TradeHill - Dwolla is being scammed and reversing transactions - page 7.

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: TeraPool on July 25, 2011, 10:30:42 PM

So how and why did this happen to tradehill and not mtgox?

Surely the "scammer" would attempt to defraud the largest, already-proven-to-be-incompetent exchange, no?

It's possible Mt. Gox had the same thing happen and didn't notice. As I understand what they're saying, Dwolla just changed the status back to unpaid and took the money without any notification. If you weren't looking for something like that, you might not notice until some time later when you tried to balance the books.

TeraPool

newbie

Activity: 42

Merit: 0

So how and why did this happen to tradehill and not mtgox?

Surely the "scammer" would attempt to defraud the largest, already-proven-to-be-incompetent exchange, no?

jwzguy

hero member

Activity: 868

Merit: 1002

Hello - first of all, this is horrible news, and I hope it is resolved very soon. We're behind you 100%.

I am still unclear on 2 issues you mentioned.
1) Does Dwolla owe you guys any money? Have you lost any funds after reversals?
2) You said your blog post was going to walk us through how this happened, but I only see that it did happen, not how they/you were scammed. First the funds in the transaction you got were confirmed and then they were reversed. Do you know how the scammer got his transfer confirmed in the first place?

Best wishes.

The_JMiner

member

Activity: 70

Merit: 10

Wow good thing I have not recommended Dwolla yet, I was raving about it with a few people but now F*ck that.

Smalleyster

member

Activity: 84

Merit: 10

I yam what I yam. - Popeye

Their reputation is currently 0 with me unless and until this gets resolved.

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: Jered Kenna (TradeHill) on July 25, 2011, 09:31:25 PM

Essentially none. We were told that it wouldn't go from "credited" to not credited and to download a new CSV. They told us that the user had their account suspended and that was the end of it.
They did confirm that the funds were not actually sent (despite being credited). We were unable to get any more information.

I hope Dwolla promptly acknowledges and corrects their mistake. Otherwise, their reputation is going to go to near-zero pretty quickly. They should reimburse you for whatever the actual amount of your loss was.

"Remember, these are cash-based transactions! No credit card fees, chargeback concerns, or signing necessary!" - Dwolla

Jered Kenna (TradeHill)

sr. member

Activity: 420

Merit: 250

Quote from: JoelKatz on July 25, 2011, 09:27:00 PM

What information has Dwolla provided you about this transaction? Specifically, what information about whoever claimed that it was fraudulent and what explanation they gave? IMO, you are entitled to a signed affidavit and a police report at the very least.

Essentially none. We were told that it wouldn't go from "credited" to not credited and to download a new CSV. They told us that the user had their account suspended and that was the end of it.
They did confirm that the funds were not actually sent (despite being credited). We were unable to get any more information.

Jered

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

What information has Dwolla provided you about this transaction? Specifically, what information about whoever claimed that it was fraudulent and what explanation they gave? IMO, you are entitled to a signed affidavit and a police report at the very least.

Jered Kenna (TradeHill)

sr. member

Activity: 420

Merit: 250

Quote from: Smalleyster on July 25, 2011, 09:17:28 PM

Any response from Dwolla yet?

None. We're looking forward to working with them and resolving this issue.
The idea of Dwolla is great but if transactions are reversible that changes things.
If they're not reversible then they shouldn't be advertised as so on their site here (bottom): http://www.dwolla.org/blog/retail-merchants-rejoice-web-kiosk-online/

Jered

Smalleyster

member

Activity: 84

Merit: 10

I yam what I yam. - Popeye

Any response from Dwolla yet?

Jered Kenna (TradeHill)

sr. member

Activity: 420

Merit: 250

Please see our blog post here: http://tradehillblog.com/2011/07/25/tradehill-audit-discovers-dwolla-transactions-are-reversible/ for a walkthrough of the transaction.

We would like to work with Dwolla and find a way to prevent this in the future. Hopefully the same thing hasn't happened on other exchanges.
Dwolla has been scammed out of at least $37,000 by our records and we have prevented another $27,000.

The latest updates can be found on www.tradehillblog.com

The individual listed is a confirmed scammer and most likely not their real name.
We have 17 other documented examples.

To sum it up: Dwolla sends out CSV files and emails stating that a payment has been credited. Several days later they remove the funds without mentioning anything to the merchant (TradeHill in this case).
We will continue to provide withdrawals through Dwolla and our users will be able to access all of their funds within TradeHill.

Jered

Topic: TradeHill - Dwolla is being scammed and reversing transactions - page 7. (Read 19245 times)