LocalBitcoins.com - Unfair dispute handling

[jook]

Data taken from OP's screenshots in post #1:

LBC Trade request:    Nov 18, 5:18 am
Bank transfer #1:      Nov 18, 3:47 pm
Bank transfer #2:      Nov 19, 1:00 am

If...

- you have set the correct timezone in your LBC account, and
- the contractual payment window was 90 minutes, and
- the seller had not agreed to modify the contract

...then you failed to comply with the contract and the seller was rightfully allowed to cancel the deal. Your first bank transfer was already 9 hours too late. LBC clearly states the time window in which the payment has to be initiated.

The seller has to refund your $7367.23 AUD immediately, of course, but that's a seperate case. I don't see how your bank transfers could retroactively have an effect on a contract that had already been breached. Or am I missing something?

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[ginbank]

To jook, no, the time zones don't match because I am not currently living in Australia. The time zone was either set to Localbitcoins default since I had not changed the settings, or if in any way auto detected, it would have been GMT or GMT+1, no idea if our current summer/winter time adjustment was taken into consideration.

The bank statements show the Australian time, NSW time I would say.

The first transfer was sent out right after opening the trade. I went straight from the trade where the sellers bank details were displayed to me to my online banking, I also wrote this in detail in the original post how the events unfolded.

The payment window was not 90 minutes because the trade was advertised as National Bank transfer, and the seller did not make any further specifications.
It is common knowledge that transfers between any two different banks in Australia take around 1-3 business days. The seller resides in Australia and so he would be well aware of this. He could have advertised Cash deposit as the payment method or same bank transfer otherwise.

I would also like to add that there was no expectation from my side to receive the BTC before my funds have been credited to the sellers bank account and I also made this clear to him from the beginning.

[Grinder]

The payment window was not 90 minutes because the trade was advertised as National Bank transfer, and the seller did not make any further specifications.

The 90 minute window for doing the transfer is specified in the rules for using the escrow system.

[ginbank]

The payment window was not 90 minutes because the trade was advertised as National Bank transfer, and the seller did not make any further specifications.

The 90 minute window for doing the transfer is specified in the rules for using the escrow system.

Yes, the payment is supposed to be marked as complete within 90 minutes, which I did, with a national bank transfer however there is no expectation for the funds to arrive within those 90 minutes.  

The purpose of marking the payment complete within 90 minutes is to prevent sellers BTC stuck in escrow forever if the buyer changes his mind or is simply unresponsive.
If the buyer has sent funds, the payment needs to be marked as complete, otherwise the BTC will not be held in escrow and the buyer could lose his payment.

When I sent the first payment (after being forced to split it in 2 parts), I had to mark the payment as complete, otherwise I would have potentially lost the money I already sent out. I marked it as complete well within the 90 minutes limit, too and I knew that I would be sending the second part after midnight and I also kept the seller informed.

Any reasonable seller in his right mind would not have had a problem whatsoever with the payment arriving in two parts (especially since they arrived within 1 business day, and both arrived at the same time), especially after I uploaded all kinds of ID, receipts, etc ..  and considering that I communicated with the seller constantly, even offered to call him.

[Grinder]

When I sent the first payment (after being forced to split it in 2 parts), I had to mark the payment as complete, otherwise I would have lost the money I already sent out. I marked it as complete well within the 90 minutes limit, too and I knew that I would be sending the second part after midnight and I also kept the seller informed.

Which means you lied when you said you had completed the transfer. It wasn't very nice behaviour from the seller, and he probably didn't even know he had the rules on his side. Unfortunately this means you should have taken the first offer, and now your stubbornness has really backfired.

[ginbank]

When I sent the first payment (after being forced to split it in 2 parts), I had to mark the payment as complete, otherwise I would have lost the money I already sent out. I marked it as complete well within the 90 minutes limit, too and I knew that I would be sending the second part after midnight and I also kept the seller informed.

Which means you lied when you said you had completed the transfer. It wasn't very nice behaviour from the seller, and he probably didn't even know he had the rules on his side. Unfortunately this means you should have taken the first offer, and now your stubbornness has really backfired.

Can you quote where I lied?

Can you justify why I should be receiving any less than the traded amount of BTC when the seller did not suffer any delay in receiving the full payment from me?
He received the full payment just as quickly as it would have been received in one single transfer.

In fact, had I not kept the seller updated and told him about the split transfer, then he would not have even known until he received both amounts in his account on the next day. The only fault from my side seems to have been to keep the seller informed.

[jook]

Any reasonable seller in his right mind would not have had a problem whatsoever with the payment arriving in two parts (especially since they arrived within 1 business day, and both arrived at the same time), especially after I uploaded all kinds of ID, receipts, etc ..  and considering that I communicated with the seller constantly, even offered to call him.

Based on common sense I completely agree with your point of view. The seller didn't have the slightest bit of a disadvantage because of the bank transfer splitting and you did everything that could be expected of a buyer in your situation. In place of the seller I would have released the coins and rated it as a flawless transaction.

But... I understand the LBC decision as well. It is expected of a business not to make financially important decisions based on whatever they might perceive as common sense, they need to stick to the words of the contract. You marked the payment as completed although it was not, so they were entitled to cancel the trade. In my opinion it would have been reasonable to keep the coins in escrow until your fiat was refunded, though. Any news on that?

[Grinder]

Can you quote where I lied?

You marked the transfer as complete even though it wasn't.

In fact, had I not kept the seller updated and told him about the split transfer, then he would not have even known until he received both amounts in his account on the next day. The only fault from my side seems to have been to keep the seller informed.

You would still have had to lie about when the transfers were done in the dispute. It doesn't matter when he received the transfers or that it wasn't possible for you to do the complete transfer within the 90 minutes. All that matters is that you could have backed out of the deal if the price had gone down before the second transfer, and this gave the seller an excuse to do the same when the opposite happened.

[ginbank]

Can you quote where I lied?

You marked the transfer as complete even though it wasn't.

In fact, had I not kept the seller updated and told him about the split transfer, then he would not have even known until he received both amounts in his account on the next day. The only fault from my side seems to have been to keep the seller informed.

You would still have had to lie about when the transfers were done in the dispute. It doesn't matter when he received the transfers or that it wasn't possible for you to do the complete transfer within the 90 minutes. All that matters is that you could have backed out of the deal if the price had gone down before the second transfer, and this gave the seller an excuse to do the same when the opposite happened.

Grinder, I did not lie about when the transfers were done at all. I always kept the seller updated via the message system as well as localbitcoins admins who could read the messages. As I said before the time zones of localbitcoins and the online banking screens were about 10 hours apart.
I could not have backed out of the deal at all. That is why the payment needs to be marked as complete. At that point I can not back out of the deal.  At that point the deal is sealed and if I would not pay for it, then I would not get any BTC, I would get a bad review and get my account banned and in my case, if I would not have sent the remaining amount out after midnight as I immediately informed them I would do, then I could have expected not only to receive no BTC, a bad review and a blocked account, but I could have also expected to lose the AUD $5000 of the first part of the transfer! So it is unreasonable for anyone to alledge that I was doing this on purpose or that it affected the seller negatively. 

What the seller then did, was trying to find any reason to back out of the trade due to the BTC price hike. He would have called his bank and told them he was going to receive a fraudulent transfer and to reject it, even tough he could see the ID I uploaded and even though I offered to give him a call.
Why is this very bad for the bitcoin community? If people cause the banks additional work this way (as if fraud was not already bad enough), it is clear why they come to dislike everything that's got to do with Bitcoin or other transactions related to virtual currencies.
My bank then blocked my account completely. I could not log on to my online banking anymore at all and try to get this fixed while being 16,000km away.

By making such allegations and involving banks fraud departments in disputes, even involving governemnt institutions such as police and courts of course they will start to regulate more because it is causing them a workload, they will want to find a way to tax and regulate. This can not be what we want to achieve. 

[Grinder]

Grinder, I did not lie about when the transfers were done at all.

You are obviously completely unable to view this case from any other than your own extremely biased side, so this will be my last reply. You marked the transfer as complete before it was. That's really all that matters if you want to nitpick on the rules like you do. It doesn't matter that you updated the seller. The rules doesn't say that you can mark the transfer as complete when it isn't as long as you notify the seller. You should not have agreed to buy more coins than you could pay within the 90 minutes, but in this case it was very fortunate for the seller that you did.

I could not have backed out of the deal at all.

Of course you could, all it would take is not doing the second transfer and come up with an excuse (like the seller did). There would have been some negative consequences, but if the price fell by more than 50% (which it has done several times before in that much time) you would certainly have saved money. Even if it fell by less you might have gotten something back from the dispute and been better off than if the deal came through.

[MPOE-PR]

But... I understand the LBC decision as well. It is expected of a business not to make financially important decisions based on whatever they might perceive as common sense, they need to stick to the words of the contract. You marked the payment as completed although it was not, so they were entitled to cancel the trade. In my opinion it would have been reasonable to keep the coins in escrow until your fiat was refunded, though. Any news on that?

Exactly.

OP, it's unfortunate this didn't work out, and I don't entirely grasp the whole "your posting on reddit has consequences" nonsense, but you'll have to learn to get things right to the letter when working in systems that depend upon things being right to the letter. It may seem petty, but it's not, and neither would it be petty to learn how to get your ducks in a row for smoother deals in the future.

[ginbank]

I am noting the opinions of the 'Hero Members' here and I would like to ask some questions:

What do you think about LocalBitcoins not releasing the BTC from escrow after the seller told them to release them on Nov 21?  At that stage he told them to release the escrow to me. "Gomerlin :  Please localbitcoins, return this buyer the bitcoins that was taken from her. I don't want them."
That was Nov. 21, 2013, 8:49 a.m. in the localbitcoins system.
If you check the BTC charts, well suddenly as the price went down temporarily, he was ok to release the escrow to me ..  
Who is the one changing his mind more than once about this trade?


Also, if you consider that if had I not told the seller about the split transfer before he received the funds, I would have received the BTC, because he could not have used it as a reason to complain in the first place. He would have had to continue his allegations that I am a scammer and tried that way to cancel the trade but it would most likely not have been sucessful since I uploaded all kinds of ID. It was not affecting the end result of the payment I made that the transfer had to be split unexpectedly.
Doesn't this mean that my only fault was to keep the seller updated?


Do you completely endorse the behaviour of the seller during this trade? The accusations, the threats, the overreacting, the lies and making up completely ridiculous stories? It was obvious to anybody that he just tried to cancel the trade because the price of BTC went up. Do you think LocalBitcoins should support this the way they did?


An Australian bank transfer could have taken 3 business days to be received and it wouldn't have been a reason for anyone to complain. The seller would have simply had to wait for it, no matter if the BTC price goes up or down. Equally I would have had to come to terms with it if the price had gone down, while waiting to recieve my BTC. But a trade is fixed and can not just be changed. Considering my funds arrived the next business day, it was a quick payment well within the expectations of the seller who did not post any other requirements in his trade details.


What would you have done in my situation? Not mark the payment complete and waive good bye to AUD $5000.00?


The other person who bought AUD $2000.00 worth of BTC from the same seller Gomerlin the day before I bought from him (also just before the big price increase), but forgot to mark the payment as complete still did not receive the AUD $2000.00 back.
Gomerlin first ignored the messages of the buyer completely for several days while being online and engaging in other trades and then finally replied that his account was hacked and the buyers BTC were 'stolen'.
Doesn't this show what kind of person he is. What a coincidence that right when he has some trades he'd rather like to cancel he claims his account was hacked. How would the 'hacker' have 'stolen' the buyers BTC out of escrow?  He tried to make up the same excuse during my trade at some point.

[frei.sein]

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.

Yes LBC supports scammers to steal your bitcoins. One day a scammer tried to trick me an instead of 18,000 he just send 18.000 XRP. He started a dispute and localbitcoins asked me to release the bitcoins for 18 thousand XRP but I only received 18 XRP.

Another time I lost 3,000 USD because of this kind of scam. I contacted the support, but after 1 day they replied and said sorry the user already withdrawal the bitcoins. Hahahah


Then I reached the trading limit and my account got frozen, since then it keep frozen 1 year. Once I verify they freeze right away and ask my to verify again.

Localbitcoin.com is a super evil scamming company, better to stay away of it.