LeagueSafe - Protection of Player Funds? (1 Viewer)

[BassNBrew]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

 

[squistion]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

 

[ILUVBEER99]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

Serious question, how many people report their FF winnings on their taxes unless it's from daily sites or something where they have to. I'd say less than 1%.

 

[squistion]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

Serious question, how many people report their FF winnings on their taxes unless it's from daily sites or something where they have to. I'd say less than 1%.

Irrelevant if you happen to be the less than 1% that is audited.

 

[BassNBrew]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

I thought at some dollar amount the company has to report the distribution to the IRS.

 

[IC FBGCav]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

I thought at some dollar amount the company has to report the distribution to the IRS.

@ 600 you get a 1099 form which also goes to the IRS.

 

[BassNBrew]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

I thought at some dollar amount the company has to report the distribution to the IRS.

@ 600 you get a 1099 form which also goes to the IRS.

Thanks C.

Does anyone know if they are actually doing this?

 

[ILUVBEER99]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

I thought at some dollar amount the company has to report the distribution to the IRS.

@ 600 you get a 1099 form which also goes to the IRS.

leaguesafe sends out 1099's for payouts over $600?

 

[IC FBGCav]

Why shouldn't it involve the IRS? If the IRS requests the information of who is being paid with an Amazon card in lieu of cash, can Amazon refuse to provide it? If it is considered reportable income, an Amazon card shouldn't be treated any differently than a Visa card (otherwise this is a great tax loophole that I need to look into).

Surely they've investigated the IRS rules. It would really suck if the IRS locked down all their account for tax evasion.

It is not their accounts the money paid out goes to, so they have nothing to worry about. They aren't evading any taxes, it would be those who are paid via Amazon cards that don't report it as income. LS in completely in the clear as far as the IRS would be concerned, they just distribute the funds to the recipients via Amazon (if that is the current mode of payment now).

I thought at some dollar amount the company has to report the distribution to the IRS.

@ 600 you get a 1099 form which also goes to the IRS.

leaguesafe sends out 1099's for payouts over $600?

Not sure about league safe, Master has sent me 1099's and I think FFPC sends them out too.

 

[cstu]

I have always wondered how LeagueSafe is possibly profitable to run. It's a great service as a commish not to have to worry about collecting payments and to have that transparency and flexibility in payouts. But the amount of profit they make vs. the amount deposited and escrowed has to be miniscule.

http://tech.mn/news/2013/01/31/game-on-minnesota-sports-tech-leaguesafe/

How do you make money?

Much like an escrow service, we hold fantasy league entry fees throughout the sports season. So, obviously, we make money on the float over a five month baseball season or a six month basketball season. But, with interest rates at all-time lows, weve gotten creative about finding other revenue, including revenue from withdrawals and late fees.

- See more at: http://tech.mn/news/2013/01/31/game-on-minnesota-sports-tech-leaguesafe/#sthash.u4UYHahL.dpuf

 

[Touchdown There]

I have always wondered how LeagueSafe is possibly profitable to run. It's a great service as a commish not to have to worry about collecting payments and to have that transparency and flexibility in payouts. But the amount of profit they make vs. the amount deposited and escrowed has to be miniscule.

http://tech.mn/news/2013/01/31/game-on-minnesota-sports-tech-leaguesafe/

How do you make money?

Much like an escrow service, we hold fantasy league entry fees throughout the sports season. So, obviously, we make money on the float over a five month baseball season or a six month basketball season. But, with interest rates at all-time lows, weve gotten creative about finding other revenue, including revenue from withdrawals and late fees.

- See more at: http://tech.mn/news/2013/01/31/game-on-minnesota-sports-tech-leaguesafe/#sthash.u4UYHahL.dpuf

Every company needs a profitable business model. Making money off the "float" reads to me that they invest is into something, which is a risk. I think the users need to know where that money is going and make their own decision whether or not LeagueSafe is actually safe. I would rather them officially escrow the money into insured accounts and just charge a 1% fee for their service.

 

[Touchdown There]

In other words, don't risk the entire pool of money for a .5% return. Instead double your profit at 1% as a fee and secure the funds.

 

[IC FBGCav]

In other words, don't risk the entire pool of money for a .5% return. Instead double your profit at 1% as a fee and secure the funds.

In other words, don't risk the entire pool of money for a .5% return. Instead double your profit at 1% as a fee and secure the funds.

I just don't think you will every comprehend what is going on here.

 

[Charch]

I'm always available to FBG members. I adore Joe and David, and have a ton of respect for the FBG members. As some of you have noted, I've posted into these forums before.

And I'm always happy to answer your questions about LeagueSafe. Many of you have PMed me here. I welcome your interactions. Really!

I'm glad this thread was started. Companies like FFPhenoms put everyone in the industry in a bad light. LeagueSafe, DraftKings, FanDuel, …any company that is exchanging cash for the promise of a service or payout.

Some of you will never trust LeagueSafe. No matter how long we operate. No matter how many people we pay out perfectly. No matter that we are a consumer protection service, with specific safeguards to protect fantasy players from fraud. No matter how many people get ripped off by not using LeagueSafe (there are several dozen "I got ripped off" threads in these forums). I accept that. Skeptics will never be customers.

Phenoms made an unforgivable decision. They spent prize funds on operational expenses. If Phenoms had used LeagueSafe, this never would have happened.

Allow me to be unequivocal about this: We have never, not once, spent a dollar of customer funds on LeagueSafe operations. And we never will. I know some of you will never trust that statement. But, it's true.

I'll take this opportunity to talk about LeagueSafe's business history:

· We've processed millions of transactions through LeagueSafe. I'm not saying millions of dollars. I'm saying millions of unique transactions.

· Even with millions of transactions, look on these forums (or anywhere else) for complaints about LeagueSafe. (While you're at it, look on these forums for complaints about commissioner who have stolen funds using traditional payment methods. It's a long, disheartening read.)

· LeagueSafe has several safeguards against bad acts, which traditional payment means do not have. If you want to endanger your fantasy sports funds, traditional payments (PayPal, check, cash, etc…) are the way to do it.

· LeagueSafe has an A+ rating from the Better Business Bureau. http://www.bbb.org/minnesota/business-reviews/internet-shopping/leaguesafe-in-plymouth-mn-96089195

Some of you have asked how we invest the funds. Obviously, we return 100% of the funds that we receive. Correspondingly, we invest extraordinarily conservatively. We'd be fools to put league prizes at risk. Suggestions to the contrary are, frankly, foolish.

Many of you raised topics that I'll address specifically:

Ignoratio Elenchi says, "I mean, if Charch comes in here and tells you where the money is, what difference does that make? If you tell me what bank you keep all your money in, that won't stop you from withdrawing it all tomorrow. It would do me no good to know it used to be in an account at Bank of America yesterday if, today, it's in a duffel bag in your car."

Charch responds: Broadly, you're right. At the end of the day, there's no realistic way to ensure that any company can't find a way to do bad acts.

FatUncleJerryBuss says, "You simply can not set up a trust account for every league they collect money for."

Charch responds: You're right. It's administratively impossible.

T with a T says, "if you use leaguesafe be prepared to have the IRS involved."

Charch responds: I understand why it would be confusing, but that's 100% incorrect. Remember, we're not a game, sweepstakes, or contest. Or even a league administration service. If we were running contests for prize money, we'd be required to report to the IRS. But we don't. We're just the banking instrument for the security of league funds. We operate at the direction of your league - commissioners are solely responsible for telling us which owners receive funds from each league, and owners have the option of voting to approve/reject the commissioner's distribution of funds. For the same reason that (in a traditional cash league) your commissioner's bank doesn't have to issue 1099s, we don't.

BroadwayG says, "Leaguesafe is no safer than a random internet guy."

Charch responds: Again, look through these forums. They guys who are getting ripped off are the ones who trusted a random internet guy with their funds. We're a seven-year-old business with fantasy payment safeguards, millions of transactions, and an A+ BBB rating.

BroadwayG asks, "Does FDIC cover LeagueSafe?"

Charch responds: Yes, our banks do have FDIC insurance, but it's not really relevant unless the bank folds.

Wdcrob says: "I think a business with five employees that's dedicated to collecting and holding money, with at least some safeguards in place, is a lot safer than some guy who's also Commishing the leagues through reputation alone and has access to the $$ at any time."

Charch responds: I agree.

Touchdown There says, "Time for this Paul guy to step in and discuss how the funds are held. What prevents him from pulling the millions out of US Bank in cash and then heading for Latin America."

This Paul Guy responds: To be perfectly honest, I don't need to steal a million dollars from LeagueSafe users. I made plenty of money from the Fanball sale, and LeagueSafe is worth millions of dollars. Why would I steal a million dollars, flee the country, and risk a life in jail, when my company is already worth millions of dollars?

Plus imagine the hit to my reputation (you might not care about that, but I do. A lot). I've spent 20 years in the industry. I'm the president of the Fantasy Sports Trade Association. I'm in the Fantasy Sports Hall of Fame. I'm a public figure. I'm on the radio in a dozen markets. My reputation would be ruined.

I hope that helps answer some questions about LeagueSafe.

 

[snogger]

I'm always available to FBG members. I adore Joe and David, and have a ton of respect for the FBG members. As some of you have noted, I've posted into these forums before.

And I'm always happy to answer your questions about LeagueSafe. Many of you have PMed me here. I welcome your interactions. Really!

I'm glad this thread was started. Companies like FFPhenoms put everyone in the industry in a bad light. LeagueSafe, DraftKings, FanDuel, …any company that is exchanging cash for the promise of a service or payout.

Some of you will never trust LeagueSafe. No matter how long we operate. No matter how many people we pay out perfectly. No matter that we are a consumer protection service, with specific safeguards to protect fantasy players from fraud. No matter how many people get ripped off by not using LeagueSafe (there are several dozen "I got ripped off" threads in these forums). I accept that. Skeptics will never be customers.

Phenoms made an unforgivable decision. They spent prize funds on operational expenses. If Phenoms had used LeagueSafe, this never would have happened.

Allow me to be unequivocal about this: We have never, not once, spent a dollar of customer funds on LeagueSafe operations. And we never will. I know some of you will never trust that statement. But, it's true.

I'll take this opportunity to talk about LeagueSafe's business history:

· We've processed millions of transactions through LeagueSafe. I'm not saying millions of dollars. I'm saying millions of unique transactions.

· Even with millions of transactions, look on these forums (or anywhere else) for complaints about LeagueSafe. (While you're at it, look on these forums for complaints about commissioner who have stolen funds using traditional payment methods. It's a long, disheartening read.)

· LeagueSafe has several safeguards against bad acts, which traditional payment means do not have. If you want to endanger your fantasy sports funds, traditional payments (PayPal, check, cash, etc…) are the way to do it.

· LeagueSafe has an A+ rating from the Better Business Bureau. http://www.bbb.org/minnesota/business-reviews/internet-shopping/leaguesafe-in-plymouth-mn-96089195

Some of you have asked how we invest the funds. Obviously, we return 100% of the funds that we receive. Correspondingly, we invest extraordinarily conservatively. We'd be fools to put league prizes at risk. Suggestions to the contrary are, frankly, foolish.

Many of you raised topics that I'll address specifically:

Ignoratio Elenchi says, "I mean, if Charch comes in here and tells you where the money is, what difference does that make? If you tell me what bank you keep all your money in, that won't stop you from withdrawing it all tomorrow. It would do me no good to know it used to be in an account at Bank of America yesterday if, today, it's in a duffel bag in your car."

Charch responds: Broadly, you're right. At the end of the day, there's no realistic way to ensure that any company can't find a way to do bad acts.

FatUncleJerryBuss says, "You simply can not set up a trust account for every league they collect money for."

Charch responds: You're right. It's administratively impossible.

T with a T says, "if you use leaguesafe be prepared to have the IRS involved."

Charch responds: I understand why it would be confusing, but that's 100% incorrect. Remember, we're not a game, sweepstakes, or contest. Or even a league administration service. If we were running contests for prize money, we'd be required to report to the IRS. But we don't. We're just the banking instrument for the security of league funds. We operate at the direction of your league - commissioners are solely responsible for telling us which owners receive funds from each league, and owners have the option of voting to approve/reject the commissioner's distribution of funds. For the same reason that (in a traditional cash league) your commissioner's bank doesn't have to issue 1099s, we don't.

BroadwayG says, "Leaguesafe is no safer than a random internet guy."

Charch responds: Again, look through these forums. They guys who are getting ripped off are the ones who trusted a random internet guy with their funds. We're a seven-year-old business with fantasy payment safeguards, millions of transactions, and an A+ BBB rating.

BroadwayG asks, "Does FDIC cover LeagueSafe?"

Charch responds: Yes, our banks do have FDIC insurance, but it's not really relevant unless the bank folds.

Wdcrob says: "I think a business with five employees that's dedicated to collecting and holding money, with at least some safeguards in place, is a lot safer than some guy who's also Commishing the leagues through reputation alone and has access to the $$ at any time."

Charch responds: I agree.

Touchdown There says, "Time for this Paul guy to step in and discuss how the funds are held. What prevents him from pulling the millions out of US Bank in cash and then heading for Latin America."

This Paul Guy responds: To be perfectly honest, I don't need to steal a million dollars from LeagueSafe users. I made plenty of money from the Fanball sale, and LeagueSafe is worth millions of dollars. Why would I steal a million dollars, flee the country, and risk a life in jail, when my company is already worth millions of dollars?

Plus imagine the hit to my reputation (you might not care about that, but I do. A lot). I've spent 20 years in the industry. I'm the president of the Fantasy Sports Trade Association. I'm in the Fantasy Sports Hall of Fame. I'm a public figure. I'm on the radio in a dozen markets. My reputation would be ruined.

I hope that helps answer some questions about LeagueSafe.

From a personal stand point I met Charch way back in the late 1990's during the Fanball days at a Fantasy Football Conference at the Metrodome and have followed his other sites and his pre-season Fantasy Football shows he has up here in the Twin Cities area.. I've never had the feeling when dealing with him..

Just saying I know how to find him if need be

 

[Touchdown There]

Good stuff, Charch. Do you think charging a 1% fee for your services is fair, or do you think you will lose a bunch of clients? Most of us here would rather not see the funds invested at all, even if it is "conservatively".

 

[Dinsy Ejotuz]

This Paul Guy responds: To be perfectly honest, I don't need to steal a million dollars from LeagueSafe users. I made plenty of money from the Fanball sale, and LeagueSafe is worth millions of dollars. Why would I steal a million dollars, flee the country, and risk a life in jail, when my company is already worth millions of dollars?

 

[RUSF18]

Some of you will never trust LeagueSafe. No matter how long we operate. No matter how many people we pay out perfectly. No matter that we are a consumer protection service, with specific safeguards to protect fantasy players from fraud.

I hope that helps answer some questions about LeagueSafe.

Appreciate the response. Can you shed some more light as to these safeguards you're referring to? I think that could help people get more comfortable with the service. I'm sure people trust your personal reputation but not knowing who else is in the company, and what they could personally pull off, could lead to some reservations. But that's where these safeguards could come into play...

 

[Charch]

Good stuff, Charch. Do you think charging a 1% fee for your services is fair, or do you think you will lose a bunch of clients? Most of us here would rather not see the funds invested at all, even if it is "conservatively".

Thanks. I'm certainly interested in collecting user feedback on that topic.

Of note, the 3% that we collect on credit card deposits mostly goes back to the credit card companies. And we get some resistance from customers who assume that we're keeping the 3% (Visa doesn't let us actually say why we're charging the 3%.). So, it's a little tricky.

 

[BassNBrew]

Good stuff, Charch. Do you think charging a 1% fee for your services is fair, or do you think you will lose a bunch of clients? Most of us here would rather not see the funds invested at all, even if it is "conservatively".

Actually most of us here would rather have then invested conservatively at a bank then buried in mason jars in his backyard.

 

[cstu]

Touchdown There says, "Time for this Paul guy to step in and discuss how the funds are held. What prevents him from pulling the millions out of US Bank in cash and then heading for Latin America."

This Paul Guy responds: To be perfectly honest, I don't need to steal a million dollars from LeagueSafe users. I made plenty of money from the Fanball sale, and LeagueSafe is worth millions of dollars. Why would I steal a million dollars, flee the country, and risk a life in jail, when my company is already worth millions of dollars?

Plus imagine the hit to my reputation (you might not care about that, but I do. A lot). I've spent 20 years in the industry. I'm the president of the Fantasy Sports Trade Association. I'm in the Fantasy Sports Hall of Fame. I'm a public figure. I'm on the radio in a dozen markets. My reputation would be ruined.

The two reasons I decided to use LeagueSafe originally were these:

- Your reputation within the fantasy community, which I imagined was valuable to you

- Your sale of Fanball - so I figured you wouldn't need to steal money

Ultimately though it does come to 'trust me', right?

 

[IC FBGCav]

Touchdown There says, "Time for this Paul guy to step in and discuss how the funds are held. What prevents him from pulling the millions out of US Bank in cash and then heading for Latin America."

This Paul Guy responds: To be perfectly honest, I don't need to steal a million dollars from LeagueSafe users. I made plenty of money from the Fanball sale, and LeagueSafe is worth millions of dollars. Why would I steal a million dollars, flee the country, and risk a life in jail, when my company is already worth millions of dollars?

Plus imagine the hit to my reputation (you might not care about that, but I do. A lot). I've spent 20 years in the industry. I'm the president of the Fantasy Sports Trade Association. I'm in the Fantasy Sports Hall of Fame. I'm a public figure. I'm on the radio in a dozen markets. My reputation would be ruined.

The two reasons I decided to use LeagueSafe originally were these:

- Your reputation within the fantasy community, which I imagined was valuable to you

- Your sale of Fanball - so I figured you wouldn't need to steal money

Ultimately though it does come to 'trust me', right?

From everything I have read, the short answer is yes. But you have to have one person in charge to do business.

 

[Touchdown There]

Good stuff, Charch. Do you think charging a 1% fee for your services is fair, or do you think you will lose a bunch of clients? Most of us here would rather not see the funds invested at all, even if it is "conservatively".

Actually most of us here would rather have then invested conservatively at a bank then buried in mason jars in his backyard.

That is true. Just not one of the options being discussed. The new option proposed is FDIC insured accounts that are not invested w a 1% fee vs fully invested funds earning .5%ish but free to users.

 

[BassNBrew]

Good stuff, Charch. Do you think charging a 1% fee for your services is fair, or do you think you will lose a bunch of clients? Most of us here would rather not see the funds invested at all, even if it is "conservatively".

Actually most of us here would rather have then invested conservatively at a bank then buried in mason jars in his backyard.

That is true. Just not one of the options being discussed. The new option proposed is FDIC insured accounts that are not invested w a 1% fee vs fully invested funds earning .5%ish but free to users.

What's the risk if he dumps the funds in a 5 month CD at a bank for 0.5%?

 

[Touchdown There]

CD's are not offered in oddball time lengths like 5 months. Samples of 3 month rates below, which looks to be a solid .01% to .08%. Seems pretty pointless to go the CD route at these rates.

Wells Fargo

Bank of America

 

[Ignoratio Elenchi]

Any company that is holding money for any meaningful period of time is investing it somewhere. It would be foolish not to, it's standard practice. Note that "investing" doesn't mean putting it all in penny stocks, there are suitably conservative investments that will ensure that the company will be able to meet its ongoing obligations while still making money on the float.

 

[Charch]

Any company that is holding money for any meaningful period of time is investing it somewhere. It would be foolish not to, it's standard practice. Note that "investing" doesn't mean putting it all in penny stocks, there are suitably conservative investments that will ensure that the company will be able to meet its ongoing obligations while still making money on the float.

That's exactly correct. I couldn't have phrased it better myself.

Thanks again for the conversation everyone.

 

[Slider]

Very nice Charch. It's unfortunate that the few good guys will get smothered by the many bad guys. Please don't let us down and keep doing what you're doing. It's refreshing but so hard to keep that slight doubt the bad guys have planted in everyone's head at bay.

 

[Charch]

Some of you will never trust LeagueSafe. No matter how long we operate. No matter how many people we pay out perfectly. No matter that we are a consumer protection service, with specific safeguards to protect fantasy players from fraud.

I hope that helps answer some questions about LeagueSafe.

Appreciate the response. Can you shed some more light as to these safeguards you're referring to? I think that could help people get more comfortable with the service. I'm sure people trust your personal reputation but not knowing who else is in the company, and what they could personally pull off, could lead to some reservations. But that's where these safeguards could come into play...

You bet.

LeagueSafe Safeguard #1: Unlike traditional payment methods, we can resolve a league payment issue, such as commissioner fraud, at the end of the season. At that point (4-6 months after you've paid), you're past the dispute window for credit cards companies, banks, and PayPal.

LeagueSafe Safeguard #2: League owners can vote to authorize the commissioner's intended end-of-season prize payouts. As one example, if he's trying to give all the league funds to himself, the league can easily block him by voting against his plan

LeagueSafe Safeguard #3: You've joined a league, but you're getting the feeling something shady is happening with your commissioner. You can get a refund on your entry fees any time before the payment deadline.

LeagueSafe Safeguard #4: We have numerous internal, programmatic processes that help us spot shady behavior by commissioners. Through the years, we've learned to spot a lot of fishy site usage. We shut those people down.

LeagueSafe Safeguard #5: We use "Know Your Customer" verification for bigger winners, to ensure that the right people are being paid.

LeagueSafe Safeguard #6: We lock down your league's fees throughout the season. Let's be honest, most commissioners spend the money in-season. Some of them are good for it at the end of the year. Some aren't.

That's the list off the top of my head. I hope that helps

 

[Dinsy Ejotuz]

I think they're looking for LeagueSafe's internal safeguards.

i.e. you use the words "escrow service" -- is it a true escrow? Do you or your employees have access to the money while it's in the bank account? Do you have traditional accounting/financial/auditing safeguards within the company? Etc.

 

[SayWhat?]

I think they're looking for LeagueSafe's internal safeguards.

i.e. you use the words "escrow service" -- is it a true escrow? Do you or your employees have access to the money while it's in the bank account? Do you have traditional accounting/financial/auditing safeguards within the company? Etc.

This.

I trust LeagueSafe, but this is the information that people are looking for. Not what the safeguards are against shady commissioners running your leagues when you all deposit your fees with LeagueSafe.

 

[squistion]

Plus imagine the hit to my reputation (you might not care about that, but I do. A lot). I've spent 20 years in the industry. I'm the president of the Fantasy Sports Trade Association. I'm in the Fantasy Sports Hall of Fame. I'm a public figure. I'm on the radio in a dozen markets. My reputation would be ruined.

That all sounds very nice, but doesn't make me feel any better about using LS. Bernie Madoff had a sterling reputation for almost 50 years, until he didn't. Not comparing you to Madoff, but your current reputation (which I will stipulate hundreds of people will vouch for) would be of little consolation to anyone who lost money if LS were to suddenly fail.

 

[DLR]

LOL on all the Charch bashing.

 

[cstu]

Charch, you're not making me feel better by avoiding the issue in question.

 

[DLR]

I vouch for Charch. Its all good.

 

[SayWhat?]

LOL on all the Charch bashing.

I don't think anyone has bashed Charch at all, as the questions being raised are extremely valid.

 

[tangfoot]

Charch, you're not making me feel better by avoiding the issue in question.

I've never used LeagueSafe before, but his evasion doesn't exactly give me a warm and fuzzy feeling.

From the outside looking in, he would have been better off not responding at all.

 

[Touchdown There]

Charch, you're not making me feel better by avoiding the issue in question.

I've never used LeagueSafe before, but his evasion doesn't exactly give me a warm and fuzzy feeling.

From the outside looking in, he would have been better off not responding at all.

Yup, did not go how he thought it would go. Losing customers, including me. I was actually endorsing the service in other threads. There is no conservative investing for 5 months in a zero interest rate environment. The funds are not safe.

 

[Dinsy Ejotuz]

Good grief.

 

[IC FBGCav]

IMO there is only one way to do this to make it 100% safe. And it is really simple. But really dumb business at this point. You need to have an account of the businesses(ie leaguesafe) own money that is tied by an independent lawyer to the player league funds account.

Example, leaguesafe takes in 1,000,000. They need to have an trust account of their own money with a 1,000,000 in it. The trust will state you can only take money out of the trust account when it is less than the player league account.

It is really that simple but if you have 1,000,000 to put in a trust account, there is probably a million better places to have it. Someone would do this just because they want to, not as a profit making company.

 

[IC FBGCav]

Any company that is holding money for any meaningful period of time is investing it somewhere. It would be foolish not to, it's standard practice. Note that "investing" doesn't mean putting it all in penny stocks, there are suitably conservative investments that will ensure that the company will be able to meet its ongoing obligations while still making money on the float.

That's exactly correct. I couldn't have phrased it better myself.

Thanks again for the conversation everyone.

BTW Charch, I want you to know I am not for or against you. I would probably put a reasonable amount of money with you but in the end it is still just trust.

Plus if you have that cash, I think I am give you on hell of a business idea to corner the market.(I know you have the market, to make it a must do for all ff sports leagues.)

 

[snogger]

Good grief.

 

[GregR]

IMO there is only one way to do this to make it 100% safe. And it is really simple. But really dumb business at this point. You need to have an account of the businesses(ie leaguesafe) own money that is tied by an independent lawyer to the player league funds account.

Example, leaguesafe takes in 1,000,000. They need to have an trust account of their own money with a 1,000,000 in it. The trust will state you can only take money out of the trust account when it is less than the player league account.

It is really that simple but if you have 1,000,000 to put in a trust account, there is probably a million better places to have it. Someone would do this just because they want to, not as a profit making company.

Or be bonded with or insured by a reputable company of sufficient size. Like get insured by a State Farm, Allstate or other big insurance company, vs theft/fraud/embezzlement. And let your customers be able to confirm it with the other company.

Short of something like that, someone is always going to be able to steal the money. Whether the owner of the company, the lawyer you have run the escrow... someone has to be able to withdraw the money to have the prizes paid. So you're trusting the negative effects of such a theft (jail time, the loss of their business, being disbarred, etc) are more than stealing that sum would be worth.

 

[IC FBGCav]

IMO there is only one way to do this to make it 100% safe. And it is really simple. But really dumb business at this point. You need to have an account of the businesses(ie leaguesafe) own money that is tied by an independent lawyer to the player league funds account.

Example, leaguesafe takes in 1,000,000. They need to have an trust account of their own money with a 1,000,000 in it. The trust will state you can only take money out of the trust account when it is less than the player league account.

It is really that simple but if you have 1,000,000 to put in a trust account, there is probably a million better places to have it. Someone would do this just because they want to, not as a profit making company.

Or be bonded with or insured by a reputable company of sufficient size. Like get insured by a State Farm, Allstate or other big insurance company, vs theft. And let your customers be able to confirm it with the other company.

Short of something like that, someone is always going to be able to steal the money. Whether the owner of the company, the lawyer you have run the escrow... someone has to be able to withdraw the money to have the prizes paid. So you're trusting the negative effects of such a theft (jail time, the loss of their business, being disbarred, etc) are more than stealing that sum would be worth.

I am almost positive that you cannot insure your company against your company stealing ......think about it.

 

[GregR]

IMO there is only one way to do this to make it 100% safe. And it is really simple. But really dumb business at this point. You need to have an account of the businesses(ie leaguesafe) own money that is tied by an independent lawyer to the player league funds account.

Example, leaguesafe takes in 1,000,000. They need to have an trust account of their own money with a 1,000,000 in it. The trust will state you can only take money out of the trust account when it is less than the player league account.

It is really that simple but if you have 1,000,000 to put in a trust account, there is probably a million better places to have it. Someone would do this just because they want to, not as a profit making company.

Or be bonded with or insured by a reputable company of sufficient size. Like get insured by a State Farm, Allstate or other big insurance company, vs theft. And let your customers be able to confirm it with the other company.

Short of something like that, someone is always going to be able to steal the money. Whether the owner of the company, the lawyer you have run the escrow... someone has to be able to withdraw the money to have the prizes paid. So you're trusting the negative effects of such a theft (jail time, the loss of their business, being disbarred, etc) are more than stealing that sum would be worth.

I am almost positive that you cannot insure your company against your company stealing ......think about it.

Note I said bonded or insured. I don't know what each type of company will cover, but I'm sure you get the point that you're giving the customer assurance that their contract with you will be upheld by someone even if your company defaults.

 

[IC FBGCav]

IMO there is only one way to do this to make it 100% safe. And it is really simple. But really dumb business at this point. You need to have an account of the businesses(ie leaguesafe) own money that is tied by an independent lawyer to the player league funds account.

Example, leaguesafe takes in 1,000,000. They need to have an trust account of their own money with a 1,000,000 in it. The trust will state you can only take money out of the trust account when it is less than the player league account.

It is really that simple but if you have 1,000,000 to put in a trust account, there is probably a million better places to have it. Someone would do this just because they want to, not as a profit making company.

Or be bonded with or insured by a reputable company of sufficient size. Like get insured by a State Farm, Allstate or other big insurance company, vs theft. And let your customers be able to confirm it with the other company.

Short of something like that, someone is always going to be able to steal the money. Whether the owner of the company, the lawyer you have run the escrow... someone has to be able to withdraw the money to have the prizes paid. So you're trusting the negative effects of such a theft (jail time, the loss of their business, being disbarred, etc) are more than stealing that sum would be worth.

I am almost positive that you cannot insure your company against your company stealing ......think about it.

Note I said bonded or insured. I don't know what each type of company will cover, but I'm sure you get the point that you're giving the customer assurance that their contract with you will be upheld by someone even if your company defaults.

I can't ask an insurance company to insure me for a million dollars incase I happen to steal the million dollars. If we can, we are all millionaires for pennies on the dollar.

 

[Jello_Biafra]

Some of you will never trust LeagueSafe. No matter how long we operate. No matter how many people we pay out perfectly. No matter that we are a consumer protection service, with specific safeguards to protect fantasy players from fraud.

I hope that helps answer some questions about LeagueSafe.

Appreciate the response. Can you shed some more light as to these safeguards you're referring to? I think that could help people get more comfortable with the service. I'm sure people trust your personal reputation but not knowing who else is in the company, and what they could personally pull off, could lead to some reservations. But that's where these safeguards could come into play...

You bet.

LeagueSafe Safeguard #1: Unlike traditional payment methods, we can resolve a league payment issue, such as commissioner fraud, at the end of the season. At that point (4-6 months after you've paid), you're past the dispute window for credit cards companies, banks, and PayPal.

LeagueSafe Safeguard #2: League owners can vote to authorize the commissioner's intended end-of-season prize payouts. As one example, if he's trying to give all the league funds to himself, the league can easily block him by voting against his plan

LeagueSafe Safeguard #3: You've joined a league, but you're getting the feeling something shady is happening with your commissioner. You can get a refund on your entry fees any time before the payment deadline.

LeagueSafe Safeguard #4: We have numerous internal, programmatic processes that help us spot shady behavior by commissioners. Through the years, we've learned to spot a lot of fishy site usage. We shut those people down.

LeagueSafe Safeguard #5: We use "Know Your Customer" verification for bigger winners, to ensure that the right people are being paid.

LeagueSafe Safeguard #6: We lock down your league's fees throughout the season. Let's be honest, most commissioners spend the money in-season. Some of them are good for it at the end of the year. Some aren't.

That's the list off the top of my head. I hope that helps

So, Leaguesafe protects us from crooked commissioners. Who protects us from Leaguesafe?

I think people that join internet leagues with people they mostly don't know, like using leaguesafe. Any commissioner that uses Leaguesafe has zero intention of stealing the league's money. But, the reality is, just because you're a "good guy" in many people's eyes, doesn't mean you won't steal all our money.

I don't think it's out of line to ask how much money are you holding? Where are you getting the money for these low risk investments?

 

[Jello_Biafra]

Good stuff, Charch. Do you think charging a 1% fee for your services is fair, or do you think you will lose a bunch of clients? Most of us here would rather not see the funds invested at all, even if it is "conservatively".

Thanks. I'm certainly interested in collecting user feedback on that topic.

Of note, the 3% that we collect on credit card deposits mostly goes back to the credit card companies. And we get some resistance from customers who assume that we're keeping the 3% (Visa doesn't let us actually say why we're charging the 3%.). So, it's a little tricky.

This answer does not match the question.

 

[snogger]

I am a commish for 3 leagues... one I hold the money and the other two I use leaguesafe for a local league and Tilt for our ESPN league and figure in the end someone is going to "hold" the money. You just need to decide if you trust your commish, leaguesafe, tilt or something else.

 

[TheWalk84]

Charch, you're not making me feel better by avoiding the issue in question.

I think he answered this in a round about way, when he said they use the deposits on "very safe investments"..

I don't believe an escrow account can be invested by him/leaguesafe at any point…