TradeHill - Why we no longer accept Dwolla and an open letter to Ben Milne - page 10.

Rob Lister

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Quote

Excuse the repeated question Jered, but did any of your customers lose money in this? That's really the only concern I have.

Jered,

Can you answer the question directly?

If the answer is no and I highly suspect it is, why did you make this such a public spectacle?

I think the answer he provided was about as direct as possible under the circumstances; that they would not pass on the loss to their customers. Maybe I'm missing something.

Quote

If the answer is no and I highly suspect it is, why did you make this such a public spectacle?

I don't follow your logic. The answer to that question, yes or no, has nothing to do with making it public or not. IMO, making it public was the appropriate course of action. IMO, they got scammed. Other words that come to mind are ripped off, defrauded, and cheated

Why wouldn't they make this public? They did a service by making this public. It should be made public.

Vod

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Licking my boob since 1970

Quote from: Jered Kenna (TradeHill) on July 27, 2011, 12:02:39 PM

Dwolla has already refused to respond and only admitted in one email - right before we went public - that 'charge-backs' did/do occur. After which, they promptly changed their TOS on July 25th (the day we went public). Everyone knew they promoted and marketed 'no charge-backs' and this is what made them so attractive to Bitcion exchanges.

I believe it is illegal to unilaterally change terms of service without notice. I hope you have copies of their old terms so you can sue them.

You are doing a great job Adam. Ignore the couple trolls who are trying to twist your words.

Smalleyster

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I yam what I yam. - Popeye

Quote from: Jered Kenna (TradeHill) on July 27, 2011, 12:02:39 PM

If Dwolla does not cover the losses incurred from their inappropriate advertising and data inaccuracies, then we will take legal action. In the meantime, we will make good with our customers from our own pockets. We hope people realize what this means to us.

Adam

Good stuff!

I want to thank you guys publicly for bringing this out in public. I feel 2 weeks was an appropriate time to wait for Dwolla to answer you.

As a consumer and relatively new and admittedly small client of yours it makes me feel that your instincts are to do the right thing and be as transparent as possible. That means that I plan to continue to do more and more business with you.

Thank you both.

dacoinminster

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Rational Exuberance

[POLL] Will you reverse your Dwolla transactions?
http://forum.bitcoin.org/index.php?topic=32354.0

Rob Lister

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Quote from: Jered Kenna (TradeHill) on July 27, 2011, 12:02:39 PM

If Dwolla does not cover the losses incurred from their inappropriate advertising and data inaccuracies, then we will take legal action. In the meantime, we will make good with our customers from our own pockets. We hope people realize what this means to us.

Adam

Noted. Thank you Adam. Given the circumstances, I can't see how you could take any action other than to cover the trades surrounding this fiasco. Still, the question had to be asked.

Jered Kenna (TradeHill)

sr. member

Activity: 420

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Excuse the repeated question Jered, but did any of your customers lose money in this? That's really the only concern I have.
[/quote]

Let me also clarify.

We do not intend to pay for Dwolla's mistakes. Tradehill will not be responsible for the mistakes of others. We only take full responsibility for our own mistakes. Dwolla needs to make good with us and the community.

Dwolla has already refused to respond and only admitted in one email - right before we went public - that 'charge-backs' did/do occur. After which, they promptly changed their TOS on July 25th (the day we went public). Everyone knew they promoted and marketed 'no charge-backs' and this is what made them so attractive to Bitcion exchanges. Why? Because exchanges could credit customer accounts 'instantly' without the risk of loss. Note that none of this explains why transactions just disappear/appear on past statements. Gox, Bitcoin Exchange, and others have now stated they also found errors in Dwolla data.

If Dwolla does not cover the losses incurred from their inappropriate advertising and data inaccuracies, then we will take legal action. In the meantime, we will make good with our customers from our own pockets. We hope people realize what this means to us.

Adam

Jered Kenna (TradeHill)

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Quote from: Danzou on July 27, 2011, 11:44:04 AM

Quote from: Jered Kenna (TradeHill) on July 27, 2011, 11:18:51 AM

If another exchange is down 50k 100k or 500k and can't afford it then they could go under and their (which a lot are also ours) customers will be hit hard.
It's possible that our mutual customers are going to lose money but it's too soon to say for sure.

So does Gox not even know how much it's in the hole for yet?

He's going to have to speak for himself on that one. Could be a little or a hell of a lot.

Danzou

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Quote from: Jered Kenna (TradeHill) on July 27, 2011, 11:18:51 AM

If another exchange is down 50k 100k or 500k and can't afford it then they could go under and their (which a lot are also ours) customers will be hit hard.
It's possible that our mutual customers are going to lose money but it's too soon to say for sure.

So does Gox not even know how much it's in the hole for yet?

cypherdoc

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Quote from: Jered Kenna (TradeHill) on July 27, 2011, 11:18:51 AM

Quote from: Rob Lister on July 27, 2011, 11:05:35 AM

Quote from: Jered Kenna (TradeHill) on July 27, 2011, 10:56:07 AM

Quote from: tvbcof on July 27, 2011, 10:24:31 AM

Quote from: nmat on July 27, 2011, 06:55:15 AM

Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

That seemed very odd to me as well.

As I hypothesized on another thread, perhaps there are NSL's involved.

http://en.wikipedia.org/wiki/National_Security_Letter

Mt Gox confirmed some transactions have gone missing on IRC and possibly a post. exchangebitcoin.com confirmed it and isn't accepting Dwolla, Bitcoin7 isn't accepting Dwolla and I've been told they confirmed the chargebacks.

It's 100% possible that CampBX didn't receive any chargebacks. If I have to guess it's because they didn't have the open orders to justify defrauding 5k or they thought they would get caught faster with lower volume to hide in. If that's the case good for them. Dealing with fraud isn't fun. I'm assuming if they continue to accept Dwolla and nothing changes they will see fraud.

Jered

Excuse the repeated question Jered, but did any of your customers lose money in this? That's really the only concern I have.

Valid question, we are willing to pay out of our own pockets. Had this been higher and we couldn't cover it ourselves yes they would have.
If another exchange is down 50k 100k or 500k and can't afford it then they could go under and their (which a lot are also ours) customers will be hit hard.
It's possible that our mutual customers are going to lose money but it's too soon to say for sure.

To sum it up: We're not going to pass the fraud on to our customers like Dwolla has done. It stops with us because we will eat it if Dwolla doesn't do the right thing.

Jered

well thats laudable.

Jered Kenna (TradeHill)

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Activity: 420

Merit: 250

Quote from: Rob Lister on July 27, 2011, 11:05:35 AM

Quote from: Jered Kenna (TradeHill) on July 27, 2011, 10:56:07 AM

Quote from: tvbcof on July 27, 2011, 10:24:31 AM

Quote from: nmat on July 27, 2011, 06:55:15 AM

Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

That seemed very odd to me as well.

As I hypothesized on another thread, perhaps there are NSL's involved.

http://en.wikipedia.org/wiki/National_Security_Letter

Mt Gox confirmed some transactions have gone missing on IRC and possibly a post. exchangebitcoin.com confirmed it and isn't accepting Dwolla, Bitcoin7 isn't accepting Dwolla and I've been told they confirmed the chargebacks.

It's 100% possible that CampBX didn't receive any chargebacks. If I have to guess it's because they didn't have the open orders to justify defrauding 5k or they thought they would get caught faster with lower volume to hide in. If that's the case good for them. Dealing with fraud isn't fun. I'm assuming if they continue to accept Dwolla and nothing changes they will see fraud.

Jered

Excuse the repeated question Jered, but did any of your customers lose money in this? That's really the only concern I have.

Valid question, we are willing to pay out of our own pockets. Had this been higher and we couldn't cover it ourselves yes they would have.
If another exchange is down 50k 100k or 500k and can't afford it then they could go under and their (which a lot are also ours) customers will be hit hard.
It's possible that our mutual customers are going to lose money but it's too soon to say for sure.

To sum it up: We're not going to pass the fraud on to our customers like Dwolla has done. It stops with us because we will eat it if Dwolla doesn't do the right thing.

Jered

Rob Lister

newbie

Activity: 54

Merit: 0

Quote from: Jered Kenna (TradeHill) on July 27, 2011, 10:56:07 AM

Quote from: tvbcof on July 27, 2011, 10:24:31 AM

Quote from: nmat on July 27, 2011, 06:55:15 AM

Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

That seemed very odd to me as well.

As I hypothesized on another thread, perhaps there are NSL's involved.

http://en.wikipedia.org/wiki/National_Security_Letter

Mt Gox confirmed some transactions have gone missing on IRC and possibly a post. exchangebitcoin.com confirmed it and isn't accepting Dwolla, Bitcoin7 isn't accepting Dwolla and I've been told they confirmed the chargebacks.

It's 100% possible that CampBX didn't receive any chargebacks. If I have to guess it's because they didn't have the open orders to justify defrauding 5k or they thought they would get caught faster with lower volume to hide in. If that's the case good for them. Dealing with fraud isn't fun. I'm assuming if they continue to accept Dwolla and nothing changes they will see fraud.

Jered

Excuse the repeated question Jered, but did any of your customers lose money in this? That's really the only concern I have.

Jered Kenna (TradeHill)

sr. member

Activity: 420

Merit: 250

Quote from: tvbcof on July 27, 2011, 10:24:31 AM

Quote from: nmat on July 27, 2011, 06:55:15 AM

Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

That seemed very odd to me as well.

As I hypothesized on another thread, perhaps there are NSL's involved.

http://en.wikipedia.org/wiki/National_Security_Letter

Mt Gox confirmed some transactions have gone missing on IRC and possibly a post. exchangebitcoin.com confirmed it and isn't accepting Dwolla, Bitcoin7 isn't accepting Dwolla and I've been told they confirmed the chargebacks.

It's 100% possible that CampBX didn't receive any chargebacks. If I have to guess it's because they didn't have the open orders to justify defrauding 5k or they thought they would get caught faster with lower volume to hide in. If that's the case good for them. Dealing with fraud isn't fun. I'm assuming if they continue to accept Dwolla and nothing changes they will see fraud.

Jered

tvbcof

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Quote from: nmat on July 27, 2011, 06:55:15 AM

Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

That seemed very odd to me as well.

As I hypothesized on another thread, perhaps there are NSL's involved.

http://en.wikipedia.org/wiki/National_Security_Letter

makomk

hero member

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Merit: 564

Quote from: a63ntsm1th on July 26, 2011, 11:18:52 PM

I get that part. I mean whats stoppiong TH from accepting through ACH?? Membership in some organization? A license?

The fraud risk mostly, I think. ACH transactions are very definitely reversible and have a somewhat high fraud risk attached; if TradeHill were to start accepting them directly they'd be out a lot of money they'd never see again every time a fraudster used an ACH transfer from some random victim's bank account to buy bitcoins and transferred them out. (What's more, you're not going to find any payment method that's as cheap or easy that's not also reversible: non-reversible transactions require considerably more security, which costs both money and time.)

Dwolla seemed to offer a perfect solution: they appeared to swallow the substantial fraud risk associated with accepting ACH transfers for the low, low fee of $0.25 a transaction. Of course, if it sounds too good to be true it probably is.

Mistafreeze

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Quote from: bbit on July 26, 2011, 10:47:53 PM

F.B Post regarding Dwolla's incident ?

Yup, they deleted my post. No more messages, nothing. I guess that's all the answer I needed.

westkybitcoins

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Firstbits: Compromised. Thanks, Android!

Quote from: nmat on July 27, 2011, 06:55:15 AM

Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

Maybe MtGox and CampBX are just "experienced businessmen" and just know when to be discrete (as in just keeping their mouth shut, accepting a little fraud as part of the way business is done, and keeping everyone else—including customers—in the dark about it.) Tongue

Why am I not terribly surprised?

JoelKatz

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Quote from: nmat on July 27, 2011, 06:55:15 AM

Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

We don't know. Perhaps the scammers hit TradeHill first/hardest and Dwolla doesn't yet have an answer to whether they're going to reimburse them or come up with some excuse not to.

nmat

hero member

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Dwolla and CampBX are discussing a solution to the problem and everything seems to be going fine. MtGox is ok with this (I haven't heard anything from them). Why is TradeHill the only one being ignored? This doesn't make much sense to me...

JoelKatz

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Democracy is vulnerable to a 51% attack.

Quote from: Raoul Duke on July 27, 2011, 05:51:24 AM

Regarding Dwolla's facebook page: Do you guys think that a bomb of 10k postings from different facebook users there pointing to this thread would give them any chance to delete them? Roll Eyes

That CAN be arranged! The 10k number can even be multiplied several times Wink

I would really like to see the bitcoin community to take the high road on this. We want to keep it easy for Dwolla to do the right thing and resolve this. (There's a huge market for $0.25 transactions. But they have to pass off their fraud costs. It can't work any other way.)

Raoul Duke

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Regarding Dwolla's facebook page: Do you guys think that a bomb of 10k postings from different facebook users there pointing to this thread would give them any chance to delete them? Roll Eyes

That CAN be arranged! The 10k number can even be multiplied several times Wink

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