The UIGEA rules have caused another instance of over-blocking to be reported as a Lotto customer in New York is hit with huge charges by their bank. 

In this incident where a bank has been accused of over-blocking because of the UIGEA rules preventing them from processing transactions associated with online gambling, a credit card customer of Chase Bank was affected. His crime was to make a credit card subscription payment to New York's State Lottery, which the bank treated as a regular cash advance allowing it to charge a fee of $10 plus include an outrageous interest rate to accompany it.

The customer in question charged his Chase MasterCard with his annual subscription of $98 to New York's State Lottery's popular Mega Millions game. He later noticed on his monthly statement a $10 fee for a cash advance, plus an interest charge of $1.24 on the $10 fee in addition to the original $98 Lottery subscription. The customer was understandably upset by what he believed was an error, so he decided to find out what had happened.

The plot deepened rapidly when the customer called Chase to get an explanation for the unusual charge. He was referred back to the State Lottery and was told that the charge had been incorrectly processed as an advance of cash instead of a subscription charge. Not content with that answer, he then contacted the Lottery.

They told him that the responsibility for the charge was not theirs, but officials took time to explain what had really occurred. That was the bank had taken advantage of the rules set out in the UIGEA, which became applicable on the 1st of June this year. Those rules gave power to credit card companies to handle those charges they deemed as being for the purpose of Internet gambling, which was illegal. It transpired that the bank had decided to classify the State Lottery along with horse betting, both of which are legal in the State, as illegal forms of gambling. Currently, the State Lottery is seeking legal advice as to a suitable way to progress the situation.

Armed with this new knowledge obtained from the Lottery officials, the customer subsequently returned to Chase bank. He made the reasonable request for the incorrect charges be reversed. Unfortunately, the bank refused to do this. So the loyal customer of 30 years took action of his own and closed his account with immediate effect.