Bitcoin Forum

Let me first introduce myself. I am Jouke Hofman, co founder and co owner of bitonic.nl . We provide an easy and fast solution to buy bitcoins in the Netherlands. We have been operating our business for just over a half year. We have done over a thousand bitcoin transactions, and that number is increasing at ever faster rates every month.

We always thought that government regulations would be the first thing that would bring us headaches. It turned out to be the banks. The software the banks use for internet banking is not as safe as one thinks. Hackers are apparently quite easy able to gain control over a banking account. They have used this control to buy bitcoins at our company.

Although this is not directly our problem, we didn’t want to make money over the backs of innocent bystanders (not all banks refund the stolen money). We spend a lot of time and money on creating a fraud detection system. We had a lot of constructive talks with a couple of the largest banks. One of them, Rabobank, seemed to be most interested in our fraud detection system and even opted to help us develop it even further. After a little while we started to hear less and less from them.

In our talks they revealed that they are expanding their own fraud detection system as well and we soon noticed its effects. Some of our regular customers reported they got “a strange error” trying to send us funds at the Rabobank. When we asked the bank about it we received a standard message that they are looking in to it.

We used other Payment service providers and bank accounts as a test. When we used those, our customers never experienced those “strange” errors. Confronted with this, the bank gave evasive answers. Apparently the Rabobank finds it easier to just block transactions to our company, than to help us make a workaround to their broken software.

They don’t just block every transaction. Transactions less than 50 euro’s make it through. So the workaround to this blockade is to tell our customers to make multiple transactions as that somehow doesn’t trigger the fraud detection. This however adds extra costs for our customers.

We are still working on somehow resolving this issue, but we wanted to tell the community about this, just to get it off our chest. As I said, we spend a lot of time and money (still are) in trying to fix the broken system of the banks and this is how they treat us.

Wow!

Good luck, and let me know if there is anything I can do to help

-Charlie, BitInstant

If my bank did this to me, Id be a very loud EX-customer. I hope your clients react the same way.

^this, don't think twice

I've been on the other side of this (writing risk analysis software). It's a really sucky situation to be the victim of false positives, but seen from their perspective, you're not a valuable customer and failing to block fraud has big consequences for them. I actually am glad to hear they are or were willing to talk to you, but don't expect answers if you ask questions like "What exactly is triggering the blocks" as obviously that's confidential information.

I hear there's a bank in France...  ;D

As are our own methods.

But there is clearly something wrong with their profiling when regular customers are suddenly subject to this blockade. We told them that we are willing to work with them in order to fine tune their software, but they said they couldn't accept this proposal because of privacy concerns.

I get why they don't have an incentive to fix it, it is not costing them money. They are however also not honest to their customers by giving vague errors. How are they supposed to know it is something they have to complain about. Also, some of our customers are not very keen to let anyone know they are buying bitcoins.

We had the exact same problem a few months ago. What happened is that the bank account we used at the time got blacklisted by the Crédit Agricole bank. As a consequence, our customers could simply not wire money anymore to us, this thread (https://bitcointalk.org/index.php?topic=101933.0) followed the issue.

That was a retarded situation. But we won and got it unlocked unconditionnally (as I said in thursday's announcement lots of the work we do is unseen).

My advice is the following : Leverage all the contacts you have there, we reported some phished bank accounts to the Crédit Agricole before getting blocked, so we had a couple phone numbers. Call these contacts, every day, I repeat every fucking day, don't let go of them, escalate the issue and talk to the boss, talk to the boss's boss. Be polite, explain politely that it's not acceptable, explain politely that you are losing business because of them, insist heavily on this fact. Insist that this absolutely not acceptable, that the issue is on their side, not yours. Remind them of how you helped them improve their security (in our case we reminded them of the money that didn't get stolen thanks to our phished accounts reports). A bank gives no shit whatsoever, but individual contacts will be embarassed, use this, insist, call again, and again, and again. Don't threaten them directly, but make it clear that it is not going to be tolerated, that a solution has to be found. That a bank can not simply shut a legitimate business down by cutting its funding. Use the embarassment of the individuals you'll have on the phone.

Call again and again. If they say they're going to get back to you ask them when, and if they don't call back you call them.

Be patient, you'll win. It took us a full month, but we won.


Yeah, and trust me, we know our shit.

I think it's important to understand what this stuff looks like from the bank's perspective and act accordingly...

From a bank's view, there is this weird thing called bitcoin, which is a very tiny little micro-community of enthusiasts. For whatever reason, people try to get bitcoins and sometimes try to do it fraudulently. As a bank, if they can just cut off payments/support to anything bitcoin-related, then they save themselves some headache and won't lose any significant business, because bitcoin is small.

^^^ that's how a bank sees this.

Of course, the truth is that the fraud is related to the old rail systems! It is the poor design of banking itself which enables the fraud, and fraud seeks out the bitcoins because Bitcoin is irreversible and far more solid, like gold. The irony then of Bitcoin is that it's so well designed that it encourages fraud everywhere on its periphery.

The banks, not realizing their own faults, then blame Bitcoin for the fraud, and they'll simply chose to shut off bitcoin services. It's not some dark conspiracy, it's just a rational response by the banks since they see bitcoin as high-risk, low-importance.

People don't even know the half of it.

All the talks we have had with banks, central bank, financial watchdogs, the companies we are customer of, journalists, etc. etc.

Thanks. We used that exact tactic when an account with serveral thoudands of euros got blocked by the PSP. They released the money and we got an excuse in the end, but it took its time .. :/



Exactly! We have got such a good product, even hackers use it.

We had a bank account with Commerzbank in Germany. They froze about €1000 and closed the account. When I called them and asked questions they would say they were not required to tell me anything and just hang up the phone. I still can't believe I would be treated that way as a customer.

Then I went to the bank branch in person. All I could get was an account statement to see the latest incoming transfers, but they insisted that the €1000 would be returned to the originating phished bank account, and that it was part of our contract with them that we should suffer the loss.

You should have fought harder, they have no right to return a bank transfer without your explicit agreement.

I had a similar issue with a German bank, I wasn't even allowed to open a bank account with them. The application was rejected for 'undisclosed reasons and the decision cannot be discussed further'. That's pretty rude.

Is that a SEPA-wide principle, and you're sure local laws cannot be different?

While i absolutely love this attitude and this method of operating, I've done it quite a few times myself, what I find is that doing it this way creates enemies, and sometimes just plain out add to me having a weaker case overall. But then again, doing nothing makes nothing happen, so perhaps some middle ground is the best way to go about it ?

Surely, if a business is not on a case, it can't expect anyone else to do the job.

Thing is, you can use this attitude and be nice at the same time, just be consistent.
"Okay, you'll look into it ? No worries at all, take your time, you understand my problem. You call me back in a week ? No problem". And a week later you call back because they won't. You don't have to be belligerant at all. When people feel you won't let it go they'll get up their asses, just to be left alone :)

Yeh? How do you know. . Bank transfers can be reversed all the time. And what is the difference a bank doing it or an account holder who requests the bank do it for what ever reason.

A very good point. I've experienced people promising me things, and then not delivering on those promises, and I call back, get a new promise, and same thing. In the end, you wonder - is this a company that you want to work with ? Perhaps sometimes it's the only choice you have.

Sounds to me like you should be using a more secure system for transacting with Rabobank .... like bitcoin network for example.  ::)

Just get them to hold a bitcoin account with you and vice versa and settle up like that.

I'm not teling i'm asking. Funny you did not get the difference . eh?

Quite a nifty shop tho. . do you do more?

Guess not and an unanswered question.  :-*

The reason people are questioning this statement is because their own banking systems will reverse a wire transfer in the case of fraud.  It's true that you can't generally reverse a legitimate wire transfer without the consent of the receiver (if you wired funds to the wrong person, for instance), but fraudulent transactions are treated differently under some banking systems.

i don't know man im pretty sure i was able to reverse a transfer. . I fact i'm pretty sure i've done it .. I ' don't know if there was a specific time limit but i'm pretty darn sure i was able to reverse a transfer  . without consent.

I dealt with banks in both France and Latvia, and always had the same experience, they'll ask you if you're ok to reverse a transfer but they won't do it without your consent. We accepted most reversals because we correctly smellt something fishy going on and locked the funds, but in one case where there was fraud we had to refuse the reversal because that would have resulted in a net loss for us (and no we didn't feel really good about that, but after all, phishing fraud is the bank's problem for having insecure systems in the first place)

Are you sure it was a wire transfer and not another type of electronic funds transfer?  Wire transfer used to be the only means to instantly put funds in someone else's bank account apart from physically depositing cash at their bank.  Many banking systems now have other means of doing that so a lot of people think that any instant transfer is a wire transfer, but that's not the case.

It didn't really sound like one, anyway the answers are here <3

This is kind of an interesting concept. Since the bank is traditionally the entity that customers trust, it's reasonable to expect that they have a sufficient level of security.

Someone conducting business through  a bank, say a bitcoin business selling bitcoins, trusts that the incoming money is legit, and thus dispatch the bitcoins. Later, when the bitcoin business gets told by the bank that it's a fraudulent purchase, and that the funds needs to be reversed, the bitcoin business has no recourse.

The bank(s) claw back their money, and leave the small bitcoin business with their loss.

A bitcoin business selling bitcoins should have some anti fraud system in place, the same should the bank, and it's only reasonable for the bank and the bitcoin business to cooperate about these anti-fraud measures, however as it's been mentioned earlier in this thread, the banks doesn't care, because bitcoin businesses may be fraud prone, and is not contributing significantly towards the bottom line.

Also I can imagine that most bitcoin businesses doesn't have the financial and legal muscles to meet a bank in court to have cases like these settled.

So from the bank's point of view, the way of least resistance is the easiest one: Reverse the transaction(s) and optionally shut down the account of the bitcoin business.

Since banks don't make much money from people who don't earn much money, as a bank if they can just impose enough fees to cause those account holders to close their accounts and go elsewhere, then they save themselves some headache and won't lose any significant business, because low income earners don't save much.

Does that seem acceptable to you?

The reason banks can't simply "cut off" these account holders is that the banking industry is protected from competition -- they are essentially granted a monopoly.  (i..e., You or I cannot start a bank [edit: even one that does not lending] because there is no way outsiders can put together the ginormous capital requirements required by the regulations).

So this is a righteous fight.  How dare they suppress a competitor in this manner.  In taking this action they are limiting my options as a consumer and as a monopoly player they can work together making it impossible for this competitor to serve its customers.

If I can open a bank next door, then I say fine let these financial dinosaurs serve their dying days milking their profitable customer base and whatever else they do, but until then we cannot allow banks to choose to serve only their most profitable customers and force the rest to go elsewhere.


Silence is acquiescence.  Thank you for not backing down.

 oh i didn't know ..

Quite the opposite in fact.

This thread cracks me up. Wasn't bitcoin created as an alternative to banks? I think Satoshi is beating his head against a wall right about now. Instead of trying to figure out how to use bitcoin with banks, figure out how to use bitcoin without banks.

My two bit-cents. :)

Unfortunately this isn't strictly true.

The recipient bank is legally obligated to honor a recall request if it believes the funds are the proceeds of crime (at least in every jurisdiction I'm familiar with).

The amount of evidence the recipient bank requires to convince them that the funds are the proceeds of crime varies wildly.

Some banks will return any transfer for months afterwards if the sender claims to have been hacked others will require substantial evidence.

Edit: I should note that Intersango's account with BZWBK is effectively blacklisted at all major .NL banks.  However customers who call the bank and insist that the transfer be made have been successful despite the blacklist.

...that aren't wires.

Banks go about substituting actual service with bullshit replacements that are "just as good" all the time, just as any other corporation.

They are required to *report* transactions if they believe the funds are of criminal origin, not return them.

OK, please fill me in with what the opposite consists of.

Well, read the thread :)

Such is done.

With lots of business practise in said field, I can assure you that banks are a pain in the ass to deal with. Most of the time a small bitcoin company doesn't have the resources to hire expensive lawyers.

Until proven otherwise, I take your statement as a load of bull.

No shit sherlock.

Who said you had to hire expensive lawyers to solve problems? A telephone is a very powerful tool when used correctly.

See the thread I linked in the first page. That's actual experience. It's in French but hey, it's 2012, so Google translate buddy.

I've used phones several times. But there's no point in discussing with people like you who clearly have a problem with civilized adult discussions. Show no respect, and talk out of your ass, and the same thing comes back to you. Next time, what about trying to answer in a polite way, I can't know what you're thinking in your mind. And I don't see what's the big problem by answering more rationally and calmly, like an adult.

I've stated facts, shown you where to check them, yet


so maybe you want to check your own tone before complaining that you can't have a "civilized adult conversation".

Very good point. The issue is liquidity. Most people consider something exchanged with fiat currency as liquid, but other assets are fairly liquid as well. It will take time for Bitcoin to become recognized as a currency unto itself. Hopefully folks will find other means of exchanging Bitcoin for assets they want. With the ability of 2-party escrow, now is the time for creative finance ideas to form. For instance, I imagine private lenders like pawn shops can form networks to provide competitive lending for higher risk customers.

On the other hand, Bitcoin is an opportunity for banks to be competitive. Eventually the bailout money will run dry and banks will be forced to work for their paychecks. Bitcoin will look better to them by cutting administration costs.

You're quoting me out of context, to make your self look good. Well, good luck with your further discussion in this thread.

Ok champ, whatever, I shared my experience with the OP, he said it was helpful, so I'm happy about it. Have a good one.

Just read about some bank called Deutsche bank and about some kind of police raid.

Source or it didn't happen.  ;)

Quite easy to spot...

http://mediacenter.dw.de/english/video/item/767549/German_police_raid_Deutsche_Bank/

http://economictimes.indiatimes.com/news/international-business/police-raid-deutsche-bank-in-tax-fraud-probe-company/articleshow/17586699.cms

http://www.france24.com/en/20121212-police-raid-deutsche-bank-tax-fraud-probe

http://www.ft.com/cms/s/0/66d8a6be-4447-11e2-952a-00144feabdc0.html#axzz2ErtWW2AL

Hey, I just received a handwritten christmas card from the branch leader. They have humor.

Sounds like a thread or wiki entry summerising and ranking the various banks is needed.

While there is a lot to cover if we can identify the least worst that will be very useful. The SEPA zone is at least a good example of competition.

UK:
Last seen Intersango with Metrobank following dumping Lloyds.

Here's the list:

ALL BANKS SUCK!

Use bitcoin instead.

 ;D