Caveat: Those who can't take all this reading and the length of this post, just jump to the end of the post, for the "bottom line".
QUOTE(Receiver's Letter posted 4/21/2006 (4/21/2006))
Re: Securities and Exchange Commission v. Charis Johnson, LifeClicks, LLC, and 12Daily Pro; USDC, Central Dist. of CA, Case No. CV 06-01018-NM(PLAx)
First, understand that this is an unauthoritative (holds no legal authority or enforcement). This is an attempt by Lennon to force his interpretation of what he thinks the “Civil Minutes” means.
QUOTE(Receiver's Letter posted 4/21/2006 (4/21/2006))
Because the Permanent Injunction was not clear as to whether it also applied to financial institutions....
Note, Lennon uses the phrase"financial institutions" here but then migrates to only using the phrase "credit cards" further on in the letter. Indeed, Judge Manella not only legally interpreted, Visa and Mastercard to be a "financial institution", but she also specifically and legally interpreted a bank to be a "financial institution", or in legal terms, "DFI" (Depository Financial Institution) in her legally authoritative Civil Minutes Order.
I quote:
2. None of the provisions of the Permanent Injunction Order entered March 1, 2006 shall:
(b) apply to any automated clearing house (“ACH”) operator or processor;
© impose any obligation, prohibition, or condition on any depository financial institution (“DFI”) with respect to its handling of any ACH adjustment entries, or returns or reversals;
(d) prevent or interfere with Visa, Mastercard, any issuer bank, acquirer bank (and their processing agents), ACH operator, ACH processor or DFI from complying with applicable laws and regulations, including without limitation, the Electronic Funds Transfer Act, Federal Reserve Regulation E, the Truth in Lending Act and Regulation Z, and applicable ACH rules, including the NACHA Rules and Federal Reserve Bank Operating Circular 4.
QUOTE(Receiver's Letter posted 4/21/2006 (4/21/2006))
....that individuals that used their credit cards to purchase memberships or upgrades retained whatever rights they had under their agreements with their credit card issuer.
Those rights, by the way, are based on banking laws & regs (just thought I'd add that).QUOTE(Receiver's Letter posted 4/21/2006 (4/21/2006))
As a result of these orders, investors who used credit cards to invest are not enjoined from exercising self-help vis-à-vis their credit card, but investors that used electronic fund to invest are enjoined from exercising self-help.
Absolutely wrong. (BTW, he is making the distinction between "credit cards" and "electronic fund"--there is no legal distinction, both fall under Electronic Fund Transfer (EFT). Again, I quote the "Civil Minutes", from above:2. None of the provisions of the Permanent Injunction Order entered March 1, 2006 shall:
(b) apply to any automated clearing house (“ACH”) operator or processor;
© impose any obligation, prohibition, or condition on any depository financial institution (“DFI”) with respect to its handling of any ACH adjustment entries, or returns or reversals;
(d) prevent or interfere with Visa, Mastercard, any issuer bank, acquirer bank (and their processing agents), ACH operator, ACH processor or DFI from complying with applicable laws and regulations, including without limitation, the Electronic Funds Transfer Act, Federal Reserve Regulation E, the Truth in Lending Act and Regulation Z, and applicable ACH rules, including the NACHA Rules and Federal Reserve Bank Operating Circular 4.
QUOTE(Receiver's Letter posted 4/21/2006 (4/21/2006))
Although this may seem like an unfair distinction, the legal rights of each group are different. The rights of consumers to dispute electronic transfers are limited to unauthorized "debits" or "errors" in the amount of "debits"....
In the context of "Errors" and an "Unauthorized Electronic Fund Transfer" in Regulation E, which Lennon has appeared to have mixed up here, there is nothing that talks about unauthorized "debits" or unauthorized "errors"This is what Regulation E states, I quote:
Sec. 205.11 Procedures for resolving errors.
(a) Definition of error--(1) Types of transfers or inquiries covered. The term error means: ….
(i) An unauthorized electronic fund transfer; ….
QUOTE(Receiver's Letter posted 4/21/2006 (4/21/2006))
....but do not provide a right to reverse a transfer because the consumer has discovered that the recipient was perpetrating a fraud.
Lennon, means 12 Daily Pro here. But we are doing a ACH reversals based on what Stormpay did, and the fact that they have the money to this day, not 12 Daily Pro, and not Lennon. Our dispute is with Stormpay and is based upon a money trail that originated at our bank. We authorized that amount to be drawn from our bank originally, but the authorization stopped there. That amount was then interfered with, and taken. This is called an "Unauthorized Fund Transfer". We provide that money trail on our dispute forms. Where Lennon and Stormpay see it as a transaction that originated with our bank and ended when it arrived in our Stormpay account, the banks have seen it as otherwise.QUOTE(Receiver's Letter posted 4/21/2006 (4/21/2006))
Moreover, all investors and creditors are enjoined from initiating any legal action against 12Daily Pro, LifeClicks or Charis Johnson.
We don't have an interest in either of these. Stormpay's unilateral action directly caused us the financial harm, no one else.Ask yourself, "If Lennon had any legal grounds for the distinction he is making between what he calls “credit cards” and “electronic fund”, wouldn't he file a motion for clarification, like he did with the first injunction???". Instead he wrote this letter to again, in the spirit of what Stormpay has done, intimidate, and threaten. At best, he has poor judgment.
Lennon's motives for what he says he is trying to do i.e. "fair and equitable results", are not all together altruistic, as he wants you to believe. At worst, he it's a personality flaw that finds it necessary seek absolute control and power over the matter, when that power and control is not absolute.
BOTTOM LINE: Continue with your ACH Reversals. It is your legal right to do so. Let your dispute forms and supporting documents speak for themselves, for the truth they contain. And, let your bank determine whether they think the dispute is valid or not. Nothing should be determined by Lennon, accept only what the courts through Lennon, has ajudicated. In this case, what is contained in the "Civil Minutes".
