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The Almighty Buck Businesses Games

FanDuel is Now Charging Inactive Users $3 Per Month For Not Playing (techcrunch.com) 154

You expect to lose money gambling, but you don't really expect to lose it abstaining from gambling. But if you're a FanDuel user who hasn't made any bets or deposits for two years, the site will now deduct $3 per month until you put some money on the table. You have to play to win, it seems, but not to lose. From a report: In an email sent to such lapsed (or perhaps recovering) users, FanDuel wrote: "It appears your account has been inactive for over two years, which means you have neither deposited nor entered a contest during that time. We've recently updated our Terms of Use to impose a monthly inactivity fee of $2.99 for any accounts that have no play or deposit activity for a period of 24+ months. Per our terms, we are providing you with 30 days notice prior to imposing this fee."
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FanDuel is Now Charging Inactive Users $3 Per Month For Not Playing

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  • by Anonymous Coward

    WTF is "FanDuel"? I haven't heard of 99% of the things mentioned in the "news" these days...

  • by SuperKendall ( 25149 ) on Thursday May 02, 2019 @10:20AM (#58527160)

    Can't be much cost to keeping old accounts around, so it seems more like this is a tool to get people to come back in to play some more.

    I would think the reaction would be more negative than helpful though. And it's pretty unethical I think for a company to earn money by scraping accounts that have not done anything for a while (at least as the article mentions they don't actually charge you, just remove money from your account).

    Maybe part of this was they were having too large a sum in escrow, and wanted to free some of it up. Or maybe the problem is really worse, that they have no escrow and couldn't possibly cover the virtual money sitting across many old accounts, so want to reduce the potential liability of people cashing out...

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Banks used to do this all the time. Same with gift cards until states passed laws banning it. Don't use your account for long enough and they'll charge fees until you go negative and then they'll close the account and send you a bill. Sure, they could just close the account and send you a check for the balance instead (I actually had one do just that), but charging fees makes them more money.

    • by Anonymous Coward

      the old accounts make 'em money, as they can make money off the balance they hold... just not as much as their cut of wagers.

    • Accounting (Score:5, Interesting)

      by sjbe ( 173966 ) on Thursday May 02, 2019 @11:15AM (#58527486)

      Can't be much cost to keeping old accounts around, so it seems more like this is a tool to get people to come back in to play some more.

      Accountant here. There is more cost to it than you might imagine. No the cost isn't normally huge, but it isn't zero either. Not trying to judge this particular circumstance but just pointing out that it's more expensive than some might imagine.

      If a company charges money and hold it for later use by a customer, then they have to keep a liability on their books indefinitely. That's the reason why many companies have their checks expire after 60 or 90 days if they aren't cashed. Otherwise they are stuck holding an outstanding liability without any end. Same reason you'll sometimes see gift cards charge inactivity fees. It gets the liability off the books of the company in some reasonable and more importantly known time frame. Inactivity fees can make sense if they are reasonable both in time and quantity. (Yes they also can be a dick move cash grab...)

      And it's pretty unethical I think for a company to earn money by scraping accounts that have not done anything for a while

      It's not unethical at all as long as they give adequate notice of the policy so people can make a decision about what they want to do. No idea if it is reasonable in this context and don't really care.

      • by Anonymous Coward

        I guess we know you're an actual accountant since you don't see anything ethically wrong with this. If the costs of having those inactive accounts is too much, they could solve the problem by just deleting them.

        If somebody hasn't logged in in 2 years, you can be reasonably sure they aren't interested in the service. If they haven't logged in after being notified of the policy change, you can be reasonably sure they haven't agreed to the change.

        You can't ethically, or legally, change the terms of the contrac

        • by B'Trey ( 111263 )

          I guess we know you're an actual accountant since you don't see anything ethically wrong with this. If the costs of having those inactive accounts is too much, they could solve the problem by just deleting them.

          If somebody hasn't logged in in 2 years, you can be reasonably sure they aren't interested in the service. If they haven't logged in after being notified of the policy change, you can be reasonably sure they haven't agreed to the change.

          You can't ethically, or legally, change the terms of the contract in this manner. Changes of terms require consent from both parties. With accounts this old, it's highly likely that people won't remember they had used the service and probably will interpret the email as a phishing attempt.

          They're only taking money from the accounts which hold a positive balance. So what happens to that money when they delete the account? You're saying that they should just grab all of the money up front instead of taking it a little at a time?

      • by E-Rock ( 84950 )

        They know who the customer is, so they have more options than a (somewhat) anonymous gift card.

        If they want it off their books, they should close the account and return the money. Charge a tiny fee to cover the ACH charge and be done with it. Draining the account, then closing it is a dick move.

      • Re: (Score:3, Insightful)

        by mysidia ( 191772 )

        There's no cost of having a liability on the books --- its just a number that becomes effectively a static database entry;
        there is no substantive cost here, even if there are a million inactive accounts

        It would be great to be a company with a few million inactive accounts, even at $10 per account.
        As this essentially provides a way to be profitable without offering any direct goods or services.

        Every such "Liability" will be negated by an asset of equal or greater size, the inactive asset --
        cash in partic

        • There's no cost of having a liability on the books --- its just a number that becomes effectively a static database entry;

          That's simply not true. The cost isn't necessarily a large one but it is demonstrably and easily shown to not be zero. If they have a liability that creates an opportunity cost. It means that they must utilize capital at some point in the future in a specific way which necessarily precludes them from using it some other way. There is a cost to this. Also at minimum there is a time value of money [wikipedia.org] component to holding a liability (or an asset). Inflation exists so holding any asset or liability is not

      • There's some minute costs to keeping accounts from a systems/process perspective, that's all. Yes, there's a liability on the books, but ... it's offset by the cash in the assets column, isn't it? And that's cash you get to keep, for free, and make money off of as long as people don't pull it, exactly like the float in insurance companies or what banks do with your checking accounts.

        Let's be honest, the truth is not that they want to reduce their assets/liability figures, it's that they want to appropriat
      • It's not unethical at all as long as they give adequate notice of the policy so people can make a decision about what they want to do. No idea if it is reasonable in this context and don't really care.

        TFA points out the Catch-22 here: They say that they can change the terms and conditions any time they want to...and continued use of the site means that you agree to those terms.

        But what if you never used the site again?

      • by kubajz ( 964091 )
        Another accountant here.

        Keeping a liability on the books forever is NOT a burden if the liability is interest-free, such as in this case. The flip side of having a liability is actually having some cash available that they can use in limited ways such as interest-bearing short term investments and, e.g. in case of banks who manage a large amount of such liabilities, for longer term investments.

        • Keeping a liability on the books forever is NOT a burden if the liability is interest-free, such as in this case.

          You are forgetting about time value of money and several other things. There is no such thing as a burden free liability no matter what amount of interest you are dealing with. Stop thinking simply in terms of GAAP and thing about the economics of it. There are opportunity costs, holding costs, administrative costs, and more to the company. The costs aren't always huge but they definitely aren't zero.

          The flip side of having a liability is actually having some cash available that they can use in limited ways such as interest-bearing short term investments and, e.g. in case of banks who manage a large amount of such liabilities, for longer term investments.

          Sure, but there is no guarantee those investments will result in positive cash flow. And they still do

      • Accountant that doesnt know what they are talking about. The funds can be sent to the account holder or forwarded to the state for unclaimed funds. This is about making money. Taking money via TOS.
    • Banks do it to. The goal is to cull abandoned accounts so they can’t be used for nefarious purposes, including money laundering.

    • Re: (Score:1, Interesting)

      by Anonymous Coward

      If one company starts this, I'm sure others will follow suit. To boot, you may not know they are charging you until you find some bill collector calling you, your boss, and your friends multiple times a day demanding $2000, or finding a "Greetings, you have been sued" with the court in Barrow, Alaska, or some other place that is expensive to travel to.

      This is not uncommon. A family member bought some product from a website, didn't realize it came with a subscription of $50 a month to some no name thing, w

    • Can't be much cost to keeping old accounts around, so it seems more like this is a tool to get people to come back in to play some more.

      In related news... Next month FanDuel will start charging non-users $5 / month until they sign-up, then $3 / month if they don't play.

  • I don't think retro-actively changing the "Terms of Use" for inactive accounts is going to work. You would have to have to get accounts, which have not logged in, to agree to New Terms of Use. Of course it is the courts that will have to go about smacking them, the limitations of being able to do business anywhere.

    • Unfortunately, there's a standard entry in pretty much any terms of service that says that the company can change the terms at any time and you're forced to accept them or quit using the service. I don't know of any court cases offhand, but the fact that companies routinely change their TOS and say "continued use equals acceptance of the new TOS" means that any cases were likely decided for the company. (I don't think companies should be allowed to do this, but this is the legal climate that we have now.)

      It

      • by rnturn ( 11092 ) on Thursday May 02, 2019 @11:32AM (#58527610)

        ``... or quit using the service.''

        That would surely be my response to a change like this. I'd guess that anyone who hasn't used the service/site for two years is no longer interested in it anyway and are probably glad to have received the reminder---they probably meant to cancel before when they tired of it but never got around to it.

        • My only issue with this would be if they required a minimum amount for withdrawals. For example, suppose they'll only allow withdrawals of $10 or more and you only have $5 in your account. Would you be SOL and forced to lose that $5? Or would they let you close the account and bypass the withdrawal limit?

          (I've used ad services for websites in the past where they'd only pay you when you hit amounts like $25. Unfortunately, the ads brought in very little money so my account would be stuck around $10 for a lon

          • I had a LendingClub account for quite some time. $1 minimum withdrawal. $0.27 balance. Notification of balance was mailed monthly (monthly statements). After ~3 years, they closed the account and took the money (with notification). Honestly, I was just curious how long it would take and what would happen. No, I'm not depositing $0.73 to get my $0.27 back - because this whole process is retarded and not worth my time.

            • by Ambvai ( 1106941 )

              I had a similar issue with my old stock brokerage; I had some toxic assets that were delisted and effectively worthless so they couldn't be transferred when I closed my account and switched brokerages.

              Fast forward a few years, somebody actually bought that company, and it was technically still extant as the same company, so my shares were worth something again, on the order of thousandth of a cent per share. So they rounded down and mailed me a check for one cent.

      • Isn't the point at issue the fact that they have already stopped using the service? So, seems to be perfectly consistent.

    • by Anonymous Coward

      I don't think retro-actively changing the "Terms of Use" for inactive accounts is going to work. You would have to have to get accounts, which have not logged in, to agree to New Terms of Use.

      Legally* they aren't.

      You can't legally change terms in a previously agreed to contract (that is, retroactively)
      But you CAN legally agree to terms in a contract.

      That might sound obvious, but since you missed it, the contract agreed to 2 years prior has some form of claim in it worded such as:
      "You agree to accept future term changes if no action is taken to indicate otherwise within XX days of notification of the new terms"

      Once one has agreed to that in the first place, they send out a notice, and it is up to

      • by Anonymous Coward

        That's not how the law works in the US. A change of that sort does not include all the necessary elements to be a legally enforceable contract.

        It's treated like an enforceable contract by people who don't know any better, but it's not. I guarantee you that anybody hit by that charge who files for a chargeback with their issuer is going to receive their money back and that the money will be coming directly from fanduel's accounts. And I also guarantee that they wont' do shit about it because they know they d

  • This is a GAMBLING outfit: their sole purpose and motivation is to exploit the weaknesses of others. Why the fuck would you think that exploitation would magically hit an ethical wall around their terms of service?

    • by AmiMoJo ( 196126 )

      It's not even new either. Some shopping sites started doing it years ago. You get billed monthly if you don't buy something.

      • by macraig ( 621737 )

        It's a rare corporation whose primary motivation isn't exploitation of others' weaknesses; they ALL do it. If you find one that doesn't, I'd like to submit my resume to it.

    • Having to hold someone's credit with an actual cash value indefinitely is essentially treating them as a bank without any ability for FanDuel to invest that cash. Meaning it costs them money to hold that credit for those customers. If there are significant enough numbers of those aged accounts, that can translate into real issues for the bottom line. Now, is this really an issue for them in that way now? I have no idea, but it's good business to make sure it doesn't become one.
      • by macraig ( 621737 )

        Bullshit argument. Stop thinking like a banker, because bankers' thinking is bullshit couched in what appears to be logic but isn't.

        It doesn't "cost them money" to hold non-physical intangible credit for someone else. All it does is deny them POTENTIAL profit they might have enjoyed from exploiting that credit while in their possession. They ARE NOT bankers. When someone agrees to be a client of a bank, they agree to the risks involved in allowing the bastards to play with and take risks with their mone

        • Actually it does. Do you want regular accounting reviews? The cost scales with the number of accounts. Do you want that money insured? Once its a noticeable amount, you can't just dump it into a checking account and let FDIC take care of it, you as a business have to pay for insurance and that too comes with a cost. The costs are small for each account, but they're not nothing.

      • "Having to hold someone's credit with an actual cash value indefinitely"

        Who said they have to hold all that cash on hand? Many companies often invest a portion of the cash they are holding on to, knowing that everyone isn't going to want it back at the same time. That's literally the banking model.

  • There are users of a site - any site, don't matter - that don't patronize it and leave money dormant in their account, or some way for the site to withdraw money, for over 2 years.

    Those careless enough to do that deserve to be charged a monthly idiot fee.

    • by Wulf2k ( 4703573 )

      I wouldn't be surprised if a significant number of these accounts belong to dead people.

      Who remembers to check if grandpa had any accounts to online gambling sites?

  • Abandoned Accounts (Score:5, Insightful)

    by ntsucks ( 22132 ) on Thursday May 02, 2019 @10:45AM (#58527300)

    This is probably more about zeroing out abandoned accounts than charging a fee to make money. That way they dont have to carry that liability on the books forever.

    • Finally someone gets it.
      It's not some stupid conspiracy or evil corporation move as most here tend to jump to.

    • Depends on the state though, right? FanDuel calls them bank accounts.. and some states have laws prohibiting fees in some circumstances.. California for example requires that inactive bank account balances belonging to CA residents be turned over to the state's Unclaimed Property fund after 3 years. I suppose FanDuel can charge $36 during year 2, but then they would be obligated to turn over any remaining funds.
    • Right. I'd imagine those with a zero balance would have the "your account looks unused - we're going to delete it"

      But if you have a balance "we're going to charge you a fee to maintain it"

      I used to have a Saving Account at some far off bank. They sent me a letter "either up your minimum balance to X or we'll cut you a check and close it" It costs them money to manage these things.

    • All states have abandoned account laws, after a certain number of years without activity the account funds have to be turned over to the state. This is likely an attempt to avoid the headache of transfer the balance and account information to the state.

      In addition these unused balances have to counted as liabilities. These liabilities can grow rather large over time, to the point of completely destablizing the company. This particular reason is why pre-paid debit/gift cards generally have this policy. Witho

      • by Wulf2k ( 4703573 )

        " figured out that within 10 years they've have more liability on the books because of these accounts than their total net worth."

        So, maybe they shouldn't be spending the money?

        If the liability is perfectly matched by the free money they have laying around, then what's the problem?

  • Seems to me that they're betting on people with inactive accounts having clicked "Report Spam" on their emails a whole bunch of times (or getting caught up in the heuristics) and not seeing the notification email, then not noticing a recurring $2.99/month charge.

    Clever, even if it is a bit scummy.

    Actually, how hard would it be to craft a notification email that would get flagged by the most common spam filters intentionally?

    • Seems to me you didn't RTFA:

      To be clear, the money comes out of your FanDuel account balance, and once that bottoms out it’s done — they’re not going to reach out and ding your actual bank account.

      I think they're mostly trying to entice people to do some more gambling.

      • You're right. I didn't. That changes things a little bit.

        In that case, it's a good way to clear out balances that they might otherwise have to pay out at some point in the future.

        • I wonder if they have thousands/millions of accounts where people played and have tiny balances like $4.23 or $0.72 left. Its too small for many people to care about a refund and effectively abandoned. It may cost more to mail those people a check. I can see wanting to close those accounts out to limit liability among other concerns.

          If I ran that site, I'd hate to get compromised and be compelled to pay for credit monitoring services or similar items for a customer who was on the books with a $1.72 balance.

          • by Zebai ( 979227 )

            If I ran that site, I'd hate to get compromised and be compelled to pay for credit monitoring services or similar items for a customer who was on the books with a $1.72 balance. I'd like to get them purged from the books.

            This. All these comments I'm reading people think that keeping these accounts on file is free or the cost to keep them is paid by having the cash on hand. The cost to keep these accounts its not simply in the cost to maintain their book keeping accounts it is also in liability. There is always going to be a potential liability and they may even have some insurance against it a cost that might lower if they purge these old accounts.

            The company I work for does not purge old accounts like this that hav

  • by Anonymous Coward

    That there isn't an equivalent porn site that responds to people abstaining from porn by sending women to their house to give blowjobs.

    As long as it's not a fetish actor, like fat Japanese midgets with leprosy, or something like that.

  • "I am altering the deal. Pray I don't alter it any further." -- Fan Duel
  • As a programmer, I am well aware how trivially easy it would be to fix online gambling games. For example, in online poker, how do you know that any of the players you're playing against are actual human beings? Even if the house isn't crooked, it would be easy to program a bot to take up all but one of the seats at the table, share information, and kick the remaining player's butt at poker!
    • Trusting that this doesn't happen is part of the gamble.

    • by Cederic ( 9623 )

      I'd suggest you don't put your theory into practice. If you were lucky you'd run out of money before getting arrested for fraud.

      Online gambling sites know that they're targets and know that they'll go out of business if someone works out how to 'fix' the games. You may want to consider the implications of them still being in business.

  • Considering that it costs them exactly nothing to maintain an inactive account (we're talking about a few rows in a database, tops...), this is a completely bullshit gouge move that makes microtransactions look like utter benevolence.

    This company needs to be crushed before other game companies get it in their heads that this is an acceptable way of doing things (like they did with MTs) and suddenly everyone signed up for any online game suddenly starts seeing their wallets getting drained unwillingly just b

    • Banks and brokerages can take your money as they please through service charges and fees. Back in the first dot-com boom, I bought a tiny bit of stock in a "promising" company that ended up going nowhere. I had like $1000 bucks into it and it dropped to $600, and I got disgusted and kind of forgot about it. Months later, I discovered that Etrade had taken most of the remaining $600 for themselves. It was probably one of the more obvious terms of service I agreed to, but still...

  • If so that's a never-ending money machine.

    Seems short-sighted, a sign that they are losing money and also short on cash.

    First time I've heard of the site as well.

  • About 70% of the people who are going to get hit with this fee put FanDuel in their spam filter long ago, and this is going to wind up in court.

  • Good way to clean up accounts. Maybe I can't be bothered to go delete some account I don't use, but if they are going to charge me for not doing it, I can be bothered ...
  • We're going to start seeing a lot more of this. GDPR, and general security practices, and ever-growing databases make dormant accounts first a headache, then a concern, then a cost.

  • I know I am so tired of this shit, all these companies are doing anything to make money. Well screw them. Please everyone completely stop using this company and close your accounts. Send a hard message to them and other companies will start learning that we DON'T like this BS!
  • The only winning move is not... erh... to sign up.

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