Did dwolla close your account immediately and suddenly? Or was there some adjudication process during which time they were mulling things over before putting down the hammer?
I'm asking because I woke up this morning to discover that dwolla was limiting my account access and was requesting a government photo ID. They said they suspect I'm exchanging bitcoins on a peer-to-peer basis and that it violates their TOS. I, too, was running a few trades on localbitcoins.com and have been doing so for less than three weeks. I'm left wondering if I have any recourse or if I should just write off my balance as a total loss. Any insights from your experience would be appreciated.
Topic: PSA - Dwolla even worse than Paypal for accepting payments (Read 2058 times)
I say that Dwolla is even worse than Paypal, becuase at least Paypal gives you some recourse and tries to figure out who is at fault when there's a problem.
Wrong.. When you get PayPalFucked, you get no recourse either.. They got me for over $5k.. and only after valid, written threats of legal action did they do anything.. I refuse to use Paypal again.. After reading this i'm thinking twice now about Dwolla..
But.. why can an exchange like CampBX use Dwolla for selling BTC, but not you or me?
Am I correct in saying that you (one person) were selling Bitcoin to other Dwolla users? Were there imposed limits? It sounds like you were a currency dealer via Dwolla, which I could see why they might not be too happy if you did not contact them before doing so and ask for guidance on regulatory requirements (with all the crap coming from the Fed lately on virtual currency, etc).
Yes, I had limits. The biggest transaction I ever did was $800. Normally they were much lower.
I see their side of things, but feel like their treatment of me was overly harsh.
Am I correct in saying that you (one person) were selling Bitcoin to other Dwolla users? Were there imposed limits? It sounds like you were a currency dealer via Dwolla, which I could see why they might not be too happy if you did not contact them before doing so and ask for guidance on regulatory requirements (with all the crap coming from the Fed lately on virtual currency, etc).
I just want to share my experience this morning with Dwolla's curt, unhelpful customer service.
I have ocassionally been selling Bitcoins to people for Dwolla via LocalBitcoins. While I know that Dwolla transactions are reversible, it seems like they are harder to reverse, and Dwolla says they "work hard to protect you from unwarranted chargebacks." Dwolla also has a dispute resolution mediation system. I have had zero issues with chargebacks, so I've been pretty comfortable with it as a form of payment.
Today I woke up and my account had been closed.
Immediately I suspected someone I'd sold Bitcoins to had done a chargeback. So I called Dwolla customer support.
"Your account has been suspended because you are selling Bitcoins. That violates our terms of service."
What? I hurredly pull up the Dwolla ToS. https://www.dwolla.com/tos.
I search for the word "bitcoin" but find nothing. Then I see the've recently added a bit about the recent FINCEN guideline concerning virtual currencies, and a section that says you cannot sell virtual currencies for Dwolla.
Damn. Okay, I guess that's that then. I complain that I had no idea they had added this rule. I say that closing my account seems pretty harsh. Couldn't they have just given me a warning? And what happens to my Dwolla balance?
"That's actually not why we're closing your account."
What? But I thought you said it was...
It turns out someone sent me some money from a hacked/stolen account. Further, I was informed that Dwolla's security department had been able to recover the funds and return the money to the rightful owner (Yay! Good going Dwolla, I thought). So my next question was, how can I restore my account to good standing and working order?
"There is no way to continue." the service rep says.
What?
Turns out I am banned from using Dwolla for life. The Dwolla account the fraudulent money was sent from is also blacklisted forever. No appeal. In other words, the accounts of the victims of fraud on Dwolla's system have been blacklisted. Further, I learned that, without contacting me, the Dwolla security team had gone around reversing a bunch of my previous Dwolla payments, including a deposit to CampBX. And now my account with CampBX has been suspended. My Dwolla account balance is forfeit.
Pretty drastic. The reasoning the representative gave me for this was: "We don't know whether you were also committing fraud."
So I am assumed guilty and they don't care whether I'm innocent. Dwolla also purposely got me in trouble with a bunch of vendors, including my favorite Bitcoin exchange, CampBX. There was no reason to do this. They could have contacted me, and I would have been willing to restore any lost funds to vendors. My bank account is linked to my Dwolla account and I even had incoming deposits from my bank to Dwolla through ACH.
I think this is an incredibly shitty way to treat customers, especially considering I went through their Know-Your-Customer process, uploading my ID and utility bills and all that. And I have had an account for over a year and have made many transactions, for which they have collected fees. I wasn't aware of their anti-Bitcoin policy. I have not committed any fraud, and I am the one who has been most victimized. I'm out money and my accounts are ruined all over the Internet.
Considering 20% of all Dwolla transactions involve Bitcoin in one way or another, I think this is a crap way to treat the Bitcoin community in general. They should be a bit more reasonable, considering how much money they make from Bitcoin. I say that Dwolla is even worse than Paypal, becuase at least Paypal gives you some recourse and tries to figure out who is at fault when there's a problem.
I have ocassionally been selling Bitcoins to people for Dwolla via LocalBitcoins. While I know that Dwolla transactions are reversible, it seems like they are harder to reverse, and Dwolla says they "work hard to protect you from unwarranted chargebacks." Dwolla also has a dispute resolution mediation system. I have had zero issues with chargebacks, so I've been pretty comfortable with it as a form of payment.
Today I woke up and my account had been closed.
Immediately I suspected someone I'd sold Bitcoins to had done a chargeback. So I called Dwolla customer support.
"Your account has been suspended because you are selling Bitcoins. That violates our terms of service."
What? I hurredly pull up the Dwolla ToS. https://www.dwolla.com/tos.
I search for the word "bitcoin" but find nothing. Then I see the've recently added a bit about the recent FINCEN guideline concerning virtual currencies, and a section that says you cannot sell virtual currencies for Dwolla.
Damn. Okay, I guess that's that then. I complain that I had no idea they had added this rule. I say that closing my account seems pretty harsh. Couldn't they have just given me a warning? And what happens to my Dwolla balance?
"That's actually not why we're closing your account."
What? But I thought you said it was...
It turns out someone sent me some money from a hacked/stolen account. Further, I was informed that Dwolla's security department had been able to recover the funds and return the money to the rightful owner (Yay! Good going Dwolla, I thought). So my next question was, how can I restore my account to good standing and working order?
"There is no way to continue." the service rep says.
What?
Turns out I am banned from using Dwolla for life. The Dwolla account the fraudulent money was sent from is also blacklisted forever. No appeal. In other words, the accounts of the victims of fraud on Dwolla's system have been blacklisted. Further, I learned that, without contacting me, the Dwolla security team had gone around reversing a bunch of my previous Dwolla payments, including a deposit to CampBX. And now my account with CampBX has been suspended. My Dwolla account balance is forfeit.
Pretty drastic. The reasoning the representative gave me for this was: "We don't know whether you were also committing fraud."
So I am assumed guilty and they don't care whether I'm innocent. Dwolla also purposely got me in trouble with a bunch of vendors, including my favorite Bitcoin exchange, CampBX. There was no reason to do this. They could have contacted me, and I would have been willing to restore any lost funds to vendors. My bank account is linked to my Dwolla account and I even had incoming deposits from my bank to Dwolla through ACH.
I think this is an incredibly shitty way to treat customers, especially considering I went through their Know-Your-Customer process, uploading my ID and utility bills and all that. And I have had an account for over a year and have made many transactions, for which they have collected fees. I wasn't aware of their anti-Bitcoin policy. I have not committed any fraud, and I am the one who has been most victimized. I'm out money and my accounts are ruined all over the Internet.
Considering 20% of all Dwolla transactions involve Bitcoin in one way or another, I think this is a crap way to treat the Bitcoin community in general. They should be a bit more reasonable, considering how much money they make from Bitcoin. I say that Dwolla is even worse than Paypal, becuase at least Paypal gives you some recourse and tries to figure out who is at fault when there's a problem.
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