LocalBitcoins.com - Unfair dispute handling

[ginbank]

update:

Nov 24 - I still did not receive any of my BTC.

No further statements from localbitcoins.com

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[PenAndPaper]

update:

Nov 24 - I still did not receive any of my BTC.

No further statements from localbitcoins.com

Maybe you pissed them off more by posting here as well 

[Sindelar1938]

This is shocking

I have used them several times, and it always went off flawlessly...

[Pony789]

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.

True, if OP has chosen a reputable trader, he would probably never need to contact the admin at all.

But the big problem shown here is how the admin on localbitcoin is trying to resolve a conflict.
The OP has provided lots of (IMO, way more than enough) proofs showing that he did send the money but never receive the bitcoin.
Yet, somehow the admin changes the escrow amount randomly (no explanation to OP), and later even refuse to release the escrow at this moment because of OP's reddit post.

This kind of support service is completely unacceptable.

update:

Nov 24 - I still did not receive any of my BTC.

No further statements from localbitcoins.com

OP, please keep updating your situation.

[ginbank]

Yet, somehow the admin changes the escrow amount randomly (no explanation to OP), and later even refuse to release the escrow at this moment because of OP's reddit post.

This kind of support service is completely unacceptable.

They did actually provide an explanation as to why they deducted the amount, I do not agree with the way of thinking though. They deducted it basically because I had to split the amount in two bank transfers. However those two bank transfers arrived on the same day at the sellers bank account (the next business day after the trade), the split transfer did not cause a delay in payment, so it was no difference for the seller. So I don't accept to have anything deducted from the 13 BTC.  

My only fault seems to have been that I was so kind to inform the seller of the split transfer via the message system. He took it up as a reason to cancel the trade, saying I have to pay within 90 minutes. He simply tried to find a reason to cancel the trade.

He should have advertised his trade with another payment method, if he needed the money within 90 minutes, like cash trade, cash deposit for example.
There is no reasonable expectation to receive a bank transfer between different banks within Australia immediately, it is impossible.

[ginbank]

update:

Nov 25 - I still did not receive any of my BTC.

The amount in escrow is still the reduced amount of 12.7304645 BTC instead of the 13 BTC originally traded.

No further statement from localbitcoins admins.

I told the seller to release the 12.7304645 BTC from escrow and provided an address to send me the remaining 0.2695355 BTC.
He is online, but not releasing the BTC.

[brad1121]

The whole dispute system is worthless to the site if this is the reputation they intend to hold up.
Thankfully I've only had smooth..ish transactions (delays in release) for bank reasons, and have not had to come to a dispute.

Also hurts the escrow part of the site if the value can be altered on such a weak excuse. What is a few hours difference going to make when we are talking net banking. It's never quick in AUS unless you have your bank trust an account which requires authorization, at which point you may as well just do a cash deposit.

GL to the Buyer in at least getting his 12.7 BTC and LB come to their senses and save their rep a little by upping it back to 13.

The story of the sellers account getting hacked, isn't really your problem. You paid and agreed upon an amount, sounds like a contract to me.

Sounds like the seller was just but-hurt about the recent price hike in BTC.

Still, at this point. Poor form LB.

[niothor]

Best way to trade bitcoins...
Face to face , in a safe place , preferably in a restaurant or hotel lobby where they have guards , have a gun in your pocket just in case , ask him for the id and hold it until the transaction is completed.
Also , avoid a seller/buyer that tries to do the same to you )))).

 

[howzar]

Best way to trade bitcoins...
Face to face , in a safe place , preferably in a restaurant or hotel lobby where they have guards , have a gun in your pocket just in case , ask him for the id and hold it until the transaction is completed.
Also , avoid a seller/buyer that tries to do the same to you )))).

 

have a gun in your pocket just in case Are we some kind of Mafia? . F2F aren't comfortable at all since there are physical risks when meeting a total stranger and each of you holding x.xxx$ or more.
I always though doing bank transfers through LBC was safe/least issues and apparently it's not.

[xtanns]

I always though doing bank transfers through LBC was safe/least issues and apparently it's not.

I have the same impression before, but no longer now.

[PenAndPaper]

have a gun in your pocket just in case

In the most part of the world carrying a gun is illegal.
Having said that, i agree that someone must take precautions when trading in person.

[ginbank]

Let's not go off-topic about cash trades, that was not an option in this case.

The warnings & lessons to be learned are:

• When trading on localbitcoins.com, only deal with sellers who have a lot of good reviews and have had their account for a long time.
• Do not upload any ID that shows your home address because your trading partner can see it and not just localbitcoins staff. In case of a dispute, you are vulnerable!
• LocalBitcoins.com does not have a lot of staff to deal with disputes, expect that your money or BTC are stuck for a long time in case of a dispute.
• Do not expect disputes to be handled fairly by localbitcoins staff!
• If you trade on localbitcoins, keep screenshots and receipts of everything , you might really need them later.
• Trade with someone who is online and before sending money, chat with them first, clarify every detail, find out what their expectations are.
• If you are selling with bank transfer, protect yourself against mitm (man in the middle) fraud by requesting a URL to be part of the payment description. On this URL you post a warning.

[ginbank]

update:

Nov 26 - LocalBitcoins admins are still supporting the seller to back out of the trade (I bought 13 BTC with $7367.23 AUD on Nov 18),
saying they will return the amount of BTC that is remaining in escrow to the seller, and let him return the AUD to my bank account!  This would be outrageous.
 
If I had to buy the 13 BTC today with AUD bank transfer, they would cost me $13000 AUD or more.

Nov. 26, 2013, 11:20 a.m. ADMIN

LB_Support:  Apparently the seller issued a refund for the payments made by the buyer ($7367.23 AUD).

In general, all trades should happen as a mutual agreement between the buyer the and the seller, so that both parties agree with the deal, and both parties have a feeling that the trade is beneficial.

The buyer did not initiate the payment within the requested timeframe. Granted, it was not the buyer's fault and there are no reason to believe that it was not the buyer's intention to make the payment fully within the required timeframe. Regardless of what were the intentions of the buyer, when requirements of the initial trade are not fully met, it is a good trading practice to re-negotiate the terms of the trade.

The seller did suggest a fair resolution to the situation, that the price is updated to match the market price at the time the payment was fully completed. As the seller pointed out, his/her price was still really competitive, and the suggestion was not out of the line anyhow.

The buyer completely ignored the suggestion made by the seller. Additionally the seller's account was very likely hacked by a malicious party, which very likely sent those messages to the buyer with German language.

The dispute was initiated, which resulted that a little bit better deal was offered to the buyer, so that the initial 5000 AUD was counted with the price the trade was initiated, and only the price of the latter payment was adjusted. However, the buyer denied this opportunity as well.

While it is perfectly ok to publicly question and criticize the fairness and execution level of localbitcoins support and dispute resolution process, it is really unwise to publicly share details of the seller while the dispute is still ongoing. While we are unable to evaluate what is the possible harm affected to the seller, it is imminent that it did not help to get any kind of agreement with this trade.

We completely agree that localbitcoins is not a perfect in many ways, and usually flaws of the system are more imminent when the market price is really volatile. In general, the escrow system protects that the money is not stolen, and in case of the dispute, first of all we want to ensure that buyer will either receive the invested money back or the bitcoins in the escrow. Right now we cannot fully protect the buyer or the seller against market price movements.

Considering the legal issues and strong disagreement with the buyer and the seller, we think that it is safest resolution that the legal tenders (AUD) are fully refunded to the original owner, and bitcoins from the escrow are returned to the seller. We kindly ask the buyer to confirm when the refund have been issued to the bank account, and cancel the trade.

[niothor]

I could tell you from the start that this will be their solution but didn't want to be the bringer of bad news.

[PenAndPaper]

Judgment of Solomon. I say take the deal and run. And be carefull from who you buy in the future 

[coqui33]

Judgment of Solomon. I say take the deal and run. And be carefull from who you buy in the future 

I agree. I believe that LBC's resolution was more than fair to the buyer.

[ginbank]

Judgment of Solomon. I say take the deal and run. And be carefull from who you buy in the future 

I agree. I believe that LBC's resolution was more than fair to the buyer.

Can you explain what was fair about cutting the amount of BTC I bought down to ~12.7 for no reason?

Yes it would have been more economical, taking a 0.3 BTC loss at this stage as opposed to paying my lawyer. But considering the threats and accusations and the unprofessional behavior by the seller and localbitcoins, I will rather give my lawyer the money.

My physical security was threatened, and having a man trespass on my property has affected me badly as a female living alone.
My funds are being illegally withheld, I will sue for damages, lost income, lawyers fees, whatever my lawyer recommends. I have enough evidence and the stupid comment by localbitcoins stating that they would have already released my BTC from escrow had I not made the case public, _after_ localbitcoins staff himself suggested to me to make the case public and ask the opinion of the community will be a good indication of their behavior to anyone reviewing this case.

[PenAndPaper]

Judgment of Solomon. I say take the deal and run. And be carefull from who you buy in the future  

I agree. I believe that LBC's resolution was more than fair to the buyer.

Can you explain what was fair about cutting the amount of BTC I bought down to ~12.7 for no reason?

Yes it would have been more economical, taking a 0.3 BTC loss at this stage as opposed to paying my lawyer. But considering the threats and accusations and the unprofessional behavior by the seller and localbitcoins, I will rather give my lawyer the money.

My physical security was threatened, and having a man trespass on my property has affected me badly as a female living alone.

You should definately do that if you think that they harmed you in any way.
Also it seems that i missed the part that someone trespassed your property. wtf  

[Garizzle]

I'd just like to chime in that I also had a bad experience with user "Gomerlin" on this site. In my case, it was my mistake in that I somehow forgot to click "Payment Complete" after I had transferred him $2,000AUD. Once I realised (unfortunately it was the next day, I think), I immediately requested him to re-open the purchase, but this was futile as obviously he had the bitcoins returned to him. He kept ignoring me and trying to mislead me in various ways, but I knew that he had received the funds. Anyway, eventually he agreed to "return my money" (this was several days ago), and since then has ignored all my attempts to contact him, including directly via email. I had even attempted to cut a deal with him (via email), to at least send me 1 BTC back, otherwise I would pursue the matter with appropriate authorities. As he still has not replied, I have begun taking action. We will see how this goes.

Note: I also filed a dispute to Localbitcoins, but I don't expect there to be any resolution. It seems Localbitcoins staff are either extremely busy or just hold disputes in contempt because they didn't even think it worthy to respond at all. This was a few days ago already.

[ginbank]

Thank you Garizzle for sharing this information! 

The advantages of making this public become obvious. 


I will not get LocalBitcoins and the seller Gomerlin get away with this.  Obviously LocalBitcoins are aware of at least one more person who was having trouble with this seller.

Garizzles case it a little different, because the BTC are not even secured in escrow since the payment was not marked complete. The seller should at least have the obligation to return the bank transfer in Garizzles case.