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Who will take action on NETeller's breach of contract?

Discussion in 'Other Complaints' started by BJSwitchFan, Aug 7, 2007.

    Aug 7, 2007
  1. BJSwitchFan

    BJSwitchFan Dormant account

    Occupation:
    Professional
    Location:
    California
    Repeating my comments posted on other sites.
    .
    As everyone knows by now, NETeller has e-mailed U.S. customers, saying that the company would now accept withdrawal requests. Now, an interesting twist is that when you go to the withdrawal screen, you will be presented with a form of release, asking you to give up any claims against NETeller. This would most obviously apply to interest NETeller owes you for the delay in payment, and any other damages you might claim because of the delay. As we're all used to seeing when installing software and so forth, you're presented with two radio button choices, "I agree," and, "I don't agree." You would predict that NETeller might simply refuse to pay you if you didn't agree to the release. But it turns out that if you click, "I don't agree," the Web site will go ahead and process your withdrawal. A very recent addition to the information on the Web site, if you look for it, informs you that you do not need to agree to the release in order to receive payment.
    .
    To the company's credit, NETeller has been making speedy payments by EFT to customers' bank accounts.
    .
    Nevertheless, I was offended by this one last sleazy trick by a company that, at crunch time, many of us felt did not give the interests of its customers the highest priority. They weren't going to be as brazen as to refuse to pay people unless they knuckled under to a gratuitous release of claims. But they try to fool you into thinking that they won't send you money unless you agree to the release. I bet that they get off the hook with a few million customers this way. But don't you fall for it!
    .
    (Probably won't work, actually, because it's too misleading. Customers don't get any benefit from the "mutual" releases. I'm not aware that NETeller has some theory under which it thinks thousands or millions of their customers might owe them money.)
    .
    Which brings me to another point. NETeller sat on our money for about seven months. The laws of probably every state and every nation that respects private property give a creditor the right to recover interest on a debt that is not paid on time. NETeller posted a statement on its Web site several months ago saying, "In accordance with NETELLER's Terms of Use, no interest on account balances will be paid." Of course, this ignores the fact that NETeller breached its own Terms of Use by refusing to pay its customers their funds promptly! I don't care that the U.S. government strongarmed NETeller into not paying people. That's not a legal excuse. If some other terrorist state had held NETeller's friends hostage, we wouldn't consider that an adequate reason for the company failing to honor its obligations to millions of customers. Add to that the fact that NETeller has been collecting interest on our funds while they've been sitting in the company's bank accounts.
    .
    What I am hoping is that someone will step up to the plate and take combined legal action on behalf of all U.S. customers to collect the interest we're owed. It's a big sum, in the aggregate. Maybe it's to the point that U.S. courts can no longer function independently, and at the government's bidding will refuse to enforce this obligation. So maybe a domestic class action would not be effective. But I hope that some large law firm may take an interest in this matter, and if need be bring suit in a more civilized country. NETeller is based in the United Kingdom, and does substantial business in much of the European Union, so it could be vulnerable in a number of jurisdictions.
    .
    Now it's true that a lot of big law firms aren't tempted to take a case unless they think they can make tens of millions in fees. But there are still lawyers who are trying to make a more modest living, and would happily take on an apparently easy case with likely damages of a few million dollars. There is definitely a syndrome of lawyers handling class actions looking out for no one but themselves, and that's a problem. So many times the courts approve settlements that pay millions in fees to the plaintiffs' attorneys, and that give the class members worthless coupons and the like. But this is a case of real, tangible, quantifiable losses, and the mechanics of NETeller making additional payments to its customers would be very simple.
    .
    Any takers?
     
  2. Aug 7, 2007
  3. winbig

    winbig Keep winning this amount. webby PABnononaccred

    Occupation:
    Bum
    Location:
    Pennsylvania
    Hate to burst your bubble, but the way I understand it is the fact that Neteller is not a bank. Which means they cannot legally have "interest bearing accounts". Which also means that they are under no obligation to pay interest on any money sitting in any account.

    Does that make it right? No....if they wanted to make it right, they would have stuck all of the money owed to Americans and stuck it in an escrow account, or something....who knows...maybe that could have been a loophole. :)

    Also, Neteller did not maliciously "sit" on monies owed to USA customers. This money was frozen by the DoJ.
     
  4. Aug 8, 2007
  5. vinylweatherman

    vinylweatherman You type well loads CAG MM

    Occupation:
    STILL At Leisure
    Location:
    United Kingdom
    Even if you cannot sue for interest, it may be possible to sue for consequential damages that arose because Neteller initially LIED to US customers by claiming withdrawals were actually being processed, and delays were due to the large volume of transactions requested. Customers may have arranged their finances differently if they were told from the outset the courts had frozen the funds indefinitely. Neteller could also be liable if they acted to prevent customers from removing their funds BEFORE the freeze was implemented. They did this, by announcing the cessation of gambling transactions AFTER it was implemented, even though at the time there was no reason why it had to be done right away, rather than after a period of notice. Any court case will cause more to be revealed than currently has been, and even if it fails, may be the end of Neteller.
    It is just possible that Neteller will make out of court settlements to those that pursue the issue, rather than have such corporate shenanigans dissected in open court.
     
  6. Aug 8, 2007
  7. tennis_balls

    tennis_balls Dormant account

    Occupation:
    fish n chips promoter
    Location:
    Albuquerque, NM
    i got my $15 out today.....finally I can return home from Portugal :D
     
    2 people like this.
  8. Aug 8, 2007
  9. winbig

    winbig Keep winning this amount. webby PABnononaccred

    Occupation:
    Bum
    Location:
    Pennsylvania
    Not to mention the possibility of having their shares suspended again.
     
  10. Aug 9, 2007
  11. BJSwitchFan

    BJSwitchFan Dormant account

    Occupation:
    Professional
    Location:
    California
    Moving this discussion to...

    Winbig, even if NETeller was restricted from offering interest on accounts while they remained open as their customers wished, that does not mean that customers cannot collect interest, as damages for NETeller's breach of contract, for the time after they wished to close their accounts, and NETeller failed to pay them their principal. As I said, the laws of probably every state in the United States, and I believe of most foreign nations, will award interest as damages in such cases.
    .
    NETeller's liability for interest for breach of contract doesn't depend on any malicious intent. I realize that NETeller was put in a difficult spot by the federal government grabbing a big piece of the company's funds, but like I said before, arbitrary and illegal action by one government isn't a reason for letting the company off the hook for its obligations to customers. NETeller could have simply mailed its customers checks out of its other funds, but apparently preferred to avoid any risk of further action against its bank accounts, and any risk of further antagonizing a government that was after blood. In the end, NETeller chose to reach a settlement rather than fight, and we're in no position to force the company to change that decision. I'd like to see the money come back out of the federal treasury, but have no power to try to make that happen. NETeller needs to live with the consequences of its choice. Although the U.S. market was formerly the lion's share of its business, NETeller continues to have great ambitions of expanding its operations globally, and of being very profitable in the future. They are undoubtedly making all of their choices with that goal in mind. For the same reason, they must continue to protect their reputation, and will continue to be sensitive to the possibility of further legal action.
    .
    It turns out that there have been people working actively for many months to take legal action against NETeller. Quite a few customers had account balances close to $100,000. They were obviously highly motivated to make certain that NETeller paid them. It looks like the threat of suit had a lot to do with NETeller moving forward as fast as it did (not to say that it was especially fast) in arranging for the return of customer monies. One might conclude that between them, NETeller and the U.S. government dragged things out about as long as they could have without a big lawsuit, and efforts to get prejudgment relief like an injunction, having been started.

    People interested in possible legal action have been gathering at a Yahoo group with the name "SueNeteller." Catchy, isn't it? The moderator has to approve membership applications. I've applied, but haven't received a response yet.

    There seems to be continued exploration of a possible suit to recover interest. There may be barriers to a class action, so suit might proceed as an ordinary action that just happens to have several thousand named plaintiffs. Apart from the question of interest, it is widely believed that NETeller turned over detailed records of all customer transactions to the U.S. government. This could give rise to claims for violations of the company's promises of customer privacy.

    So I won't have more to say here about NETeller. If any of you are interested, I'd invite you to look into the Yahoo group, where I'm sure there will be a lot of information exchanged.

    I trust you all have your money by now, and are ready to go on to bigger and better things.
     

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