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."
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
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