On Tuesday, July 31, 2007 Neteller CEO Ron Martin posted a video message on the popular video upload site YouTube.com apologizing to US members for the more than 6 month wait to withdraw funds from the online payment processor.
In mid-January 2007 Neteller decided to cease doing business with US customers following the arrest of Neteller’s founders, John David Lefebvre and Stephen Eric Lawrence. These arrests which in part were do to the passing of the UIGEA (Unlawful Internet Gambling Enforement Act) of 2006 which President Bush signed into law in October, 2006 caused shock waves throughout the online gaming industry and drew criticism from many poker players, online gaming businesses, stock market analysts and even many nations.
Since January, US members have had no access or withdrawal options from Neteller and even more disturbing… little or no information from the company on what it’s doing with US members money and if it had any plans to pay it’s US members. Neteller had released limited information on it’s website basically saying the US Department of Justice had seized the funds and that Neteller was currently working with the US government on a repayment plan for it’s US members.
In mid-July many US members were elated to find out that Neteller had reached an agreement with the US Department of Justice and that they would start repaying funds to it’s US members on July 30, 2007. This was great news to many as the US DOJ had seized over $94 million in US member’s money with many members having well over $100,000 in their account.
While I can’t agree with how Neteller and the US DOJ handled this situation, I can respect them for at least making sure members eventually did get their money back and also for simply apologizing. Neither of these things makes what happened right, but with the US government acting recklessly, and Neteller being put in a very tough situation, I have to acknowledge both for doing what was right as far as the members were concerned. Although I would have liked to see interest paid on the money I think a full repayment was fair. Remember… The US government could have just kept the money saying it was part of “illegal activities” and Neteller could have just folded and filed bankruptcy, since the US was almost 80% of their revenue.
The lesson we all learned from this was… Never keep too much money in any one account. It doesn’t matter if it’s a bank, an online account or whatever. In the online day and age we all live in, too much trust is put into companies that aren’t in our state, country or even continent. If you can’t drive down the street, walk in the door, and walk out with your money, then keeping your money with that account is just asking for trouble.
Below is part of the statement from Neteller CEO Ron Martin followed by the YouTube video.
Recently, the U.S. Department of Justice stepped up investigations into the legality of online gaming services provided to U.S. customers. As a part of these inquiries, they’ve issued subpoenas, laid charges, filed indictments against – and in some cases settled with – a number of companies and individuals.
These include banks, payment processors as well as online gaming companies. Many of these institutions are well-known and respected global brands, such as ourselves.
Because of these actions, and due to the possible impact to our non-U.S. business, we voluntarily suspended our service to U.S. residents at the time. As we took this action, U.S. financial institutions began declining transactions to and from online gaming companies and payment processors.
The U.S. authorities also seized money, including that being sent from NETeller to U.S. customers, and vice-versa.
Even though our service to the rest of the world customers is unaffected today, since January we’ve been unable to return our U.S. customers’ funds until we reached a resolution of the investigation with the U.S. authorities. However I can assure you it has always been our highest priority to get these funds back to you.
We know that many of you have expressed concern over the length of time it’s taken us to reach this point, but as you may know, by now, we’ve reached a resolution with U.S. authorities.
That means on July 30th we began the process to return funds. I’m sure you’re all relieved to hear this good news. All the details are provided on our Web site. I’ll provide a link at the end, but here are some of the key points of the plan:
We started the processing of returning funds to U.S. customers on July 30th. On the first day alone, we processed over $40 million in withdrawals. For those who haven’t requested funds yet, you’ll have to sign in to your secure NETeller account to request your withdrawal.
You’ll need to complete this activity online within a 180-day time frame indicated on our Web site. Your money will be delivered by electronic funds transfer to your bank or by check that we’ll mail to you.
We have a total of $94 million to return, to hundreds of thousands of U.S customers in total, so it’ll take a little time for all payments to be processed. All withdrawal fees will be waived. It will be free to you.
Please visit the Web site shown “http://updates.neteller.com/”) to find out more. Thank you again for your business, your understanding and your continued trust in NETeller.”