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Tuesday, May 29, 2007

Neteller: sending payments from customer accounts without customer authorisation

In late May 2007, in the Prime Casino remove my money from Neteller thread at Casinomeister, a player reported having a winnings' withdrawal, originally paid into his Neteller account two weeks previously from new Microgaming operation Prime Casino, reversed out of his Neteller account, by Neteller, and returned to the casino.

The payment back to the casino, from the player's Neteller account, was not authorised by the player and it was done entirely without his prior knowledge.

The fact of Neteller's ability to effectively perform a "chargeback" on a player and return player funds to the casino merchant they come from, without the players' authorisation, was apparently corroborated by the manager of the casino in question:

There is nothing I can do about Neteller "pulling back" payouts. This is something that every Casino is able to do and I don't imagine that it's going to change any time soon.

As such, it's now apparent that player funds are not safe in Neteller, because casino merchants can request that payments made to players be returned to them; neither does the request need to be immediately after the transfer took place - the reversal in question took place fully two weeks after the payment was originally sent from the casino. One has to assume therefore that any payment, however many weeks or months previously it was sent, can be taken out of a player's Neteller account and sent back to whichever casino originally sent it.

Aside from being a quite flabbergasting betrayal of the client / Neteller relationship - imagine the consequences if a bank or credit card company plundered a customer's account to send a payment without that customer's authorisation - it is also in direct breach of Neteller's own terms of use:

10.5. You acknowledge and agree that all electronic money purchases, transfers or withdrawals into or out of your Account are final and not reversible. NETELLER cannot arrange for your Account to be refunded where you believe the purchase, transfer or withdrawal was made in error.

As such, Neteller is operating in direct contravention to its own rules. These are the rules which, as a player customer, you sign up and agree to.

Neteller is regulated by the UK Financial Services Authority - see the Neteller entry.

The FSA have guidelines for correct behaviour towards customer - see the FSA Treating customers fairly page:

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect

Clearly, the product in question - a financial transfer from customer to casino - has not performed as one has "been led to expect", since Neteller's own terms state that such a transaction may not be reversed.

As such, Neteller would appear to be in breach of their agreement with the FSA.

Further details will be reported as they emerge.

The matter is also under discussion in the Prime Casino thread at Winneronline.

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