Neteller revokes our merchant account

[Warrior]

As one of the principals of BabyKGB.com, I already had a merchant account and a personal account with Neteller prior to the Jan 16 meltdown. Just like everyone else, we were monitoring the situation as events unfolded for all of Neteller’s customer-base. US customers began a flurry of peer to peer transactions amongst themselves; everyone was in a panic.

I placed a call to Neteller to ask about their position on peer to peer transfers, specifically if I as a Canadian citizen were to charge a fee to assist people from the USA in withdrawing their funds. Neteller replied that they would not have a problem with this, so long as the monies were not transferred to a gaming site. I proceeded to post on one of the popular forums that I was open for business and would be prepared to cash out affected USA players with Neteller balances. I successfully handled one customer for approximately $6000 US$, and he was happy to receive his funds. With a 10% fee, I only netted about $300 after all expenses. Subsequent to this, my posting account was frozen on that forum for twenty-four hours for “spamming”, even though I felt I was providing a valuable service (my first client would likely agree).

By the time my account was reopened, Neteller had stopped all peer to peer transactions. They subsequently froze my Neteller account for twenty-four hours, but after placing a call and verifying some information, my account with them was reopened. In the meantime, I called my merchant representative looking for an angle to help out the US customers and at the same time make a profit.

Specifically, I approached them with two plans :
- The first plan was to apply for a merchant account for my existing online electronics and computer hardware company to accept payments using Neteller for the purchase of goods or services we sell online.
- The second plan was to apply a second merchant account for a new site I would launch. The purpose of this site would be to sell bank drafts to US citizens who Neteller could not currently pay. It would, in effect, provide an alternative to US customers allowing them to be paid out, as Neteller's processing banks in the US which normally process EFT to players had supposedly frozen their accounts on orders from the US DOJ. Seeing this as a win-win situation, I tried to sell this idea to Neteller. My merchant rep was receptive, but Neteller’s compliance department was not too thrilled.

On February 15th, a merchant account was issued for BabyKGB.com (but not for MyBankDraft.com). I was then told that USA clients would not be able to shop at BabyKGB.com, and was not given a time frame. My Neteller representative had already told me that the reason for blocking USA customers from shopping online at any merchant at the moment was a coding issue as Neteller was unable at that time to distinguish between gaming and non gaming accounts. He told me that the programmers were working on it and should have the coding done in a few days. On my end, I proceeded to have our in-house programmers perform all of the software integration on our end to allow Neteller as a payment option for our customers when they made their purchases at our online store. I figured that Neteller would have their coding issues resolved by the time we launched this new payment option.

On March 6th I placed a small notice on the message boards. I stated that BabyKGB.com was now open for any Neteller business. I also suggested that customers may also try to purchase gift cards, and subsequently cash them out. This was only a suggestion, and was never implemented on the BabyKGB.com e-commerce website. The gift cards were never actually available, as I had yet to sell Neteller on the idea.

The argument that I put forth was this : If a customer were to purchase a gift card and we were not able to credit back to his account (due to the blockage to US customer account), then we should be able to send him a wire, or provide some other manner of refund for these types of purchases. We had three or four inquiries about this gift card idea, but most customers were interested only in purchasing hardware.

Gerald St. Pierre at Neteller compliance seemed to have an issue with this line of thought. He mentioned that this type of activity would be in contravention of the merchant agreement. I told him that Neteller themselves were already in contravention of the agreement, as they did not allow me to credit back funds to my existing US customers accounts with my other merchant accounts. He responded that situation was out of Neteller's control. That statement was plainly inaccurate. I informed him that everyone was paying their players outside of the Neteller system; he reiterated that this was in contravention of the merchant agreement.

He asked me if I was paying customers with other methods. I told him he must be joking. It seemed as if this guy had been living on some other planet for the last fifty days. After this exchange with him, I figured this was not the guy to talk to, and instead asked to speak to someone in Neteller’s legal department. He refused to put me through, telling me all my questions had been answered. I assured him that I would take it upon myself to connect through to someone in that department while pursuing a possible solution. He then proceeded to hang up on me.

I called Neteller's Andrew Gilcrist at Investor Relations in the UK. I left him a message to give me a call to discuss the situation. On March 9th, he called me back. I explained the situation to him, that we at BabyKGB.com were having tens of thousands of dollars in sales declined due to this block on payments by USA customers. I discussed with him that there was no real reason to block US players from shopping or cashing out their funds. He said that was true, but he was listening to their lawyers. We had a good conversation; it sounded like they were simply interested in avoiding having the US DOJ charge them, and that they were cooperating with their every request. So much for customer privacy.

I told him to keep me informed of any subsequent changes. On the weekend, Neteller proceeded to close all my Neteller accounts, including my personal account. For what reason? Breach of contract. What breach? Well, my personal account was closed because i did a peer to peer transaction (or so I was told by their customer support). This was after they themselves had told me that it was OK. Probably a mistaken impression on the part of the rep I spoke with? Hard to say. All my merchant accounts including BabyKGB.com was subsequently closed. For what reason? Breaching the contract, I was told. I guess they did not like my attitude, or my persistence in attempting to help our customers access otherwise blocked funds. As for breaching my contract, I did not at any point breach it in any fashion as I can determine here. Considering they had not approved one sale, it is pretty hard to breach that contract. I guess they must be referring to their own actions, in that they were in fact breaching my contract with every legitimate purchase attempt they denied.

Things to consider :
- Neteller was not completely forthcoming about peer to peer transactions
- Neteller was not completely forthcoming about US customers being able to purchase at non-gaming merchants and websites.
- Neteller was not completely forthcoming about supposedly being unable to pay customers in an orderly fashion (because “their funds were frozen”). Neteller has ample funds to pay (according to their public financial statements), and were in fact offered a few alternatives to get the USA customers their funds, but flatly turned them down.
- Neteller believes that once they pay they do not have any liability issues. They feel most of you will just take your money and go away. Now is not the time to shy away from a battle. They asked for it we should now deliver. I sent them any email and followed it up with a telephone call and it has been 1 week and so far they have refused to get back to me. The time for talking is now over. I will not stop until everyone is paid and Neteller goes out of business. They have no right to be the safe keepers of our cash. They showed us just what type of company they are.
- You would think with all the money they have that they would stand up for the customers. You would have thought they would fight for your rights. They could have at least followed the example of smaller, less profitable sites, and quickly pay out the customers while the exited the US market. They chose none of the options they had available that would have prevented thousands of customers suffering the hardships they have instead had to endure. How many of you had difficulty in paying your rent, credit card bills mortgage payments? How many really needed that withdrawal. If you didn’t need it my guess is that you wouldn’t have made it. Whether or not you needed the money is not the point. It is your money.
- They would not even allow you to shop at a non-gaming merchant site. That is not what their press release on January 18th told you. I would bet that all the employees that were let go received a nice severance package, while you (with blocked deposits in your accounts) could not even get the money that is rightfully yours. While I continue to pursue legal avenues that may be open, I will cooperate with this group to provide all the info needed to show that Neteller did not even live up to its press releases and obligations. They are playing politics with your funds. If the DOJ believes they can charge Neteller they will whether they release your funds or not. One action is not tied to the other.
- We believe that the sheer number of US customer complaints over attempted purchases overwhelmed Neteller’s phone support line, and that they suspended the BabyKGB.com merchant account to make the phone complaints go away.
- If anyone need further info, you can email me at Pino@BabyKGB.com

[greg nice]

so what can i do with my $5k in neteller? cant buy things, cant cashout, cant transfer

[ericp42]

Thanks for the explaination. I had got my hopes up with BabyKGB. I also had enquired about a Merchant account with Neteller, and, inexplecably, they were uninterested. Simple lies and stupid spin from Neteller are infuriating.

[LinusKS]

Neteller is in extreme CYA mode.

And you're right, only legal action is going to make a difference to them.

[Makin_Money_24/7]

ROFLOL what's a "nerchant account"

[Wahoo73]

[ QUOTE ]
Neteller is in extreme CYA mode.

And you're right, only legal action is going to make a difference to them.

[/ QUOTE ]

QFT.

Until legal action is taken by American customers, either individually or collectively, to recover their funds from Neteller, and the resultant pressure from such legal action becomes more unbearable than the pressure on Neteller from the DOJ, it should now be clear to all of us that Neteller has breached contracts with, misrepresented itself to and falsely advertised its services to its American customers post-January 16, 2007. For now, it seems as though Neteller has no intention of returning OUR MONEY to us until they feel threatened to do so, if ever.

[berya]

"it seems as though Neteller has no intention of returning OUR MONEY to us until they feel threatened to do so, if ever."

Then who do we have to kill?

[LinusKS]

Neteller is allegedly regulated by something called the FSA in the UK.

Their numbers are:

Main switchboard

From UK: 020 7066 1000
From Overseas: +44 20 7066 1000


Consumer Helpline (including Central Register authorisation queries)

From UK: 0845 606 1234 (call rates may vary)
From Overseas: +44 20 7066 1000

They have no email to take consumer complaints, and their "contact us" page states: We do not investigate individual consumer complaints, (bold original)

Their "disciplinary history" for Neteller is blank.

Neteller's headquarters are in the Isle of Man. I don't know what bank they hold our money in. If they're to be sued, they have to be sued where their assets are. Suing them in the US is pointless.

[thirstyforwater]

Thanks for all of the information. I wish I could count all of the times I was lied to by their customer service reps.

[Mike Haven]

See the "About the FSA" link in the Neteller sticky.