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Regarding them accepting orders, then later denying them for high risk... I don't think coinbase is a scam, but rather they just do a lot of stupid things.
Rememeber when they just sprang the policy change without warning where you had to add a credit card (not a debit card, but a go-into-debt credit card) to continue getting the instant purchases? The only mention of it was on their support site, in small letters in the news section. Everyone just freaked out about it. Nevermind that nobody else offers you the ability to buy bitcoins, and gives you the coins before the ACH transfer goes through. Even paypal doesnt do that.
So this reeks of them just being stupid. They probably just set up some automatic fraud detection thing, and just figuring all they have to do is deal with customers case by case when it gets it wrong. Great plan, right? They are just being STUPID, and not realizing the damage to the brand that kind of thing does.
Hey Olaf, if you're reading this, I suggest instead of having it cancel the order, put it on hold for review. Then encourage the customer to contact support. Just saying transaction cancelled makes people feel ripped off. Yes, fraud is a big problem, but there has got to be a better way than just cancelling the order.
People use coinbase like an exchange, and if they can't trust that they can buy some coins from you without worrying about you just randomly cancelling the transaction, that only gives opportunity to the competition.
So far in my own experience, support has been very responsive, and I would definitely raise hell with support if I got flagged for fraud before making a new post on bitcointalk just trying to smear them.
I urge everyone to ignore any complaints about coinbase.com unless it includes a statement like "I contacted support about it and ____". At least give them a chance to make it right first before skipping to telling everyone they are a scam.
Rememeber when they just sprang the policy change without warning where you had to add a credit card (not a debit card, but a go-into-debt credit card) to continue getting the instant purchases? The only mention of it was on their support site, in small letters in the news section. Everyone just freaked out about it. Nevermind that nobody else offers you the ability to buy bitcoins, and gives you the coins before the ACH transfer goes through. Even paypal doesnt do that.
So this reeks of them just being stupid. They probably just set up some automatic fraud detection thing, and just figuring all they have to do is deal with customers case by case when it gets it wrong. Great plan, right? They are just being STUPID, and not realizing the damage to the brand that kind of thing does.
Hey Olaf, if you're reading this, I suggest instead of having it cancel the order, put it on hold for review. Then encourage the customer to contact support. Just saying transaction cancelled makes people feel ripped off. Yes, fraud is a big problem, but there has got to be a better way than just cancelling the order.
People use coinbase like an exchange, and if they can't trust that they can buy some coins from you without worrying about you just randomly cancelling the transaction, that only gives opportunity to the competition.
So far in my own experience, support has been very responsive, and I would definitely raise hell with support if I got flagged for fraud before making a new post on bitcointalk just trying to smear them.
I urge everyone to ignore any complaints about coinbase.com unless it includes a statement like "I contacted support about it and ____". At least give them a chance to make it right first before skipping to telling everyone they are a scam.
You can't be serious. Their support is abysmal. It takes 1week + for them to get back to you or they completely ignore you.
When they do get back to you, it's the usual copy and pasted response "We're sorry you had trouble doing *some action*..." and no actual attempt to resolve the issue.
My experience:
I tried to verify my bank account through the non-instant method. After multiple calls to my own bank, I verified with my bank that CoinBase only ever debited me and never credited me.
I sent an email to support. It took 1 week to get back to me and they told me to verify with my bank again. I took their request and verified with my bank a second time and sent them an email back. One and a half weeks later I still get no response. I eventually decided to use the instant-method.
2 days AFTER I had verified, I finally get a email back from support saying that they see I had verified my account. I sent an email back to them specifically stating that the original verification method failed due to errors on CoinBase' part and was concerned about future issues I may run into with the account. I never did get a response back about this email.
Of course after I made my first purchase and BTC went from 140-220, my transaction is canceled. After a month of going back and forth with them, they threw the TOS in my face.
When I decided to make a purchase, I read through their TOS. First thing I noticed was the "high risk" transaction. Their definition of "high risk" transaction allows to categorize EVERY transaction as high risk so they can chose what to cancel. Usually companies do this as a CYA, but they are actively screwing customers with this.
They do not make their purchase process clear either. Once you purchase the BTC and a popup comes up saying "You will receive your BTC by...", you assume you would receive your BTC and that the transaction was approved. However, in fact your transaction has not actually been approved and just put in purgatory for a week.
The best part is this blog post by CoinBase CEO:
http://blog.coinbase.com/post/44046687068/high-risk-transactions
Statements posted here contradicts certain parts of CoinBase' own TOS. And makes believing in their story absolutely ridiculous.
Take for example:
Quote
1. There is no human reviewing the transactions deciding they are high risk. These are automated systems that make educated guesses looking for suspicious signals, and they only get 80-90% accuracy right now.
Why does it take the automated system 1 entire week to determine if a transaction is fraudulent? 1-2 days would be believable if bank transfer requests get denied. Instantly would be believable too if the automated system thought that the bank account was linked fraudulently. There is absolutely no excuse for 1 week.To further support this:
Quote
It’s also worth noting that we only buy the amount of coins we expect to pay out, adjusted for estimated fraud. For example, if we have 100 bitcoin of purchases and estimate 3 bitcoin are fraudulent, we only buy 97.
Coinbase themselves know of the high volatility of BTC. It's right in their TOS. This would mean they would know they have to obtain the BTC quick once a transaction goes through. Again, there is absolutely no excuse for a 1 week wait if they can determine 97% of a batch of transactions is non-fraudulent right off the bat.Then take their TOS:
Quote
3.5 When buying or selling bitcoin, you are buying or selling from Coinbase directly. Coinbase does not act as an intermediary or marketplace between other buyers and sellers of bitcoin.
This is an absolute load of crock. This contradicts the quote from the CEO in his blog post "For example, if we have 100 bitcoin of purchases and estimate 3 bitcoin are fraudulent, we only buy 97.". In addition every time BitStamp goes down, tickers/buy/sell all stop working. It's a well known fact by now that when a customer starts a transaction, that the customer is giving money to CoinBase and CoinBase is using that money to obtain BTC from BitStamp to resell to the customer.Now my favourite part of the TOS:
Quote
3.3 Coinbase users are in control of their bitcoin at all time, and Coinbase keeps 100% of customer funds in storage. Coinbase does not engage in fractional reserve lending.
CoinBase may not be doing fractional reverse lending with BTC, but they sure as hell are with customers money. If they were able to determine a transaction was fraudulent or unable to obtain BTC at the agreed rate from an exchange at the time of the transaciton, there is NO excuse for holding the the funds or the pending transaction over the customer for an entire week.Sign off bit from CoinBase blog post:
Quote
Thank you for bearing with us as we continuing working on improving things.
Apparently not because it has been a serious enough issue to get addressed in a blog post all the way back in March. There seems to be increasing number of complaints. And back in July CoinBase changed the TOS such that you no longer have to try to work out any of these transactions with your customers. This doesn't seem like any sort of improvement at all. I think CoinBase is rather going in reverse.
