Complaining to British regulators about Neteller

[bobman0330]

Does anyone have any information on the best way to register a complaint with the UK Financial Services Authority about Neteller's behavior? I've started ending every Neteller conversation with threats to contact the FSA, but I don't actually know how to do so. If the FSA hears a lot of complaints, maybe they'll quietly encourage Neteller to do a better job of moving deposits along. And if everyone makes similar threats to Neteller people too, that might help motivate them. It's not like they care about losing the business of the people they're mistreating right now, but they should certainly care about pissing off the FSA.

[Petomane]

Has it occurred to you that it might not be Neteller that's screwing you over? It probably isn't. So calm yourself dowm.

[DrewOnTilt]

If you think that it is Neteller who is to blame for the current situation, then

you (http://en.wikipedia.org/wiki/US_Department_of_Justice)
are (http://en.wikipedia.org/wiki/Bill_Frist)
sorely (http://en.wikipedia.org/wiki/Jon_Kyl)
mistaken. (http://en.wikipedia.org/wiki/Eliot_spitzer)

[Milagro]

I am sure the British regulators would be all over this. Especially since billions of pounds have been lost by British investors and because British and Commonwealth subjects are being persecuted and jailed by a U.S. government that is out of [censored] control. What is it you expect from the rest of the world? We have been horrified by your choice of politicians for over 6 years. Where have you been! While I do not hope that Neteller keeps your money (two wrongs do not make a right) I do hope that you can understand our lack of sympathy and please, please, stop whining and VOTE!

[Homer]

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I do hope that you can understand our lack of sympathy

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I can't

[Milagro]

[ QUOTE ]
[ QUOTE ]
I do hope that you can understand our lack of sympathy and please, please, stop whining and VOTE!

[/ QUOTE ]

I can't

[/ QUOTE ]
You can't stop whining and vote? Well then I hope Neteller keeps your money and puts it to the legal defense of John LeFevre and Steve Lawrence.

[bobman0330]

[ QUOTE ]
Has it occurred to you that it might not be Neteller that's screwing you over? It probably isn't. So calm yourself dowm.

[/ QUOTE ]

I don't know about anyone else, but I haven't heard a clear explanation of what problems Neteller has. All I know is that they haven't paid me my money, and that they're reneging on assurances they gave me last week about when they would. Maybe they're doing their best, but I find it really hard to believe that it takes two weeks or more to get money from anywhere to anywhere else, under any circumstances. Have you considered that Neteller might not be putting their best efforts into finding a way to accommodate people who will never do business with them again?

I'm not saying that people should panic or go burn down the Isle of Man, I'm just saying that Neteller isn't really acting like a reputable financial institution should, and that the FSA is the best situated to possibly remedy the situation.

[bobman0330]

[ QUOTE ]
If you think that it is Neteller who is to blame for the current situation, then

you (http://en.wikipedia.org/wiki/US_Department_of_Justice)
are (http://en.wikipedia.org/wiki/Bill_Frist)
sorely (http://en.wikipedia.org/wiki/Jon_Kyl)
mistaken. (http://en.wikipedia.org/wiki/Eliot_spitzer)

[/ QUOTE ]

So, because Jon Kyl is worse than Neteller, Neteller must be OK?

[poorolrich]

You do know that the F S A is a NON-government entity. They are almost like the BBB here in the US.

[davmcg]

[ QUOTE ]
You do know that the F S A is a NON-government entity. They are almost like the BBB here in the US.

[/ QUOTE ]

No that is not correct, the FSA became a statutory regulator in 2001 - previously they were a self regulating body.

It is only Neteller UK that is regulated by the FSA - US customers won't be clients of this. However, as the FSA has fined several firms for poor anti-money laundering procedures, I imagine that it will not have escaped their notice that the DoJ apparently considers that Neteller's entire US business is money laundering.

[Homer]

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I do hope that you can understand our lack of sympathy and please, please, stop whining and VOTE!

[/ QUOTE ]

I can't

[/ QUOTE ]
You can't stop whining and vote? Well then I hope Neteller keeps your money and puts it to the legal defense of John LeFevre and Steve Lawrence.

[/ QUOTE ]

Do you think everyone voted for the current administration? This is out of our hands. Hoping Neteller steals money from people makes you a sad little man.

[sg23]

[ QUOTE ]


Do you think everyone voted for the current administration? This is out of our hands. Hoping Neteller steals money from people makes you a sad little man.

[/ QUOTE ]

Q
F
T

[Sniper]

Bobman, FSA has a website... fwiw... the 1st step in the "complaint" process is to send a letter to Neteller...
(I am not sure how effective following thru on this process will be, at this time)

Your funds are still "secure"... Neteller just has no way to get you funds, since "apparently" no US Bank will deal with them or any of their "current" 3rd party processors...

Stay tuned in the Neteller Update thread.

[Milagro]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I do hope that you can understand our lack of sympathy and please, please, stop whining and VOTE!

[/ QUOTE ]

I can't

[/ QUOTE ]
You can't stop whining and vote? Well then I hope Neteller keeps your money and puts it to the legal defense of John LeFevre and Steve Lawrence.

[/ QUOTE ]

Do you think everyone voted for the current administration? This is out of our hands. Hoping Neteller steals money from people makes you a sad little man.

[/ QUOTE ]
I don't really hope that Neteller keeps your money. But if you "can't" understand why the rest of the world (including the British regulators) may not be sympathetic to your plight than you are narrow-minded selfish "sad little man".

[Richas]

[ QUOTE ]
I don't really hope that Neteller keeps your money. But if you "can't" understand why the rest of the world (including the British regulators) may not be sympathetic to your plight than you are narrow-minded selfish "sad little man".

[/ QUOTE ]

I think the FSA will be very concerned about any consumer losing out here. There has been no UK offence, UK citizens have accounts with them. The only way Neteller would not pay out is if the company goes under and the money is not in trust as they claimed, there would be big questions about where the money went for what is essentially a banking service.

The FSA role is partly to protect the consumer and partly to give UK and foreign consumers and companies the confidence to deal with UK Financial services and institutions. If Neteller were to not pay out that would threaten the whole of the AIM market, a lot of what the City of London does and be the end of a credible FSA itself. UK customers would be as angry as anyone - besides it is still a sound business meeting a need for those of us outside the US.

The FSA will look at complaints but only after the companies complaint procedure is completed. You should ask if this is the end of their complaint process as once they confirm this you can go to the FSA.

[JPFisher55]

IMO Neteller keeps most (90%) of their clients' accounts in CD's and bonds with short to medium maturities like banks do with depositors money.
By leaving the US market, Neteller has created a "bank" run on their deposit accounts. It will take 2-4 months for the CD's and bonds to mature so that Neteller can refund their US accounts.
However, they have ruined their reputation and will never regain their dominant status in the industry when the DOJ war on online gambling falls to WTO and court litigation. Maybe they should have stuck with the US market and suffered the consequences which would not have been as bad for their business as the present situation.

[Milagro]

Good post. No doubt you are right about this. I am frustrated (as many are) with this whole situation and a bit angry that this anti-freedom crowd in the United States is able to reach across the Atlantic and affect my life and what I choose to do or not to do within the laws of my own country.

[ QUOTE ]
The only way Neteller would not pay out is if the company goes under and the money is not in trust as they claimed, there would be big questions about where the money went for what is essentially a banking service.

[/ QUOTE ]

I was hoping to stick with Neteller but this is beginning to look too much like a panic to me. So I suppose I should just have my bankroll wire transferred out to my bank account here in Switzerland in case Neteller does go bust. I guess all non-U.S. 2+2ers should do the same just in case. /images/graemlins/frown.gif

[ADBjester]

[ QUOTE ]
IMO Neteller keeps most (90%) of their clients' accounts in CD's and bonds with short to medium maturities like banks do with depositors money.

[/ QUOTE ]

Um.... most banks' assets are *not* held in CD's (which would by necessity be held by other banks). Most assets of a bank are in very long term notes: mortgages, business loans, etc. A smaller amount is in short-to-mid term receivables (credit cards balances owed by cardholders).

For the typical bank, far less than 100% is held in liquid or near liquid assets.... *far* less. (Think teens).

Jester

[disjunction]

[ QUOTE ]

I don't really hope that Neteller keeps your money. But if you "can't" understand why the rest of the world (including the British regulators) may not be sympathetic to your plight than you are narrow-minded selfish "sad little man".

[/ QUOTE ]

I just want to be clear on your argument. If you don't like a government's policy, you think it is justified to take action, even if that action may affect the government's citizens. If the citizens complain, you are not sympathetic. And you do not see the irony.

k thanks

[Richas]

[ QUOTE ]
By leaving the US market, Neteller has created a "bank" run on their deposit accounts. It will take 2-4 months for the CD's and bonds to mature so that Neteller can refund their US accounts.

[/ QUOTE ]

It does look like a scene from Wonderful Life. Though Neteller is based in the Isle of Man it is Aim listed and FSA regulated so I would expect the normal arrangements for a bank run in the UK to kick in. The last one we had was a bit different in that Nick Leeson had genuinely bankrupted Barings (later sold for £1) but what normally would happen is that the Bank of England would act asa lender of last resort. In practice the Bank of England gets all the big banks (and these days probably a couple of big hedge funds) in and thrashes out a deal where a bank subject to a run is given access to enough cash (on credit) to pay out. The City of London and the other big banks have access to huge amounts of cash (liquidity) I would be surprised if over the weekend Neteller is not sorted out with the cash to payout. If it isn't then frankly the City of London are not doing their job.

I doubt I could pay out a prop bet to anyone in the US right now but the 20% of my roll on Neteller (the rest is spread between sites) will be staying there for now. If I don't get it back I will be complaining to the FSA and will be happy to champion US customers cause too (including with my sister in law who works for the FSA).

[JPFisher55]

But is Neteller a bank that can take advantage of this system?

[davmcg]

[quote

The FSA will look at complaints but only after the companies complaint procedure is completed. You should ask if this is the end of their complaint process as once they confirm this you can go to the FSA.

[/ QUOTE ]

Look I really wish ppl wld stop posting this drivel. Neteller PLC is located in the Isle of Man and is not regulated by the FSA. Neteller PLC has a subsidiary, Nateller UK, that is authorised as an electronic money operator, NOT a bank, to carry out business in the UK and passported into various othe EU countries.

In any case the FSA does not deal with complaints from consumers, it sets out a complaints procedure that authorised firms should follow. After dealing with a complaint an authorised firm should give the complainant the right to refer the complaint to the Financial Ombudsman where the FO has jurisdiction. US customers of Neteller PLC do not fall under FO jurisdiction.

[Sniper]

Richas...

Interesting(?) thought in the "run on the bank" scenario... what if?... the problem is with Neteller's Bank not being able to liquidate the funds that Neteller needs and transfer the funds to Neteller?

This could have a serious effect on that Banks liquidity and reverberate throughout the entire UK banking system and markets...

Do we know what financial institution they may be using?... whatever that bank is, should be publically disclosing this problem...

ps... discussion of UK big brother made it to the parliament floor... this seems a bit bigger issue. How is this news playing in the UK?

[Richas]

[ QUOTE ]
This could have a serious effect on that Banks liquidity and reverberate throughout the entire UK banking system and markets...

[/ QUOTE ]

Neteller is a real minnow in terms of City of London the big banks, hedge funds and the Bank of England. There really should be no problem with sorting them a line of credit for every single deposit especially if the FSA that took over the Bank of England's regulatory role gets the Bank of England to agree to being the lender of last resort (it's job!!!!) essentially it would be a risk free loan for the big banks/hedge funds. The cash is there it's just difficult for Neteller to convert their investments to pay out immediately. All banks know about runs and they have agreements in place to cooperate. OK the Neteller call staff will not know about what is going on in the background but if the City does not keep Neteller afloat it destroys the credibility of the City (which turns over a Neteeller about every hour).

[davmcg]

[ QUOTE ]
[ QUOTE ]
This could have a serious effect on that Banks liquidity and reverberate throughout the entire UK banking system and markets...

[/ QUOTE ]

Neteller is a real minnow in terms of City of London the big banks, hedge funds and the Bank of England. There really should be no problem with sorting them a line of credit for every single deposit especially if the FSA that took over the Bank of England's regulatory role gets the Bank of England to agree to being the lender of last resort (it's job!!!!) essentially it would be a risk free loan for the big banks/hedge funds. The cash is there it's just difficult for Neteller to convert their investments to pay out immediately. All banks know about runs and they have agreements in place to cooperate. OK the Neteller call staff will not know about what is going on in the background but if the City does not keep Neteller afloat it destroys the credibility of the City (which turns over a Neteeller about every hour).

[/ QUOTE ]

FFS you are confused about so many issues. Listing on a UK stock exchange is utterly irrelevant to any issues of consumer protection.

Neteller UK is not a bank it is an electronic money issuer

http://www.fsa.gov.uk/register/firmPermissions.do?sid=102712

The rules governing an electronic money issuer are

http://fsahandbook.info/FSA/html/handbook/ELM


The rules particular to a bank are

http://fsahandbook.info/FSA/html/handbook/BIPRU

In any case the funds are in US$ so could not possibly affect UK capital markets.

As posted above only Neteller UK is regulated.

[Sniper]

[ QUOTE ]
[ QUOTE ]
This could have a serious effect on that Banks liquidity and reverberate throughout the entire UK banking system and markets...

[/ QUOTE ]

Neteller is a real minnow in terms of City of London the big banks, hedge funds and the Bank of England. There really should be no problem with sorting them a line of credit for every single deposit especially if the FSA that took over the Bank of England's regulatory role gets the Bank of England to agree to being the lender of last resort (it's job!!!!) essentially it would be a risk free loan for the big banks/hedge funds. The cash is there it's just difficult for Neteller to convert their investments to pay out immediately. All banks know about runs and they have agreements in place to cooperate. OK the Neteller call staff will not know about what is going on in the background but if the City does not keep Neteller afloat it destroys the credibility of the City (which turns over a Neteeller about every hour).

[/ QUOTE ]

However, this situation may be complicated by the unknown/undecided(?) UK Gov't reaction to this whole thing...

Remember these same banks may be facing DOJ subpenas... and may not have coordinated an appropriate response.

If the DOJ decided to go after any bank that assisted Neteller, and effectively remove them from doing business in the US, this issue just reached a whole new scale!

[Homer]

[ QUOTE ]
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[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I do hope that you can understand our lack of sympathy and please, please, stop whining and VOTE!

[/ QUOTE ]

I can't

[/ QUOTE ]
You can't stop whining and vote? Well then I hope Neteller keeps your money and puts it to the legal defense of John LeFevre and Steve Lawrence.

[/ QUOTE ]

Do you think everyone voted for the current administration? This is out of our hands. Hoping Neteller steals money from people makes you a sad little man.

[/ QUOTE ]
I don't really hope that Neteller keeps your money. But if you "can't" understand why the rest of the world (including the British regulators) may not be sympathetic to your plight than you are narrow-minded selfish "sad little man".

[/ QUOTE ]

I cannot understand why citizens of other countries would not be sympathetic to injustices that are out of our control. What is it that you want me to do exactly? I am one person in a country of hundreds of millions. I see injustices in the world all the time, and don't automatically think to blame the citizens of those countries.

[Milagro]

[ QUOTE ]
[ QUOTE ]

I don't really hope that Neteller keeps your money. But if you "can't" understand why the rest of the world (including the British regulators) may not be sympathetic to your plight than you are narrow-minded selfish "sad little man".

[/ QUOTE ]

I just want to be clear on your argument. If you don't like a government's policy, you think it is justified to take action, even if that action may affect the government's citizens. If the citizens complain, you are not sympathetic. And you do not see the irony.

k thanks

[/ QUOTE ]

You are right. My bad. I hope you get your money back and some of your freedoms as well. Hopefully I will see you all back at the tables sooner than later.

[Milagro]

[ QUOTE ]
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[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I do hope that you can understand our lack of sympathy and please, please, stop whining and VOTE!

[/ QUOTE ]

I can't

[/ QUOTE ]
You can't stop whining and vote? Well then I hope Neteller keeps your money and puts it to the legal defense of John LeFevre and Steve Lawrence.

[/ QUOTE ]

Do you think everyone voted for the current administration? This is out of our hands. Hoping Neteller steals money from people makes you a sad little man.

[/ QUOTE ]
I don't really hope that Neteller keeps your money. But if you "can't" understand why the rest of the world (including the British regulators) may not be sympathetic to your plight than you are narrow-minded selfish "sad little man".

[/ QUOTE ]

I cannot understand why citizens of other countries would not be sympathetic to injustices that are out of our control. What is it that you want me to do exactly? I am one person in a country of hundreds of millions. I see injustices in the world all the time, and don't automatically think to blame the citizens of those countries.

[/ QUOTE ]

You are right, of course, and I apologize I hope you get your money and some of your freedoms back. Hopefully I will see you all back at the tables in the next few years.

[Richas]

[ QUOTE ]
FFS you are confused about so many issues. Listing on a UK stock exchange is utterly irrelevant to any issues of consumer protection.

[/ QUOTE ]

but it is relevant to the credibility of the UK stock Market, City of London and UK financial regulation. It would be politically and economically unacceptable to let Neteller fail because of a "run".

[ QUOTE ]
In any case the funds are in US$ so could not possibly affect UK capital markets.

[/ QUOTE ]

That would be the City of London that handles more foreign Exchange transactions in dollars than any other financial centre? The currency the funds are held in is entirely irrelevant in terms of the response.

[ QUOTE ]
As posted above only Neteller UK is regulated.

[/ QUOTE ]

Which is one of the reasons why the UK regulator would not allow it to collapse as a result of a run. The only scenario of non payout is a collapse due to a run, nobody believes they are crims who have run off with the money.

This is about consumer protection but it is also about the credibility of the UK and the City of London.

The issue of bank concerns re the legality of Neteller are real but as they have withdrawn from the US and we are only talking about new lines of credit this should not be a real barrier. As for the subpoenas and arrests, if anything this will annoy directors of banks and make them more willing to help, the anger in the City on this is very real.

FFS your post failed to address my point which is that the UK and the City can easily cope with a run on an institution like this and that the credibility of the City depends on making sure it does not fail.

Finally the UK's position on this is clear. The UK is regulating and granting licenses to online operators. UK gov policy is to make the UK the largest centre of online gambling possible via rigorus regulation. The UK gov will not want a collapse due to a run (especially given the recent scandal on Farepak a Christmas saving/buying scheme that went belly up).

[phish]

If it's true that Neteller keeps its deposits in segregated trust accounts, then even a run on the bank should not lead to collapse.

The reason traditional runs lead to collapse is because depositors' moneys are lent out for mortgages, etc. The bank itself only keeps 10% or so of all deposits as liquid assets. When that 10% is gone, the bank can't call all its loans in immediately, and hence the collapse.

Unless Neteller too is invested heavily in non-liquid assets, this should not be a concern. If all deposits are held in money market funds or the like, then 100% of the money is there for withdrawal.

[davmcg]

I really don't know why you are making up this stuff.

Neteller PLC is in the Isle of Man and could be in Venezuala as far as the UK govt is concerned. In fact if it went down and Neteller UK customers were safeguarded, they would use the opportunity to tell everyone how fantastic UK regulation is.

As long as Neteller UK continues to operate normally and the plight of Neteller PLC does not change this, the FSA has no powers to do anything.

[Richas]

This link is to the Neteller Investors site. The presentation on their latest interim results (Sep 06) contains some interesting information for anyone concerned about where their cash is and the scale of the problem

http://tinyurl.com/yvrecr

Skipping over the revenues and business plan stuff the interesting bits are about the total deposits and the cash position for the company.

Slide 13 is the most important as it shows where the cash is - EU Customer money in trust $48.1m, owing to customers merchants $220.1m (in trust accounts), $28.8m company cash (restricted) in trust accounts - this is the money put into trust to cover cash in transfer and a few other company bits and bobs where the money is there but basically spent ie share options....then there is the company cash of $135.9m which is not held in trust.

Most of this money is invested not really cash it would take time to access it. On average per day Neteller deals with about $4.7m of transfers plus their normal business transactions the readily accessible cash would be scaled to meet this demand. They can't access the EU money to meet US withdrawals but the strong cash position of the company roughly equal to or just below US customers deposits should be reassuring especially as the US customers money is there - in trust accounts.

Looks to me like the money is there, they have logistics problems and issues accessing the cash immediately but any company used to dealing with $5m a day was suddenly swamped with requests for up to $200m and a set of US banks unwilling to deal with them at all wold need time to pay out and struggle to answer the phones/complaints.

$200m is chump change to the city (they just paid out $38bn in bonuses to their staff for 2006), Neteller has the cash they just need the City to help them access it quickly via loans and guarantees from others. In short I think everyone will get their cash from Neteller.

PS Dav the UK regulators would not let the US customers get shafted to protect EU customers it would destroy the City of London if non EU customers felt they were not protected by our regulation - you are pointing to a normal company legal structure for regulatory purposes not some conspiracy to leave out US citizens from protection.

[davmcg]

[ QUOTE ]


PS Dav the UK regulators would not let the US customers get shafted to protect EU customers it would destroy the City of London if non EU customers felt they were not protected by our regulation - you are pointing to a normal company legal structure for regulatory purposes not some conspiracy to leave out US citizens from protection.

[/ QUOTE ]

US customers of Neteller are not protected by UK legislation. Read the Financial Services Act. How in gods name you can think that a US customer of an Isle of Man company would be, I really can't fathom at all.

[Richas]

[ QUOTE ]
[ QUOTE ]


PS Dav the UK regulators would not let the US customers get shafted to protect EU customers it would destroy the City of London if non EU customers felt they were not protected by our regulation - you are pointing to a normal company legal structure for regulatory purposes not some conspiracy to leave out US citizens from protection.

[/ QUOTE ]

US customers of Neteller are not protected by UK legislation. Read the Financial Services Act. How in gods name you can think that a US customer of an Isle of Man company would be, I really can't fathom at all.

[/ QUOTE ]

Because I am talking about the continuing operation of the group of companies not an individual consumers ability to complain via the ombudsman which is all you are talking about. Even then any US consumer adversely treated compared to an EU customer would have recourse to the courts.

The framework of legislation that the company operates within protects all the company's customers.

In terms of the criminal law When you deal with a company subject to UK law they need to obey the law, they can't just go oh yeah he's from the US/Zimbabwe/Iraq/Iran/Timbuktu so I can nick his money - it would still be illegal wherever you were from.