Topic: LocalBitcoins.com - Unfair dispute handling (Read 4804 times)

I am noting the opinions of the 'Hero Members' here and I would like to ask some questions:

What do you think about LocalBitcoins not releasing the BTC from escrow after the seller told them to release them on Nov 21?  At that stage he told them to release the escrow to me. "Gomerlin :  Please localbitcoins, return this buyer the bitcoins that was taken from her. I don't want them."
That was Nov. 21, 2013, 8:49 a.m. in the localbitcoins system.
If you check the BTC charts, well suddenly as the price went down temporarily, he was ok to release the escrow to me ..  
Who is the one changing his mind more than once about this trade?


Also, if you consider that if had I not told the seller about the split transfer before he received the funds, I would have received the BTC, because he could not have used it as a reason to complain in the first place. He would have had to continue his allegations that I am a scammer and tried that way to cancel the trade but it would most likely not have been sucessful since I uploaded all kinds of ID. It was not affecting the end result of the payment I made that the transfer had to be split unexpectedly.
Doesn't this mean that my only fault was to keep the seller updated?


Do you completely endorse the behaviour of the seller during this trade? The accusations, the threats, the overreacting, the lies and making up completely ridiculous stories? It was obvious to anybody that he just tried to cancel the trade because the price of BTC went up. Do you think LocalBitcoins should support this the way they did?


An Australian bank transfer could have taken 3 business days to be received and it wouldn't have been a reason for anyone to complain. The seller would have simply had to wait for it, no matter if the BTC price goes up or down. Equally I would have had to come to terms with it if the price had gone down, while waiting to recieve my BTC. But a trade is fixed and can not just be changed. Considering my funds arrived the next business day, it was a quick payment well within the expectations of the seller who did not post any other requirements in his trade details.


What would you have done in my situation? Not mark the payment complete and waive good bye to AUD $5000.00?


The other person who bought AUD $2000.00 worth of BTC from the same seller Gomerlin the day before I bought from him (also just before the big price increase), but forgot to mark the payment as complete still did not receive the AUD $2000.00 back.
Gomerlin first ignored the messages of the buyer completely for several days while being online and engaging in other trades and then finally replied that his account was hacked and the buyers BTC were 'stolen'.
Doesn't this show what kind of person he is. What a coincidence that right when he has some trades he'd rather like to cancel he claims his account was hacked. How would the 'hacker' have 'stolen' the buyers BTC out of escrow?  He tried to make up the same excuse during my trade at some point.

Exactly.

OP, it's unfortunate this didn't work out, and I don't entirely grasp the whole "your posting on reddit has consequences" nonsense, but you'll have to learn to get things right to the letter when working in systems that depend upon things being right to the letter. It may seem petty, but it's not, and neither would it be petty to learn how to get your ducks in a row for smoother deals in the future.

You are obviously completely unable to view this case from any other than your own extremely biased side, so this will be my last reply. You marked the transfer as complete before it was. That's really all that matters if you want to nitpick on the rules like you do. It doesn't matter that you updated the seller. The rules doesn't say that you can mark the transfer as complete when it isn't as long as you notify the seller. You should not have agreed to buy more coins than you could pay within the 90 minutes, but in this case it was very fortunate for the seller that you did.

Of course you could, all it would take is not doing the second transfer and come up with an excuse (like the seller did). There would have been some negative consequences, but if the price fell by more than 50% (which it has done several times before in that much time) you would certainly have saved money. Even if it fell by less you might have gotten something back from the dispute and been better off than if the deal came through.

Grinder, I did not lie about when the transfers were done at all. I always kept the seller updated via the message system as well as localbitcoins admins who could read the messages. As I said before the time zones of localbitcoins and the online banking screens were about 10 hours apart.
I could not have backed out of the deal at all. That is why the payment needs to be marked as complete. At that point I can not back out of the deal.  At that point the deal is sealed and if I would not pay for it, then I would not get any BTC, I would get a bad review and get my account banned and in my case, if I would not have sent the remaining amount out after midnight as I immediately informed them I would do, then I could have expected not only to receive no BTC, a bad review and a blocked account, but I could have also expected to lose the AUD $5000 of the first part of the transfer! So it is unreasonable for anyone to alledge that I was doing this on purpose or that it affected the seller negatively. 

What the seller then did, was trying to find any reason to back out of the trade due to the BTC price hike. He would have called his bank and told them he was going to receive a fraudulent transfer and to reject it, even tough he could see the ID I uploaded and even though I offered to give him a call.
Why is this very bad for the bitcoin community? If people cause the banks additional work this way (as if fraud was not already bad enough), it is clear why they come to dislike everything that's got to do with Bitcoin or other transactions related to virtual currencies.
My bank then blocked my account completely. I could not log on to my online banking anymore at all and try to get this fixed while being 16,000km away.

By making such allegations and involving banks fraud departments in disputes, even involving governemnt institutions such as police and courts of course they will start to regulate more because it is causing them a workload, they will want to find a way to tax and regulate. This can not be what we want to achieve. 

You marked the transfer as complete even though it wasn't.

You would still have had to lie about when the transfers were done in the dispute. It doesn't matter when he received the transfers or that it wasn't possible for you to do the complete transfer within the 90 minutes. All that matters is that you could have backed out of the deal if the price had gone down before the second transfer, and this gave the seller an excuse to do the same when the opposite happened.

Based on common sense I completely agree with your point of view. The seller didn't have the slightest bit of a disadvantage because of the bank transfer splitting and you did everything that could be expected of a buyer in your situation. In place of the seller I would have released the coins and rated it as a flawless transaction.

But... I understand the LBC decision as well. It is expected of a business not to make financially important decisions based on whatever they might perceive as common sense, they need to stick to the words of the contract. You marked the payment as completed although it was not, so they were entitled to cancel the trade. In my opinion it would have been reasonable to keep the coins in escrow until your fiat was refunded, though. Any news on that?

Can you quote where I lied?

Can you justify why I should be receiving any less than the traded amount of BTC when the seller did not suffer any delay in receiving the full payment from me?
He received the full payment just as quickly as it would have been received in one single transfer.

In fact, had I not kept the seller updated and told him about the split transfer, then he would not have even known until he received both amounts in his account on the next day. The only fault from my side seems to have been to keep the seller informed.

Which means you lied when you said you had completed the transfer. It wasn't very nice behaviour from the seller, and he probably didn't even know he had the rules on his side. Unfortunately this means you should have taken the first offer, and now your stubbornness has really backfired.

Yes, the payment is supposed to be marked as complete within 90 minutes, which I did, with a national bank transfer however there is no expectation for the funds to arrive within those 90 minutes.  

The purpose of marking the payment complete within 90 minutes is to prevent sellers BTC stuck in escrow forever if the buyer changes his mind or is simply unresponsive.
If the buyer has sent funds, the payment needs to be marked as complete, otherwise the BTC will not be held in escrow and the buyer could lose his payment.

When I sent the first payment (after being forced to split it in 2 parts), I had to mark the payment as complete, otherwise I would have potentially lost the money I already sent out. I marked it as complete well within the 90 minutes limit, too and I knew that I would be sending the second part after midnight and I also kept the seller informed.

Any reasonable seller in his right mind would not have had a problem whatsoever with the payment arriving in two parts (especially since they arrived within 1 business day, and both arrived at the same time), especially after I uploaded all kinds of ID, receipts, etc ..  and considering that I communicated with the seller constantly, even offered to call him.

The 90 minute window for doing the transfer is specified in the rules for using the escrow system.

To jook, no, the time zones don't match because I am not currently living in Australia. The time zone was either set to Localbitcoins default since I had not changed the settings, or if in any way auto detected, it would have been GMT or GMT+1, no idea if our current summer/winter time adjustment was taken into consideration.

The bank statements show the Australian time, NSW time I would say.

The first transfer was sent out right after opening the trade. I went straight from the trade where the sellers bank details were displayed to me to my online banking, I also wrote this in detail in the original post how the events unfolded.

The payment window was not 90 minutes because the trade was advertised as National Bank transfer, and the seller did not make any further specifications.
It is common knowledge that transfers between any two different banks in Australia take around 1-3 business days. The seller resides in Australia and so he would be well aware of this. He could have advertised Cash deposit as the payment method or same bank transfer otherwise.

I would also like to add that there was no expectation from my side to receive the BTC before my funds have been credited to the sellers bank account and I also made this clear to him from the beginning.

Data taken from OP's screenshots in post #1:

LBC Trade request:    Nov 18, 5:18 am
Bank transfer #1:      Nov 18, 3:47 pm
Bank transfer #2:      Nov 19, 1:00 am

If...

- you have set the correct timezone in your LBC account, and
- the contractual payment window was 90 minutes, and
- the seller had not agreed to modify the contract

...then you failed to comply with the contract and the seller was rightfully allowed to cancel the deal. Your first bank transfer was already 9 hours too late. LBC clearly states the time window in which the payment has to be initiated.

The seller has to refund your $7367.23 AUD immediately, of course, but that's a seperate case. I don't see how your bank transfers could retroactively have an effect on a contract that had already been breached. Or am I missing something?

jook, the details have been published in my first post. There is a full description of the events and there are links to the screens in the text.
There should also be screens of the seller confirming that both transfers were received the next day.

Does it boil down to a disagreement over whether the fiat transfer finished in time? They buyer claims that the bank transfers of the full amount cleared on the day following the trade request. LocalBitcoins claims that the payment has not been initiated within the requested timeframe. This looks contradicting to me.

It might help if both parties published the exact times of:

- Opening of trade request on LBC
- Initiation of bank transfer #1
- Initiation of bank transfer #2
- Receipt of bank transfer #1
- Receipt of bank transfer #2

These can be compared to the official contract to come to a conclusion.

not really. You want him to adhere to the contract despite him taking a huge loss because a contract-is-a-contract, and you want him to stick to it, even if he wants to back out of it (which IS bad faith IMO. I've had similar situations where I at least split the difference when there is a huge price change).

Yet, you feel that you can slightly bend your end of the agreement and its 100% justifiable. Nope, sorry dude - a contract-is-a-contract.

I wouldn't sell to you either. I think localbitcoins did an excellent job moderating the situation and this actually makes me feel better about doing business with them.

Then explain to me where did the seller have any disadvantage that justifies me receiving less BTC than originally traded?
Where was his loss?

Had I not been so kind to keep him up to date via the message system, he would not have even known that the amount was split into two transfers. Next day the money was in his account very well in line with what could be expected of a national bank transfer in Australia.

He only took it up as a reason to hold on to, because he wanted to cancel the trade during the BTC value surge and he was being proven wrong in his accusation that I am a scammer. He needed something else to hold on to and to make a big deal of.


Also, in legal terms: I acted in good faith during this trade, the seller acted in bad faith.

I read the entire thread, including what localbitcoins wrote you, and I find that they tried to be fair. You didn't have all the money in on time. The fact that your bank had a limit and you couldn't send it all in time isn't the seller's fault. You can make justifications and say that the money came in over night and it didn't make a difference, but it doesn't matter.

It has nothing to do with greed, there was no justification to get less BTC than the 13 BTC I paid for. 

cryptoanarchist, I have the impression you might not be completely up to date with this case to be able to make a judgement as yet.
The reason I believe this is that you refer to me using the masculine pronoun, where it could already be established that I am female after reading the complete story.

I understand that the entire series of events and messages is a lot to read, and that the minority of people will have the time to read it all. Even in this post, only the critical events are shown in screens, and of course screens are cropped, otherwise it would take even longer for people to understand the case.
I am happy to put the complete dialogues on pastebin or somewhere else. If anyone would like to check on any details. It would only get more embarrassing for the seller and for localbitcoins. I had previously gotten into trouble for trying to protect myself in case something happens to me by posting the real name of the seller gomerlin on reddit, even though anybody could find his real name from his website. The posts containing the real name were removed, but the other posts should still be there.

Yes, I was told by one of localbitcoins employees (nikolaus) while talking to him on IRC to ask the public:



Then a while after I did this, he himself replied to my support ticket via e-mail (and I have the full email including headers if anybody cares):