Chargebacks and Checks

[skinny27]

What is the name of your state? Minnesota
I have many friends who have done this action and have asked me to ask for advice. They are somewhat heavy online gamblers and have charge money to their credit cards, no more than $3000-5000 throughout a 4-5 year period and have disputed these charges as chargebacks. The online casinos are contacting them somewhat regularly and have dismissed their online playing rights. There are a few of them who have done the same thing with online checks. Some of the credit card transactions and online checks have cleared, but many of them were disputed by my friends. There is one online gambling site who has stuck a collection agency on one of them. With all personal thoughts set aside, what will happen if these individuals refuse to pay any of these chargebacks and disputed checks if the online casinos and collection agencies keep hounding them? Any information would be greatly appreciated. There was one online banking company who credited $4-6000 to my buddies checking account for no reason. Weird. This whole inline gambling thing is out of control in my opinion.

 

[Veronica1228]

What is the name of your state? Minnesota
I have many friends who have done this action and have asked me to ask for advice. They are somewhat heavy online gamblers and have charge money to their credit cards, no more than $3000-5000 throughout a 4-5 year period and have disputed these charges as chargebacks. The online casinos are contacting them somewhat regularly and have dismissed their online playing rights. There are a few of them who have done the same thing with online checks. Some of the credit card transactions and online checks have cleared, but many of them were disputed by my friends. There is one online gambling site who has stuck a collection agency on one of them. With all personal thoughts set aside, what will happen if these individuals refuse to pay any of these chargebacks and disputed checks if the online casinos and collection agencies keep hounding them? Any information would be greatly appreciated. There was one online banking company who credited $4-6000 to my buddies checking account for no reason. Weird. This whole inline gambling thing is out of control in my opinion.

Not only have your friends committed fraud, but if they signed affidavits (physically or electronically) attesting that these charges or checks were unathorized then they committed perjury also.

My advice to you is to go shopping for one of those big black hats and some Jackie-O sunglasses so that you have something to wear when visiting them in prison!

 

[skinny27]

But....

I have heard so many times, on this site too, that online gambling will not be able to enforce or go after anybody? See below.

"For instance, what happens when a consumer refuses to pay credit card charges claiming he never gambled online or claiming he was cheated? How would the credit card companies adjudicate these disputes in a scenario involving a small, lawless country with no regulations? In fact, this is exactly what happened before the card companies cut off funding in California, where a woman was charged $80,000 for gambling debts she claimed she did not owe. When the credit card company sued the woman, the court ruled for her, saying she did not have to pay the charges. Then, there is also the issue of money laundering, and how terrorists or mafia types could so easily misuse a type of business where large sums change hand in foreign clime and are repatriated elsewhere, all by wire."

 

[Chien]

Don’t know the age of the quote you pulled, but the Unlawful Internet Gambling Enforcement Act of 2006 was passed last Sept. The Act is directed at banks and places restrictions on the financial transactions that occur in connection with online gambling; it restricts electronic fund transfers and the use of credit cards in connection with wagering. This means that players can no longer make wagers, or collect winnings using electronic fund transfers, credit or debit cards, or some other online payment systems.

Prior to the Act, eleven states had laws on the books that specifically banned all forms of online gambling. These states are: IL, IN, LA, MI, NJ, NV, NY, OR, SD, WA, WI. Online gambling continues to be considered illegal in these states. Also, for years prior to the recent legislation, the Justice Dept. had considered all forms of online gambling illegal pursuant to the Wire Act.

But online gambling continued largely uninterrupted, and there was a pragmatic reason and a reason for what you read. This is a multi-billion dollar industry. Plus other countries don’t agree with the US. Online betting is legal and huge in some of these and the World Trade Organization says the US has no right to prevent it. So, while there was “opportunity” for collection and enforcement before, nobody was willing to rock the boat for a gambler here and there. Casinos just cut them off.

Now that it has become a matter of banks getting sanctioned or action being taken against gamblers, your friends are learning who gets the short straw. Added to that, Veronica1228 is right about the fraud and potential perjury.

(P.S. The author of that quote was wrong. The Haines case didn’t end in a ruling. The card issuers settled and agreed to wipe out the charges. They followed that by posting warnings that using credit cards for gambling was prohibited. The warnings were broadly ignored, so now you have legislation, collection and suit. And England, where online wagering is substantial, would be offended to be called “small and lawless”.)

 

[skinny27]

Other Comments

I understand everything that you have said. But I have read and have been told that it is illegal for these gambling sites to take wagers from US people, and have tricked many credit card companies into thinking the charges made are from somewhere else. So credit card companies, banks, and collection agencies for that matter do not know that the debts are indeed gambling debts. One of the individuals I am talking about have $3K is debts to a particular gambling sites, was contacted once, and have not heard from them since. Do you really think they will go after them over $3-4K or $9-10K for that matter. How many other people have done this, and is there any evidence out there of people who have been arrested for online gambling fraud of this amount in the manner I have discussed. Also, how can it be proven that these people have even gambled on these sites, it could be anyone on the other end of the computer with the right information. It just seems confusing to me how these people could be proven guilty if they do not pay these gaming sites.

 

[TigerD]

Do you really think they will go after them over $3-4K or $9-10K for that matter.

Would you go after someone for $3 - 10k? If not, I'd like to cash a check.

DC

 

[Chien]

I’m beginning to wonder if I’m stepping on somebody’s toes. I don’t gamble, not because I have no vices, they’re just other vices, so I as long as somebody doesn’t bet away house and home, I have no feelings one way or the other. I go whole days without thinking about it, but if you want more information, this could get to be a very long thread, because I do find it an interesting subject.

To better understand what’s going on, accept the premise that the present Administration has a much stronger aversion than you or I, and it really doesn’t want it. In addition to the Act that I mentioned, Bush signed different legislation in October. It was called the Safe Port Act aka Port Security Act. Ostensibly, it was one more law to deal with terrorism and, specifically, prevent people from sneaking bombs and other nasty stuff into the country inside the millions of cargo containers that enter each year. What does that have to do with online gambling?

Well, wedged into a little corner of that Act is some pretty strong legislation to ban US banks and credit card issuers from processing payments for gambling activities deemed illegal in the US, and we’ve already touched on that. And since we’re now talking about fighting terrorism, the security goes up and the rights go down. Hypothetically, under the Safe Port Act, “they” can get records from your ISP, put spyware on your computer, get all your banking records to track electronic funds transfers (‘cuz foreign casinos now want real money players from the US – “real” as in tangible currency).

So the banks and card issuers worry, and gamblers are ticked, but it could be pretty potent legislation. (Nothing mentioned about sending you to Guantanamo, but who knows). More seriously, while I haven’t heard of any prosecutions yet, and the Act is aimed at the “conduits”, rather than the gamblers themselves, I can envision a prosecution where, once the government establishes a prima facie case, it creates a presumption that forces the defendant to prove its innocence.

Banks and card issuers do well enough legitimately. There’s no incentive to cross paths with the Justice Department. Accordingly, it makes sense to me to CYA by getting tougher with gamblers. So you have legislation that allows casinos to be less reluctant about going after losers and legislation that gives banks more incentive to make it tougher to gamble and easier to know if you do. It’s not a briar patch that I’d want to step into with some BS “my laptop was stolen” story, ‘cuz they’ll follow the money trail.

 

[skinny27]

IP Address

There are so many people which use the same computer I do, how can they prove it was me and not one of my roomates committing the fraud against me?

 

[Chien]

Could you all withstand a bank account scrutiny and come out with no question marks? Do you pay bills and buy goodies with money you keep under the mattress? Even if so, how do you fund the game without EFT, if real funds are now required, because of the location of the ISP the betting is through?

Have funds been transferred that only you could access?

Remember, if the Safe Port Act is involved, it’s going to be a bigger target they want. Bigger target means more effort and more resources. Even if you slide, it will only be once and then you have a file. Everybody’s Mom and Dad going to be happy if sweetums gets subpoenaed? If the incentive is big enough and sure enough, maybe so. And maybe none of it happens, but now there’s a way to do it, if you choose.

It occurred to me that I may still not have tied this together as you and your friends hoped.

Before all of these changes, the government was more detached and was tracking but had bigger fish to fry than Joe Slump betting $5-6K/yr. The banks weren’t targets yet and card issuers didn’t want to get caught up in another Haines fiasco, but they made good money on transaction fees, and it probably all balanced out and everyone was content to turn a blind eye. If a customer disputed, the card issuer was obliged to respect its customer’s dispute, and nobody was really coming after Joe. Why kill the Golden Goose for him? The technology that supports online wagering is staggeringly sophisticated (another discussion for another time). Joe would be universally blackballed in time and, until then, he could savor his little victory.

The new legislation turns all that thinking upside down.

 

[skinny27]

Eft

Funds were not required. They would give me credit with the understanding that they had sufficient funds. Plus, in some instances they gave credit without checking if the bank account number or even the credit card was under their name. Also, I have have read about many instances where people have had their identity stolen...why couldn't this be the case with these guys, considering they have disputed the charges?

 

[Chien]

OooKay. How did you get paid, if you won, and what happened if you lost?

I could envision circumstances conducive to identity theft, but these seem like a bunch of groovy, fun, generous guys. Probably never crossed their mind. Sounds like social networking. They want to make new friends.

Look, I have a tiny, little flaw and sound snide at times. I’ve taken up Santeria to cure it. I figured I was dealing with a “a friend has a problem” problem awhile back. Before I add to this essay, what’s your real question or concern? Security? Depends where you play, how you play and what you’re playing. Cards, sports betting, competition video games? Legal? Answered that. Risky? Have an addictive personality? Any other risks? Lose enough money and you can probably imagine several and you’d be right. Where are we going with this?

 

[skinny27]

Ok

I will be stating one of my buddies situations. He emailed me this few weeks ago.

I have gambled much online for quite sometime. I have debts to three online gambling sites. Here is the situation:

1. One site I have chargedback $3000 because I did not recognized the charges (online gambling sites trick credit card companies so they do see recognize it as a online gambling site). So I owe them $3000. They contacted once three months ago but have not heard from them since.

2. Another site I owe $2100. I used e-checks which was charged to an unopen account, this is the account that they had on file. Joseph, Mann, and Creed have contacted me for payment.

3. The last site I owe $1500 because of unsufficeint funds in my bank account and it was sent back.

The credit card companies and my bank have no idea that these are gaming sites.

If I do not pay these debt back to these online gambling sites....

What will most likely happen?
Are there any court cases or arrests known for this and online gambling?

I am sure there are many other people in my situation. I have seen on other websites the comments that people have thousand of dollars owed to online gambling sites and nothing has happened to them not paying them back.

Also, I do know how they can prove that I ever gambled online considering nothing was physically signed. I can think of a dozen people you could sign up for an account with all of my information. It really is not that hard to get from anyone. All I need is one enemy and they could screw you.

Any input would be great. Thank you.

I have had so many people tell me that they cannot collect gambling debts.

 

[Chien]

Nuts. I was hoping for strip poker on MSN with a sorority in Sweden. I was going to ask you to PM the site. Instead, you’ve hit on the risk I expected.

Ok, NOW I’ve read your other posts, but I’m still not sure if the buddy’s problem is “the buddy’s” or a continuation of the discussion had with LNR on the Consumer Bankruptcy forum. For what it’s worth, in my opinion, you couldn’t have found a better free consultant, layman or pro, and she was on target.

To simplify things, let’s just assume that you and the buddy have gone through exactly the same things, you both have a BK discharge and there’s this new online gambling issue. Maybe it started pre-BK to avoid that possibility.

In any event, sorry for “online gambling 101”. An academic discussion wasn’t what was needed, but some of it is still relevant.

Not having any hands-on experience, I don’t know about that “trick card issuers” business. Having talked about “turning a blind eye” already and being a cynic, I don’t know whether there was really a trick or it was more a “that didn’t happen – wink, wink, nudge, nudge” Either way, as I said before, there was a time when such was allowed to slide, for self-serving reasons. Whether it still slides, for the same reasons, despite increased rights, probably differs by case and amount, and I’d be speculating. All that I could say is that silence is golden, hope it lasts and cross that bridge when you come to it, if it doesn’t last.

As to the checks, that’s a different matter. Those are per se violations – issuing the dishonored instrument is sufficient to create liability on the instrument. Arguing that it was issued for an illegal purpose isn’t going to help. We could dissect that and spend time talking about illegality nullifying contacts, but that’s the bottom line.

Every state has laws, criminal and civil, against issuing “bad paper”. As a civil matter, checks are covered under the Uniform Commercial Code and every state has adopted some version. If you want to make it more convoluted (and I can’t imagine why), assume that gambling is legal where the “services” were provided, but both gambling and bad check issuance are illegal where the transactions originated and the services received. Not directly on point in terms of online gambling, but I’m from CA. NV can’t enforce gambling debts incurred by my state’s citizens in my state’s courts. But the holder of a bounced check can enforce the check obligation because, like a rose is a rose is a rose, a check is a check etc.

I’m not aware of any arrests for online gambling or personally aware of any civil recovery efforts. As I explained, I think the latter is primed to change. There are civil cases daily for bad checks.

As far as someone else authorizing those e-checks, as I explained earlier in talking about who will carry such a burden of proof, I expect the burden to fall squarely on the ostensible beneficiary. If a reasonable doubt can be created, then good on you.

You didn’t ask directly about payment on the e-checks, but I would suggest contact and discussion of a payment arrangement.

Enough for me. Another member can respond to other questions. Good night and good luck to your friend.

 

[skinny27]

e-checks

He dispute the echeck after it was posted to his account saying that he does not recognize the company, just like a chargeback. It was not considered a bad check...it was good and posted, then disputed. Does this change your comments about the e-checks??

 

[Chien]

Not at all. The account was good, the obligation was valid and he knew what the check was for. Now he has at least lied and, depending on what was required to dispute, perhaps committed perjury in the chargeback request. Go back and read Veronica’s post. If the law firm or CA or whatever it is decides to litigate this matter, it would not be prudent to have the same memory lapse in court. I would hope that he could figure that one out on his own.