So from a bank's perspective - if they have what appears to be a valid legal claim (affidavit?) that a transaction was fraudulent, I guess they work on the basis that the merchant will have the relevant information as to who actually initiated the transaction and so is best positioned to follow it up.
That's ridiculous. Dwolla interacted with the party that supplied the money and the party that claimed the transaction was fraudulent, they are in the best position to figure out pusue the claims. The merchant had no contact whatsoever with the money source except through Dwolla. The merchant didn't necessarily ever interact with anyone.The fraud claim must be that the person who initiated the transfer (who interacted only with Dwolla) wasn't authorized to perform the transfer by the person who owned the funds (who interacted only with Dwolla). Who does the merchant follow up with? Two people he interacted with only through Dwolla?
I don't see anything in their user agreement that says that can reverse transactions. Dwolla has gone, in my opinion, from useful to useless. I'll raise my opinion of them a bit if I see what information they provided when they reversed a transaction. If the released literally all information they had from both contacts, I'll revise my opinion a bit.
I still don't get fully what happened and I didn't see Anything on tradehills website. 
