Posted by
ryuzaki0
on from the how-to-cut-your-losses dept.
ShawnD writes "A California woman has gotten out of a $70,000 on line gambling debt by claiming that the 'loan' from Visa was illegal (California apparently frowns on loaning money for gambling). The judge agreed.
See this article at ZDNN."
Why Visa should have known better!
by
breser
·
· Score: 3
Credit cards can be used in some jurisdictions to charge money used in gambling. In some you can't. However, how the credit card companies deal with these charges is what is important here. Charges for gambling are counted as cash advances against the account NOT as a regular charge.
This is accounted for via SIC codes (Standardized Industrial Classification). Each merchant account has one associated with it. Unless the merchant lied about what they were selling the SIC code would have clearly indicated it was for gambling.
So since they had the knowledge of that it was gambling, were already doing special processing on the charge, and had the individuals address, Visa should have blocked the charge!
While I don't think this woman should have sued Visa, I can see how she could manage to get them to settle.
P.S. IANAL but work within the ecommerce industry so I'm familiar with how the credit card system is setup
It's really unfair to bash the judgement here. A law is a law; judges exist to uphold the law. The theory behind this country's legal system is that it is run by laws, not judges, as much as possible. So let's look at this. If it's not legal in California to give loans for gambling, then if you loan someone money for gambling, IT'S ILLEGAL. Wow. And despite the way people VIEW credit cards, any purchase you make on a credit card IS A LOAN. That's the reality, even if most people don't THINK about it that way. And since it's clear to the credit card company that the money is going to a casino, it's obvious that they're LOANing the woman money TO GAMBLE WITH. The fact that the transaction was automatically handled by a computer does NOT make it legal in any way. It isn't about what the company could do, or whether it was intentional. If you break the law and don't know about it, you've still broken the law. That's why large companies hire lawyers. IANAL of course (lawyers on Slashdot? don't make me laugh) but this decision seems completely reasonable to me. The woman's motives are irrelevant. "Common sense" means the opinion of a large majority of people, and is also irrelevant. If you don't like this decision, direct your wrath at the LAW. If you live in California, write letters to your politicians. Sitting around whining about how stupid the "system" is, when all the system has done is uphold the law, is just pointless.
-- I have seen the future, and it is inconvenient.
Go to your nearest burn unit and ask them if they would call "190F" liquids "hot".
*NEVER* make the mistake of thinking that the "temperature" shown by a thermometer has any direct correlation with the potential damage to human tissue. A child or elderly person can be scalded with water not much above 120F, and even a healthy adult can be scalded by water over 140F.
190F will scald anyone. 190F is *boiling water* in these parts. (Well, in the mountains to the west; in Denver water boils at around 200F). Anyone who quickly drank that coffee would require medical attention for severe burns in their mouth and throat... and at least they could vomit it out. The woman involved in the suit had the hot liquid dumped onto clothing which held it against her skin.
(Before you comment that anyone dumb enough to drink something that hot deserves what they get, what about people who have lost most feeling in their hands? *You* might be able to feel the heat through the cup, but many people will feel nothing or only mild warmth.)
I could understand that one particularly dumb manager didn't understand the consequences of keeping his coffee around 20F hotter than everyone else, but the plantiff's lawyers showed that McDonald's knew it was causing injury *and* refused to accept responsibility for those injuries.
-- For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken
Re:Ha ha! Only in California (aka, the left coast)
by
Mr.+Slippery
·
· Score: 3
Oh, not the damn McDonalds coffee lawsuit again. Look, the woman recieived third degree burns, and required skin grafts. They had previous complaints - hundreds of them - that their coffee was dangerously hot. They sold a product that was unfit for human consumption; it would have seriously burned your mouth if you tried to drink it at the temperature offered. And the woman orginally only tried to recover medical costs, but McDonald's wouldn't even negotiate.
There are plenty of bogus personal injury lawsuits out there. (I was hit by one myself after a fender bender a few years back, and despite the utter lack of any real case on the plaintif's part my insurance company decided it was cheaper to settle than go to court.) But the McDonalds coffee lawsuit wasn't one of them.
-- Tom Swiss | the infamous tms | my blog You cannot wash away blood with blood
Clearly gambling is a mental disease in cases like this. Can anyone really fail to understand that casinos, electronic or otherwise, are not in the business of giving away money to the persistent? You have to deny reality very powerfully to invest $70k in an effort to show otherwise.
Letting this woman off without at least mandatory therapy is no service to her or to society. I hope she gets help.
I blame the CC company for settling. And not it specifically, but corporations in general. If you wonder why everyone and their brother is suing, the answer is simple -- because it works. As long as court will cost the corporation more than you are asking they'll settle. Principle is not a word in their vocabulary without a bottom line to back it up.
I'm amazed they didn't require non-disclosure in the settlement, that's usually part of the deal. Especially when problems are found in a product that might cause a recall if generally known. Here I expect a lot of copycats trying the same trick, so I wonder if they will continue to settle further cases?
Apparently they are putting the responsibility to check origin of customers on the offshore gambling sites. This seems equivalent to telling them to close their doors. Certainly the credit card companies are more likely to know where the customer lives and what credit law is like there.
I spent several years working in casinos in Atlantic City. The credit card companies have machines similar to ATM's that allow you to obtain cash from your credit card within ten feet of the casino floor. I suppose they're not there specifically for gambling purposes though:)
The judge didn't rule that VISA and MasterCard was at fault and that she was right. The Creditcard campanies settled with her. Settlements happen outside of the courtroom.
In other words, VISA AND MASTERCARD DECIDED NOT TO FIGHT HER!!
This event is a showcase of the general malaise of this country. If you blew 70 grand in VEGAS you would get no forgiveness. However, some crackpot blows the same amount ONLINE and is immediately forgiven by an equally incompetent judge. Calling the credit card a "loan" doesnt quite work. This event sets a rather unfortunate precident for the future, meaning that I wouldnt want to get into the online casino business any time soon.
-- "Dancing is the vertical expression of a horizontal desire" --Robert Frost
The credit card company will still have revenge
by
PD
·
· Score: 5
After 3-5 years of non-payment, the credit card company will forgive the debt owed to them by their delinquent customer. The customer at this point usually thinks that they are off the hook, scott free.
BUT, an unpaid loan turns into *tada* INCOME! This income becomes TAXABLE! So, once the debt is forgiven, the credit card company turns in their customer to the IRS, and the customer suddenly finds themselves with a tiger on their tail. A much bigger tiger than a credit card company.
The woman who got the $70,000 forgiven now owes about half that amount to the IRS, plus late penalties, fees, and interest.
I'm really surprised that the article didn't mention that, but maybe not too many people know about it.
What would happen if she actually won anything?
by
warlock
·
· Score: 5
I mean, VISA loans her money for gambling, she looses, she sues, VISA doesn't charge her (duh).
Suppose she won. Could the 'gambling establishment' refuse to give her the winnings on the grounds that she used an illegal loan?
Still trying to get my head around this ridiculous judging.
Now I'm not a lawyer, but when you apply for a loan, you usually are asked to specify the reason - if you put "Gambling" then the bank should refuse it if its illegal... if you however put "general expenditure" and go about gambling, why on earth would the bank be held liable for that? Besides VISA accounts are not really loans, they're more like a general expenditure overdrafts.
VISA had knowledge of where the money was going, but stop and think for a while: VISA is international, there are god knows how many weird or even contradicting laws, hence its not only ridiculous, its impossible for them to filter transactions.
Oh well. I guess they could just add another disclaimer in their next version of the contract. Yet another proof that the US legal system needs a healthy dose of common sense.
Slashdot Mirror
This is accounted for via SIC codes (Standardized Industrial Classification). Each merchant account has one associated with it. Unless the merchant lied about what they were selling the SIC code would have clearly indicated it was for gambling.
So since they had the knowledge of that it was gambling, were already doing special processing on the charge, and had the individuals address, Visa should have blocked the charge!
While I don't think this woman should have sued Visa, I can see how she could manage to get them to settle.
P.S. IANAL but work within the ecommerce industry so I'm familiar with how the credit card system is setup
It's really unfair to bash the judgement here. A law is a law; judges exist to uphold the law. The theory behind this country's legal system is that it is run by laws, not judges, as much as possible.
So let's look at this. If it's not legal in California to give loans for gambling, then if you loan someone money for gambling, IT'S ILLEGAL. Wow. And despite the way people VIEW credit cards, any purchase you make on a credit card IS A LOAN. That's the reality, even if most people don't THINK about it that way. And since it's clear to the credit card company that the money is going to a casino, it's obvious that they're LOANing the woman money TO GAMBLE WITH. The fact that the transaction was automatically handled by a computer does NOT make it legal in any way. It isn't about what the company could do, or whether it was intentional. If you break the law and don't know about it, you've still broken the law. That's why large companies hire lawyers.
IANAL of course (lawyers on Slashdot? don't make me laugh) but this decision seems completely reasonable to me. The woman's motives are irrelevant. "Common sense" means the opinion of a large majority of people, and is also irrelevant. If you don't like this decision, direct your wrath at the LAW. If you live in California, write letters to your politicians. Sitting around whining about how stupid the "system" is, when all the system has done is uphold the law, is just pointless.
I have seen the future, and it is inconvenient.
Go to your nearest burn unit and ask them if they would call "190F" liquids "hot".
... and at least they could vomit it out. The woman involved in the suit had the hot liquid dumped onto clothing which held it against her skin.
*NEVER* make the mistake of thinking that the "temperature" shown by a thermometer has any direct correlation with the potential damage to human tissue. A child or elderly person can be scalded with water not much above 120F, and even a healthy adult can be scalded by water over 140F.
190F will scald anyone. 190F is *boiling water* in these parts. (Well, in the mountains to the west; in Denver water boils at around 200F). Anyone who quickly drank that coffee would require medical attention for severe burns in their mouth and throat
(Before you comment that anyone dumb enough to drink something that hot deserves what they get, what about people who have lost most feeling in their hands? *You* might be able to feel the heat through the cup, but many people will feel nothing or only mild warmth.)
I could understand that one particularly dumb manager didn't understand the consequences of keeping his coffee around 20F hotter than everyone else, but the plantiff's lawyers showed that McDonald's knew it was causing injury *and* refused to accept responsibility for those injuries.
For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken
There are plenty of bogus personal injury lawsuits out there. (I was hit by one myself after a fender bender a few years back, and despite the utter lack of any real case on the plaintif's part my insurance company decided it was cheaper to settle than go to court.) But the McDonalds coffee lawsuit wasn't one of them.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
Clearly gambling is a mental disease in cases like this. Can anyone really fail to understand that casinos, electronic or otherwise, are not in the business of giving away money to the persistent? You have to deny reality very powerfully to invest $70k in an effort to show otherwise.
Letting this woman off without at least mandatory therapy is no service to her or to society. I hope she gets help.
I blame the CC company for settling. And not it specifically, but corporations in general. If you wonder why everyone and their brother is suing, the answer is simple -- because it works. As long as court will cost the corporation more than you are asking they'll settle. Principle is not a word in their vocabulary without a bottom line to back it up.
I'm amazed they didn't require non-disclosure in the settlement, that's usually part of the deal. Especially when problems are found in a product that might cause a recall if generally known. Here I expect a lot of copycats trying the same trick, so I wonder if they will continue to settle further cases?
Apparently they are putting the responsibility to check origin of customers on the offshore gambling sites. This seems equivalent to telling them to close their doors. Certainly the credit card companies are more likely to know where the customer lives and what credit law is like there.
I spent several years working in casinos in Atlantic City. The credit card companies have machines similar to ATM's that allow you to obtain cash from your credit card within ten feet of the casino floor. I suppose they're not there specifically for gambling purposes though :)
numb
The judge didn't rule that VISA and MasterCard was at fault and that she was right. The Creditcard campanies settled with her. Settlements happen outside of the courtroom.
In other words, VISA AND MASTERCARD DECIDED NOT TO FIGHT HER!!
Je ne parle pas francais.
This event is a showcase of the general malaise of this country. If you blew 70 grand in VEGAS you would get no forgiveness. However, some crackpot blows the same amount ONLINE and is immediately forgiven by an equally incompetent judge. Calling the credit card a "loan" doesnt quite work. This event sets a rather unfortunate precident for the future, meaning that I wouldnt want to get into the online casino business any time soon.
"Dancing is the vertical expression of a horizontal desire" --Robert Frost
After 3-5 years of non-payment, the credit card company will forgive the debt owed to them by their delinquent customer. The customer at this point usually thinks that they are off the hook, scott free.
BUT, an unpaid loan turns into *tada* INCOME! This income becomes TAXABLE! So, once the debt is forgiven, the credit card company turns in their customer to the IRS, and the customer suddenly finds themselves with a tiger on their tail. A much bigger tiger than a credit card company.
The woman who got the $70,000 forgiven now owes about half that amount to the IRS, plus late penalties, fees, and interest.
I'm really surprised that the article didn't mention that, but maybe not too many people know about it.
If tits were wings it'd be flying around.
I mean, VISA loans her money for gambling, she looses, she sues, VISA doesn't charge her (duh).
Suppose she won. Could the 'gambling establishment' refuse to give her the winnings on the grounds that she used an illegal loan?
Still trying to get my head around this ridiculous judging.
Now I'm not a lawyer, but when you apply for a loan, you usually are asked to specify the reason - if you put "Gambling" then the bank should refuse it if its illegal... if you however put "general expenditure" and go about gambling, why on earth would the bank be held liable for that? Besides VISA accounts are not really loans, they're more like a general expenditure overdrafts.
VISA had knowledge of where the money was going, but stop and think for a while: VISA is international, there are god knows how many weird or even contradicting laws, hence its not only ridiculous, its impossible for them to filter transactions.
Oh well. I guess they could just add another disclaimer in their next version of the contract. Yet another proof that the US legal system needs a healthy dose of common sense.
-W