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Author Topic: LocalBitcoins.com - Unfair dispute handling  (Read 4317 times)
ginbank
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November 23, 2013, 10:56:58 AM
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LocalBitcoins.com - Unfair dispute handling
Do admins support fraud? Is there a bias towards sellers?


Short version:

I bought 13 BTC for $7367.23 AUD via advertised payment method "National bank transfer".
The seller received the full payment in his bank account the next day. 
The seller acknowledged that the payment was received.
The seller did not release the 13 BTC from escrow.
The seller opened a dispute instead.
Localbitcoins admins adjusted the BTC amount in escrow from 13 BTC, to ~12.7 BTC, effectively changing the terms of a fixed deal.
Localbitcoins.com admin stated in an email to me that they have no doubt that the money was received by the seller.
My bank has confirmed to the sellers bank that the bank transfer was legitimate after I called my bank.
Localbitcoins.com have not released my 13 BTC from escrow. The seller has not released my BTC from escrow.
Localbitcoins.com staff stated that they did not release the BTC from escrow, because I posted the case on reddit.
As of now, my BTC have not been released from escrow.



Longer version:

LocalBitcoins.com - Do admins support fraud? Is there a bias towards sellers?


Nov 18 - I bought 13 BTC for $7367.23 AUD from the seller, the payment method he requested was "National bank transfer (Australia)"
 I sent the money from my St. George bank account to his Westpac bank account in two payments (due to a daily limit, I had to send $5000.00 immediately (afternoon Australian time) and $2367.23 after midnight, I was not aware of this limit in advance, I kept the seller updated via the message system, he received the funds the next day without delay.).

The BTC price went up a lot (check the charts between Nov 18 - 20).

The seller requested that I cancel the trade, even after I told him the money has already been sent.

I sent my ID documents to the seller as well as the banking receipts 1 and 2 and offered to call him. He did not provide his phone number.

The seller made threats and accusations towards me, partially in broken German language, after he saw my German ID.

The seller called me a scammer and a man 

The seller claimed his account was hacked.

The seller announced that he will return the money once it is in his account.


Nov 19 - The seller confirmed via the messaging system that he received the money in his bank account (both transfers) while claiming that his localbitcoins.com account was hacked.

The seller did not release the BTC from escrow, instead opened a dispute.

I uploaded several other ID documents as well as bank statement and transaction receipts via the dispute form to localbitcoins staff. Including credit cards from my St. George bank account, government IDs and more.

I had conversations with localbitcoins admins on IRC and one staff suggested I "ask forums what the community thinks".

Localbitcoins admins asked me for my bank account number so that the seller can return my money and cancel the trade. By doing this they supported his goal not to honor this trade and sell his BTC for much more.

I stated that I would like to receive the 13 BTC as per the trade.

Nov 20 - My bank confirmed that the money was sent out, I can also see it via online banking.

Localbitcoins admins change the BTC amount in escrow from 13 BTC to ~12.7 BTC - effectively changing the terms of a trade that was fixed, this was their solution to the sellers dispute request, they called it "fair".

I disagree with changing the terms of a trade that was fixed previously and fully paid for by myself.

There was an incident at my residential address.

Nov 21 - I post the story on reddit to get feedback from the community as suggested by localbitcoins staff, to protect myself (because an unknown man came to my house the day before), and to warn other people about the slow & unfair dispute resolution taking place on localbitcoins.com

The seller begs me to remove the post because it damages his reputation.

Reddit removed the post.

The seller asked localbitcoins staff to give me what I want and to release my BTC from escrow.

Localbitcoins staff state that because I posted the story on reddit, they can not release the escrow now.

Nov 22 - Localbitcoins admins write to me that "Regarding to the money transaction, we have no doubt that it have been successfully conducted and credited to the seller's account".

Yet localbitcoins admins do not change the escrow amount back to 13 BTC, neither do they release the escrow to me.

My bank confirmed that they have informed the recipients bank about the transfers being completely legitimate.

As of now I still did not receive any of my BTC. The seller is not releasing the escrow, localbitcoins admins are not releasing the escrow.

Localbitcoins admin requests that I send them a photo of myself holding a utility bill.

Seller alleges that he spoke to police in Australia and that they told him I have a "history".

I provide localbitcoins admins with a photo of myself holding a utility bill next to my face.

I provide localbitcoins admins with a police clearance certificate from the Australian Federal Police as well as employment reference letters.

Nov 23 - I still did not receive any of my BTC.

I have had a couple of very stressful days and sleepless nights.



By now the entire message history, conversations and sequence of events would be too much to read for anybody, however I have everything saved and can back up every single statement I am making. There was more to the entire story, including a threat to my physical safety, when a stranger (male) trespassed on my property on Nov 20, 2 days into the dispute, observing my home, walking around my house, in my garden, waiting for me to get back home. I saw him, concerned neighbors informed me about this as well. - The ID I provided to the seller included my home address.


My original reddit post was deleted, there is another one here.
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escrow.ms
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November 23, 2013, 11:07:40 AM
 #2

They did not adjusted amount. You are forgetting that they charge 1% Fees.


EDIT: Yeah they have changed amount.

Please click here to know why I have negative feedback. https://21.co/escrow/
Tip address: 1nPfxnncZqWvVP4UHT6XLfNzfaik7akQS
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November 23, 2013, 11:11:44 AM
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They did not adjusted amount. You are forgetting that they charge 1% Fees.


1% fee would be 12.87 BTC, down from 13 BTC. Why would the admins be scamming like this? This makes no sense. If everything is correct, why do the admins not release escrow? Are they butthurt that they got called out?

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November 23, 2013, 11:14:15 AM
 #4

They did not adjusted amount. You are forgetting that they charge 1% Fees.


1% fee would be 12.87 BTC, down from 13 BTC. Why would the admins be scamming like this? This makes no sense. If everything is correct, why do the admins not release escrow? Are they butthurt that they got called out?

Oh shit yeah it's 12.7 something on image.. :O

Please click here to know why I have negative feedback. https://21.co/escrow/
Tip address: 1nPfxnncZqWvVP4UHT6XLfNzfaik7akQS
ginbank
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November 23, 2013, 11:31:50 AM
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They did not adjusted amount. You are forgetting that they charge 1% Fees.


1% fee would be 12.87 BTC, down from 13 BTC. Why would the admins be scamming like this? This makes no sense. If everything is correct, why do the admins not release escrow? Are they butthurt that they got called out?


No, the buyer does not pay a fee, I think the seller does. This adjustment was not because of a fee. 

Localbitcoins staff changed the amount because they think this is a fair solution to the sellers dispute! The seller claimed he had a disadvantage because I had to split the transfer in two parts. In fact he had no disadvantage, he received both the next day. Quickly even for a transfer between two different banks.

"National bank transfer" on localbitcoins.com means a transfer between two banks within the same country, where the accounts do not have to be at the same bank - A national bank transfer between two banks in Australia can vary between 1 - 3 business days, depending on the banks. This is common knowledge - A seller who does not want to wait 1-3 business days would only offer payment methods such as "cash" or "cash deposit" or at least a "transfer within the same bank".
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November 23, 2013, 11:44:00 AM
 #6


No, the buyer does not pay a fee, I think the seller does.

No, buyer pays fees. for example
I bought 1 BTC but got 0.99 in my wallet.


12.87-12.70 = 0.17 BTC Difference.
I think you should have accepted that.

Please click here to know why I have negative feedback. https://21.co/escrow/
Tip address: 1nPfxnncZqWvVP4UHT6XLfNzfaik7akQS
davidg
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November 23, 2013, 11:47:07 AM
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I dont use LocalBitcoins escrow, too many bad feedback from friends.
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November 23, 2013, 11:48:34 AM
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I dont use LocalBitcoins escrow, too many bad feedback from friends.

you are asking your self to be scammed if you dont use escrow , lol

coqui33
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November 23, 2013, 11:54:50 AM
 #9

LBC merely enables each buyer to choose a seller. They are not an exchange. In future:

1. Choose a seller with over 400 customers and a spotless record who offers a no-questions-asked money-back guarantee. For example: https://localbitcoins.com/accounts/profile/coqui33/?ch=4ja

2. If you are dissatisfied with the seller you chose, write a negative feedback to warn off others.

Armed Citizens and the Law -- NRA-certified firearms instructor
ginbank
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November 23, 2013, 12:15:21 PM
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LBC merely enables each buyer to choose a seller. They are not an exchange. In future:

1. Choose a seller with over 400 customers and a spotless record who offers a no-questions-asked money-back guarantee. For example: https://localbitcoins.com/accounts/profile/coqui33/?ch=4ja

2. If you are dissatisfied with the seller you chose, write a negative feedback to warn off others.

I will in the future. That day it was hard to find a good deal so I could not be too picky, I agree I should have noticed that the sellers account was only 2 weeks old.

I am not able to leave a review / feedback, because the trade is still in "dispute" stage.

At this stage, localbitcoins admins have the power to do release the BTC, but are not doing so.


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November 23, 2013, 12:20:04 PM
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Localbitcoins.com staff stated that they did not release the BTC from escrow, because I posted the case on reddit.
As of now, my BTC have not been released from escrow.

Do you have a screenshot of them telling you that they are not releasing because you posted it on reddit?
I mean wtf? Thats childish to say the least...
ginbank
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November 23, 2013, 12:28:26 PM
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No, the buyer does not pay a fee, I think the seller does.

No, buyer pays fees. for example
I bought 1 BTC but got 0.99 in my wallet.


12.87-12.70 = 0.17 BTC Difference.
I think you should have accepted that.

According to https://localbitcoins.com/fees  only the person who created the advertisement pays fees. In my case the seller advertised, and I responded to his advertisement, so I should not be liable to pay any fees.

If you would post an ad to buy, then you would pay fees as the buyer, this was not the case for me.

Nothing should be deducted from my BTC amount.

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November 23, 2013, 12:28:51 PM
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Localbitcoins.com staff stated that they did not release the BTC from escrow, because I posted the case on reddit.
As of now, my BTC have not been released from escrow.

Do you have a screenshot of them telling you that they are not releasing because you posted it on reddit?
I mean wtf? Thats childish to say the least...

+1

I think this is the dumbest excuse I have ever heard.
If indeed they said this I think it's time to start avoiding them.

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November 23, 2013, 12:32:19 PM
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According to https://localbitcoins.com/fees  only the person who created the advertisement pays fees. In my case the seller advertised, and I responded to his advertisement, so I should not be liable to pay any fees.

If you would post an ad to buy, then you would pay fees as the buyer, this was not the case for me.

Nothing should be deducted from my BTC amount.



Oh alright, Goodluck then.

Please click here to know why I have negative feedback. https://21.co/escrow/
Tip address: 1nPfxnncZqWvVP4UHT6XLfNzfaik7akQS
ginbank
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November 23, 2013, 12:36:21 PM
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Do you have a screenshot of them telling you that they are not releasing because you posted it on reddit?
I mean wtf? Thats childish to say the least...

Yes, it was in an e-mail, via the support ticket system of localbitcoins, here it is: http://postimg.org/image/83durg4zf/ 

wording: "Please also note that we  would have released the escrow
for you already, if that reddit post would not have happened. Now it can
take quite a time to get a peaceful resolution here."

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November 23, 2013, 12:43:01 PM
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Do you have a screenshot of them telling you that they are not releasing because you posted it on reddit?
I mean wtf? Thats childish to say the least...

Yes, it was in an e-mail, via the support ticket system of localbitcoins, here it is: http://postimg.org/image/83durg4zf/  

wording: "Please also note that we  would have released the escrow
for you already, if that reddit post would not have happened. Now it can
take quite a time to get a peaceful resolution here."



That "tiny" amount of BTC is worth 10k usd right now , that email response is making me think 10 times before using localbitcoins again.

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November 23, 2013, 01:14:45 PM
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Yes, it was in an e-mail, via the support ticket system of localbitcoins, here it is: http://postimg.org/image/83durg4zf/ 

wording: "Please also note that we  would have released the escrow
for you already, if that reddit post would not have happened. Now it can
take quite a time to get a peaceful resolution here."
I agree. Giving that excuse was a bad business decision by LBC support. They might have a legitimate reason to delay your refund. I cannot imagine any reason to blame a delay on your publicly complaining.

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November 23, 2013, 03:33:30 PM
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This is toal BS by localbitcoins and make me never want to use them. Pay the man his coins!
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November 23, 2013, 03:38:11 PM
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wow, this really is bad.
I would probably never try localbitcoin.

coqui33
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November 23, 2013, 04:56:03 PM
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This is toal BS by localbitcoins and make me never want to use them. Pay the man his coins!
wow, this really is bad.
I would probably never try localbitcoin.
Please do not write off dozens of honest businessmen because of a support person's ill-chosen words. Just be cautious in choosing a trader. Traders' policies and feedback reputations are open and visible to the public. Some of us even offer no-questions-asked money-back guarantee when requested within 24 hours, thus bypassing the LBC dispute system entirely.

Armed Citizens and the Law -- NRA-certified firearms instructor
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