Heads Up on using any Credit Card to Deposit

[footdr]

This post is in reference to any Credit or Debit Card including Pre-paid cards.

A review of the Bankers Online Forum posts(I am a posting member there) indicates that if the issuing Bank discovers use of credit/debit cards for gaming purposes by cardholders or discovers Merchant/Processors submitting charges for gaming and fraudulently mis-coding the transaction (not coding it as a gaming transaction but as a purchase or none gaming service); the Bank will consider the transaction fraud. They will cancel the Merchants Account and most likely the required report to the Fed will target the processor and they will immediately close the players account and could prosecute under law.

They would close the cardholders account and can potentially prosecute as fraud. Regulation GG while addressing the submission of transactions by merchants or their processors doesn't specifically target the cardholder; but the Bank can target the cardholder due to the terms of use of the Credit/Debit card, including pre-paid cards.

Just a heads up, as, I believe most players believed the new law Regulation GG and the UIGEA doesn't specifically apply to them. However, fraudulent use of the card is still considered fraud by the issuing banks.

 

[harrys99]

This post is in reference to any Credit or Debit Card including Pre-paid cards.

A review of the Bankers Online Forum posts(I am a posting member there) indicates that if the issuing Bank discovers use of credit/debit cards for gaming purposes by cardholders or discovers Merchant/Processors submitting charges for gaming and fraudulently mis-coding the transaction (not coding it as a gaming transaction but as a purchase or none gaming service); the Bank will consider the transaction fraud. They will cancel the Merchants Account and most likely the required report to the Fed will target the processor and they will immediately close the players account and could prosecute under law.

They would close the cardholders account and can potentially prosecute as fraud. Regulation GG while addressing the submission of transactions by merchants or their processors doesn't specifically target the cardholder; but the Bank can target the cardholder due to the terms of use of the Credit/Debit card, including pre-paid cards.

Just a heads up, as, I believe most players believed the new law Regulation GG and the UIGEA doesn't specifically apply to them. However, fraudulent use of the card is still considered fraud by the issuing banks.

Is this just recently and going forward or is the talk about looking at any past transactions?

 

[ksb11]

This post is in reference to any Credit or Debit Card including Pre-paid cards.

A review of the Bankers Online Forum posts(I am a posting member there) indicates that if the issuing Bank discovers use of credit/debit cards for gaming purposes by cardholders or discovers Merchant/Processors submitting charges for gaming and fraudulently mis-coding the transaction (not coding it as a gaming transaction but as a purchase or none gaming service); the Bank will consider the transaction fraud. They will cancel the Merchants Account and most likely the required report to the Fed will target the processor and they will immediately close the players account and could prosecute under law.

They would close the cardholders account and can potentially prosecute as fraud. Regulation GG while addressing the submission of transactions by merchants or their processors doesn't specifically target the cardholder; but the Bank can target the cardholder due to the terms of use of the Credit/Debit card, including pre-paid cards.

Just a heads up, as, I believe most players believed the new law Regulation GG and the UIGEA doesn't specifically apply to them. However, fraudulent use of the card is still considered fraud by the issuing banks.

Not that I wouldn't be careful, however, how would the banks break the code? I mean I would believe that the bank would be to busy to have their own cryptology department! I guess that just kinda angers me that they would prosecute somebody for using their own money to do what they want to with it. Whatever.

 

[vinylweatherman]

I would have expected individuals to have been targetted before if they were going to go this far. Maybe this is more of a deterrent measure, and means that once caught, they now have the power to immediately shut down the merchants and cardholder's accounts. They may also place the cardholder on a blacklist, making it harder for them to get an alternative card. Unless it is specifically illegal to gamble online as a player, any deposits would merely be a breach of the terms, surely a civil matter. To make it fraud, the card issuer would have to prove that the player knew that the processor was fraudulently miscoding the transactions. The only way to get a definite legal view would be for a "volunteer" to be prosecuted as a player where the processor fraudulently miscoded the transactions. I always thought that UIGEA was targetted at the banks, and forced them to identify and block all transactions forbidden under UIGEA. This new rule may be designed to force those banks who currently "turn a blind eye" to what is going on to make more of an effort. US players have indicated that staff of some prepaid cards know damn well what is going on, but do not take action unless they are forced to by a government or state body. Some banks also make it very clear to customers by printing "unmissable" warnings on bank statements should they suspect the account is being used for online gambling. This then removes the "I didn't know" defence, even if it is only dealt with as a breach of terms. Surely UIGEA would need to be amended to provide for prosecution of the originator of the transaction (the player), rather than just the banks and processor.
Recently, I have read that some US players have found that their cards and accounts are automatically blocked from making ANY international transactions unless they ask to be placed on a list. This could be another step designed to make the gambling transactions easier to spot, as they will be able to ask questions of those customers who ask to be put on the list for international transactions.

The DoJ recently backed down from their view that the Wire act covered casino gambling, which will make it harder to claim a casino player has made an illegal transaction if it is not for sports betting.

The exception would be those states that have specific laws that allow the act of gambling by an individual online to be prosecuted. These are the players who are most likely to be the target of individual prosecution after the banks and card companies have uncovered gambling transactions.

Vigorous pursuit of the processors would make it much harder for operators to find alternatives, and this could eventually kill off online gambling for the majority of US players without the need to go after individuals.

Going after individuals tends to be a PR disaster, one only has to look to cases where RIAA have gone after "grandma" or the 12 year old kid with a multi-million dollar suit.

 

[Realitybitez]

Weird. According to my bank statements. The deposits I make to casinos are referred to as purchases. I have no idea why but have always considered it a good thing as cash advances are usually charged interest from day one.

My credit card company cant claim ignorance in the matter because they have a few times froze my account as they didnt know what all these oversea transactions were (they were basically looking after me - thinking someone was making unauthorized deposits on my account, so didnt bother me too much) but was abit of a hassle getting them unfrozen, however I always explained they were just for the various casinos I played on So its not like they didnt know

How can it be fraud, its your money and you should be able to deposit/use it as you wish. Unless that rule is just for some banks/countries

Interesting

 

[vinylweatherman]

Weird. According to my bank statements. The deposits I make to casinos are referred to as purchases. I have no idea why but have always considered it a good thing as cash advances are usually charged interest from day one.

My credit card company cant claim ignorance in the matter because they have a few times froze my account as they didnt know what all these oversea transactions were (they were basically looking after me - thinking someone was making unauthorized deposits on my account, so didnt bother me too much) but was abit of a hassle getting them unfrozen, however I always explained they were just for the various casinos I played on So its not like they didnt know

How can it be fraud, its your money and you should be able to deposit/use it as you wish. Unless that rule is just for some banks/countries

Interesting

It's fraud if they are miscoded and use "front" companies such as a bike shop in Dubai in order to trick the bank into letting them through. If they are correctly coded, it is the choice of your card issuer whether to treat these transactions as purchases or cash advances. Here in the UK, card issuers have amended their terms to specifically indicate how they treat gambling transactions. Most have gone for treating them as cash advances, bearing interest from the date of the transaction, but have not applied the usual cash advance fee as they would for a direct cash advance, such as from an ATM.

My Barclaycard is one of the few where such transactions are still purchases, interest free if paid off in full each month. This is why it is my "gambling card", and I don't use any of the others that treat these transactions as cash advances.

In the US, it is illegal for banks to knowingly let a gambling transaction destined for overseas through, which is where the issue of fraud comes in, who is to blame, and who is to be prosecuted.

 

[P.V.]

This post is in reference to any Credit or Debit Card including Pre-paid cards.

A review of the Bankers Online Forum posts(I am a posting member there) indicates that if the issuing Bank discovers use of credit/debit cards for gaming purposes by cardholders or discovers Merchant/Processors submitting charges for gaming and fraudulently mis-coding the transaction (not coding it as a gaming transaction but as a purchase or none gaming service); the Bank will consider the transaction fraud. They will cancel the Merchants Account and most likely the required report to the Fed will target the processor and they will immediately close the players account and could prosecute under law.

They would close the cardholders account and can potentially prosecute as fraud. Regulation GG while addressing the submission of transactions by merchants or their processors doesn't specifically target the cardholder; but the Bank can target the cardholder due to the terms of use of the Credit/Debit card, including pre-paid cards.

Just a heads up, as, I believe most players believed the new law Regulation GG and the UIGEA doesn't specifically apply to them. However, fraudulent use of the card is still considered fraud by the issuing banks.

I doubt any offshore gambling sites list their transactions with the correct name etc., inside the US.

Most are probably services, or purchases.

FootDr is correct but it's not new news. If a bank, or card processor detects a front, they're going to shut down the merchant account and play havoc on all involved.

The first contact would be the site/merchant vs. the player but the player could lose whatever's in question, face legal issues if it's a big enough issue and found to be illegal.

I've been in the ATM business for many years so let me be hypothetical here. If I were to place an ATM inside an illegal business within the US and said it was a coffee shop, I'm in trouble.

FootDr makes a valid point but as with anything it a hard field to plow.

But everyone must remember, with the right herd anything's possible.

 

[footdr]

The regulations aren't new but it appears to me that there are more comments on the bankers forum related to Regulation GG and due diligence and compliance issues to pass audits

I just wish processors would use ach for payment versus wire.

Also, Visa and Mastercard actually don't want to know the truth because they make a ton of money from large banks overseas that issue the most visa and mastercard merchant accounts. Such as the largest bank in Germany, forget the name at the moment.

 

[Mousey]

The regulations aren't new but it appears to me that there are more comments on the bankers forum related to Regulation GG and due diligence and compliance issues to pass audits

I just wish processors would use ach for payment versus wire.

Also, Visa and Mastercard actually don't want to know the truth because they make a ton of money from large banks overseas that issue the most visa and mastercard merchant accounts. Such as the largest bank in Germany, forget the name at the moment.

Received newsletter email from FinCEN on the 29th regarding Customer Due Diligence Requirements.... .

You do not have permission to view link Log in or register now.

You do not have permission to view link Log in or register now.

 

[P.V.]

The regulations aren't new but it appears to me that there are more comments on the bankers forum related to Regulation GG and due diligence and compliance issues to pass audits

Agreed, the bank sponsors are in fact increasing their stance on compliance and due diligence. The push started the first of this year, probably why all the chatter.

 

[Realitybitez]

It's fraud if they are miscoded and use "front" companies such as a bike shop in Dubai in order to trick the bank into letting them through. If they are correctly coded, it is the choice of your card issuer whether to treat these transactions as purchases or cash advances. Here in the UK, card issuers have amended their terms to specifically indicate how they treat gambling transactions. Most have gone for treating them as cash advances, bearing interest from the date of the transaction, but have not applied the usual cash advance fee as they would for a direct cash advance, such as from an ATM.

My Barclaycard is one of the few where such transactions are still purchases, interest free if paid off in full each month. This is why it is my "gambling card", and I don't use any of the others that treat these transactions as cash advances.

In the US, it is illegal for banks to knowingly let a gambling transaction destined for overseas through, which is where the issue of fraud comes in, who is to blame, and who is to be prosecuted.

Funny! I just checked my bank statements and some of my casinos transactions are listed as

www.wiregamezone.com ( I have no idea which casino that one is at)
Digmedia OS Maltanzd 1000
Trqipmad AB Shanghaicny 13169 ( I have no idea which casino this one is at either)
32 Red Gibraltaraud ( This one aint hard to figure out)
Gaming Portals Sales Internet
www.seabrookltd.eu Internet

And they're all listed as purchases It really would be hard to work out which or what ones are casino transactions.

 

[ksech]

I find this interesting, a little over a year ago the bank whom I had done business with for 30+ years closed my account due to too many questionable international wire transactions (deposits into NeTeller and then into QT and a few wire transfers into my bank account from winnings). I just received a letter in the mail on Friday from them (all legalese mumbo jumbo about this Regulation GG and compliance stuff) stating they are looking into whether there is/are/were fraudulant activity. Does anyone know what the statute of limitations are on a closed account? And is this something I should be worried about? It's not like I ever had mega huge international wire transfers from any casino.

 

[Mousey]

Not that I wouldn't be careful, however, how would the banks break the code? I mean I would believe that the bank would be to busy to have their own cryptology department! I guess that just kinda angers me that they would prosecute somebody for using their own money to do what they want to with it. Whatever.

All the banks have to do is ask the Feds. DOJ/FBI/Homeland Security have people playing and depositing and withdrawing at online casinos all the time. Just like us, all they have to do is deposit, then look at the card statement to see how it was processed.

I don't see what the banks point is in going after customers. I deposit money to play online. I get what I paid for. I can't help what the merchant calls their transactions. (insert silly angel smilie here LOL)

If you live in a state (such as Washington) where online gambling is specifically illegal, this new emphasis on customer due dilligence could very well bring about some unhappy consequences.

ksech
I find this interesting, a little over a year ago the bank whom I had done business with for 30+ years closed my account due to too many questionable international wire transactions (deposits into NeTeller and then into QT and a few wire transfers into my bank account from winnings). I just received a letter in the mail on Friday from them (all legalese mumbo jumbo about this Regulation GG and compliance stuff) stating they are looking into whether there is/are/were fraudulant activity. Does anyone know what the statute of limitations are on a closed account? And is this something I should be worried about? It's not like I ever had mega huge international wire transfers from any casino

I don't like the sound of this, and it borders on harrassment, as they have already closed your account. Neteller has already been prosecuted and fined, QT has mega bucks tied up by the feds.... So.... what's the bank want? YOUR money too?

edited to add: You might want to make sure the letter did in fact come from your (previous) bank, and whether they are investigating YOU for fraud. If so.... it may be time to lawyer up.

 

[nisosbar]

I am not a lawyer, but I don't understand the subtext here.

You purchase chips, and for most players, that's that. From what I understand, the UIGEA applies to money movers, not players. So on a couple levels, I don't see the logical connection from point A to point B.

 

[vinylweatherman]

I am not a lawyer, but I don't understand the subtext here.

You purchase chips, and for most players, that's that. From what I understand, the UIGEA applies to money movers, not players. So on a couple levels, I don't see the logical connection from point A to point B.

Bullying.

This will scare many players into giving up because they fear the "feds will go after them" if they continue, and will even go after them for PAST gambling. The whole thing has mostly been "scare tactics", and as Calvin Ayre has shown, there is not much they can do when the operator is REALLY determined to carry on, and players are just as determined to choose what they do with their own money.

Far from "clearing out the criminals and terrorists", they have cleared out many of the reputable operators and softwares, leaving the market open to these "criminals", or even the terrorists who were probably never there to start with.

Now that the DoJ has backed down on it's view that gambling itself is illegal under the wire act, I can't see what the banks could do if they manage to discover that these "fraudulent transactions" were deposits and withdrawals from casinos. The only actual fraud involved would be from the merchant side.

It is possible, however, that the harrassment could extend to passing the information to any new bank a player moves to, causing players to find it hard to get new accounts, let alone use them for gambling transactions. Banks will need to tread carefully though, because they may trip up over privacy laws in doing so, which in the US could be very expensive for them if caught.

 

[footdr]

I am not a lawyer, but I don't understand the subtext here.

You purchase chips, and for most players, that's that. From what I understand, the UIGEA applies to money movers, not players. So on a couple levels, I don't see the logical connection from point A to point B.

The UIGEA does apply to money movers, from one bank to next and vice versa. However, the banks customer agreement as well as the card issuers customer agreement is where the players may be subject to legal issues if the Bank were to choose to persue it and perhaps even the Fed. But most likely, they will just close all accounts.

This is why I started the thread, as I said, there has been increased buzz on this subject in the Bankers forum as the banks start cracking down due to being audited for compliance. Plus many are just now finalizing their operating procedures to comply with UIGEA due diligence of merchant accounts and customer accounts. Wires make a stop in the U.S. and are scrutinized before they finally make it to your bank account/bank.

Mine stop in New York first, where they are processed and sent on to my bank.

ACH and check is the safest method for all including processors IMO.

The statute of limitations for a federal bank fraud case is 10 years.


State of limitations on IRS Audits:

Below are the three different time frames the IRS can audit and descriptions of when each applies.

•3 Year Period: This is the standard amount of time that the IRS has to legally audit most tax returns. This is the time period that applies if you do not fall into any of the two categories listed below.
•6 Year Period: If the income on the tax return was understated income by 25% or more the statute of limitations to audit the return can be extended by another 3 years.
•Unlimited Time Period: If the tax return was filed with the intent to commit fraud then the statute of limitations can be extended to forever. There is a fine line between fraud and negligence and this only applies to tax fraud. The IRS must prove fraud in these types of cases and typically will only do this if a lot of money is involved or it is a high profile tax case

 

[nisosbar]

The UIGEA does apply to money movers, from one bank to next and vice versa. However, the banks customer agreement as well as the card issuers customer agreement is where the players may be subject to legal issues if the Bank were to choose to persue it and perhaps even the Fed. But most likely, they will just close all accounts.

'perhaps even the Fed' - but on what charges? That's my problem here - most players are purchasing chips. If that puts the player in violation of the contract, that's a civil matter. But I see no fraud there.

If I recall correctly, proving fraud requires (among a laundry list of other things) an intent to deceive. For many players, that is completely absent in the process of purchasing chips.

This is why I started the thread, as I said, there has been increased buzz on this subject in the Bankers forum as the banks start cracking down due to being audited for compliance. Plus many are just now finalizing their operating procedures to comply with UIGEA due diligence of merchant accounts and customer accounts. Wires make a stop in the U.S. and are scrutinized before they finally make it to your bank account/bank.

Mine stop in New York first, where they are processed and sent on to my bank.

ACH and check is the safest method for all including processors IMO.

The statute of limitations for a federal bank fraud case is 10 years.

And again, I don't see how the player has committed anything even resembling fraud. It's arguable that they have violated a civil contract with their bank, but even THAT is debatable, IMO.

 

[vinylweatherman]

'perhaps even the Fed' - but on what charges? That's my problem here - most players are purchasing chips. If that puts the player in violation of the contract, that's a civil matter. But I see no fraud there.

If I recall correctly, proving fraud requires (among a laundry list of other things) an intent to deceive. For many players, that is completely absent in the process of purchasing chips.



And again, I don't see how the player has committed anything even resembling fraud. It's arguable that they have violated a civil contract with their bank, but even THAT is debatable, IMO.

That is what I thought. Violation of the terms of having a bank account would be a civil breach of contract, and the bank would close the account and leave it at that. The legal problems might arise if your IRS decide to audit the payments into the account, and if they find they are related to gambling, could decide that tax evasion has taken place by not declaring them. This would be a criminal matter, but proof to criminal court standards would be needed.

Maybe the biggest effect is what happens in the future. With banks having their procedures fully implemented, plus more extensive vetting of merchant accounts, what is currently a difficult process could become close to impossible, and just not worth the effort.

Having read some of the seizure notices and indictments through here, it seems the REAL focus is on preventing players from receiving their cashouts, rather than preventing them from depositing. Calvin Ayre has payment of winnings listed as a charge on his indictment, rather than the taking of deposits to make those bets. This focus could be used for political gain, as it would show that the DoJ and FBI "bully boys" are targetting the "little guy" in order to prevent them from being paid their cashouts, rather than stopping the operators from TAKING their money. It would follow from this that a rogue operator that never paid it's players would not get trapped under the current focus, and could carry on taking US money out of the country long after those operators honest enough to pay were driven out.

 

[P.V.]

ACH and check is the safest method for all including processors IMO.

ACH isn't the solution because it allows the OC's, or whomever to debit the account by contract, the ACH agreement form. So by example if you should hook up with a bad operator they would have access to all your account funds via auto ACH towards your account. Not good, will never be the norm IMO.

 

[met1959]

The concept of freedom totally lost!!!

I personally don't care what other people do with there money!! But for some reason other people seem to want stop what you do with your money. WTF Low mentality, Or Unable to see the bigger picture

 

[footdr]

ACH isn't the solution because it allows the OC's, or whomever to debit the account by contract, the ACH agreement form. So by example if you should hook up with a bad operator they would have access to all your account funds via auto ACH towards your account. Not good, will never be the norm IMO.

There is a difference between "recurring ACH" for which you have a contract with a company allowing them to automatically debit the same exact amount from your account on specific dates. When someone is paying your account via ACH it is treated as an EFT(electronic funds transfer) when it is a single payment. (i.e. not your paycheck for which there is a recurring payment to your account and authorized by you through your employer).

You give all of your bank information when requesting a wire so there is no difference other than EFT's going through the Automated Clearing House) are easier, faster and are under less scrutiny.

Checks are under the least scrutiny as they are not coded at all.

For more information on this subject look up Regulation E+Z and regaring UIGEA look up Regulation GG

 

[footdr]

'perhaps even the Fed' - but on what charges? That's my problem here - most players are purchasing chips. If that puts the player in violation of the contract, that's a civil matter. But I see no fraud there.

If I recall correctly, proving fraud requires (among a laundry list of other things) an intent to deceive. For many players, that is completely absent in the process of purchasing chips.



And again, I don't see how the player has committed anything even resembling fraud. It's arguable that they have violated a civil contract with their bank, but even THAT is debatable, IMO.

Read your Banks customer agreement and your credit card agreements and that will explain it.

Here is a post on BankersOnline.com

Both M/C and Visa prohibit their cards to be used for illegal purposes. Most banks cancel cards once they figure out that the customer may be involved in internet gambling. That way you only deal with this situation once by following Regulation E and card issuer rules.

Meaning that eventhough Regulation GG doesn't require going after the accountholder, they can use Regulation E.
and

Well, fraud is always a way around the rules until the person or company is caught.

 

[P.V.]

There is a difference between "recurring ACH" for which you have a contract with a company allowing them to automatically debit the same exact amount from your account on specific dates. When someone is paying your account via ACH it is treated as an EFT(electronic funds transfer) when it is a single payment. (i.e. not your paycheck for which there is a recurring payment to your account and authorized by you through your employer).

You give all of your bank information when requesting a wire so there is no difference other than EFT's going through the Automated Clearing House) are easier, faster and are under less scrutiny.

Checks are under the least scrutiny as they are not coded at all.

For more information on this subject look up Regulation E+Z and regaring UIGEA look up Regulation GG

I got it, ACH credit transfer only.

I was thinking about some companies I deal with and they can ACH credit, or debit my account.

 

[vinylweatherman]

Read your Banks customer agreement and your credit card agreements and that will explain it.

Here is a post on BankersOnline.com

Meaning that eventhough Regulation GG doesn't require going after the accountholder, they can use Regulation E.
and

This is still a civil breach of the terms. Closing the account when a gambling transaction is one thing, but in order to go after the account holder, a higher standard of proof is needed, and then the question is about WHO acted illegally. In most states, gambling itself isn't illegal, only the transaction to fund it is. In this case, under UIGEA, it is the card issuer that has acted illegally in allowing it through, and the processor if they have used miscoding or other misrepresentations in order to prevent the card issuer following UIGEA. It is also the card companies that initially gave the processor the merchant account after supposedly doing their due dilligence. The account holder can argue that if the merchant has passed scrutiny from the banks and has been allowed a merchant account, the banks must be satisfied at the time that no illegal activity has taken place, or is likely to.

It seems from this that the main risk to players is a much more aggressive approach from their banks, which will mean more accounts getting closed on the spot, rather than banks just querying the transactions, and being satisfied with any reasonable explanation from the account holder that argues it has nothing to do with gambling.

Also, the "mind your own business" reply from account holders may no longer make the banks go away, instead they may force the issue by freezing the account and demanding a proper explanation.

For players using their "everyday" accounts for gambling, this could be a HUGE problem, and one set to get much worse. Players should ringfence their gambling into accounts and banks used only for this purpose, and for other non essential everyday matters that can easily be switched to their main account. They should NEVER have things like salary paid directly into an account at a bank they use, or have used recently, for gambling.

 

[butterflyboogie]

Chase Announcement to Merchants

Hey, I own a gift shop where I live and I just received an email about new regulations regarding cards, prepaid and gifts. I don't mind copying and pasting the entire email from Chase if it is ok to do it here. Will Brian or Max let me know if it is ok? It is interesting and confusing. We use to have our own personal gift cards to load at the store through Chase so this is probably why I received it. Something to do with FinCEN, or something like that. I will await to hear from Brian or Max, or I don't mind forwarding the email to them so they can decipher it.