The Gold Blog

After all the Iranian accounts were blocked/frozen, other comments and complaints began surfacing on the e-gold list and elsewhere around the Internet.

12/11/06 [e-gold list] Finexe has been operating since 2004, accepting e-gold as payment for servers, hosting, and other web related services. They posted:

“We recently received mail from a customer saying he no longer can order from us due to a value limit on our account. Upon check the account was indeed limited, why I called e-gold to ask why and resolve any misunderstanding there might be. I told the operator that I haven’t received any mail from e-gold regarding this issue and she told me that she would send me a mail just as we spoke. Later I received the e-mail, and here is what it says:”

“Your account has been permanently blocked under our Right of Association clause in the account user agreement. Quoting from the e-gold Account User Agreement: http://www.e-gold.com/unsecure/terms.htm

4.6. Right of Association
Issuer reserves the right to refuse service to particular individuals or entities, at its sole discretion, with or without cause. Please note this means the block will not be removed.
thank you,
e-gold Passphrase4″

“So I called e-gold again and explained the situation. The lady on the line took our account number, then she said, yes, it means we don’t want any business with you and I don’t need to explain any reason to you. Then she hung up on me. What should I do? Does this the money in the e-gold account is gone/unusable? Will any exchanger be willing to help and buy the e-gold, or are we mistaken for abusers now? Obviously we have lost the payment alternative that I have praised strongly just until now… I’m very disappointed. Please HELP!”

Another poster quoting from the recent Wired article:

Date: 2006-12-14 - I have some concerns and suggestions. http://www.wired.com/news/technology/0,72278-0.html

“His (Dr. Douglas Jackson’s) lawyers also say that once the company discovered evidence of possible wrongdoing, it had no choice but to hand over information to the government. Jackson could even have been charged with aiding and abetting money launderers under federal statutes if he didn’t report the suspicious activity.”

http://www.e-gold.com/unsecure/terms.htm 3.7.2. Unless (1) otherwise approved by User or (2) ordered by a court or arbitration body of acceptable jurisdiction, as determined by Issuer, Issuer shall not reveal User’s contact or identifying information or transaction history to any third party.

I suggest that e-gold update its account agreement to include the phrase “or (3) required by law” in section 3.7.2.

The same person posted this:

“Tue, 12 Dec 2006 [e-gold list] This behavior by e-gold is not something you expect from a trustworthy company. This list has lots of complaints on PayPal for carelessly freezing accounts. I ask, how is e-gold’s action better than PayPal’s? At least PayPal just freeze accounts, then they talk with you and resolve the issues when you have sent them documentation. And they are polite at all times.”

Other Posts Include This One by Tom Nicholson

12/18/23 [e-gold list] Around two weeks ago the accounts for my exchange business were blocked with in excess of 50kUSD in them. I received the same generic email from them (e-gold) to which I have tried many times to get further responses but it has become apparent to me that they actually block emails from you after sending the initial Right of Association message. I know this because they have ignored all further emails from me until I tried again from a different email address and received the same canned crap.

Calling them yielded but an even more rude and bizarre result, I was told if I didn’t like it I could call the “authorities”. They know full well I live a good 18 hour flight away and am not an American citizen. I asked if I could have my money back via Omnipay and this woman laughed at me saying of course Omnipay doesn’t accept from blocked accounts.

The suggestion she gave for removing my money was to find an exchanger who will accept from blocked accounts. Since I know a number of them due to my work in the industry the last couple of years, this was not a problem, not until when they inquired to e-gold they were informed their account would be blocked instantly if they received money from me.

After a week of non replies and rude helpdesk operators, I was lucky enough to have a notable member of the e-gold community make a request on my behalf so I could at least know what was going on. According to them I’ve been soliciting scammers by posting on their message boards. Now this is a bizarre accusation, the only board I’ve ever posted on is talkgold and I couldn’t even tell you the names/addresses of any scamming boards if you held a gun to my head.

So where does this leave me?

1: E-gold block my emails and I’m suspicious that they’ve even blocked my phone number as I’ve been calling now for 3 days 5+ times a day without being able to get a connection. Why would they not reply to me?

2: The only person even associated with e-gold who will give me the time of day is Jim Ray who simply told me to contact DDU. Obviously this is smoke and mirrors since they ignore my emails and shrug me off on the phone. Probably most importantly;

3: Obviously they have the right not to deal with me if they choose. The thing that worries me is that their idea of Right of Association is to actually keep all my money in the process and proceed to stonewall me. If they were under New Zealand jurisdiction I would have called the cops long ago, but that’s not an option I have, they know it and seem to take a sick pleasure in it.

What further concerns me is that no one seems that bothered by it, like it hasn’t happened to them yet so why be concerned. Obviously there’s no way I can afford to lose this kind of money, particularly since a portion of it is a family loan and a reasonable amount is due for the taxman early next year. Tom Nicholson www.webmoney.co.nz

Today December 19 Larry Nieves writes in to the e-gold list:

“Well, I’m starting to feel really uncomfortable with all these reports. The most disturbing feature, it seems to me, is the lack of an official response from an e-gold representative. As a customer I need to know with the company I’m trusting my hard earned money to. First was the “Iranian case”. The speculation was that the government forced e-gold to block the Iranian accounts. But no official response from e-gold. Then Finexe, who could solve the problem only due to a third party intervention and now this. I think e-gold should give state clearly what’s going on, and what are the causes for account blocking. Otherwise, I’m afraid my money will be going somewhere else.”

Also today, the 19th James A. Donald writes:

“I am transferring all my remaining e-gold (not that there is much) to pecunix. This sort of behavior is suggestive of a money issuer that is in severe financial difficulty. As you know, there has not been an audit of e-gold’s gold holdings for a while. There might be an innocent explanation for that curious lack of audit, but the recent events suggest another explanation. –digsig James A. Donald”

For those of you unaware of the right of e-gold to block your account, if you receive spends from another blocked account for payment or anything else yours, the receiving account will also be blocked.

Please see the graphic below, make sure you have spends from blocked accounts check “REFUSE”. This is the default setting when you open your account, you have to log in and change it in order to allow bad money in…..so if you have not made that deliberate change you account should be safe from this exposure. However we suggest you make sure your account refuses any bad money transfers.