Sunday, March 25, 2007

Over/Under on the NETeller Payoff Date?

NETeller announced earlier this week that they have signed agreements with the U.S. Attorneys Office of Southern New York that should pave the way for a repayment of frozen funds. The press release issued by the company is available here, should you desire reading about the piece, but we'll give you the facts and the commentary and save you the effort.

Essentially, NETeller will create a plan sometime within the next 75 days to repay all frozen funds. NETeller is also bringing on a third-party auditing firm, Navigant, to assist with and oversee the process. This does not mean that you will see your NETeller funds in 75 days (or rather 70 days and counting), but as that period expires you should at least be able to have a realistic expectation as to when your funds will arrive.

I don't think it will take place electronically, unless an entire new processor is brought online specifically for this purpose. Rather, I expect that all U.S. customers will have to go through a re-verification and re-authentication process, and will receive checks for their remaining balances. At that point, NETeller will depart the business, never to return.

Timeframe on that process? This uneducated guesser thinks it could stretch out by as much as an additional 90 days, due to the perceived demand for the frozen funds.

As to anyone with funds still frozen on one of those NETeller debit cards, who knows what's up with that. Such transfers actually left NETeller at the time they were loaded onto the card, which came from one of several third-party banks issuing debit cards on NETeller's behalf. Those cardholders likely require a separate process to get those funds back off the card, unkess a recertification of user accounts also includes a reactivation of the cards, something I deem unlikely.

In any event, the tunnel stretches on for a bit, though there is a hint of brightness down there at the end. We'll have to wait a bit longer, all of us.

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