Topic: Dwolla TOS gems (Read 2316 times)

They use the ACH system, so 25¢ is about right for a deposit.

Their ToS are "interesting", to say the least.  It seriously looks like someone's just cut and pasted from another contract and then made up a few additional clauses for shit and giggles.  I'd guess that at least some of those clauses would be found void by a court (I have no idea whether Minnesota law voids an entire contract if one of the terms is invalid).

Regardless of what bullshit they put in their terms of service, they're bound by the laws which regulate money transmitters in their jurisdiction - they can't contract their way out of those laws.  The clause stating that they won't entertain disputes in respect of virtual products is especially stupid because it precludes lesser remedies than a civil action (which would obviously be commenced in the plaintiff's jurisdiction) and courts generally don't like that.

They probably can change their ToS.  Banks and other financial services do it all the time by giving their customers advance notice of the change and therefore the option to "opt out".

I never cease to be amazed at the sheer length of time which seems to be involved in resolving disputes with financial service providers in the US.  I complain about it taking up to 10 business days here, but 90 or 180 days is utterly ridiculous unless the account has been frozen by court order.

What a well thought out post, and I agree with most of it.

I liked Dwolla, but always wondered when it was going to fall apart.  It just didn't make any sense: If it was possible to move that much money around with so little fees why hadn't anyone done it before?

Same answer as why doesn't paypal have more competitors.  It's a huge legal due dilligence pain in the ass requiring a ton of startup money to do it right.  I think the answer is that Dwolla just skipped the details, "we'll figure it out later".  Now that they are figuring it out, they are scrambling.

They haven't acknowledged me at all, but I did suggest to them via e-mail to lawyer up jointly and severally about 2 weeks ago, and it seems like they have done so, at least jointly.  A little "thanks for warning us how deep the hole we were digging was" would be nice, but oh well.

All I got was a request to upload my govt-issued photo ID.  Pfffft.

No.  Someone can make a claim that I owe them money.  Then Dwolla gives up my info. 

I am pretty sure there is a full process and paperwork and depths to that, but no matter how much work goes into it, I don't like that it is done at all. 

so that means anyone can get someone else's user info by sending them $1.00

That is a big one imo.  Does Paypal even do that?

never did get my money back after they suspended my account for no reason with over $400 in it.

I said this in another thread... I'm wondering if the 25c thing is actually sustainable, or if they're just doing it burning through venture capital hoping to hit critical mass before they run out of the ability to secure more funding, before going to a more paypal-like pricing schedule.

I mean if you think about it, sure the folks involved in paypal are money-grubbers, but greed isn't the only motivator for them doing the things they do. The idea that just doing things like not screwing over clients and not charging the 30c+3% fees is so easy... well if it was, why isn't everyone doing it? Not that I think Paypal's margins are terribly thin or anything, but Dwolla is really starting to look like it was too good to be true.

Even if you disregard Bitcoin, I was really rooting for Dwolla, because when we sell stuff for $5/month and no less because anything below that and we start getting burnt in Paypal costs.... 25c transactions seem really attractive. But if they're just going to be another Paypal in a few years I don't really feel like investing any time in them.

Dwolla just keeps getting worse and worse. Pretty soon it will be PayPal. This just highlights the need for Bitcoin in the marketplace.

"In the event a dispute shall arise between the parties to this [contract, lease, etc.], it is hereby agreed ..."

Haha looks like someone didn't quite finish doing the cut a paste job. Not looking like top notch legal representation to me.


IANAL, but I've spent a fair amount of time dealing with legal matters for my company.  Wouldn't it be nice if you could create a contract that just says disputes are not acceptable.  In actuality this provision is A) not enforceable, and B) most likely puts the validity of the entire contract in question.  Without a severability clause, this denial of dispute becomes a fundamental point of the contract and therefore if judged unlawful or unenforceable invalidates the entire contract.  In that case the issue would go to court in the customers jurisdiction and this contract is not admissible, or admissible but of no effect.

Further, if it was found to be enforceable it invalidates the arbitration clause with respect to bitcoins meaning that the plaintiff can make a strong case that the suit should move forward in the customers jurisdiction, and in a civil court instead of arbitration.

Even if Dwolla where to read my post and make changes to the contract it would only apply to future users, current and past users can only be bound by this agreement or the agreement that was in effect at the time.

So I used Dwolla a bit, have had cause to read the TOS, and found these gems.  If you were thinking of using Dwolla, these should dissuade you:

1) Your personal information will be given to one who claims you owe them money.

"You agree in the event you have unpaid debts or bills with users within the Dwolla system, other Users may use documentation within the Dwolla system in collection of that debt."

2) They can freeze your account and shut you out for 90 days.  At any time no grounds needed, just alluded to.

"At any time Dwolla retains the right to close, suspend, or limit account activity. Dwolla may, in the event of excess returns, chargebacks, or suspected illegal activity revoke access to the account for 90 days."

3) They do chargebacks, reverse payments and require arbitration in any dispute.

"The receiving party of a transaction may be subject to chargebacks occurring within the account if claims are made by the sending party or by the financial institution. In the event fraud occurs, funds may be reversed and arbitration will begin with both parties."

4) They would drag your ass to Minneapolis, MN for an arbitration, which can't be challenged in Court.  But oh wait, you don't get an arbitration because you used dwolla to pay for bitcoins, which is a virtual currency.

"Any purchase or transaction involving virtual currency or a virtual product is not eligible for a dispute or arbitration."