Hi all,
I would like to report to you what has happened to me, because I think this is a
precedent with dangerous implications for all of us.
Apparently my account was frozen by court order.
Yesterday I found my account unaccessible.
>From an email which was still in my trash bin I learned the following:
-----------
>Hello. My name is Sean Shiff. I am an attorney in Minneapolis, Minnesota, USA.
I represent a company called Cash Cards International, L.L.C. ("Cash Cards").
Cash Cards provides funding to customers for online purchases through accounts
with E-Gold Ltd.
>On Friday, March 21, 2003, Cash Cards was attempting to fund an E-Gold account
for one of its customers, in the amount of $3,260.00, but Cash Cards
inadvertently put these funds into your E-Gold account (No. 102468). However,
since E-Gold has strict privacy rules and other restrictions, E-Gold would not
reverse the transaction or freeze the account unless Cash Cards obtained an
order from a court. So, that is what we did. Attached hereto in PDF format are
the papers we filed, along with the signed order from the Hennepin County
District Court. As a result of the order, your account is frozen, but we want
to work cooperatively with you to get Cash Cards' funds back and unfreeze the
account as quickly as possible. We apologize that we had to proceed in this
fashion, but I hope you can understand and appreciate E-Gold's rules.
>Also, please review the attached proposed agreement, which would allow Cash
Cards to retrieve its $3,260.00 from account No. 102468, and then unfreeze the
account. If it meets with your approval, please sign it, fax it back to me, and
mail me the original, keeping a copy for your files. I will then deliver it to
E-Gold, who will make the necessary arrangements with Cash Cards for
implementation. After that, I will dismiss the lawsuit. If you have any
questions for E-Gold or if you would like to verify what I am representing to
you in this e-mail, you can contact Randy Trotter at 1-(800) 909-6590, extension
106.
--------------
Attached were 9 pdf files with what looks like several court documents, although
I don't see many court stamps or signatures other than the one of Mr Shiff.
Now, with my account frozen I am not even able to verify if the $3260 is really
there.
E-gold has not bothered to contact me about it, even though my correct email is
in their possesion.
This could be a well constructed scam and once I agree to pay $3260 in e-gold I
could find out that the money was not there and some guys from Pitcairn have
already taken off with mine....
But I guess e-gold would not have frozen the account if the claim was not true..
I want some proof however.
Basically this means that anybody can proceed easily to have an account frozen
by
court order.
All you need to do is put some money into the victim's account by 'mistake' and
head to Minesota court.
They will order to have your private data transmitted to the court . The order
also forces e-gold to hand over all information about transactions done from the
account since the mistaken funds came in.
Moreover your name is mentioned in a court case, so people who look up your
records later on will find out that an account of yours has been frozen by court
order, so they will easily assume you have been engaged in criminal activity,
money laundering, etc...
If the victim happens to live in a country where it is not completely legal to
have accounts abroad, he could be in for even more trouble.
A lot of damage and trouble while you actually did NOTHING.
This is a not a very comforting idea...
And I would urge e-gold to implement some necessary changes to avoid this kind
of things to happen. (more below)
Here is the answer I have given to Mr Shiff so far:
----------
Dear Sir,
I found your message yesterday.
It had been sent to the trash bin by my email program settings, so I only found
out now after I was unable to access my e-gold account and took a look there.
I was shocked to find out that my account can be frozen without my knowing and
while I am obviously absolutely innocent.
First of all, because my account is unaccessible I have no way to find out if
there is really $3260 worth of gold that has come into it by mistake.
I also have not yet received any message directly from e-gold about this matter.
What proof did you take to the court to show them that you sent $3260 to my
account. Please also send it me.
I have to consider this a scam attempt until proven otherwise.
Now, supposing your claim is true.
The proposal you are making is not realistic because it doesn't take into
account all the damage that I am suffering because of your client's mistake.
1) How about my costs for arranging all this and writing the responses to you?
Sending faxes from Belgium and Bulgaria is not free of charge.
Consulting my laywer is not free of charge either.
2) How about the inconvenience for me being unable to use my account? (Yesterday
I was to receive a payment but my customer told me it didn't work. This is
because the account freeze of course...)
3) Furthermore I see my privacy unnecessarily compromised by having my personal
data ordered to be given to the court.
4) The reputation of my website and my personal name is being tarnished. Anybody
who does a search for possible criminal records will find this US court order
that had my account frozen, so people will easily assume that I was engaged in
criminal activities. Before you know it I will be supsected of terrorism..
5) You ask for $3,260.00 to be given back, but that means I would eat the loss
of any adverse move of the price of gold.
I suppose it is a certain amount of gold grams that was put into my account by
mistake. The value of these goldgrams will fluctuate with the pog.
By this court order I could end up paying back more gold than was mistakenly put
into my account. This is ridiculous of course and makes this court order
logically invalid.
The court order will have to be changed and show the amount in gold grams, not $
I have no objection to give back money that is not mine, but obviously it is the
person who made the mistake that should take the losses and damages that are
done to get the money back. I am not going to take any loss on this.
I am going to share this story on the e-gold discussion as I think it is a
precedent that should be known by anybody who uses the e-gold system.
Regards
Danny
------------------------------
So, now we will have an amusing case where the court will be forced to discard
the $ and recognise goldgrams as unit of payment in this case.
There is no other way.
But that's where the fun ends.
What is e-gold going to do about this?
Clearly the system is not safe. Non-repudiable payment is now a joke, it is
simply rejected by the court.
Somebody wants his money back, he can go to the Minesota court and say the
payment was made by mistake:
account is ordered frozen without any questions asked.
If the victim lives outside the USA he can perhaps not afford to pay an attorney
in the USA to fight the case...
It becomes a complete mess...
The e-gold rules were used as an argument before the court to grant locking the
account BEFORE contacting the owner of the account.
More than one year ago I critcised the turing numbers. I was laughed at and
called an idiot, even after I published a very simple program that cracked them
with 95% accuracy.
Now I see some better turing numbers there, so at least it has done something.
Six months ago, I suggested that e-gold be made repudiable as an 'option',
simply because non-repudiable payment is only suitable for a few particular
online businesses like gambling. Repudiable payment is an excellent marketing
tool and very succesful for most online businesses, that's why cc and Paypal are
winning.
By sticking to non-repudiable only, e-gold chooses to remain small, which is
fine but...
Perhaps after this case we should realise that even e-gold is repudiable
already, with some difficulty that is.
So, why not be pragmatic and introduce repudiable e-gold besides the already
existing non-repudiable e-gold.
The only difference is that a repudiable payment turns into non-repudiable
e-gold after a certain period of time.
This would serve several puposes.
It would solve the problem of Cash cards for example, if they make a mistake
like they did in my case, they could simply reverse the payment and all this
trouble would have been avoided. It is very likely that people using e-gold for
larger amount payments would choose repudiable e-gold with a short expiry period
(for example 3 days) just in case a human error occurs.
Secondly, the existence of repudiable e-gold will make the non-repudiable e-gold
stronger.
In a court case, if somebody tries to reverse a non-repudiable payment, it will
be much more difficult to make the case because the user could have choosen the
repudiable e-gold if he wanted the option to get his money back.
If e-gold prefers to remain small and deal only with non-repudiable, there is
another solution I could suggest.
A nice option would be to be able to require payee acceptance before the
non-repudiable payment is finalised.
If Cash cards had been with this option, they could have send the $3260 to me
with a payee acceptance request.
That would mean I receive an email (just like Paypal does) and I have to go to
the e-gold site inorder to claim the gold or refuse it if I see it is an error.
Seeing this money is sent to me in error, I could have simply rejected it and
all this trouble would have been avoided.
Accepting it anyway I would have fully deserved the trouble.
Without this payee acceptance system I cannot avoid receiving payments I don't
want. That can turn into nasty trouble as you can see.
I always seem to have this kind of problems, money coming in my accounts by
mistake.
A few years ago I got $50000 into my Etrade account , out of the blue.
It took them 6 weeks to fix it and I got a good amount in damages awarded.
See what happens now...
Greetings
Danny
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