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The Almighty Buck

Woman Avoids $70,000 Online Gambling Debt 197

Posted by Roblimo
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."
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Woman Avoids $70,000 Online Gambling Debt

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  • by Anonymous Coward
    No one ever gets out of a gambling debt for that kind of coin. Some night, somewhere, she will be sleeping with the fishes.
  • by Anonymous Coward
    You are absolutely correct. I am appalled when privileged white people - such as O J Simpson - are able to get away with murdering defenseless minorities - i.e. Nicole Brown and Ron Goldman. Another example of this would be Michael Jackson (another evil white man!) apparently using his profound wealth to derail an investigation of pedophilia against him. It is this kind of lopsided justice that makes me ashamed to be an American!
  • by Anonymous Coward
    california has a totally different judicial system than the rest of the country
  • I don't see how you figure that the judge is incompetent. He made a pretty obvious interpretation of California law. Obviously, his ruling might be seen as a license to 'charge it,' but realize this: The law was originally written to protect idiots from being allowed to get themselves in deep shit. If he had ruled the other way, he would have basically been contradicting the original intent of the law in the first place.

    Now, the judge has upheld the spirit and intent of the original law, and placed the responsibility on the money thieves.

    And finally, to top it all off, there was no ruling! It was a *settlement.* The card company knew it would lose, and didn't want to see how bad the ruling might be for them.
  • Stupid people getting away with murder -- only in America.

    - A.P.
    --


    "One World, one Web, one Program" - Microsoft promotional ad

  • Either this is a prank by the makers of slashdot, or this troll has found a way to bypass moderation

    The comment is _long_ therefore is considered to be one point upper.

  • From the article:
    Under the settlement, Visa USA agreed to forgive the debt, and will collect the money instead from the gambling sites.

    That seems to imply that Visa will not technically be forgiving the debt, but instead are going reverse the charge and will simply not pay the gambling sites.

    Then again, this may be perfectly equivalent, but I am not a lawyer.
  • >VISA can't regulate what customers do with their cards. So it should >be the customer who is at fault.

    If there are laws making Online Gambling illegal from within the US, isn't VISA and other credit card companies in fact taking part in a criminal act by allowing their cards to be used to pay online gambling debt, therefore voiding the transaction?
  • by vlax (1809)
    It may not be possible to restricy gambling on the 'Net with laws. Canada is trying to and failing miserably. But, using the credit card companies to limit access is really a very creative solution. After all, Visa and Mastercad have the legal power to limit the activities of their merchants. Getting a merchant account means signing a contract, which can perfecty easily forbid the use of the card for gambling. It's really quite inspired.
  • Most comments on this issue are about how "dumb and stupid" she is. This is an addiction like heroin or crack. She got into trouble and found a way out.

    THIS TIME.

    Thats all fine and good with me as I don't like online casinos and, for that matter, I don't like monopoly financial organizations.

    What she does need to do now, though, is get some psychiatric help for her gambling addiction.

    Stop calling her "stupid" because in fact she ( or her lawyer anyway ) is very very smart.

    Thats my two cents.

    Ken Broadfoot
    "As I was cleaning my guns, the voices told me to behave"
  • The rationale for prohibiting the use of loans (e.g., a credit card such as Visa) for gambling is to protect compulsive gamblers from themselves. This law is an example of "the common good". In this case, society is better off by not letting gamblers borrow many than by the situation in the story.

    The web sites should know better. I think what this woman did is detestable, but it is legal. This is the difference between something that is legal and something that is moral. Unfortunately, the U.S. legal system is not always a question of morality (c.f. O.J. Simpson...)

    --

  • In the UK, there is a debit card run by the Visa network, branded as 'Visa / Delta'. There is also Switch which I believe is run by Mastercard. Bookmakers accept Delta and Switch but not ordinary Visa / Mastercard, presumably for just this reason. They must have some way of checking, when somebody makes a bet over the phone, whether the card number they give is a Visa / Delta debit card or just plain Visa credit card.

    Maybe there is a similar 'product' in America - if not, it's going to be needed pretty soon, unless casinos in California don't mind not being allowed to accept plastic.
  • The woman who got the $70,000 forgiven now owes about half that amount to the IRS,
    plus late penalties, fees, and interest.


    It depends on how you look at it. If she can prove that she never spent the money in the first place, she doesn't have to pay income tax on it.

    She just has to prove that "She spent VISAs money, not hers", or the casino's.

    Suppose someone at Mastercard misreads a salesslip and charges MY creditcard $70000. Mastercard charges me. After two months they figure things out and cancel my debt, do I suddenly have $70000 in extra income? Nah!

    Suppose she'd gone and bought a Ferrari for $70000. If now she has that Ferrari, then it is pretty clear that she has had that amount or the Ferrari as income. Since in reality she now has nothing, she can claim not having had any income.

    Roger.

  • the government can regulate e-commerce by ignoring it. Cheat somebody on Ebay? Get arrested for wire-fraud.

    Gain gambling debts? Yawn. We Feds can't be bothered. Tough luck for the online casino owner. Gambling's sleazy anbyway. Win some money gambling and then see the online casino refuse to pay? Tough luck, dummy. Gambling's sleazy anyway.
  • At least with VISA deciding not to contest this in court we don't run the risk of a dangerous precident being set. It could really be quite damaging for online commerce in general if she won her case. I wonder what sort of dollar value online merchants are worth to VISA; how big do they have to get hit before they begin to think it's not a good risk. Specifically, does the online gambling organisation still have their VISA merchants account?
    Personally I think the law is fair enough. It seems to be in the same vain as it being illegal to sell alchole to someone who is already intoxicated. But in a bar the customer and the trader are under the same laws - not easy to make sure you're compliant when you don't know what laws might apply - especially if you're a third party (VISA) and you get to add another level of abstraction.
    More questions than answers here - I imagine we'll be seeing more issues like this in the near future. It'll be interesting to see what the courts say when they do get to rule on the matter.
    AdamT.
  • by AdamT (7312)
    Why can't transaction filtering work? The credit card companies already have to be (more or less) aware of all the relevent laws in order to do normal business. If the casino was a bricks and mortar establishment in California I'm sure VISA wouldn't be able to plead ignorance there. (Ignorance not generally being a defence anyway.)
    All the transactions are electronic so how hard can it be to red flag certain customer/merchant match ups based on location and catagory. You can be sure they do this already for marketing and customer profiling. That said I don't think it's really likely. It would be much easier for VISA to put the onus (sp?) on the customers - illegal use would be against the cards conditions of use. Lieing about what you were using it for would be defrauding the company and you'd be stuffed.
  • Well, don't forget AntiOnline [antionline.com], or the current lawsuits against gun manufacturers, or even the classic "Mcdonald's-hot-coffee-in-the-lap".

    I think that it's just too profitable to sue nowadays--in most cases [colt.com] the victim of a lawsuit just gives in, rather than face a possible multi-million dollar judgement against them. It works out to be cheaper that way.

    It's the exact moral equivalent of a protection racket: buy your "fire insurance" for $100 a week, or your store mysteriously burns down. Oh, and don't bother with the cops, or you might fall down some stairs. Settle out of court, or we'll tie you up in litigation for years, and you'll probalby lose in front of some soft-headed jury, anyhow.

    What can be done about it? Heck, I dunno. Maybe I can scrape up some cash and sue someone...

  • The loan was authorized by Visa. She probably got her Visa card in California, so the agreement under which Visa lent her the money at the moment that the casino charged her card was signed in California.

    So it's California law.

    EjB
  • Believe it or not, many lawyers and law students DO read and comment on Slashdot...
  • Actually, it's probably even more slanted than the study data indicates, because bright, rich criminals are probably also better at not getting caught in the first place (and therefore not being data points).
  • I suspect that the Visa and/or the merchant bank will pass the charge on to the gambling operator.

    Merchant accounts usually have terms roughly like this:

    "No matter what, in any case, if anything goes wrong, you the merchant will absorb the loss."

  • OK, you might be right that 190 is excessively hot. But I don't think it changes the point all that much. If you are right that drinking the coffee in the first few minutes would give you third degree burns, then one of two things must be true:

    1- Customers are going to get pissed and start buying coffee elsewhere, or

    2- Most McDonalds's don't keep thier coffee that hot and so this was a fluke.

    In the former case, the market will take care of this on its own, since McDonalds will realize that they are losing customers and lower the temperature. If you're right about the dangers of that amount of heat, I'd say its unlikely that all restaurants make it that hot. In the latter case, it's the fault of a single stupid manager, and McDonalds is hardly responsible. I can certainly sympathize with the woman, but I still don't see that it is the fault of McDonalds as a company. A handfull of people out of 1 billion cups sold *is* statistically insignificant. And obviously most of those people didn't mind the high temperature.
  • Actually, the basis of Capitalism is the accumulation of capital.

    All industrial societies accumulate capital. That's what causes economic growth.

    Given that there's really only a certain amount of capital at any given time, that means that you're going to miss out on your capital while someone else gets it instead.

    No there isn't. Yes, there is a certain amount of capital at any one time, but wealth is not a static quantity, and it doesn't grow on trees. The reason we have capital is that people work to produce it. The people who produce it should keep it.

    Capitalism is directly responsible for the ridiculous divide between the rich and the poor, and the major unemployment problem the USA has.

    Hmmm... Seems to me that the unemployment levels in the US are among the lowest in the world. We have had unemployment levels below 5% for most of the last five years. Many European countries (with less capitalist economies) have had consistent unemployment in the double digits. I'm not sure what unemployment problem you are referring to.

    But in any event, the unemployment problem we do have is due primarily to minimum wage laws, liscencing restrictions, high taxes, frivolous lawsuits, and other government measures that make it increasingly expensive (or in some cases illegal) to hire unskilled workers. Many workers simply don't have the skills to justify paying them minimum wages, and even if some employer is willing to hire him, they have to pay Social Security and Medicare taxes.

    Also, the welfare system doesn't do any good. It's not suprising that when you subsidize unemployment, you get more unemployed people. Subsidies cause more of everything else in an economy, so it should be obvious that paying people not to work will cause them not to work. Welfare reform helped, but there are still many states with extremely generous welfare benefits.

    As for the "divide between the rich and the poor," I find it amazing that people focus so much on the relative prosperity of different groups rather than the overall stadard of living in those groups. It may be that the rich are getting richer, but the poor are getting richer as well. I don't think it's all that terrible that the rich are getting richer faster. Life is not a race for money. The standard of living today is drastically better for everyone today than it was for people in any social class a hundred years ago, and even the lower rungs of the economic ladder are doing as well today as the wealthy were in decades past.
    The rising tide has lifted all boats.

    And the amazing thing is that the USA thinks that this is a GoodThing(TM)

    Yes, freedom and prosperity are good things.
  • 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.

    Settling looks like a bad move until you look at the stupid people that sit on American juries. The same people who gave us judgements against breast implants, tobacco companys and McDonalds' famous coffee incident are quite likely to let the woman off the hook and set a dangerous precedent in the process. The problem is not that companies settle. The problem is that if they don't settle, they will get screwed. In that atmosphere, then principle or not, they have to settle because fighting does no good if you lose.
  • I had heard most of these details, and I still think the lawsuit is ridiculous. It's not like it's a suprise that coffee is hot. I strongly suspect that if you did a study of the average coffee burns per cup served for other restaurant chains and for home coffee makers, you would find that McDonalds is in line with other sources of coffee, and that most fast-food coffee is . Coffee is hot, and it would seem to be common sense that you should not spill it on yourself. And I hardly think that printing a warning on the cup saying "warning: contents are hot. Do not spill on self" would make much difference. The reason this sort of thing happens is because people are careless. They are not going to be less careless because the cup says they shouldn't be.

    What happened was a simple accident. It is neither the woman's fault nor McDonalds's. The result of making simple accidents the target of lawsuits, (and when you sell a billion of *anything,* you're going to have some complaints) is to make corporations the all-purpose scapegoat for peoples' woes. There was nothing particularly dangerous about that cup of coffee. The customer knew exactly what was in it, and she willingly took that risk.

    The result of this lawsuit is likely that McDonalds reduced the temperature of its coffee. Despite your scornful remark, I suspect that most customers *do* "like it hot." Coffee isn't very good when it is cold, and often coffee sits in the cup for several minutes on the trip into work or whereever it gets consumed. The lawsuit made it much more difficult to get coffee at the temperature they like it. One woman's carelessness led to the inconveniencing of 999,999,9999 other customers.

    So the McDonalds case is not an example of corporate hype. The lawsuit was in fact ridiculous. Regardless of what the results to the woman were, making McDonalds responsible for accidents that happen with its product is an abdication of individual responsibility. Corporations should be liable when they directly cause harm to their customers, not when they sell an ordinary product that everyone knows can do damage if used carelessly.
  • If I read it right, Visa and Mastercard already have paid: It's the card companies who take the loss - the gambling orgs have their pay.
  • IMHO, I don't really like the idea of Visa giving out loans for gambling. They should never have signed contracts with the offshore gambling houses. I don't really want my credit card company to be a loan shark.

    I think this is a perfect argument for digital cash. She shouldn't have been able to spend anything but real money. If she borrowed the money from Visa, well, then she's defrauding Visa.

  • My understanding is that VISA agreed to send out a non-disclosure to all their customers, and all website dealing with gambling has to have the same text.
  • Hmmm... care to explain how Judge Ito let a murderer free? Last time I checked, the American justice system was based on the jury system, and it was the JURY that gave the innocent verdict.
  • I agree with most of your points, but I still believe that its nearly impossible for them to comply with all laws.

    For example in some countries it is illegal to get more than one loan for a particular purpose (this is done to protect borrowers from running up debts they can't afford I guess).

    Basically it means that if you go to bank A and get a loan to buy a new car, and then go to bank B to get a second loan (since its a more expensive car than your bankmanager thinks you can afford :), bank B would be violating law if they loaned you the money. Same thing in principle to VISA violating law by loaning you money for gambling in my book.

    This is usually worked around by forcing you to sign a decleration that you haven't got another loan for that purpose, so if you made the bank break the law you're responsible.

    I believe this is the way to go - transfer responsibility/liability to the customer, but then again that's just me.

    -W
  • Hmmm... no, it's not as simple as that.

    Why should VISA prohibit their merchant account holders from charging money for gambling because its illegal in a couple of US states and countries?

    Or are you suggesting that they filter transactions? In which case, what consitutes an illegal loan... if the cardholder's address is in a state where its illegal (ie CA) or if the cardholder is accessing the internet from a state where its illegal?

    How on earth would a system like that be practical?

    Besides, its not only loaning for gambling, chances are there are loads of other similar laws in other countries, restricting merchants or filtering transactions cannot possibly work.

    In the end of the day the cardholder should be responsible for whatever he does with his account, or he should not be using it at all.
    I guess its VISA's fault for not putting a suitable disclaimer somewhere.

    Perhaps they thought they could win the case but decided to settle because their lawyers have better things to do - who knows.

    -W (who is not a lawyer)
  • I have no sympathy for the woman who lost the $70,000 in debt. But I think that the ruling is a very good ruling, because it spikes the gambling industry, an industry that I see as largely parasitic.

    Also, it is good that loan companies will be discouraged from giving loans for the purpose of gambling, because a loan company has a responsibility to make sure that they are making a responsible loan, and a loan for the purpose of gambling can never be responsible, since it clearly is not a good investment.

    Also, in some cases, it really is the case that the gambler should not be held responsible for their debts, for example, if the gambler suffers from altheismers disease, or is in some other way mentally impaired. For they will lose a lot of money, and in many cases it will be their loving relatives who will have to pick up the tab for their debts.
  • But it's not impossible for VISA to police this. They approve the transaction automatically through their computer system rather than be inefficient and do it over the phone like it used to be done. if they want to be more efficient, then they have to pay the price for letting more bad approvals happen.

    Since the approvals are done automatically through a computer, why can't the computer have certain vendors (like gun stores, gambling outfits, etc) automatically check against the purchaser's locality and thus the governing laws (much like they currently do for sales taxes or shipping charges).

    We can all agree she's pretty spineless to not take responsibility for her actions, BUT, VISA similarly has to take responsibility for making illegal loans. they can't put everything to run automatically on a computer and then plead "we didn't know it happened!"

  • VISA and MC have always had to accept that a certain amount of their charges would be written off, and they've always had to deal with holding the bag when illegal things occur through their streamlined channels. they've consciously made the decision that they'd rather lose a little money to bad transactions than be less efficient by checking each one.

    For example, if a bank sends a VISA card to a 12-year old and the kid goes around buying stuff, VISA is gonna get stuck paying the bill because they "approved" the charges when they were made, and only later discovered that they had screwed up in the issuing process. Why should it be different if they're "approving" charges for things that aren't legal?
  • And you're correct that there's a lot of weird stuff like that. there's only so much shifting of legal responsibility VISA can do, though. You can't sign away your rights, as many people are fond of pointing out, so the most they could do is try to intimidate customers with the contract they signed.

    But ultimately this isn't the big deal everyone makes it out to be -- these are exactly the costs that plague any money-lending group (no more online than in the real world). you know some percentage of your loans are going to be bad or default or whatever, but the increase in efficiency offered by automatic processing usually more than makes up the difference...
  • On the other hand, having a credit card could save you in the event that some emergency came along and you didn't have enough in the bank.

    Of course, some (at least my) banks have "Overdraft Insurance" or something like that for debit cards, so for instance, with my bank, I can withdraw up to $100 over what I have in my checking account. They'll slap $25 on me for it plus however much I overdrew, but the transaction will go through, potentially saving my ass for the time being. A Credit Card has is more useful for emergency situations, in that you can slap a lot more deniro on one of them w/o paying right away. You still have to pay, plus interest, but once again, it could save you.

    I think that while the credit card companies may not be exactly operating in their user's interests (more in their investor's intrests), they can still be useful. They get next to nothing for instance if you never put anything on the cards or at least pay up before it rolls over into next month (thus increasing their revenue from interest).

    I myself just have a VISA checking card, from my bank.. I hope I never have to use that overdraft protection, but its there, which is good :)
  • "Should" in the sense that it's morally correct, is a sticky situation.

    However since they are interested in money, if they decide that the backlash from gambling is too great, they might do it anyways to save themselves some money.
  • I take it you think gambling is sleazy?

    -WW
  • Actually, capitalism's basis is the creation of capital, not the accumulation thereof. It's a subtle but important distinction. Capitalism is the only econmic model that does not address distribution of wealth. (There is a logical consequence of how the wealth is distributed, of course, but it is not part of the model per se.)

    As another poster pointed out, it's not a zero-sum game. There is typically less of a divide between rich and poor in capitalistic systems because of the ability for upward mobility. Non-capitalist systems usually result in a system with very few elites with a wide gap between them and the "common man" -- capitalist systems tend to have a much more dynamic distribution of wealth.


    --

  • Actually, the basis of Capitalism is the accumulation of capital. That's why it's called Capitalism. Given that there's really only a certain amount of capital at any given time, that means that you're going to miss out on your capital while someone else gets it instead. Capitalism is directly responsible for the ridiculous divide between the rich and the poor, and the major unemployment problem the USA has.

    And the amazing thing is that the USA thinks that this is a GoodThing(TM)

    Damn I'm glad I'm leaving in 1w5d
  • I wonder how difficult this woman will find obtaining credit cards in future? I can't imagine Visa and Mastercard rushing to give her a new card!

    The Great Chunder Page - Alcohol Induced Fun!
  • And the banks will presumably check that.

    The Great Chunder Page - Alcohol Induced Fun!
  • Punitive damages should NOT be awarded to the plaintiff or their lawyer. They should go directly into the social security pot (where politicians will have some trouble stealing from). They are PUNISHMENTS, and should not be given as an incentive to the lawyers to pursue bad cases. Make that one change, and I swear that these cases will plummet.

    If I had a hot (and I mean HOT) cup of coffee, I'd keep it far FAR away from my gentitalia. The woman made a bad mistake. But serving such hot coffee to people in their cars, is just asking for trouble.
  • The worst thing about all of this, is that people have stopped thinking that they are responsible for their own actions and, consequently, blame others for their stupid mistakes. And here, and many other examples, the court concurs. It's no wonder so many need the government to look out for them.
  • That's the problem. She's abandoned her responsibility and now the credit card company is left to spread it out among the rest of the consumers.
  • and yet, as hot as the coffee was, the woman stick the styrofoam cup between her own legs and tries to drive off.
  • A) It was coffee
    B) by definition, coffee is hot
    C) she spilled it, not McDonald's
    D) it wasn't McDonald's fault she was clumsy.
    E) maybe the temperature WAS too hot. If someone had sued because they had burned their tongue I would have a better time with it. Still think you ought to know it's fucking coffee for god's sake, and it's gonna be hot!
    F) no i didn't read all the court briefs, and no I don't look to Leno to do my thinking for me. I think it was a bullshit lawsuit just on the face of it.
  • When you're in charge of Slashdot, you get to pick what is and isn't relevant. Just what exactly is your perception of a "proper" Slashdot story? Considering you didn't start Slashdot, you don't run Slashdot, you don't do anything except read it and post responses, you have no right to question anything they feel is appropriate. If they are wrong, the number of hits starts to go down. That simple.
    Personally I feel CdrTaco, Hemos, Roblimo et.al. do a good job. Occasionally there is a story I'm not interested in, so I don't read it. I don't however, question their judgement in posting it.
    Excuse the rant, but your comment struck me the wrong way.
    Now for MY response to the story. Reminds me a little of the lady who sued McDonald's because she spilled a cup of coffee in her lap and burned herself. And she won!! Just another example of people not taking responsibility for themselves and the judicial system letting them do it. Almost makes me want to go to law school just so I can be a judge and throw these kinds of cases out of court. You think Judge Judy can go off on someone, you ain't seen nothin'!
  • Let me guess it says............
  • I think it's more a case of a smart lawyer seeing the possibilities. On the one hand I definitely agree with you. It is a stupid lawsuit, brought by a totally irresponsible woman, guided by a shrewd lawyer.
    Unfortunately, if it's illegal to offer loans for gambling, and VISA is an option at a gambling site, it's VISA's fault. Legally.
    This woman got lucky, she's an idiot, but she got lucky. Chances are she'll get herself in hot water again and won't be so lucky next time. And if there is a God, she won't have credit for the rest of her life.
  • After 3-5 years of non-payment, the credit card company will forgive the debt owed to them by their delinquent customer

    Actually in my experience, (don't ask) the credit card company sells the debt to a collector, who then sells it to another who then...etc, etc. After 8 yrs I still got companies calling me about a debt from 1991. (and no, I'm not proud of it)

  • It's a foregone conclusion on the actual money. But maybe there is a silver lining.

    This judge's decision needs to be seriously looked at. If it's found that she's within the bounds of law, fine - adjust the law. If not, adjust HER.

    Another /.er noted that Visa can hardly know what their cardholders are using their services for. I'm hard-pressed to understand how this judgement was rendered, but until I get more than a ZDNet article (they thought Jesux was legit), I can't really scream at the judge in good conscience, can I??

    My .02
    Quux26

  • You have to deny reality very powerfully to invest $70k in an effort to show otherwise.


    You ever heard of organized religion?

    My .02
    Quux26
  • I have a feeling Visa didn't realise what such a business venture would do to them. Such a large company would have a lot of trouble keeping track of state laws, etc. I agree that credit cards shouldn't be used for gambling, nor should credit card companies promote this... But I don't like credit cards anyway.

    They scare me.
    People who can't spend responsibly tend to be the people they target most when trying to gain new debtors. As a college student, I will sometimes get 3 calls in a night from people trying (and putting a LOT of pressure on) to sell me on a credit card. College students are famous for going crazy on credit cards. The machines in Vegas for getting cash from a credit card is just another example.
    It's a dirty business.
  • VISA can't regulate what customers do with their cards. So it should be the customer who is at fault.
  • Firstly, I work for WMS Industries, which is a supplier of casino gaming equipment. I do pinball now, but I did some gaming stuff in the past.

    Secondly, this is my PERSONAL opinion. I am a programmer, NOT a spokesman. Got it?

    This isn't the main point of my post, but you use the term 'gambling establishment' and I'd like to clarify this matter. Offshore Internet casinos have nothing whatsoever to do with the state-legal, regulated 'gambling establishment'. There is an enormous quantity of federal and state legislation covering that entity and it's almost all designed to protect gamblers. There's a reason that the Offshore casinos are illegal to do business with.

    As for this specific case, well, Visa lent this woman money (and it is definitely a loan, funds advanced against future payment with interest) by authorising a transaction with XYZ corporation offshore (Cayman islands most likely) for an unspecified purpose.

    It's later brought to their attention that the purpose in question is illegal gambling. Now they have a problem. If this woman were in Florida they would actually have been party to a crime, for reference. Since they don't want to see California enact a similar law, they do what they did.

    I'm personally undecided whether I think such laws are a good thing or a bad thing. It's an instance of the general case of how much society should use legal force to protect its members from situations where they may be hidden, disadvantageous, circumstances.
  • The problem is that this 70K Visa paid will be
    passed to other Visa cardholders in forms of
    interest and monthly fees. (unless you believe
    Visa just gives away 70K like this)

    It seems like this is mostly law-abiding
    citizens who get screwed.
  • i've never used online gambling, but exactly how did she get 70k into debt only using her credit card? i know that some relatively wealthy people have 70k limits and it's not that unheard of, but most people don't have nearly that much. my parents are pretty upper-middle class and they "only" have a 10k limit.

    does the gambling company simply ask for your credit card number, let you do your gambling and then at the at the end of the month they charge you for your losses (or, less likely, give you credit for your winnings?). if she doesn't even have 70k worth of _credit_, it is partially the casino's fault for letting her get that far in debt without checking her card.

    i've never used online gambling, so i don't know how it works. but if this monthly statement approach is how they do it, it's simply a bad idea. a much better idea would be to buy "chips" with the credit (though probably better with "real" money). of course, you can always get cash advances on credit cards, so only allowing "real" cash won't work completely (though it would stop the completely on-a-whim things).

    even if she did have a 70k limit, she probably shouldn't've had one. i'm not saying it's not her fault, but this ruling is a stiff warning to the credit card companies and the casino companies to be more careful about who they give credit to. credit card companies live on people who can't afford the credit they give them. if everyone could, they would pay their monthly statements in full, never pay any interest, never give any money to the credit card companies. obviously, this is not so.

    no, i'm not delighted about the ruling and i don't agree with it, but it's not necessarily all bad.

  • If she doesn't have the money to pay off a $70K debt, then she never would have been given a credit limit high enough to charge $70K on two cards.

    well, never say never. i'm a college student with a $1500 credit limit. i don't even make that much money with my on campus job in 3 months. if i maxed out my credit card (which of course i wouldn't), my parents would have to bail me out. perhaps that's just what the credit card companies are thinking, but my parents are not cosingers on my card or anything like that.

    this is my first credit card, as well.

    as far as i know, they didn't do any background check on the information i put in. they didn't even ask for enough information to verify that i do work and make X amount of money or pay X amount of money for my housing, unless they have some inside connection with social security numbers.

    it just seems to me that credit card companies are a bit too willing to raise limits and give out credit cards _sometimes_, because they know they can charge 20% interest or whatever and it's really better for them if the customers don't pay on time.

    Credit card companies get a percentage of your purchase. If you charge $100 at a store with your Visa card, Visa get $4 and the store gets $96 (4% used to be the number, I don't know if this is still accurate).

    yes, i had forgotten about that, but this number is quickly dwarfed by monthly interest of usually at least 1% for someone who only pays the minimum necessary payment.

    i'd be willing to bet they make more money off of interest than off of those automatic charges, but of course i could be wrong. according to this link [bankinfo.com] the average household has $7,000 in credit card debt and pay $1,000 in interest and fees. of course, this i don't know how reliable this source is as i just found it in a quick search, but it sounds about right to me.

    it's just hard to feel sorry for a huge credit card company losing a mere 70k or an online casino losing out on 70k they charged for someone to click a few buttons.

  • Well yes and no - A credit card is actually a form of loan. And of course, a bank (which a credit card company is) does have the ability to regulate who they loan money to and what the money will be used for. So, if the uses are illegal, the loan itself is questionable. That said, this woman still got away with murder.

    -----------

    "You can't shake the Devil's hand and say you're only kidding."

  • No, the judge probably thinks she's to blame. Fortunately our legal system does not operate on how a judge feels. That would be idiotic. This judge was doing his job and following legal definitions. Actually Visa really is to blame, or at least their lawyers are. They did not look into the possible ramifications of lending money to gamblers in California. Their oversite == Their fault. The woman exploited them (and got away with it), so she can't be too stupid. Having said that, I think she should probably be euthanized :)

    -----------

    "You can't shake the Devil's hand and say you're only kidding."

  • Um, that's not even close to a good metaphor. Visa broke the law by lending money for gambling. You'd be breaking the law by shooting people. Since, by illegally buying the gun, you'd be breaking the law, you would also be in default of a loan, leaving Visa blameless for your actions. However, in this woman's case, she didn't break the law by spending the money, since the gambling was legal. Visa broke the law, because lending money for gambling is illegal.

    -----------

    "You can't shake the Devil's hand and say you're only kidding."

  • Ok, I agree. Let's imagine an online way around this silliness...
    www.e-gold.com -- we don' need (or want) no steenking loans.
    Back to basics for the gambling industry, which is slowly (and
    evidently sometimes painfully) getting/buying a clue.
    JMR

  • Could she be tried for fraudulent use of a credit card? :o)
  • Y Online casinos are a bad idea anyway - I believe that gambling is pretty lame and this proliferation of casinos on native american reservations is bad enough. Allowing people to gamble through their home is even worse.
    I can't believe this lady was allowed to do this, adn the jusge is, as you say, incompetent , and in my opinion, should be smacked for being so retarded.

    She sure wouldn't be complaing about Visa 'loaning' her money if she won!
  • Becasue I don't consider credit card charges a loan.
  • All they have to do is put the simple facts of the case in the credit file (successfully sued to invalidate $70,000 gambling debt), and no credit-card company will touch her with a 10-parsec pole. Truth is an absolute defense to a charge of defamation under US law.

    I have an image of Alfred E. Neuman captioned "What -- Me Worry?" right next to this bimbo captioned "What -- Me Responsible?"
    /.

  • If the the charge to the card is coming from an Online Gambling site, Visa has a pretty good idea what's going on.

    Would they know what kind of site it is? Given that gambling is commonly considered to be a vice, I expect that some gambling sites put the charges under innocuous names just as some pr0n sites do.
    /.

  • I stand corrected. Me being thick and it being the middle of the night in England have left be being slack ;)
  • First of all, I don't think it's fair to look at this as a judgement in favor of the (grossly irresponsible) woman, rather than as a judgement against Visa. The money was only returned to her because Visa wasn't entitled to it, since they offered the loan illegally.

    And it was a loan. I can't think of any definition of "loan" that doesn't fit credit cards. I mean, credit cards, guys?!? You can't argue that Visa had no way of knowing that their loan was going towards gambling, either. They have a record of the transaction, they know this woman's address, and they are subject to the laws of California. So if it is in fact illegal to offer a loan for gambling in California, then Visa is legally responsible. I don't think they have a leg to stand on.

    That's one thing I'm not clear about, though... The article says only that the courts "frown on" loans for gambling. That's awfully vague. Is there a law on the books, or not?

    I'm certainly not defending this law. I think it's absurd, and I think you'd be hard pressed to find a /. reader who'd say otherwise. But absurd laws are still laws, and Visa definitely violated this one.
  • by Anonymous Coward

    The McDonald's case is interesting.

    The coffee, maintained at a scalding 180F-190F because the customers supposedly "like it hot", caused severe third-degree burns. She spent seven days in the hospital and was treated with skin grafts.

    Initially she only wanted payment for her medical bills but McDonald's refused to even negotiate with her. Consequently she contacted an attorney who had settled another coffee burn case with McDonald's. In the course of the trial company documents revealed that "in the past decade McDonald's had received at least 700 reports of coffee burns ranging from mild to third-degree, and had settled claims arising from scalding injuries for more than $500,000."

    Despite knowledge of the hazard, company officials refused to warn its customers. "There are more serious dangers in restaurants." And given the 1 billion cups of coffee sold annually, McDonald's considered the number of burn complaints to be "statistically insignificant".

    After hearing such testimony a jury found McDonald's liable and awarded $200,000 in compensatory damages. The jurors deducted $40,000 for contributory negligence. Also, given McDonald's conduct, the jury awarded $2.7 million in punitive damages, which was equal to 2 days of coffee sales.

    Later the judge reduced the punitive award to $480,000. While awaiting appeal the two parties settled out of court for an undisclosed sum.

    The #1 sickening thing about the whole McDonald's coffee hype is how it distracts from the facts. I suppose you just glibly believed whatever it was the mass media told you about that McDonald's case didn't you?
  • Disclaimer: I am a lawyer, but I'm probably not licensed in your jurisdiction. This isn't legal advice, anyway. If you need legal advice, see an attorney licensed in your jurisdiction.

    The only thing surprising about this is that it took so long to happen. In fact, this was my initial reaction to the use of Visa for these places.

    Using a Visa or MC for *anything* creates a loan. It is also a contract. Courts have refused to enforce contracts that violate public policy for as far back as the Common Law records cases. You also can't sell yourself into slavery, nor consent to be murdered.

    Nothing prevents the transaction if everyone agrees to it. But when a party enters the courtroom, they are asking the court/government to enforce the contract.

    Gambling contracts are a particular type that courts commonly refuse to enforce. California's constitution specifically prohibits the legislature from legalizing gambling of the type seen in Nevada casinos. The public policy is explicit.

    When a Nevada casino issues a loan, it is aware that it can't enforce the loan in California. For that matter, it couldn't even be enforced in Nevada until the late 1980's.
  • McDonald's kept coffee extra hot because it was convenient to them. They could pour cups beforehand and not have them get cold while sitting around. No other fast food place had coffee that hot, despite the fact that they presumably have the same customers. So, McDonalds had coffee too hot, had been warned about it many times so in this case it was issued a stiff punative judgement to get them to change their behavior, which they did.

    I don't find McDonalds coffee to be too cold now, others may disagree but I doubt it's 999,999,999 out of a million as you suggest. The coffee tastes like shit, but that's a different story.

    That's not to say I don't agree that frivilous lawsuits or at least the fear of frivilous lawsuits is invconvenient for companies and consumers. After all, if a few people hadn't gone and died from bad Jack In the Box beef, I could still get a decent medium rare burger. C'est la vie.
    --
  • First off, IANAL nor a resident or citizen of the USA.

    OK, we know this woman lives in California. Now, for argument's sake let's say that this offshore casino is located in "Fictitia".


    Where & when did this "loan" take place, and whose laws should govern the transaction(s)?

    Did the loan occur in California, or in Fictitia?

    Did the loan occur when she opened her Visa account, or when she opened her gambling account?

    Was it even one single loan, or was there one loan for every transaction?


    It could have made an interesting test case if they had not settled.

  • How is Visa to know what the card is being used for? All they can possibly know is what merchant is charging the card and for how much (well, that's all they can possibly know while still maintaining some semblance of legality, at any rate). Last I checked, they bear no respobsibility for what you do with the card. As a matter of fact, since this woman used her "loan" for an illegal purpose of which Visa wasn't aware, you might be able to say she committed fraud.

    Sure, credit cards are a form of loans. However, Visa did not lend her the money so she could gamble with it. They did not know what was going on, so I don't think they should be held liable for this in the least. This idiotic woman should have to pay every last cent of that gambling debt. She chose to play, after all, and it's no one's fault but her own that she messed up.
  • Suppose she won. Could the 'gambling establishment' refuse to give her the winnings on
    the grounds that she used an illegal loan?


    The way to WIN on gambling $70.000 is by doing at most a few bets. If you place 7000 $10 bets, the chances are pretty slim(*) that you will "win".

    (*) slim as in happens once in the lifetime of the universe if someone tries the experiment every second.

    Here in the netherlands, the odds on some bets are acutally fair. Betting red/black on the roulette table gives you a 50/50 bet. Betting a number gives you 1/37 chance * 36 payback, so you lose
    on every bet. The red/black rules are such that you get exactly 1/2 * 2 return.

    The reason the casino can still make a profit is that people have credit limits. Either in "money in wallet" or on their credit card. That means that you can bet until you're broke. There is a 100% chance that you can "bet till you're broke". If you start with $100 there is a 50/50 chance that you'll end up with $200 before going broke. Many, MANY gamblers will continue "because they are on a winning streak". That means that the stakes for the casino just doubled for the casino ("Yeah right"), but the person still has a good chance of going home broke.

    If you really want to make money against the casino, you should go to the casino with $100 in your pocket and leave (or at least stop betting) when you're $10 ahead. There is about a 90/10 chance that you'll leave the casino with more money than you started out with. But the 10% chance is that you'll have lost $100, and the 90% chance is that you'd have won $10.

    Roger.
  • Visa will chargeback the gambling sites, and they will also 1099 the delinquent woman.

    Visa doesn't want to lose any money if they can't help it, and their ongoing business relationship with the gambling houses allows them to chargeback the full amount. If the gambling houses don't like it, then they don't have to accept VISA, now do they?

    No matter where Visa gets its money from, the woman received $70,000 of income that she spent how she pleased. She owes taxes on it.

    I'm not a lawyer either, but I have consulted for credit card companies, and that's how I know.


  • What's kind odd is that the comment got a score 0:Troll. So someone actually moderated it up (otherwise it would have been score -1: Troll). In theory, MetaModeration is supposed to make up for that, but obviously it's far from foolproof.

    D

    ----
  • The Register has a funny story [theregister.co.uk] on this case.

    Well, I laughed ;)

    -W
  • 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.

    So if Citibank is International (it is), they are no longer required to know and obey the banking laws in the places they do business?

    That is the "price" of being a large international company -- you have a team of lawyers, in-house and on-retainer, whose job it is to know the various laws that affect the way you do business in the many places.

    Now, what happened is that credit cards companies have to differentiate between "purchases" (for goods and services) and "cash advances" (for anything else). The rules between the two are widely different in the way the card companies are allowed to behave.

    In many states, such as California, you may not use a credit card for gambling purposes.

    Now, some will say "she did a cash advance", but that's not what happened. A cash advance is like going to an ATM machine, you surrender your card, someone draws cash against your card and hands it back to you. (In fact, the most common place for credit card cash advances IS the ATM machine, with local banks being a close second). Most credit card authorization agreements strictly forbid the merchant from performing cash advances (hence you can use your ATM card to do "$20 over" at the grocery store and get change, but they won't let you do that with your Visa card because that would be a cash advance).

    Her contention appears to be: This wasn't a cash advance, because no cash entered my hands, and it couldn't have been a charge, because credit card charges for gambling are illegal in California.

    Is the law dumb? Yes. You should be able to spend your money or ruin your credit rating on whatever you want to. This is still (supposedly) a free country.

    Did Visa violate the law? Absolutely, as is MasterCard probably. Most of them don't bother to do the kind of fine-tuning they need to on their card acceptance routines.

    Now, if she had WON, the casino could have turned the tables and said "You fraudulently used a credit card to obtain funds" and reneged (legally) on paying her winnings.

    ObDisclaimer: I am not a lawyer

  • Of course VISA can regulate the use of the card -- they're the ones loaning you money. it's their money, and if they decide one day that you won't be able to charge anything at Sears, then you better have another card in your pocket if you want to buy something at Sears.

    And if you want to buy something that's illegal, VISA better have a check in the system to not authorize the purchase, since they know they won't be able to collect. this is not new, or specific to E-commerce, it's long-standing law that contracts in which one party is engaging in illegal activity have no binding. That's why a hooker can't take a john to court if he doesn't pay (but you'll probably visit the ER sometime soon)...
  • In all likelyhood, VISA will simply charge-back the gambling group. if the gambling group wants to keep their ability to process VISA cards in the future they'll live with it (and operating e-commerce means taking credit cards or going out of business, so I suspect they'd like to keep the account).

    That's how it works, and why VISA and MC are generally able to write off things like this without a big hassle. i've gotten charge-backs for all sorts of things, from malicious retailers who deliberately tried to screw me to people who just send the wrong item. One call to your credit card company will usually have the merchant screaming "uncle".

    the net result of this will not be a "chilling effect on the growing online economy" but the gambling group taking more care to ensure they're dealing with legal gamblers -- just remember that at the end of the day, the house ALWAYS wins :)...
  • A law is a law; judges exist to uphold the law. The theory this country's legal system is that it is run by laws, not judges, as much as possible.

    I agree with spirit of your post. Too many times the law is overlooked by judges and juries around the country. Judges and juries tend to make decisions by how the feel about it, and not sticking to the law. A perfect example is Roe V. Wade, but lets not go there shall we? :)

    So let's look at this. If it's not legal in California to give loans for gambling, then if you loan someone for gambling, IT'S ILLEGAL.

    I'm not sure that the article said that it was illegal, only that courts in California "frown upon" loans given out for the purpose of gambling.

    And despite the way people VIEW credit cards, any purchase you make on a credit card IS A LOAN.

    While IANAL, I would have to question whether a purchase on a credit card is actually a LOAN per se... Credit cards are more like overdraft protection at a bank, except that you never have a balance. If she had written a CHECK for $70,000, and, assuming she could get that much overdraft protection (not likely, but this is a hypothetical situation :) would you fault the bank for giving her loan?

    The fact that the transaction was automatically by a computer does NOT make it legal in any way

    Agreed. But for a law to be effective, it has to be enforceable. For instance, the CDA, which made it illegal to allow minors to view "harmful" material on the Internet, was struck down and one of the reasons was that the law was not enforceable (besides the fact that it was too broadly worded). How would you expect the credit card company to police itself against "making a loan" to Californian online gamblers? Should they simply not do business with online casinos? What about the people in other states where loans to pay for gambling aren't illegal? Sounds like this judge is looking for a good way to effectively end online gambling.

    Personally, I would say that the California law, or at least this ruling, is unconstitutional, perhaps in violation of the first amendment. You could make the case that online gambling is a form of expression and that supressing that expression is censorship -- hence in violation of the first admendment.

    So which law do you think the judge has a higher obligation to uphold? The law about not making loans to gamblers or the First Amendment to the Constitution of the United States of America? I think the answer is pretty clear.



  • Much of the law has to do with the fact that someone can't loan money with the knowledge of the fact that it is going to be used for gambling. You might try to make the instantanius argument that Visa had no way of knowning what the money would be used for, and such and such. But that would be a blatent untruth. Visa, or any other credit card company has the right to dissapprove of any merchant from using its service. So if Visa had stopped and considered the law, it should either not allow merchants which offer gambling to accept their credit cards. Or make very specific deals with such merchants as to only accept cards from certain states. This was an oversight on visa part, and it is the one to blame. NOT that I don't think the lady should be SMACKED around a bit :) but on a purly legal status, its still Visa's problem. Though if Visa is smart it will refuse to pay the Online Casino, which is something that by contact Visa usually has the right to do. And in all honesty I'm not about to feel sorry for the Casino for loosing its money :)
  • It has long been the policy of the State of California to not enforce gambling debts. Even if this woman had traveled to Vegas, and blown her credit card while in Nevada, her bank would be prevented from attempting to collect while she was a resident of California.

    The precedent for this is Hamilton v. Abadijian which states "The owner of a gambling house who honors a check for the purpose of providing a prospective customer with funds with which to gamble and who then participates in the transaction thus promoted cannot recover on the check." While this doesn't mention credit cards, it is naturally extensible to them. If you went to a Vegas casino, you can be damned sure they won't take a credit card or a check if you are from Calif.

    The grounds for such a ruling is that it is against the laws of California to allow gambling, and therefore debt incurred while gambling is uncollectable within California. The contract to pay said debt enables an anction which is illegal, and contracts to carry out an illegal action are unenforcable. It should be noted that it would also be perfectly legal for the online gambling house to refuse to send any winnings to California since the contract is unenforcable, no matter who owes what to whom.

    The judge had no choice but to make this decision, as the law is fairly simple and straightforward. While not every state has laws against gambling (or they might have special laws stating that out-of-state gambling debts are legal), there is not a state in the US that will enforce contracts for conduct that is illegal within its borders.

    The moral of the story: The online casino should have done its homework, and looked up this woman's address first.
  • And what, exactly, do you expect to the credit report to state?

    Remember, Visa *settled*. The matter is closed, and they can't report that the woman didn't pay a lawful debt. (Note the key word "lawful.") They can't list the debt as unpaid during the time the charges were challenged.

    Could they still manage to put a barb in the credit bureau report? Sure... and it would seem to be a slam dumk for slander because the case has already be brought before a court and Visa settled.
  • Who says coffee has to be so cold that you can drink the whole cup instantly without getting burns?
    Who says french fries have to edible at the time of purchase and can't be coated with a volatile poison that's going to evaporate in a few minutes?

    When you sell a prepared food product, the implied warranty is that it is fit for immediate human consumption. For hot beverages, that may not imply "that you can drink the whole cup instantly", but it does imply that it won't give you third degree burns!

    (A friend of mine is currently involved in a lawsuit after she was poisoned by coffee containing toxic cleaning chemicals. I suppose your response is that she should have had it checked by a toxicologist before drinking it - who says coffee can't contain poison? Consumers have a choice, after all...)

    And finally... It's pretty dumb to hold HOT coffee cup between your legs.
    Which is probably why the jury reduced the award for contributory negligence on the part of the burn victim.
  • Rack up $70,000 in debt gambling illegally over the 'net? Stick the credit card company with the bill!
    Visa's not stuck with the bill - according to the article, they're going to collect from the casinos.

    I'd have to say this is a case of "there is no honor amoung con men" - casinos though they could cleverly get around the law by going online and offshore, and this woman turned out to be more clever at getting around the law.

  • The precident that this case sets can potentialy be very damaging to the (still very young) ecomerce segment of our economy. What it says is: It's not payed for till it's payed for. It's not sold until it's sold. It's not a deal unless the check is in hand.

    Visa, in this case, is wrongfully left holding the (70k) bag for this user. If I worked in risk managment at Visa, I would be very hesitant about offering services to on-line companies that could potentionaly open the comapany up to such exposure.

    If I was a user, and unknowingly charged a 6 pack of Linux Xeon servers from Dell.com and mayed the argument that "I thought those little pull down menus were a tetris game!" Would a simprethetic judge leave Visa holding my bill for my new . . . .wait for it . . Beowolf cluster? :)

  • Remember this is a California Law against the gambling loan, so it wouldn't apply in Vegas.

    On a side note, in Texas it is illeagal to sell the state's lottery tickets on a credit card, but debit cards are OK since they aren't a loan.

    You also need to keep in mind that the ATM's are giving cash advances, with all the extra fees etc, and cash is then cash.

    This probally wouldn't be an isolated case (although in TX the courts are probally more conservative than in CA).
  • by breser (16790) on Saturday October 16, 1999 @05:21PM (#1608464) Homepage
    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

  • by timster (32400) on Saturday October 16, 1999 @04:01PM (#1608465)
    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.
  • by coyote-san (38515) on Sunday October 17, 1999 @06:26AM (#1608466)
    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.
  • Oh, not the damn McDonalds coffee lawsuit [fair.org] 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.

  • by jflynn (61543) on Saturday October 16, 1999 @03:27PM (#1608468)
    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.
  • by G27 Radio (78394) on Saturday October 16, 1999 @02:58PM (#1608469)
    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
  • by Dionysus (12737) on Saturday October 16, 1999 @02:59PM (#1608470) Homepage
    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!!
  • by SaxMaster (95691) on Saturday October 16, 1999 @02:49PM (#1608471)
    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.

  • 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.

  • by warlock (14079) on Saturday October 16, 1999 @02:59PM (#1608473) Homepage
    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

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