients such as Neteller to confirm the validity of debts.

One complainant protested to a Neteller official at the company's Calgary offices, who confirmed that Neteller neither contacted him when the bogus account was created, nor before they farmed the debt out to CBV.

Approached by the Vancouver Sun, Neteller official Mark Healey at the Calgary office denied that Neteller advances credit "on basic identity details only" but referred all other questions to the firm's media relations office in London.

Asked if 200 people were affected in Vancouver, Healey said: "We are aware of a small number of accounts in Vancouver that have been subject to identity theft. I am not familiar with the number that you have proposed."

Earlier this year Neteller ceased accepting business from the U.S., Turkish and Canadian regions.

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