Is It Fraud If You Collect One Penny Legally Over And Over Again?

from the legal-conundrum dept

If you've ever needed to associate your bank account with some online service (such as PayPal), you know the drill: you provide the necessary info to the service, and a few days later, it makes two small deposits into your account (usually between 1 and 5 cents or so). You then have to report back the amount of the deposits to prove you own that account. It's a relatively cheap way for the services to confirm the account details. However, to one man, it was also an opportunity to make some cash. He set up automated scripts to basically use just such a system to open thousands of accounts and collect approximately $50,000 of these micro-transactions. As the guy noted for at least one of these accounts (with Google's CheckOut system), he read through the terms of service and this did not appear to violate the terms. In fact, it does make you wonder how illegal this really was. The fact that the guy used fake names (of various Mike Judge characters, which seems like a nod to the "skim a penny" computer hack from Judge's movie Office Space) probably hurts his case -- but it still raises some questions. If there are no limits on accounts and no other terms of service that prevent this sort of action, what exactly about it is illegal? Is there a certain number of accounts that you can open before it's considered fraud? Or does it have to do with his intent -- which was solely to get the microdeposits, rather than to use the accounts?

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