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This morning, I was reading this article on the Consumerist about a man who cancelled his business service with Comcast. In summary, he had an early termination fee of $1,775 debited from his bank account, which shouldn't have happened because it was past the term of his two-year contract. Comcast do not dispute those facts, and have repeatedly told him that a check was on its way but, two years later, the man has still not been unable to get a refund. At one point, he was told by a company representative that refunds are not issued in these circumstances, and that he should instead dispute the charge with his bank.

I am interested in the potential criminal liability in a situation like this (not necessarily this one) where a company knowingly takes money it is not due from someone's bank account and clearly has no intention of returning it.

Specifically:

  1. Could the victim report this as fraud, theft or some other related crime?
  2. Would the answer to the previous question differ based on whether the victim was eventually able to recover the money through litigation or by disputing the charge with their bank?
  3. Would the company itself or the specific employees involved be liable?
  4. Would a binding arbitration clause in the contract have any effect on criminal liability (I believe not)?

I would be especially (but not exclusively) interested in answers covering either the United States or Canada (especially Québec).

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Could the victim report this as fraud, theft or some other related crime?

They could, but it's unclear whether they would be successful. A criminal conviction would require intent on the part of the company or an employee, and that will probably be difficult to prove. In a big system like this, individuals can usually claim misunderstandings and errors of omission, which makes such a proof difficult. They could try to establish criminal corporate liability, but again this is difficult to prove. So while possible, it's probably not worth it.

Would the answer to the previous question differ based on whether the victim was eventually able to recover the money through litigation or by disputing the charge with their bank?

Probably not. For a criminal conviction, it's necessary to prove that the company or an employee deliberately took money they knew was not theirs. Whether they later gave it back is not relevant for determining guilt (though it may reduce the sentence).

Would the company itself or the specific employees involved be liable?

In principle, both could be held liable. Again, this depends on what can be proved in court.

Would a binding arbitration clause in the contract have any effect on criminal liability

No, arbitration clauses cannot protect from criminal liability, only from civil liability (within limits).


Off-topic: The fastest way to resolve such situations is usually to write one stern letter explaining why you are owed the money. If that does not work, sue them - if the situation is clear-cut, you will most likely win, or the company will settle.

Many jurisdictions have simplified court proceedings for clear cases like this, for example the Mahnverfahren in Germany.

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This would be fraud, although there is virtually no chance it will be prosecuted (but if it was it would be against the company, not its employees).

Whether the victim recovers the money after going through a civil proceeding or not does not impact the ability to bring criminal charges, but makes it even less likely a prosecutor would take it on.

Disputing the charge through the bank may or may not work, however writing letters to ”higher ups” - especially via a lawyer will usually get results, otherwise go to arbitration or small claims court. (or, if you get lucky, have the media pick up on it as this guy did - as a result he got his money back).

Binding arbitration does not affect criminal liability or proceedings - except the judicial system would see this as a civil rather then criminal matter, so unfortunately the company gets away with this. No surprise, who do you think spends more money on steering law? End users or monopolies with big legal departments?

  • Also, despite the story, I think you would be hard pressed to prove mens-rea (a guilty mind) on the telco - they could plausibly blame it on their size and employee errors - without mens-rea you will almost certaonly not win a criminal case. – davidgo Jun 25 '16 at 2:24
  • I don't think this would qualify as fraud - fraud by definition involves a deception, and the company never deceived the customer, they just took the money. It might count as fraud against the bank, because they claimed the debit was justified, even though it was not - however, proving that this was deliberate would be tricky. – sleske Aug 12 '16 at 16:28
  • @sleske, what is the status of the blank unsigned contract in your "not fraud" analysis? – user6726 Aug 12 '16 at 22:33
  • @user6726:Er, what "blank unsigned contract" are you talking about? What's that even supposed to mean? – sleske Aug 12 '16 at 23:17
  • It's part of the alleged Comcast scam, that they offered up a fake contract to support their charge. I didn't write it, I'm just reporting the allegation. – user6726 Aug 12 '16 at 23:22

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