Bitcoin Forum

Economy => Trading Discussion => Topic started by: lacedwithkerosene on July 25, 2011, 11:47:41 PM



Title: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: lacedwithkerosene on July 25, 2011, 11:47:41 PM
Discuss in here.

Story broken on Bruce Wagner's show.

2.5 % of their volume reversed. Dwolla won't respond to their inquiries.

TradeHill dropping Dwolla deposits for the time being.

TradeHill responding in their own thread: http://forum.bitcoin.org/index.php?topic=31753.0


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Keyur @ Camp BX on July 26, 2011, 12:10:50 AM
Dwolla scandal update: Camp BX is not affected by this, and every dollar is accounted for.

Hoping the same for other Bitcoin sites!

Thank you,
     Keyur
     www.CampBX.com


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: EarlyAdopter on July 26, 2011, 12:13:34 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 12:27:47 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

that's what everyone thought, apparently dwolla changed their ToS without any notice


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: geek-trader on July 26, 2011, 12:28:19 AM
Dwolla is still in the list for withdrawals at TH


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bbit on July 26, 2011, 12:28:48 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

More like Dwolla is playing games saying something has cleared but it hasn't in order to cover their ass's!


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: geek-trader on July 26, 2011, 12:30:25 AM
"Contact Us" on dwolla's site is a 404


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 12:32:47 AM
actually Dwolla doesn't have any tos, but they added this today:
http://help.dwolla.com/customer/portal/articles/99253-if-a-transaction-was-reversed-what-can-i-do-


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bbit on July 26, 2011, 12:33:19 AM
"Contact Us" on dwolla's site is a 404


Yep, just noticed that!


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Donald_Norman on July 26, 2011, 12:36:44 AM
Intersango.us hasn't been affected by this as we have just opened. We are a free service and treading carefully. We are run by the same guys that have been running Britcoin.co.uk


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 12:38:58 AM
We're open to discuss this with everyone. It's unfortunate and we want to fix the situation.

The name we used as an example in the onlyonetv.com video was identified to us as a person who's account had been closed by Dwolla and had scammed us.


We have spoken with Dwolla multiple times and they assured us that if we receive a CSV or email showing credited that it will not change.

This is clearly not the case and we are asking Dwolla to make this right.


Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 12:40:18 AM
Intersango.us hasn't been affected by this as we have just opened. We are a free service and treading carefully. We are run by the same guys that have been running Britcoin.co.uk

Donald,

You've got my contact info. You're a good guy and we would be happy to speak with you and pass on all the information we have regarding fraud and Dwolla.
If we can help prevent them from taking advantage we will.

Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: eck on July 26, 2011, 12:41:47 AM
So I understand that Dwolla deposits are disabled, but what about withdrawals? If I request a Dwolla withdrawal right now, will that be processed?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: elements on July 26, 2011, 12:44:17 AM
+1 for the title

I guess a new term is in order: dwollad!



Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 12:47:08 AM
So I understand that Dwolla deposits are disabled, but what about withdrawals? If I request a Dwolla withdrawal right now, will that be processed?

Yes.

Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: julz on July 26, 2011, 12:58:32 AM
So from a bank's perspective - if they have what appears to be a valid legal claim (affidavit?) that a transaction was fraudulent, I guess they work on the basis that the merchant will have the relevant information as to who actually initiated the transaction and so is best positioned to follow it up.

Now I know most people like the idea of collecting minimal information about customers - but given the way the banking system works, isn't it in the best interest of the exchanges  to collect enough personal/business information that they could follow up with a debt collection agency/credit reporting agency if necessary?

Ultimately there may be ways to get your BTC more anonymously (face to face etc) - but I don't see that it's necessary for exchanges to treat incoming fiat transactions as if they only need an email address as identification.

It's a slight privacy concern that an exchange has more personal data - but if you're using bank accounts etc to transfer funds in/out you're not exactly anonymous from a law-enforcement agency anyway - and really.. do most of us need to be anonymous  for  bitcoin acquisition/offloading purposes?






Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 01:09:08 AM
So from a bank's perspective - if they have what appears to be a valid legal claim (affidavit?) that a transaction was fraudulent, I guess they work on the basis that the merchant will have the relevant information as to who actually initiated the transaction and so is best positioned to follow it up.

Now I know most people like the idea of collecting minimal information about customers - but given the way the banking system works, isn't it in the best interest of the exchanges  to collect enough personal/business information that they could follow up with a debt collection agency/credit reporting agency if necessary?

Ultimately there may be ways to get your BTC more anonymously (face to face etc) - but I don't see that it's necessary for exchanges to treat incoming fiat transactions as if they only need an email address as identification.

It's a slight privacy concern that an exchange has more personal data - but if you're using bank accounts etc to transfer funds in/out you're not exactly anonymous from a law-enforcement agency anyway - and really.. do most of us need to be anonymous  for  bitcoin acquisition/offloading purposes?


+1

right now it looks like anonymity works in favor for scammers knowing they can pull this shit without any consequences


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: jackjack on July 26, 2011, 01:16:24 AM
+1 for the title

I guess a new term is in order: dwollad!


;D


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: sequence on July 26, 2011, 01:23:23 AM
Can someone make the issue clear please   ;D I still don't get fully what happened and I didn't see Anything on tradehills website.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bitcon on July 26, 2011, 01:28:13 AM
Dwolla suspended my account that had over $400 in it and now my money is gone.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: JoelKatz on July 26, 2011, 01:28:16 AM
So from a bank's perspective - if they have what appears to be a valid legal claim (affidavit?) that a transaction was fraudulent, I guess they work on the basis that the merchant will have the relevant information as to who actually initiated the transaction and so is best positioned to follow it up.
That's ridiculous. Dwolla interacted with the party that supplied the money and the party that claimed the transaction was fraudulent, they are in the best position to figure out pusue the claims. The merchant had no contact whatsoever with the money source except through Dwolla. The merchant didn't necessarily ever interact with anyone.

The fraud claim must be that the person who initiated the transfer (who interacted only with Dwolla) wasn't authorized to perform the transfer by the person who owned the funds (who interacted only with Dwolla). Who does the merchant follow up with? Two people he interacted with only through Dwolla?

I don't see anything in their user agreement that says that can reverse transactions. Dwolla has gone, in my opinion, from useful to useless. I'll raise my opinion of them a bit if I see what information they provided when they reversed a transaction. If the released literally all information they had from both contacts, I'll revise my opinion a bit.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: tvbcof on July 26, 2011, 01:28:36 AM
right now it looks like anonymity works in favor for scammers knowing they can pull this shit without any consequences

I would trade security for anonymity (preferring the latter.)

I have been prepared to get ripped off on all of the perhaps 20 or 30 of the BTC purchases I have done so far.  I break my purchases into a fraction of the total I want, and keep that fraction to something I can afford to lose.  So far I have not been ripped off.

When I spend BTC I will be similarly prepared to get ripped off.  I've spent significant time researching the providers of certain services I want.  When I have time to deal with the fallout of acquiring the services (VPS, DNS, etc) I'll balance between the vendor's reputation and whatever other details I can find.  And I'll be prepared to be ripped off anyway.

To me BTC is a brave new world.  I am comfortable with the things I lose vs. the things I gain when compared to Visa, PayPal, etc.  So, no complaints.  My attitude tends to be along the lines of "If you can't stand the heat, stay out of the kitchen.", but I can certain understand and empathize with those who don't share this attitude.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: sequence on July 26, 2011, 01:32:56 AM
Dwolla suspended my account a long time ago they don't "f " around!  If they suspect fraud and u are innocent... call them , email them , and call them some more its the only way!


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 26, 2011, 01:38:34 AM
Well, this is a huge black eye to the entire bitcoin community.

I'm grateful this happened before my meetings with the local bankers.

I sincerely hope Dwolla straightens this out quickly and publicly.

EDIT:
*************
Please make me feel you are "doing the right thing" in reference to the following line of discussion in the bitcoin community.

http://forum.bitcoin.org/index.php?topic=31712.0

I am a relatively new client of yours and I used your services to interact with TradeHill, among others. I am at this moment extremely nervous about using your services unless and until this matter is cleared up.

Thank you
************

Posted both as an open question and "emailed" to the following link:

http://help.dwolla.com/customer/portal/emails/new


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: mc_lovin on July 26, 2011, 01:40:42 AM
Dwolla scandal update: Camp BX is not affected by this, and every dollar is accounted for.

Hoping the same for other Bitcoin sites!

Thank you,
     Keyur
     www.CampBX.com


+1 for CampBX!  Sucks that scandals reduce the bitcoin value, though.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 26, 2011, 01:51:36 AM
Dwolla scandal update: Camp BX is not affected by this, and every dollar is accounted for.

Hoping the same for other Bitcoin sites!

Thank you,
     Keyur
     www.CampBX.com


Of course you are affected by this foolishness, because at this moment I don't dare try to send you any more funds as I was planning to do.

What other method do you propose I use that costs and acts about the same?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: julz on July 26, 2011, 01:55:29 AM
So from a bank's perspective - if they have what appears to be a valid legal claim (affidavit?) that a transaction was fraudulent, I guess they work on the basis that the merchant will have the relevant information as to who actually initiated the transaction and so is best positioned to follow it up.
That's ridiculous. Dwolla interacted with the party that supplied the money and the party that claimed the transaction was fraudulent, they are in the best position to figure out pusue the claims. The merchant had no contact whatsoever with the money source except through Dwolla. The merchant didn't necessarily ever interact with anyone.

The fraud claim must be that the person who initiated the transfer (who interacted only with Dwolla) wasn't authorized to perform the transfer by the person who owned the funds (who interacted only with Dwolla). Who does the merchant follow up with? Two people he interacted with only through Dwolla?

I don't see anything in their user agreement that says that can reverse transactions. Dwolla has gone, in my opinion, from useful to useless. I'll raise my opinion of them a bit if I see what information they provided when they reversed a transaction. If the released literally all information they had from both contacts, I'll revise my opinion a bit.

Sure - In this case - Dwolla is the merchant.
(edit: the customer effectively  purchased 'dwolla'  - so I agree with you.)


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 02:33:46 AM
So from a bank's perspective - if they have what appears to be a valid legal claim (affidavit?) that a transaction was fraudulent, I guess they work on the basis that the merchant will have the relevant information as to who actually initiated the transaction and so is best positioned to follow it up.
That's ridiculous. Dwolla interacted with the party that supplied the money and the party that claimed the transaction was fraudulent, they are in the best position to figure out pusue the claims. The merchant had no contact whatsoever with the money source except through Dwolla. The merchant didn't necessarily ever interact with anyone.

The fraud claim must be that the person who initiated the transfer (who interacted only with Dwolla) wasn't authorized to perform the transfer by the person who owned the funds (who interacted only with Dwolla). Who does the merchant follow up with? Two people he interacted with only through Dwolla?

I don't see anything in their user agreement that says that can reverse transactions. Dwolla has gone, in my opinion, from useful to useless. I'll raise my opinion of them a bit if I see what information they provided when they reversed a transaction. If the released literally all information they had from both contacts, I'll revise my opinion a bit.

Sure - In this case - Dwolla is the merchant.
(edit: the customer effectively  purchased 'dwolla'  - so I agree with you.)

If Dwolla steps up, comes clean and makes a clear statement if their transfers are reversible or not then we may be able to continue doing business with them.
At this point I would be weary as a merchant.

I'm trying to consolidate the Dwolla reversal issues in to this thread http://forum.bitcoin.org/index.php?topic=31753.0 (http://forum.bitcoin.org/index.php?topic=31753.0) or comments on our blog at www.tradehillblog.com (http://www.tradehillblog.com) so we can respond to as many questions as possible.

Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Aggro on July 26, 2011, 03:21:37 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

that's what everyone thought, apparently dwolla changed their ToS without any notice

You thought wrong. Everything based in the US can (and will) be reversed if it is fraudulent. Even if it is not, if the customer complains to his/her bank, etc... things will get reversed.

This is exactly why we don't take credit card payments, nor any other payment than international wire transfers when we sell e-currencies.

Roberto


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Aggro on July 26, 2011, 03:23:40 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

that's what everyone thought, apparently dwolla changed their ToS without any notice

Actually, they had a "dispute resolution" service from the get go. When there is dispute resolution, there is the chance for chargeback. The other day I saw an article tittled "Dwolla passes the million dollar a day". As soon as I read that, my initial thought was the bigger they get, the more like paypal they will become. They have to actually, they have no other choice operating out of the US.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 03:27:44 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

that's what everyone thought, apparently dwolla changed their ToS without any notice

You thought wrong. Everything based in the US can (and will) be reversed if it is fraudulent. Even if it is not, if the customer complains to his/her bank, etc... things will get reversed.

This is exactly why we don't take credit card payments, nor any other payment than international wire transfers when we sell e-currencies.

Roberto


It's fine you have chargebacks but don't list non-reversible transactions as one of your features. http://www.dwolla.org/blog/retail-merchants-rejoice-web-kiosk-online/ (http://www.dwolla.org/blog/retail-merchants-rejoice-web-kiosk-online/)


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Aggro on July 26, 2011, 03:42:25 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

that's what everyone thought, apparently dwolla changed their ToS without any notice

You thought wrong. Everything based in the US can (and will) be reversed if it is fraudulent. Even if it is not, if the customer complains to his/her bank, etc... things will get reversed.

This is exactly why we don't take credit card payments, nor any other payment than international wire transfers when we sell e-currencies.

Roberto


It's fine you have chargebacks but don't list non-reversible transactions as one of your features. http://www.dwolla.org/blog/retail-merchants-rejoice-web-kiosk-online/ (http://www.dwolla.org/blog/retail-merchants-rejoice-web-kiosk-online/)


Jared,

Don't get me wrong. I am 100% with you. I always felt that Dwolla was sort of a hack kind of put together half assed. They grew up too fast and a couple of scammers quickly wised up on how to get free money. I was reading at that article somebody posted here. It starts like this:

"If a transaction on your account has been reversed it is possible one of the following scenarios has occurred:

1. The-sending party has filed a dispute with their bank, which has resulted in an automatic reversal of a transaction."

Anybody that banks in the US knows how INCREDIBLY EASY is to reverse an ACH transfer. More or less, you just pick up the phone and go "I didn't authorized it / I am not happy with the service and/or product I bought / I changed my mind / my cat is sick and I would rather use the money on that :) ) and the list goes on.

The possibilities to scam like this are ENDLESS. I have been exchanging e-currencies since before bitcoin was only a thought :) and I have learned my lesson. We have been scammed with transfers from $100 to 65,000 which we are still battling in a european court.

Here is an example of something that can be done with Dwolla (this was done to us with a direct bank transfer in the UK):

Joe is a scammer. Joe lists a car for sale on ebay. Martin likes the car and wants to buy it. Joe instructs Martin that he receives payment only through Dwolla. Joe instructs Martin to pay for the car through Dwolla to his account on Tradehill. Of course Martin does not know anything about bitcoin/tradehill/etc, so he goes with the instructions Martin gave him and happily pays Joe through Dwolla. Joe get's the money credited in Tradehill, buys bitcoins, withdraw, and then .... GOOD LUCK finding Martin and / or the car!!

This has actually happened to us. Replace dwolla with Barclays bank and bitcoin with Liberty Reserve (100% irrevocable). We lost the funds (because there was a crime involved) and on top of everything had to spend a lot of time providing information and answering questions to the police.







Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: JoelKatz on July 26, 2011, 03:46:39 AM
You thought wrong. Everything based in the US can (and will) be reversed if it is fraudulent. Even if it is not, if the customer complains to his/her bank, etc... things will get reversed.
The issue is *what* gets reversed. Sure, the bank transaction can get reversed. The issue is whether the Dwolla transaction can be reversed. Dwolla says no.

Say you have a piece of furniture you want to sell on consignment. You put it in a consignment shop for $400. The agreement with the shop is you get $350 if it's sold. Then one day the shop says, "Sorry, we sold your furniture but the transaction was reversed. So you're out $350. Oh, and we're not going to give you any more details. Sorry about your furniture."

Sure, the credit card transaction can be reversed. But unless the consignment shop had some agreement that explicitly made you liable in that case, that's between them and their bank. Dwolla is acting like the consignment shop trying to get the money back from the furniture owner just because they were defrauded.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 03:50:10 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

that's what everyone thought, apparently dwolla changed their ToS without any notice

Actually, they had a "dispute resolution" service from the get go. When there is dispute resolution, there is the chance for chargeback. The other day I saw an article tittled "Dwolla passes the million dollar a day". As soon as I read that, my initial thought was the bigger they get, the more like paypal they will become. They have to actually, they have no other choice operating out of the US.

Anyone operating in US under money transmitting business license will have reversible procedures in place for buyer protection against fraud. I was unbelievably surprised when I heard of Dwolla service with their claim to have no chargebacks as a benefit for merchants.

I guess for non reversible USD transactions in US only way to go is to use wire transfers, I'm not even so sure about checks, unless it's certified check which costs more than domestic wire and only ensures that specific amount is available for deposit. and maybe money orders (welcome back to 90s)


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 03:57:17 AM
Aurumxchange,

I agree with you 100% and chargebacks are always going to be a problem when you deal with products or services that are non reversible.


All we ask and I assume everyone can agree:

1) If chargebacks exist don't claim your payment is non reversible
2) If you're doing a chargeback tell the merchant. Don't just debit the account and then act like it didn't happen.

All it takes is clear communication.


Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: RandyFolds on July 26, 2011, 04:01:56 AM
Man, this is ultra-scandalous. Another case of amateur hour getting too big for their britches?

Dwolla is bleeding rep like a stuck pig right now and they haven't said a damn thing to stem the flow. I am very interested for them to weigh in and make good with TradeHill...speaking of which, I applaud your announcements and attempts to save other exchanges and us consumers from the same BS. I think everyone here fully supports you.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: JoelKatz on July 26, 2011, 04:04:16 AM
Anyone operating in US under money transmitting business license will have reversible procedures in place for buyer protection against fraud.
The issue isn't Dwolla protecting the buyer from fraud. They can certainly do that if they want to by refunding their money. That's not what happened here.

It looks like this:

Scammer <- Transaction A -> Dwolla <- Transaction B -> TradeHill

Now, if Dwolla wants to reverse transaction A due to fraud to protect the buyer, they certainly can. But there's no fraud in transaction B, and Dwolla has no grounds to reverse *that* transaction.


Quote
I was unbelievably surprised when I heard of Dwolla service with their claim to have no chargebacks as a benefit for merchants.
Exactly. The whole point of Dwolla is that TradeHill doesn't have to go through the risk and expense of entering into a transaction with a possible scammer. They can just take Dwolla and deal only with Dwolla. I sincerely hope that this was simply a mistake on Dwolla's part and they'll correct it immediately as soon as they can. Otherwise, they've just eliminated their entire purpose.

And I agree with RandyFolds amateur hour comment. I don't see how Dwolla can exist on just 25 cents per transaction. If one out of ten thousand transactions is fraudulent, they'll go broke. Dwolla's business model seems impossible to me. They've agreed to take the entire fraud risk, and yet they don't charge enough to cover those costs.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 04:04:49 AM
Man, this is ultra-scandalous. Another case of amateur hour getting too big for their britches?

Dwolla is bleeding rep like a stuck pig right now and they haven't said a damn thing to stem the flow. I am very interested for them to weigh in and make good with TradeHill...speaking of which, I applaud your announcements and attempts to save other exchanges and us consumers from the same BS. I think everyone here fully supports you.

Thanks Randy. Hopefully the other exchanges can learn from this and be on the lookout for it. A lot of our funds come in through Dwolla, that should be enough for credibility alone.
The support we're receiving has been motivating.

Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bitcon on July 26, 2011, 04:09:38 AM
i don't know about anyone else, but this is conjuring feelings of being GOXED all over again...........


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Trader Steve on July 26, 2011, 04:10:04 AM
Dwolla scandal update: Camp BX is not affected by this, and every dollar is accounted for.

Hoping the same for other Bitcoin sites!

Thank you,
     Keyur
     www.CampBX.com


+1 for CampBX!  Sucks that scandals reduce the bitcoin value, though.

This actually illustrates the fact that bitcoin is a superior currency - people will lie, cheat and steal to get it. Dwolla has shown its' inferiority in this regard because it is reversible.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 04:11:32 AM
@Tradehill

Love your service and I feel for you man...

BUT

Seriously, if you shut off Dwolla as a means to withdraw USD from Trade Hill, you're game over.

True you're number two but I do believe MTGOX is the number one customer. As far as MTGOX making any statement, given their recent problems, they would eat this and remain quiet before they would bring this on them.

I realize that $37K or 2642 BTC is a chunk to say the least. However, the damage you are doing to yourself and Bitcoin in general far exceeds that amount by a factor of ten, which may be the entire purpose of the attack to begin with.

Wishing you the best and will continue to use your service until you drop outbound Dwolla transfers.

BCX

Thanks for the support BCX.

It could be game over if we shut off Dwolla but we're risking a lot by keeping it up. If we don't cut it off (until they fix it) then we are risking fraud and more importantly sacrificing our principals.
I believe continuing to use this and hide the fraud could eventually do more damage to Bitcoin. I can forgive Gox getting hacked. I can't see them hiding fraud. I think they either don't know or aren't being defrauded.
If they are and they're covering it up then that is beyond inexcusable and I will be very disappointed.

We're open to work with Dwolla and hopefully we can get this all straightened out. Outgoing Dwolla transfers should be fine.

Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 04:13:46 AM
Anyone operating in US under money transmitting business license will have reversible procedures in place for buyer protection against fraud.
The issue isn't Dwolla protecting the buyer from fraud. They can certainly do that if they want to by refunding their money. That's not what happened here.

It looks like this:

Scammer <- Transaction A -> Dwolla <- Transaction B -> TradeHill

Now, if Dwolla wants to reverse transaction A due to fraud to protect the buyer, they certainly can. But there's no fraud in transaction B, and Dwolla has no grounds to reverse *that* transaction.


Quote
I was unbelievably surprised when I heard of Dwolla service with their claim to have no chargebacks as a benefit for merchants.
Exactly. The whole point of Dwolla is that TradeHill doesn't have to go through the risk and expense of entering into a transaction with a possible scammer. They can just take Dwolla and deal only with Dwolla. I sincerely hope that this was simply a mistake on Dwolla's part and they'll correct it immediately as soon as they can. Otherwise, they've just eliminated their entire purpose.

You are right, and i'm totally with you on this. Current chargeback/dispute system can be easily abused by buyers and they are well aware of this.
Although I don't think there was a mistake and that Dwolla will make it right. They don't even have any Terms of Service on their site. They want to be like paypal with cheaper fees and will do anything to protect their business which puts them in position to bend over to buyers and screw merchants without significant due diligence. I hope I'm wrong.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: NamelessOne on July 26, 2011, 04:18:58 AM
i don't know about anyone else, but this is conjuring feelings of being GOXED all over again...........

That's the point I was trying to get across to Jered aka Tradehill.

Customer's accounts were not affected, so why make it public other than trying to place pressure on Dwolla. It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

Bitcoin didn't need this and this wasn't thought out very well.



In a way, the more I think about it, the more I get pissed.

BCX


I have the same thoughts. Things were getting into rally mode and this could seriously mess things up.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Trader Steve on July 26, 2011, 04:20:21 AM
i don't know about anyone else, but this is conjuring feelings of being GOXED all over again...........

That's the point I was trying to get across to Jered aka Tradehill.

Customer's accounts were not affected, so why make it public other than trying to place pressure on Dwolla. It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

Bitcoin didn't need this and this wasn't thought out very well.



In a way, the more I think about it, the more I get pissed.

BCX

This was the only way to get Dwolla's attention and sound the alarm to others who might get hurt. It actually illustrates how bitcoin is the superior currency - no chargebacks. It's not bitcoin's or TradeHill's fault if Dwolla is lame. I'm glad they exposed this now before the damage became worse. Again, this illustrates the superiority of bitcoin to other currencies - some people will lie, cheat and steal to get some.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 04:22:42 AM
i don't know about anyone else, but this is conjuring feelings of being GOXED all over again...........

That's the point I was trying to get across to Jered aka Tradehill.

Customer's accounts were not affected, so why make it public other than trying to place pressure on Dwolla. It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

Bitcoin didn't need this and this wasn't thought out very well.



In a way, the more I think about it, the more I get pissed.

BCX

Bitcoins didn't fuck anyone.

I'm actually glad that TH brought it up. Thing about Bitcoin project - it solves problems, just one more problem to learn how to deal with. without this announcement more exchanges could have been screwed and also puts in to perspective acceptance of ACHs for anyone whoever considered using them.  If TH could not get Dwolla to respond to them and work out these issues, TH had all rights to go public with this announcement.
Bitcoin will survive.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Trader Steve on July 26, 2011, 04:30:43 AM

Quote

Customer's accounts were not affected, so why make it public other than trying to place pressure on Dwolla. It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

This is more of a Dwolla scandal than a bitcoin scandal. Dwolla is the business that appears to be acting negligently (or even fraudulently) and TradeHill (among others) is the primary victim.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: rainingbitcoins on July 26, 2011, 04:37:56 AM
Again, this illustrates the superiority of bitcoin to other currencies - some people will lie, cheat and steal to get some.

So... people won't lie, cheat, and steal to get dollars, pounds, or euros? Interesting!


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Nefario on July 26, 2011, 04:41:35 AM
The problem is bitcoin is a hard currency, and any attempts to hook it up to the soft currency system (a.k.a. banks where almost everything can be charged back) means that there are going to be gaps created that people will take advantage.

This is an issue/problem with the current banking system, a lot of the fraud that happens today is only possible because of the current broken banking system.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 04:42:18 AM

Quote

Customer's accounts were not affected, so why make it public other than trying to place pressure on Dwolla. It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

This is more of a Dwolla scandal than a bitcoin scandal. Dwolla is the business that appears to be acting negligently (or even fraudulently) and TradeHill (among others) is the primary victim.

Exactly, Dwolla advertised no chargebacks as benefit for merchants and effectively started reversals without even notifying the merchant.  I hope TH seeks legal counsel.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Trader Steve on July 26, 2011, 04:43:09 AM
Quote

So... people won't lie, cheat, and steal to get dollars, pounds, or euros? Interesting!

I did not say that. Sorry if you got that impression. My point is that bitcoin is head and shoulders above Dwolla.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: FreeMoney on July 26, 2011, 04:48:25 AM
I don't get how this is about Bitcoin at all. One company that doesn't even use Bitcoins made a promise, now we wait and see if they keep it. It seems obvious that Dwolla would get scammed from time to time, their promise of not passing on the chargeback is what made them valuable.

I don't see why TH waited two weeks. Not because they have some obligation to tell us that they might be getting ripped off by Dwolla, but because I would stop accepting Dwolla the first time it happened if I didn't get a response from Dwolla. How can you go on bleeding money like that? I don't see how you can reliably stop it from happening, I'm under the impression that normal confirmed transactions are just being pulled back. How can you tell which to believe now?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: hugolp on July 26, 2011, 04:51:18 AM

Quote

This was the only way to get Dwolla's attention and sound the alarm to others who might get hurt. It actually illustrates how bitcoin is the superior currency - no chargebacks. It's not bitcoin's or TradeHill's fault if Dwolla is lame. I'm glad they exposed this now before the damage became worse. Again, this illustrates the superiority of bitcoin to other currencies - some people will lie, cheat and steal to get some.


The few people that know what Bitcoin is will understand this, but the 99% of people that will read the stories that will run internet wide over the next few days will not. Tradehill is going to be portayed as weak in security and run by amateurs with Bitcoin being hailed as a scam.

The only possible motive to air this out was to put pressure on Dwolla. Customer's accounts were not affected. By Jered's owm admission they have been dealing with this for two weeks. This was a bad "Chess Move".....

I seriously have concerns with an exchange that claims to do millions with Dwolla cannot float $37K for the better of Bitcoin as a whole.

I would have no problem with Trade Hill airing this if it affected customers but it didn't.

Trade Hill simply could have said there were issues with Dwolla transfers in and left it at that.

Bad move Jered, this is going to bite you back hard.

BCX

I dont see either how this is going to be spin off as a Bitcoin failure. Its a failure of Dwolla, a dollar service.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: JoelKatz on July 26, 2011, 04:51:53 AM
Customer's accounts were not affected,
What about customers who need to make deposits using Dwolla?

Quote
so why make it public other than trying to place pressure on Dwolla.
Pressure needs to be placed on Dwolla if they fail to do what they said they would do and what others relied on them to do.

Quote
It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

Bitcoin didn't need this and this wasn't thought out very well.
What do you want TradeHill to do about it? People may have made commitments to buy things with bitcoins and now they can't do it because of Dwolla. Should TradeHill just say "We're not taking Dwolla anymore. Sorry if you relied on us." when it's not their fault?

Quote
In a way, the more I think about it, the more I get pissed.
What should TradeHill have done exactly? Continued to take Dwolla? Secretly stopped taking Dwolla?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jaime Frontero on July 26, 2011, 04:54:24 AM
dwolla is behaving poorly.

i note that - while earlier today their 'contact us' page went to a 404, it now redirects to their home page.

clearly, they're in a very serious damage-control mode.

i can't help but wonder what their contacts with the banking community and the feds have been like.  methinks they are a surrogate victim for Bitcoin.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: RandyFolds on July 26, 2011, 04:55:16 AM


I seriously have concerns with an exchange that claims to do millions with Dwolla cannot float $37K for the better of Bitcoin as a whole.

I would have no problem with Trade Hill airing this if it affected customers but it didn't.

Trade Hill simply could have said there were issues with Dwolla transfers in and left it at that.

Bad move Jered, this is going to bite you back hard.

BCX

Are you joking? TradeHill should eat a $37,000 theft...for Bitcoin? As a favor to us? Why don't you float that $37,000 for Bitcoin? You will be the hero of the bitcoin exchanges.

This does affect customers. If you can't see how, I am not going to waste my time explaining it to you.

They could have glossed over the problem and left us in the dark, much as Dwolla is doing, but instead, TH did the honorable thing. I highly, highly doubt that showing his integrity will come back to bite him in the end...


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Keyur @ Camp BX on July 26, 2011, 04:56:47 AM
A quick update:

      We proposed a 3-point solution to make rollback risk more manageable going forward, and Dwolla has shown willingness to implement all 3 by end of the week.  We take this as a very positive sign, so we are continuing to accept Dwolla deposits.

I will share more details after we tie-in over a phone call tomorrow.

Thank you,
      Keyur




Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: JoelKatz on July 26, 2011, 04:56:51 AM
They could have glossed over the problem and left us in the dark, much as Dwolla is doing, but instead, TH did the honorable thing. I highly, highly doubt that showing his integrity will come back to bite him in the end...
+1.

Watch TH to see how reputable companies handle their problems.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 05:03:12 AM
A quick update:

      We proposed a 3-point solution to make rollback risk more manageable going forward, and Dwolla has shown willingness to implement all 3 by end of the week.  We take this as a very positive sign, so we are continuing to accept Dwolla deposits.

I will share more details after we tie-in over a phone call tomorrow.

Thank you,
      Keyur




Good news, hopefully good thing will come out after all of this and Dwolla makes it right with TH too
keep us posted! Thank you!


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 05:04:32 AM
Quote
Hugolp
I dont see either how this is going to be spin off as a Bitcoin failure. Its a failure of Dwolla, a dollar service.


Regardless if true or not, The Bitcoin haters and the media in general will more than happy to run the headlines

"Another Bitcoin Major Exchanged Gets Hit"

" How Safe is Bitcoin When Primary Exchanges Are Victims"

"Another Bitcoin Scam".....


Trade Hill sat on this for two weeks, this has zero to do with notifying other exchanges, that has more than likely been done privately. It's about public pressure that is going to back fire. Dwolla isn't going to take a hit on this other than the several hundred people here on this forum.

Bitcoin and Trade Hill with take a hit Internet wide.


BCX



Your posts are more damaging, I will make a note not to use your services.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bitcon on July 26, 2011, 05:08:15 AM
if Bitcoin is the enemy in the eyes of the Centralized banking system, and the banking system cannot attack bitcoin directly, so they will try to attack middlemen such as Dwolla. destroying the middleman and the Credibility of Bitcoin in the process.

sit back and wait for more.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: jgarzik on July 26, 2011, 05:10:51 AM
Seriously, if you shut off Dwolla as a means to withdraw USD from Trade Hill, you're game over.

I doubt that is a big issue.

It is transfers going in the other direction -- deposits -- where scammers can cause problems.

Generally, going from bitcoins -> { something else } is pretty easy.  I'm surprised that mtgox, TradeHill and others have not bothered with PayPal as a withdrawal method.  Paying with PayPal is certainly safe, and the exchange's account would be 100.0% fraud-free.



Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: hugolp on July 26, 2011, 05:10:55 AM
Quote
Hugolp
I dont see either how this is going to be spin off as a Bitcoin failure. Its a failure of Dwolla, a dollar service.


Regardless if true or not, The Bitcoin haters and the media in general will more than happy to run the headlines

"Another Bitcoin Major Exchanged Gets Hit"

" How Safe is Bitcoin When Primary Exchanges Are Victims"

"Another Bitcoin Scam".....


Trade Hill sat on this for two weeks, this has zero to do with notifying other exchanges, that has more than likely been done privately. It's about public pressure that is going to back fire. Dwolla isn't going to take a hit on this other than the several hundred people here on this forum.

Bitcoin and Trade Hill with take a hit Internet wide.


BCX

Honestly, if they did that it would be even possitive. It could be easily taken back to them to show that the press has an anti-bitcoin bias and get people interested into why they have such bias so they learn about Bitcoin.

It would be a very bad move from them and very good for us.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bitcon on July 26, 2011, 05:16:48 AM
Seriously, if you shut off Dwolla as a means to withdraw USD from Trade Hill, you're game over.

I doubt that is a big issue.

It is transfers going in the other direction -- deposits -- where scammers can cause problems.

Generally, going from bitcoins -> { something else } is pretty easy.  I'm surprised that mtgox, TradeHill and others have not bothered with PayPal as a withdrawal method.  Paying with PayPal is certainly safe, and the exchange's account would be 100.0% fraud-free.



yeah, paypal wants to see bitcoin succeed.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: JoelKatz on July 26, 2011, 05:17:01 AM
I am talking about reality and in the "Reputation" world, truth has nothing to do with a good reputation.
Short term, you are right. But long term, you are wrong. Protecting your reputation is a really lousy reason for doing the wrong thing. Eventually, you just get a well-deserved reputation for doing the wrong thing.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Nagle on July 26, 2011, 05:20:17 AM
I thought Dwolla can't be reversed? (I've never used it and don't know much about it)
that's what everyone thought, apparently dwolla changed their ToS without any notice
Dwolla doesn't have published terms of service. Which means the standard Uniform Commercial Code provisions apply. Those don't usually allow for repudiation because of a third party default. It's Dwolla's problem to find the party and collect from them.
<p>
That's the problem with dealing with a pseudo-bank company that's really a couple of guys in a shared hacker space in Iowa. They may not have the financial resources to deal with their own problems.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 05:22:16 AM
@Serge

I am the user BitcoinEXpress, I have zero to do with Camp BX.

Let me make this clear, I think Trade Hill is a straight up service run by straight people.

I am talking about reality and in the "Reputation" world, truth has nothing to do with a good reputation.


This will be spun as a Bitcoin failure, tomorrow when you see the stories you will realize it would have been better for Trade Hill to continue to negotiate quitely for their $37K.

That's all I saying.

Once again, I am not Camp BX.


who said anything about you being campbx?  i responded to Keyur and to you in separate replies. Other than making stupid headlines for media to pickup can't your read? Your posts in this thread been more damaging than anything else.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bitcon on July 26, 2011, 05:25:25 AM
market to be down 10% by this time tomorrow.  any side bets?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Serge on July 26, 2011, 05:29:32 AM
@Serge

I am the user BitcoinEXpress, I have zero to do with Camp BX.

Let me make this clear, I think Trade Hill is a straight up service run by straight people.

I am talking about reality and in the "Reputation" world, truth has nothing to do with a good reputation.


This will be spun as a Bitcoin failure, tomorrow when you see the stories you will realize it would have been better for Trade Hill to continue to negotiate quitely for their $37K.

That's all I saying.

Once again, I am not Camp BX.


who said anything about you being campbx?  i responded to Keyur and to you in separate replies. Other than making stupid headlines for media to pickup can't your read? Your posts in this thread been more damaging than anything else.


You said you would never use any of "My Services" I do not offer any services, just wanted to make sure you weren't confusing me with them.

BitcoinEXpress
whenever something comes up from you, I will make sure not to use it! just because of your comments in this thread.   

I have nothing bad to say about CampBX.   
pretty lame to try to mixup me addressing you with someone else.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Trader Steve on July 26, 2011, 05:34:06 AM
market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Trader Steve on July 26, 2011, 05:36:13 AM
market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.

Like any good forecaster, I predict that bitcoin will either be up or down tomorrow.  ::)


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: sequence on July 26, 2011, 05:40:28 AM
Dwolla sucks!, I told you guys in my first post ever in this forum.  What surprises me is how clueless Dwolla is about this significant fraud. A few months back I got my account suspended  because of a bank error and they yelled FRAUD!! I had to fight diligently to get my account back. They had me talking to one guy named Ben over phone and email, gave me the run around and now this!  >:(


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Jered Kenna (TradeHill) on July 26, 2011, 05:41:22 AM
All we ask and I assume everyone can agree:

1) If chargebacks exist don't claim your payment is non reversible
2) If you're doing a chargeback tell the merchant. Don't just debit the account and then act like it didn't happen.

All it takes is clear communication.


I Agree! 

Jared - how exactly did Dwolla take this money back from you?  Did they take it out of your Dwolla balance?

Yes, without mentioning it and they dodged us when we tried to track down where the funds went.
The transfers simply changed and the funds went poof. We had to write a program to audit all their data and find where it went.

Jered


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 26, 2011, 05:45:49 AM
market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.

Like any good forecaster, I predict that bitcoin will either be up or down tomorrow.  ::)

I predict it will stay flat (within 2% of current ~$13.80 8^)


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Seraphim401 on July 26, 2011, 12:50:41 PM
i don't know about anyone else, but this is conjuring feelings of being GOXED all over again...........

That's the point I was trying to get across to Jered aka Tradehill.

Customer's accounts were not affected, so why make it public other than trying to place pressure on Dwolla. It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

Bitcoin didn't need this and this wasn't thought out very well.



In a way, the more I think about it, the more I get pissed.

BCX


I have the same thoughts. Things were getting into rally mode and this could seriously mess things up.
When were things getting into rally mode?
Quit thinking about your own wallet for a change,one of the best exchanges out there just got robbed!
These guys are very open ,so is it not to be expected that they would be pissed off at someone who's not?

Also a big fuck you to Dwolla from the EU!


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: NamelessOne on July 26, 2011, 04:23:18 PM
I guess you weren't paying attention to the general pressure, and analysts all saying the same thing about impending rallies. One did happen to 14.7, though it fizzled, no doubt. Dwolla is the victim here according to TradeHIlls blog, they repeatedly say 'dwolla was scammed of'.

"It is unfortunate that Dwolla is the victim of fraud and we would like to work with them to resolve this."

So unless they worded that very poorly, or I'm misreading it, I see nothing about TH being victims. They seem to be helping Dwolla. I commend them for being open as it adds value to their service. They also could have resolved this issue and then gone public. Its more that the timing sucks. And yes, I am thinking with my wallet as are other people. This is about a currency after all, and the survival of that currency.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: bitrick on July 26, 2011, 05:39:28 PM
They also could have resolved this issue and then gone public.

But what if Dwolla is stonewalling for a long time, leaving you with no reason to believe it will ever be resolved? In that case it is reasonable to go public because a large theft appears to have occurred and the public should be aware of that, in my opinion.

Consider this. Let's say Dwolla was moving $1M/day. Let's pull a number out of thin air and suppose the average transaction was $1000. That's 1000 transactions per day. At 25 cents/tx thats only $250 per day, not including expenses.

$37,000 may represent more profit than Dwolla has ever earned on Bitcoin transactions and then some.

As JoelKatz has explained very well, the entire Dwolla business model may be fatally flawed, and if this transaction is what made Dwolla realize that, then it is conceivable that they have just decided to try to recover that money by what ever means necessary.

Their reputation is irrelevant going forward if their business model is dead anyway. Why end the business with a guaranteed big loss, when you can transfer that loss to Tradehill and hope for the best in arbitration?

I hope this is resolved in Tradehill's favor, but given Dwolla's lack of response so far, I doubt Dwolla will return the money voluntarily.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 26, 2011, 09:24:04 PM
My guess is that Dwolla is gone. This is their non-response they sent this afternoon:

Dwolla Support support@dwolla.org to me
   
show details 1:27 PM (3 hours ago)
   
__________________________________
Please type your reply at the top of the email...
Charise
JUL 26, 2011  |  12:27PM CDT
David,

We'd be happy to walk you through our processess.

Dwolla has a return and dispute process which is pretty straight forward but in the past has been fairly manual.

Is there any specific question I could possibly answer? I'd be happy to do so.

+++++++++++++++++++++

David
JUL 26, 2011  |  08:46PM CDT
Original message
Please make me feel you are "doing the right thing" in reference to the following line of discussion in the bitcoin community.

http://forum.bitcoin.org/index.php?topic=31712.0

I am a relatively new client of yours and I used your services to interact with TradeHill, among others. I am at this moment extremely nervous about using your services unless and until this matter is cleared up.

Thank you

+++++++++++++++++++++

This screams of avoiding the subject. I am not sure what my response to their non-response will be.

I think the ever astute JoelKatz has nailed it on the head, they have no reserve on hand nor any plan in place to solve this type of problem.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 26, 2011, 09:54:39 PM
market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.

Like any good forecaster, I predict that bitcoin will either be up or down tomorrow.  ::)

I predict it will stay flat (within 2% of current ~$13.80 8^)

LOL! It's now about a day later 5:53pm Tallahassee Fl time, and the price @ MtGox is...13.89!!!

The naive forecast wins again!


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: MilkMan on July 26, 2011, 11:53:54 PM
Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 26, 2011, 11:56:12 PM
Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.

Do you read for content? What did Tradehill do wrong?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: error on July 27, 2011, 12:05:49 AM
Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.

What does this have to do with MtGox or TradeHill?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: RandyFolds on July 27, 2011, 12:12:10 AM
Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.

To paraphrase the two posts above me, are you retarded? Mt. Gox all the way?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: MilkMan on July 27, 2011, 12:13:54 AM
Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.

Do you read for content? What did Tradehill do wrong?

It's my belief Dwolla was suspecting Tradehill of making illegal, fraudulent transactions, or potentially laundrying money, but it could be a number of things. To protect Dwolla's ass, they had to return or hold any transactions that were received from tradehill. Now this is my guess, not fact. Be careful who you give your money too.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 27, 2011, 12:22:54 AM
Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.

Do you read for content? What did Tradehill do wrong?

It's my belief Dwolla was suspecting Tradehill of making illegal, fraudulent transactions, or potentially laundrying money, but it could be a number of things.

Upon what evidence do you base this belief?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: CubedRoot on July 27, 2011, 12:25:46 AM
Here is the reply I received from Dwolla today about this "scandal".
It appears there have always been chargebacks available for ACH transfers, but there are no chargebacks if a Merchant uses their POS service to receive credit card payments.

Quote
Lynn
Please type your reply at the top of the email...
Dwolla Support
JUL 27, 2011  |  07:13PM CDT
Lynn,

Thank you for your e-mail.

There are no credit card or debit card chargebacks. Our apologies for any miscommunication.

There have always been bank returns and disputes in the Dwolla system. The dispute form and process has been a part of Dwolla since our initial release.

In the meantime we are putting together more information for the web site to ensure merchants are clear on the process that will likely involve updating documentation as well.

Please let us know if we can expand on any particular scenarios you have questions about. We will be happy to assist you. If there is any situation that involves your financial institution please let us know and we will be happy to dive into it!
Lynn
JUL 26, 2011  |  06:29PM CDT
Original message
Hello,
I was a true Dwolla fan until the recent scandal you guys have pulled with Tradehill.com.
You mention there were no worries of chargebacks on this page:
http://www.dwolla.org/blog/retail-merchants-rejoice-web-kiosk-online/
But, on your Help page, you clearly state that you do indeed do chargebacks. Here is that page for reference:
http://help.dwolla.com/customer/portal/articles/99247-why-was-my-transaction-reversed-

Please, can you address this publicly? I was honestly pulling for Dwolla to become the preferred way to pay for transactions on the web, and eventually become competitive with PayPal, but after this recent scandal, I am very disappointed, and I am afraid I no longer find your services valuable.
For your reference this is Case #: 2077
Find us on Twitter and Facebook



Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: MilkMan on July 27, 2011, 12:29:44 AM
Oh God, it was Dwolla's bad.... Still I'd only use http://mtgox.com or http://bitcoinbux.com. Any other site is a gamble in my opinion. Just my 2 cents :)


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: RandyFolds on July 27, 2011, 01:43:16 AM
Oh Good, that makes more sense. Still I'd only use Http://mtgox.com or Http://bitcoinbux.com. Any other site is a gamble in my opinion. Just my 2 cents :)

What makes more sense? That email just proves that dwolla is being sketchy about this whole thing. You, sir, are very misinformed. Try reading the thread. It usually tells you what's going on.

I can't say from experience, but I am pretty certain that both those exchanges use dwolla as well, and as the issue is with dwolla and NOT the exchanges, they are in the same boat as TH.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 27, 2011, 01:52:50 AM
Oh Good, that makes more sense. Still I'd only use Http://mtgox.com or Http://bitcoinbux.com. Any other site is a gamble in my opinion. Just my 2 cents :)

You sir have just proven that you do not comprehend that which you read, nor do you seem to have the ability to defend your "opinion".


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: WiseOldOwl on July 27, 2011, 02:02:26 AM
~I posted this in another thread before I found this one.~

My exchange's volume is small potatoes compared to TH and MtGox,
But I stand by our industry, and have removed Dwolla as a payment option for our exchange to protect myself, and add to the "punishment" of dwolla.
They absolutely must clear up any issues with their 2nd biggest customer, to think any company would do anything but is ludicrous.
Thank you Jered and the TradeHill team for bringing this to our attention, maybe we all (Exchange Heads) do need to stay in touch for when a potentially threatening situation is discovered.

I did speak with dwolla when opening my exchange, and their exact words were that transactions between dwolla accounts in regards to virtual currencies were irreversible and couldn't be charged-back, not that there wasnt any chargebacks or disputes. That being said it is very obvious that TradeHill is in the business of virtual currencies. If this was their Policy, then they knew they ran the risk of this happening and basically said they would cover it.
Dwolla, don't alienate your whole customer base. MtGox I'm sure will turn around and leave if they are going to risk losing 10's of thousands of dollars too. Not to mention all us 2nd tier exchanges, and bitcoin users in general.


Thanks again for the Due-Diligence, It is disturbing that a financial company either doesn't understand their own policy, or worse just plain lies about it.
The race is on to figure out a great payment solution again,
For now, MoneyGrams and Western Unions, are King when it comes to safety and that would be an unbelievable pain in the A** for a company like tradehill or mtgox I really hope we can find you guys a perfect solution ( If I figure one out I will share it of course). Good Luck in your ventures!

Also, on a completely separate note, MilkMan, you have a situation that needs to be handled with one of my customers. I have sent you an email regarding it, please handle this asap and let me know. Thank You, you can PM me if you need too but dont clutter this thread with an answer to this.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: GeniuSxBoY on July 27, 2011, 02:15:01 AM
^lol, dumbass.


Even if you lose 2.5% by sticking with dwolla, your decision makes you lose 100%. You just lost my potential consumerism to your site for being that dumb.


We're talking about Tradehill having $1,880,000 in transactions and losing $47,000. That's less money than i'd spend on credit card fees for accepting credit cards.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: WiseOldOwl on July 27, 2011, 02:17:34 AM
I didn't say I wouldn't use them at all, I said as a payment option...Genius
Payout is still functional.
 


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: GeniuSxBoY on July 27, 2011, 02:18:15 AM
:facepalm:


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: WiseOldOwl on July 27, 2011, 02:22:29 AM
Also,
That 2.5 % is about to skyrocket now that we have fully explained the weakness in their system to everyone.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: MilkMan on July 27, 2011, 02:30:48 AM
Wow I'm an Idiot. Disregard what I previously posted. I am still in disbelief that Dwolla allowed this incident to occur. And to do it to they're best customers (Tradehill patrons). I apologize for the misunderstanding, It shocked me at first, but I will be sure to be diligent in my research and make sure my posts are as accurate as possible. And Mr. Owl, I'm taking care of that request.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: WiseOldOwl on July 27, 2011, 02:46:13 AM
^lol, dumbass.


Even if you lose 2.5% by sticking with dwolla, your decision makes you lose 100%. You just lost my potential consumerism to your site for being that dumb.


We're talking about Tradehill having $1,880,000 in transactions and losing $47,000. That's less money than i'd spend on credit card fees for accepting credit cards.
I also want to point out that TH only takes a small percentage (<2.5%) of each transaction. Although it does not directly correlate with the amount in dwolla transfers, a number like 47,000 is 4.7% off 1,000,000 in transactions. I dont know what they charge but lets say .5% for the sake of argument.
47,000 = 9,400,000 in transactions
Or in other words if they charge .5% they would have to process 9.4 million to make $47,000 in profit.
That really sucks to lose no matter what.

If you choose to process credit cards then that is your decision and Im sure losing the fee was part of your business plan, If it isn't part of your plan then 2.5% could potentially be all the profit or more.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: grod on July 27, 2011, 03:04:33 AM
Also,
That 2.5 % is about to skyrocket now that we have fully explained the weakness in their system to everyone.

This, this and more this.  We've got a middleman more than willing to stick their big customers with the costs of fraud after convincing them otherwise.

Really, what Dwolla is doing is no less fraudulent than the guys running the scams.  Dwolla scammed TH out of $47000 at the moment.  Any business, big or small, would have communicated with their customer about a loss that big by now.  I work for a fortune 500 company and any customer with a $47000 dollar dispute would have been escalated to VP level by now.

The sad fact is: Dwolla can't cover fraud with their business model.  They're keeping silent and hoping this all blows over and uninformed people keep using them.

I, for one, am extremely glad TH brought this public.  If they're willing to burn a big account's butt like this what's to say they simply won't pack up and take the small fry funds next?  Definitely not a trustworthy outfit in the least -- they SILENTLY reversed transactions hoping TH wouldn't notice.  That right there speaks volumes.

MtGox is playing with fire accepting Dwolla deposits.  Sure, they can cover some fraud, but what happens when it goes from 2.5% to 10%?  20%?


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: error on July 27, 2011, 03:13:31 AM
Not to mention that the way Dwolla did this seems to completely violate generally accepted accounting principles. Dwolla is in some deep shit even if they DO give TradeHill's money back.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: dacoinminster on July 27, 2011, 05:15:03 PM
[POLL] Will you reverse your Dwolla transactions?
http://forum.bitcoin.org/index.php?topic=32354.0

If the results of this poll are accurate, there are more reversals coming. If I were running an exchange, I would disconnect my bank account from Dwolla ASAP, changing banks if necessary. Let Dwolla sleep in the bed they made.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: makomk on July 27, 2011, 10:53:00 PM
The problem is bitcoin is a hard currency, and any attempts to hook it up to the soft currency system (a.k.a. banks where almost everything can be charged back) means that there are going to be gaps created that people will take advantage.

This is an issue/problem with the current banking system, a lot of the fraud that happens today is only possible because of the current broken banking system.
There's actually no reason the banks couldn't create a system where transactions really are irreversable. The trouble is that no-one would want to use it: either they'd have to require all transactions to be made at branches after presenting proof of ID and paying a fee to cover the associated costs, or customers would have to accept that their account could be emptied out by crooks at any time for reasons beyond their control. There's no way they could swallow the cost of fraud otherwise.

It turns out that it's cheaper for everyone involved if they skip the really expensive security measures and just include a way to reverse transactions.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: coblee on July 27, 2011, 10:58:35 PM
The problem is bitcoin is a hard currency, and any attempts to hook it up to the soft currency system (a.k.a. banks where almost everything can be charged back) means that there are going to be gaps created that people will take advantage.

This is an issue/problem with the current banking system, a lot of the fraud that happens today is only possible because of the current broken banking system.
There's actually no reason the banks couldn't create a system where transactions really are irreversable. The trouble is that no-one would want to use it: either they'd have to require all transactions to be made at branches after presenting proof of ID and paying a fee to cover the associated costs, or customers would have to accept that their account could be emptied out by crooks at any time for reasons beyond their control. There's no way they could swallow the cost of fraud otherwise.

It turns out that it's cheaper for everyone involved if they skip the really expensive security measures and just include a way to reverse transactions.

Ironically, that's exactly what bitcoins is trying to solve. Transferring bitcoins is non-reversible. But then that also means if someone breaks into your wallet and steals your coins, you are screwed. I'm not sure if there will ever be a solution that can satisfy both needs at the same time.


Title: Re: More crap to deal with - Dwolla Reverses TradeHill Transactions
Post by: Smalleyster on July 27, 2011, 11:15:23 PM
I just got another non-response from dwolla:

Dwolla Support
JUL 27, 2011  |  05:28PM CDT
David,

We'd be happy to answer any questions you have.

If you could please let me know which questions you would like me to answer, I would be happy to do so.


David
JUL 26, 2011  |  06:42PM CDT
http://tradehillblog.com/


Charise
JUL 26, 2011  |  12:27PM CDT
David,

We'd be happy to walk you through our processess.

Dwolla has a return and dispute process which is pretty straight forward but in the past has been fairly manual.

Is there any specific question I could possibly answer? I'd be happy to do so.


David
JUL 26, 2011  |  08:46PM CDT
Original message
Please make me feel you are "doing the right thing" in reference to the following line of discussion in the bitcoin community.

http://forum.bitcoin.org/index.php?topic=31712.0

I am a relatively new client of yours and I used your services to interact with TradeHill, among others. I am at this moment extremely nervous about using your services unless and until this matter is cleared up.

Thank you

*********************
EDIT

My response to them just now:

When will you refund TradeHill's money?

When will you announce in public what you have done and why?

Thank you