NYC Fee Stacking Lawyers
The Internet has revolutionized the way people do just about everything, and shopping is just one of the pastimes that has been impacted. In the past, you could have never imagined being able to attend an auction virtually. With sites like eBay, though, this isn’t just possible, but also incredibly popular, and even lucrative.
Most of the time, the outcome is positive for both the buyer and the seller. The more legitimate the website, the more legitimate the outcome and exchange. Unfortunately, there are instances when the outcome is much worse, especially if fee stacking takes place. Just about any type of financial transaction is at risk of this.
While fee stacking isn’t a legal term, it is often used to describe a certain type of financial transaction, and you may hear it mentioned in legal circles. Basically, fee stacking is when one person changes the financial terms of an exchange after an agreement is reached. The change is based on false pretenses, and it’s usually to benefit the party who initiated it.
For example, let’s say there’s a person selling an item on an auction site like eBay. The seller says that the item will require a transaction fee and a flat shipping rate. Once the auction has ended and the buyer has won the item for a specific amount, the seller increases the transaction fees or the shipping rate.
When this happens, the intent is often to force the person who is buying the product to pay more to the seller than they expected to. When the buyer is encouraged to pay more than they and the seller originally agreed on, this is considered fee stacking.
Fee stacking doesn’t just occur on auction sites, either. It can take place in just about any kind of financial transaction, which includes live, in-person auctions; in-person transactions; phone transactions; and digital transactions. However it takes place, fee stacking is a serious crime and it can be punished under both federal and state law.
It’s important to understand that when fee stacking occurs, the crime you’re charged with isn’t actually called fee stacking. Instead, the charges will be for a related crime, like general fraud, or more specific crimes, like wire, mail or computer fraud. If the fee stacking scheme somehow involved a bank, there may also be a charge associated with defrauding a bank system or other financial institution.
Also, you can be charged with fee stacking even if the victim did not actually pay the additional charges. Seeking extra fees in this way automatically makes you guilty of fee stacking, whether or not you actually convinced the other party to pay them. This type of false representation can lead to state or federal charges.
When it comes to online auctions, fee stacking can be small, such as an extra $5 charge that wasn’t included in the initial agreement. Sometimes, the buyer will refuse to pay this charge or the website will intervene. However, if the incident is a one-time occurrence, it’s unlikely that anyone will pursue legal action.
More common is for the authorities to look into cases where this repeatedly happens. Even if the charges are very small, like $5 per customer, this can build up to thousands of dollars collected by fraudulent means. In this type of case, the authorities would be very interested in pursuing a fee stacking-related case.
Auction houses themselves, not just the individual sellers, can also face similar charges. There are some auction houses that charge incredibly high fees to their customers, and these charges are sometimes based on false representation. These types of auctioneers or auction houses will likely be investigated by the state or the government, and that investigation could lead to charges.
Fee stacking penalties can be serious. If the prosecution can prove that the defendant misrepresented their fees, whether online, in person or by phone, felony fraud charges and conspiracy charges may be brought. Penalties will vary based on the crime, but sentences can include up to 30 years in prison, plus a one million dollar fine per count. If the fraud is widespread, life imprisonment is possible.
If you or someone you know is facing a charge related to fee stacking, or if you’re being investigated for fee stacking, it’s necessary to contact a criminal attorney right away.
Mar 31, 2020
May 17, 2018
Spodek Law is a great firm. They are super pragmatic