Payment processor Neteller is threatening legal action against YouTeller, a new payment processor hoping to fill the space left by Neteller's withdrawal from the U.S. market in January.
Neteller's corporate counsel, Neil F. Kathol, on Feb. 28 served YouTeller with a cease and desist order, alleging that YouTeller is infringing on Neteller's trademark, which is registered in several jurisdictions, including in the United States and the European Union. Furthermore, Neteller believes that use of the name YouTeller will cause consumer confusion.
Neteller began facing its own legal woes in January when its co-founders and executive directors Stephen Lawrence and John Lefebvre were arrested and charged with conspiracy and money laundering in connection with illegal gambling.
While Neteller has not been charged with any crimes, it decided to pull out of the U.S market and claims the U.S. Justice Department has seized funds owed to its former U.S. customers. A number of customers have threatened to take legal action against the company as a result.
YouTeller was introduced on Jan. 30 and is due to launch this month on an invitation-only basis--interested users may join only at the invitation of registered members.
Recent speculation has suggested that YouTeller may have been started by either former or current Neteller executives, at least in part. But the company is registered with the Financial Services Authority as a small e-money issuer operated by London-based technology Seed Capital Ltd.
Kathol gave YouTeller until today to comply with the cease and desist order.
As of today a notice posted on YouTeller.com reads: "Seed Capital Ltd. is not affiliated with, related to or endorsed by Neteller Plc." It is unknown, however, when it was posted and whether it was posted in response to the order.
Click here to view a copy of the cease and desist order.