Topic: How bitcoin sellers are defrauded at localbitcoins.com (Read 31608 times)

Who is harrasted in the localbitcoins? directly you may write the e-mail or use the support team executive to find the issue has been resolved. I am using the LBC for more than 2.5 years to exchange my bitcoins into cash.
I did not even find the single issue with these time. I do not know why very few people getting issue on using LBC.

Dude, I do not know why you posted your problem in the thread created by 2013. Better if you have any issue please create with the issue detail on scam accusation mate.

These coin lockers are big problems in any OTC exchange. Exchange should have some fair policy so that sellers stop getting harassed. 

My dispute was finally resolved today. It appears LBC work saturdays.

So this is my story which has not yet been resolved.

143 hours ago a buyer opened a trade for bank transfer, 0.13824BTC.

2.5 hours pass and no payment is made - I open a dispute.

The Admin writes immediately (I assume automated):

Please provide a proof of payment within 6 hours or the dispute will be resolved to the seller.

82 hours pass and in that time, I provide a daily screenshot of my account and upload a video of my account to prove no payment has arrived. I request the buyer initiate a trace on his transfer. The buyer constantly calls me a scammer and a liar.

Finally, 76 hours after the first 6 hour window of evidence has closed, Admin writes again:

*USERNAME OF BUYER*, attach a screenshot of your latest bank transactions, including this payment, in 8 hours,
Fresh screenshot of the full browser page including the address bar.
Meantime please contact with your bank and try to trace the payment, evidence please submit here.
Thank you.

3.5 hours pass and the buyer admits in the chat that the bank has not sent the money for whatever reason (I don't believe a word). He wants to change the terms of trade to cash payment in branch. I refuse immediately and inform him and Admin that I have put a stop on my account for 24h. The account will not accept any deposits cash or transfer. I request the ticket to be closed by Admin. No response. The Buyer has not logged back in to his account since around this time.

17 hours pass, we are now nearly 13 hours since the 8 hour window of evidence has closed. Admin writes again:

*USERNAME OF BUYER*, if you have an issue with the bank kindly please cancel this trade
if you made a transfer again attach a screenshot of your latest bank transactions, including this payment, in 8 hours, or the dispute resolve to the seller.
Fresh screenshot of the full browser page including the address bar.

This message was sent about 26 hours ago as I write this post. The window of evidence expired 18 hours ago, in the middle of the night.

Localbitcoins staff have not replied today and my funds are still in their escrow. A whole day just to close the dispute and release my coins. The buyer has not been seen for 48 hours. It is now past 8PM in Helsinki where the Localbitcoins offices are located.

I assume they have gone home for the weekend. It will be another 60 hours or so until they return to work, unless they work Saturdays.

Obviously I'm a little upset at their behaviour! I just cannot see any reason for them to act in such a manner.

Can anyone help? Is there anyone active here that works there or know someone there?

I read this one
and I'm none the wiser. Maybe you need to explain it more clearly.

It's not 100% guaranteed, but I would think a lot of sellers will honour the price set when the trade was opened. I only found out recently that the option you described was available.

If you'd read any of my comments on this thread, you would understand this is not the case.

Thats probably the best summary of the whole thread.
Regardless of volatility (which should normally raise the price of call options significantly) - it's always a totally free ride for a buyer.

You should probably flesh out that explanation.

he is saying it is like getting a free call option for 48 hrs

Seems that you don't understand what is the point of "Escrow service". It's target is to protect BOTH SELLER and BUYER. You think that it should protect properly only seller?

I think that "two days in escrow" is better solution to you than lost bitcoins.

You may use LB advanced settings to prevent such a situation in future. I have traded quite a lot in LB and I have been in same situation than you. But because first-time buyer limit is low, big amount of bitcoins never held in escrow for long times.

Dealing in Bitcoin is forex yet the non-exchange sales models used are ones that might suit dealing in second hand goods.

I think the solution logic would be easy:

- IF buyer "marked payment as complete"
- AND dispute is opened by the seller
- AND buyer failed to present any proof of payment (image of receipt, snapshot of "paid" page, transaction id, whatever)
- AND buyer failed to respond on dispute within reasonable time, like 4 hours
- THEN - seller's escrow will be released and transaction cancelled.

I was a seller and I have given up advertising offers for exactly this reason. Now I just keep a look out of reputable buyers with reasonably good bids and sell to them. Of course when taking liquidity the price you get is never good, but I'd rather pay a little than have to deal with these scammers.

Are you a buyer or a seller? If you are a buyer, you will not find a source than can beat localbitcoins for speed, reliability, and anonymity. If you are a seller, then you are always going to be the target of scammers, no matter where you sell, because bitcoin transfers are irrevocable. Even for sellers, though, I strongly recommend localbitcoins because the admins eventually respond to attempted scams of sellers.

FYI, Tungsten and I are both sellers on LBC and we will continue selling on that site.

If I were you I'd still give it a shot. 99% of the transactions i've done there went down without a hitch. Sure, once in a while you get someone trying to do something funny, but contact localbitcoins support and they are usually quick to help out (especially if you have alot of positive feedback and they can easily tell youre likely not at fault).

thanks for warning, i wanted to use them

That was certainly done 24 hours ago!

Glad to hear you got your coins back Sorry to hear that it took so long. Hope you gave him a "distrust" feedback along with a comment that warns the rest of us about that buyer.

Update.
After more than 2 days on hold - bitcoins were finally released from an escrow.
Buyer apparently helped by cancelling the order.

I also stopped accepting interac e-transfer as a payment method and will only use bank cash deposit from now on.

Contcct local bitcoin staff, they will require proof of payment, they will use the date and time from the payment to calculate the rate per your formula. don't worry, the buyer may think he's slick, but in the end he will pay the rate as of when the payment was submitted.

Contact support staff and say that he was "hedging" (or just click start dispute and type in the communication box that the user is hedging.

Regretfully I've now had to set a limit of 0.1 BTC for new buyers since this seems to be the new big thing on Local Bitcoins. I currently have all my remaining coins tied up on three separate OKPay deals, mostly from accounts with no history (one has a single trade). It's a real shame as I like to try and accommodate new buyers - that's really what Local Bitcoins should be about.

I do think that if someone has marked the deal as paid then 24 hours is too long for instant or near-instant payment methods. Bank transfers in the UK shouldn't take more than 12 hours, even with security checks - but I can see why 24 hours is reasonable for that method. OKPay should be instant though. In fact with my automatic ads, if they've really sent the funds to my OKPay wallet they'll already have the coins by the time they come back to mark it as paid. If I have to have any involvement at all, they've marked it paid without actually paying, and as far as I'm concerned that's scamming behaviour.

indeed

this is very bad practice

So now it's more than 49 hours passed since my bitcoins were put on escrow.

• The buyer (sorachi11) still did not pay, although responded with this PM: "shit sorry, are you here?". This is likely a "keepalive" PM to show localbitcoins that he is "active". Which, in turn, will be an excuse to keep holding my bitcoins allowing fraudster to play his arbitrage game.
• Localbitcoins.com still holding them in their "escrow" playing the buyer's game on me.
• I replied to both seller and localbitcoins.com with no results.

Here's another enlightening reply I got from localbitcoins support:
"Hello,
I understand your frustration, but the other side of the coin is that if we release coins to seller quickly for legitimate-seeming buyers it opens that side for fraud. Patience is king here.
You can mitigate your risk by having low limits for public, possibly hostile buyers. Bigger deals you can provide for known-reliable traders using a trusted only ad.
Br,
Leo"

When a buyer claims to have made a bank deposit but the seller does not see the deposit, LBC admin should require the buyer to present an image of the bank teller's cash receipt. If the buyer cannot do this, LBC admin should return the escrow to the seller. If the buyer presents an image of the receipt, LBC admin should release the escrow to the buyer (and the seller must sort it out with his bank).

I suggest that everyone, including LBC admin, would agree with the above policy. Where people differ is in the timing.

Timing 1 -- How long after a sale is marked paid but the seller has not seen the money should LBC admin demand a receipt image from the buyer? As I understand current LBC policy, 24 hours must pass before any admin involvement. Personally, I think this is too much. Either the buyer made the deposit and has a receipt or he did not and does not. This is knowable within minutes. A 24-hour wait will not change things.

Timing-2 -- How long after LBC admin makes the above demand does the buyer have to photograph and email the receipt? Giving the buyer another 24 hours (adding up to 48 hours in all) seems a bit long to me, but I could be persuaded that some buyers need a few hours to take a picture and email it.

 

This is called hedging and is strictly against LBC's TOS. If you email support with the transaction number of hte person doing this, the price will be modified to the price of when the payment was actually made.

I have had this happen numerous times.

Love LocalBitCoins, their support has ALWAYS resolved things to my satisfaction and usually in a timely manner.

you should still be careful of scammers on localbitcoins, i always do sales that i can afford to get ripped off on. for large sales i choose to split the sale into multiple smaller sales and do them one at a time.

i pretty much only sell on localbitcoins, the second sale (attempt) i did there was with someone i met here (tigerguy007, same name on local) and the person claimed to have paid but did not. the person stopped responding after escrow was funded and claiming to be "scratching the moneypak will get you the code in seconds" while hours later never got me a code or any sort of communication.

as if a pathetic attempt to trick me into releasing escrow first... i immediately started worrying about someone giving me a fake code, or a code that was already loaded or didn't have enough money on it... so i contacted support with my question of how they would handle situations like that, this was my response:

It is true that moneypak cards do not offer too many possibilities to prove that the:

1) Card has sufficient amount of USD available
2) The card was not stolen.

If the buyer is able to provide the receipt of the card and the location where it was bought, it is fairly good assurance. Also, you can always take a screenshot when loading the card to show that there were not enough money. You should note that the buyer is obligated to prove that the payment was completed succesfully, and your trade history will be taken in consideration when we resolve this kind of issues.

Frankly, moneypak trading is mostly based on trust, since moneypak cards are not meant to be used that way. If you want to make sure that you won't be screwed, you should only trade with trusted users.

Also, I don't see how it would be a way for buyers to "squeeze" better prices. It might be competitors doing this, to get your ads away, but I don't see how the buyers would benefit from this.

Hi, there is the "first-time buyer limit" in the advanced section on the advertisement form, which can help you from these cases. Then you can specify a coefficient as it goes up with volume.

We are also developing other solutions to fix this problem.

I made a one-liner post here:
https://localbitcoins.com/forums/#!/fraud

That's it for now.

Have you brought the issue up in the LBC forum? If not, do you mind if I bring it up?

Exactly were my expectations as well. I even sent email to their support stating that I'll make a post HERE if they'll keep ignoring the issue.
I guess no one is reading tickets on the other end ...

Ah. Yes, I see now. I have had only one occasion when a buyer fraudulently claimed he had paid, thus locking the escrow. Eventually, I persuaded him to cancel the order. I guess I have been lucky.

On the other hand, if it were to happen, since I accept only cash handed to a bank teller (no transfers, no checks), I would expect the admins to ask the buyer for an emailed image of the bank teller receipt. If he cannot produce it, I would expect my escrow to be returned immediately.

 

I've been selling on Local Bitcoins for months now and have had very little trouble, barring the occasional time when my coins have been tied up overnight while banks carried out security checks.

It seems to me that this is an argument for not accepting payment types that can be cancelled so easily, and also for only dealing with people who have reputation to lose. There are plenty of new features, and promised ones forthcoming, to make it easier to avoid accepting a deal with someone you'd rather not deal with.

Over 60btc transactions on local and never once have I ran into this. Unlucky I guess.

Here's how it worked:
- Buyer marked payment as complete via interact e-transfer. Once he marks payment - your bitcoins are frozen.
- Buyer quickly cancels his interac payment (it takes ~20-40 minutes to reach you).
- I receive interac notification but deposit fails (because it was cancelled).

PS: in fact no one prevents buyer from marking payment as complete without doing any payments at all.

Here it goes.

I do not understand. I conduct 10-20 BTC sales per day on LBC via bank cash deposit. Out of those, three or four buyers per day fail to make their deposits within the 90-minute count-down. On such occasions the system automatically cancels the order and returns my escrow to me. That's 90 minutes, not 48 hours. That's automatic, not by registering a dispute. Are you on the same localbitcoins.com that I am on?

FYI, here is my seller info:

Join localbitcoins.com and buy bitcoins with cash deposit to your local bank:

For Bank of America, Wells Fargo, Citibank, or Regions Bank, visit https://localbitcoins.com/ad/15776/?ch=4ja

Immediate. Reliable. Anonymous.

See detailed instructions at
http://backintyme.com/depos.php

Good enough reason for me to stop using localbitcoins.com.

I posting it after getting no help from localbitcoins.com and no responses from the buyer. They holding my bitcoins hostage at "escrow" while buyer shopping/waiting for the best price.

And so after numerous good faith attempts to resolve this issue with both buyer and localbitcoins.com exchange (which actually has a great interface and quite user friendly) I have to post it here to attract attention to localbitcoins' quality of support and policies that hurts sellers.

So here's how you (seller) can be screwed. Say, you want to sell a few bitcoins. You transfer bitcoins to localbitcoins.com wallet.
You post an ad to sell at localbitcoins.com at a certain price point.

So here is a technique fraudulent buyers (sorachi11 in my case) are using:

• He goes to "buy bitcoins" section, clicks "Buy" on your ad and then "send trade request"
• At this point your problem begins: localbitcoins.com transfers bitcoins from your wallet to their "escrow" account. Which means there is NOTHING you can do unless buyer pays (which is not going to happen) or 48 hours or so passes
• Seller sends you a few PM's about "payment in progress" BS and then goes to buyers section and opens an ad to purchase bitcoins at a lower price point.
• You do not receive timely (like 10 hours after) payment from buyer and open ticket with localbitcoins.com
• In a few hours - you get a reply (actual reply here): "Since the buyer has been active yesterday, it's best to wait a little if he'll respond. Normal dispute process can be started 48 hours after payment has been marked complete"
• Now you realize that you're out of your bitcoins for at least 48 hours, while fraudster is checking the market prices for the best opportunity: if price of bitcoins goes high - he (with the help of localbitcoins.com) is holding your funds hostage at a fixed price level. If price goes lower - he'll buy stuff from someone at a lower price point.

Fraud bonus tip: No one prevents fraudulent buyer to open a few different accounts with different emails and freeze assets of a number of sellers, effectively locking them out of fast changing marketplace for 48 hours.

At this point, after more than 35 hours passes since buyer froze my bitcoins at localbitcoins's escrow - i get neither any response from buyer, nor any other response from localbitcoins (besides the one listed above) nor access to any of my bitcoins.

I hope that eventually i might get my bitcoins back and so that other sellers would be beware of my experience.