Topic: TradeHill - Dwolla is being scammed and reversing transactions (Read 19229 times)

In my email today. lol

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August 2, 2011 | Published by DWOLLA.

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100! Oooooo

That's not what happens. Someone other than the user does a chargeback because they claim that they, the owner of the funds, never authorized the transfer. TradeHill never had any contact with the person who does the chargeback.

I think you're missing the point that Dwolla is the product. The original ACH transfer was a deposit of funds into a person's Dwolla account. It has nothing whatsoever to do with with the subsequent transfer of those funds to TradeHilll. The user claiming they should reverse the transaction to Dwolla because TradeHill fell through is equivalent to them reversing the funds to Dwolla because they felt like it. And, again, it's between Dwolla and that user. If Dwolla wants to take money back from TradeHill, they need to make a similar claim, which they cannot do.

The problem is that Dwolla is charging back the transaction to TradeHill in this case for no reason. Dwolla did intend to transfer that money to TradeHill. And they have no evidence or even allegation of fraud on TradeHill's part. So again, it's a problem between Dwolla and their user.

In this case, because Dwolla's customer made a mistake, Dwolla sent money to the wrong person. Dwolla can't pass on the blame -- they're responsible for their actions regardless of who tells them to take them. So Dwolla would be responsible for any losses the mistake causes.

No, I don't at all.

Dwolla is using the non-performance of a third party as an excuse to modify its agreement with TradeHill. That's simply absurd and if it were possible in general, no contracts could work.

In these cases, Dwolla would not necessarily be liable for the full amount of the transfer, but they are responsible for any unrecoverable losses. These third-party failures explain Dwolla's failure but they don't excuse it. Dwolla still has to make TradeHill whole.

I think you're missing the point that Dwolla promised no chargebacks or reversals ever. 

User: Hey I'm going to scam Tradehill by transferring my money to Dwolla, transferring it to TH, buying my coins then doing an ACH chargeback with my bank.
Dwolla: We've received $50 from User. SEnding $50 to Tradehill.
Tradehill: We've received $50 from User via Dwolla.
Tradehill: Bitcoins bought and withdrew.
User: *initiates chargeback*
Dwolla: Oh no, the user did a chargeback because 1) he claims he never received the product he paid for or 2) he claims he meant to send it to someone else

1)
Dwolla: We aren't the ones selling the product, Tradehill is. Remove the funds from where they were sent (TH) and give it back to user. Not our fault.
Tradehill: What? We're not taking the loss. Blame Dwolla and make them eat it, even though it's not their fault.

2)
Dwolla: Looks like he meant to sent the money to someone else, but that same money has already been sent to TH. Chargeback.
Tradehill: Oh no, we don't want to take the $37k loss. Blame Dwolla and make them eat it.

See what I mean.

We agree that some innocent party must bear the cost, right? So the only question is whether it's TradeHill or Dwolla.

Well let's look at the agreement between the two of them. Dwolla said their transactions would be like cash. TradeHill asked if there could be chargebacks and was specifically told no.

I agree that it's not Dwolla's fault that users are initiating chargebacks with their banks. But I disagree that Dwolla's only choice is to reverse the transaction to TradeHill. Dwolla could eat the loss. If you don't think they can do that for some reason, please explain how that reason doesn't apply equally to TradeHill.

In fact, I don't believe Dwolla can reverse the transaction with TradeHill. That transaction was authorized by Dwolla. And Dwolla is not alleging any fraud on TradeHill's part. So I see no grounds for them to reverse it.

If I cash a check from Jack and use the money to buy a steak dinner, I can't ask the restaurant for my money back if the check bounces. I have to go after Jack for the bad check.

(As I explained in the other thread, Dwolla still doesn't claim the right to pass on chargebacks to innocent third parties. They only retain the right to chargeback the initial account and to claw back funds prior to arbitration.)

This explains everything!
OMFG those pics are too much!



 Joel Katz was probably correct about the bankrupt thing. Heaven forbid anyone ruins their plans to be the newest trendy internet millionaires.

I wonder which  of these tools was the one answering a question with "If you have any questions just ask".
Even "Bob" from New York City of India has more respect than that.

top to bottom, left to right

N HELL-N Y Y
N HELL-Y N HELl-N
n N N HELL-Y

I'd probably do about half of them.

And don't give me no flak about that only 4 of them are girls.

Sounds like that new outfit simply eats the losses themselves if they do not do what they are paid to do which is to reliably acquire funds from their users.  Simple enough, and more than fair given how Dwolla promoted their services.  Why cannot Dwolla do that?

qft

Here I found a pic of teh Dwolla Kids!


Trust US with your money, please!  Our parents wear suits so we don't have to.  In College, where we're from, we just wear T-shirts to work every day, even on company picture day!

I agree they have no choice. It's part of the terms of service for using ACH. It is Dwolla's fault for claiming no charge backs , avoiding full and timely disclosure, changing the TOS without notice. misrepresenting the TOS ex post facto, showing the credit to a third parties account ,making them eat the loss , etc...

Tradehill, you're blaming the wrong person, it's not Dwolla's fault that users are initiating chargebacks with their banks. Dwolla's only choice is to reverse the transaction on their end.

When will people stop being surprised when people get Goxed?  Nice guy, but what is needed is a business professional and some programming professionals.  Professional doesn't just mean the most technical debugging skill - it means doing it correctly and not on live databases, or taking out peoples money for weeks on end, or .. or .. or ..

If you guys want BTC to become a successful currency, you have to start acting like it's really money, whether you are the giver or receiver of funds, as an individual or a business.

I see too many entitled people whining about what they've lost, gotten stolen, can't access their basket full of eggs in one basket, etc.

Use your brains.  Diversify.  Spread out the risk.

Hopefully their process goes through more verification than the rep's posts have. A professional banking establishment representative whose grammar and spelling is that off the mark should be sending red flags to most.

Yes, that would be good to know.

I sure hope not. The next time MtGox publishes their password database, and some hacker finds my Paxum password is the same, Paxum has no need to reverse any transactions. I screwed up and it's my fault, not theirs. And yes, I'm speaking from experience. I did lose quite a bit of money due to the previous MtGox database.

I didn't see under what conditions Paxum can reverse charges. They should mention that. Mr. Paxum are you listening?

Certainly if someone compromises the bank or Paxum account, I suspect Paxum will block, maybe reverse transactions. While perhaps unlike, what are the circumstances and procedures?

A rep from Paxum is here on the forums.  He says they have rigorous verification processes that make fraud very unlikely.  So, they don't have losses that they need to pawn off on their customers.

Dwolla was pretty much just on the honor system, apparently.  Which is odd.  I got a phone call from Dwolla when I set up my account, just to verify my info.  I still haven't added any banking info to my dwolla account.

How is Paxum different from Dwolla? I read the terms and FAQ (also thought Dwolla looked fine last week) but aren't they suseptable to teh same attack? TradeHill can hope Paxum doesn't push their losses upon the merchant, but otherwise, what's the difference?

For the record, I pushed Dwolla funds to Mt. Gox this morning with no trouble.

Wow.  That article is amazing.  He seems to think that the problem is fraudulent bitcoin transactions being converted to dollars, when the real issue, as far as I can tell, is fraudulent bank transactions being converted to bitcoins.

A quick quote to illustrate what I'm talking about.


Let me rewrite that in a way that reflects reality:

Great, that's just great.  Just what we need another scandal caused by incompetence.