RIAA Shakedowns Similar To Big Retailers Shaking Down Suspected Shoplifters

from the not-so-different dept

We've talked in the past about how both DirecTV and the RIAA have used a borderline legal version of a shakedown to get people to pay them money, without them having a chance to defend themselves. The way the process works is simple. They come up with a mere slip of evidence that the person might be guilty, and then send them threatening letters offering not to sue if they merely pay up first. With DirecTV, the company used names of people who had bought smart card writing devices, even though such devices have perfectly legitimate uses beyond pirating satellite TV signals. With the RIAA, obviously, it was through a list of (often questionable) IP addresses. By using this method, many people pay rather than face a lawsuit -- even if they're innocent. They recognize that the cost of a lawsuit is much worse than just paying the settlement charge. In the organized crime world, this is generally known as a shakedown, or if you prefer, extortion. Yet, for some reason, it's legal when these businesses do it.

And, it turns out, the RIAA and DirecTV are not alone in doing so. Perhaps they even learned the practice by watching how big retailers approach shoplifters. Reader Josh sent in a Wall Street Journal article showing how many large retail chain stores are using a very similar process against suspected shoplifters. In the most egregious case, Home Depot detained a guy it thought was stealing drill bits, but dropped the effort after he showed them a receipt. A few weeks later, though, he received a letter demanding $3,000, which was later raised to $6,000. Admittedly, the amount is quite high there as the law firm that handled the case later admitted to a typo in entering the amount -- but the process seems quite similar to the RIAA/DirecTV process. It doesn't matter if the person is guilty or innocent. You just ask them to pay up or threaten them with a lawsuit. The retailers all insist this is a necessary process since shoplifting costs them so much -- but it's hard to see how forcing people to pay up without a chance to defend themselves is ever right, no matter how much shoplifting costs these retailers.

Filed Under: extortion, retailers, shakedowns

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  1. identicon
    Iron Chef, 23 Feb 2008 @ 2:42pm

    Re: Re: Re: Just pretend to steal things, its a lo

    Then you have to maintain line of sight on them until they cross the threshold of the store. At that point, the person has crossed the point of no return.

    In the past 15 years, there have been a number of legal prescedents created that complicate the definition of "shoplifting".

    It was so difficut and laborous that for a good 5 years, WalMart refused to prosecute shoplifters alltogether.

    Granted, different companies have different standards. However, due to many civil cases in the past 15 years, many companies have employed the process mentioned above. What you outlined the generally accepted practice based on reccomendations from the NRF or National Retail Federation.

    So to qualify as shoplifting, and be prosecutable, the person has to "deliberately attempt to exit the store without paying". This is usually defined as “passing the door or cash register with said unpaid merchandise”.

    As mentioned, maintaining line of sight is a necessity- an interesting statistic is: 40% of the time, when a person is stopped at the door, they actually don’t have the merchandise— they possibly put it on a shelf before right before leaving. If line of sight is not maintained throughout the entire time the product is covered, pocketed, etc, and the person is stopped at the door without the merchandise, a huge legal grey area emerges and the store could be liable for false acquisition, possible defamation of character, and should things escalate, false imprisonment.

    So shoplifting isn't the plain vanilla dictionary term you provided above. In fact, most loss prevention teams focus on internal theft because it's so hard to prosecute the external theft.

    If your curious, let's just say it was fun being a part of an understaffed ops team for a 1000-store retailer.

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