Neteller Linked to "Identity Theft" Ring

As many as 200 Vancouver-area residents could be victims of identity fraud involving an online money-transfer company accused of laundering illegal gambling proceeds.

They're people like Elmer Wiens, 62, who received a letter from a Vancouver collection agency demanding repayment of $822.75 for a debt he insists he never incurred with the Calgary office of Neteller PLC.

Wiens says it now appears that a criminal used his name, address, phone number, age, and a bogus bank account number to open an account with Neteller over the telephone last December.

He is outraged that Neteller gave his name to a collection agency without contacting him first, and is demanding $500 in compensation from the firm for both the time it has taken to resolve the issue and the anguish he has experienced.

Neteller is a British company based in the Isle of Man best known as a conduit for online gambling firms to transfer money from U.S. punters to offshore bank accounts.

In January, two founding shareholders of Neteller, Canadians Stephen Lawrence, 46, and John Lefebvre, 55, were charged in the U.S. with conspiring to transfer funds with the intent to promote illegal gambling.

Vancouver police Const. Howard Chow says as many as 200 collection contracts for $822.75 -- $750 US at the time of the transactions -- were among 1,600 contracts purchased from Neteller by Vancouver's CBV Collection Services.

CBV executive vice-president Bob Richards confirmed Wednesday that $822.75 is "a strange and consistent number" that the collection agency now views as dubious.

"We've had a number of people say that they don't owe this money," Richards said in an ianterview. "We have gone to check and that appears to be the case."

Richards couldn't say how many of the contracts were bogus but said collections activity is being suspended in suspicious cases.

"Identity theft is alive and well, unfortunately, in the city, and it is fairly widespread."

He said CBV does not flag delinquent accounts to the Equifax and TransUnion credit bureaus if the debt is not supported by the individual's signature "so that people's financial situations are not affected."

Asked how CBV ensures that it is not demanding money from people who do not owe it, Richards said the company relies on clients such as Neteller to confirm the validity of debts.

Wiens, a website designer, said he is concerned that weak-minded individuals might pay up in response to a demanding letter from a collection agency, even if they have not incurred the debt.

He said he confirmed with Mark Healey, a Neteller executive in Calgary, that Neteller neither contacted him when the bogus account was created, nor before they farmed the debt out to CBV.

Reached Wednesday, Healey denied that Neteller advances credit "on basic identity details only" but referred all other questions to the firm's media relations office in London which could not be reached at press time.

Asked if 200 people were affected in Vancouver, Healey said: "We are aware of a small number of accounts in Vancouver that have been subject to identity theft. I am not familiar with the number that you have proposed."

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Michael Kane, Vancouver Sun

Originally published June 7, 2007 10:50 am ET