Stripe Atlas is nothing but a bad marriage(medium.com) |
Stripe Atlas is nothing but a bad marriage(medium.com) |
> "we discovered that the specific charges flagged as fraudulent were not fraudulent charges" "where fulfillment was lagging heavily during the transition which led to some dissatisfied customers who opted to dispute charges"
Fulfillment lagging heavily is a fancy of way of saying people paid for orders, never got what they ordered, and so assumed it was a fraud.
> Despite understanding that our Stripe Atlas account was used across a number of businesses, and that the seemingly fraudulent/chargeback activity took place in a relatively short span of time through a single eCommerce store (that was no longer operational)
TBH, the actual percentages Stripe details in later emails would be alarming to me. 23% of charges disputed and 44% of volume are pretty red flags!
Folks with 44% of volume in chargebacks should be shut down! I've found there are always excuses from the scammers, and the whole article is in the mode of I wanted to love stripe but they screwed me.
Reality = this guy is screwing his customers over big time!
As the author says, it pains me to write this.
After some quick googling, it appears I'm not the only one to use this term.
Holy. ANY payment process will drop you after something like this. A botched purchase of another company doesn't relieve you of any of the obligations they had made.
I haven't used Stripe for years, so I'm not sure: is that totally kosher? And if you enter the same business/tax/ID details for two different accounts, will there be any problems?
It'd be great to hear from someone about Stripe about this, as I know a lot of Stripe people hang around HN.
I have no experience acquiring companies, but my first instincts are I would acquire a given company into a separate owned LLC, to firewall the rest of my assets from unknown snakes in the grass. If I'm doing that, plugging those LLC's details into Stripe seems like a non-issue.
There is actually another business that leverages it's transaction flow to work with scammers / counterfeit product resellers.
Basically, you buy storefronts at high risk of charge-back or who on their own might have a 10% charge-back rate and can't hold a merchant account. For example, someone sells counterfeit apple chargers. Believe it or not, even though some people might realize it's bogus, maybe only 10% actually charge back. The rest either don't catch on or can't be bothered to charge back. That still is too high. But someone who can mix that in to their own account / high volume account less likely to be shut down - it's a business opportunity.
Exact same issues going on in the ACH space actually which is often used for bogus ongoing / recurring billing.
FWIW, I'm a pretty happy Stripe Atlas customer, and it's pretty WYSIWYG, for better and for worse.
The moral of the story was that Stripes REAL concern was to keep good numbers for their upstream provider. (as an agent/ISO). So... targeted chargebacks probably would have the intended effect.
IMO if this questionable post is the worst story out there about Stripe, it shows that Stripe is doing a great job.
What are you selling?
If my company stopped providing the service I was charging for, I would have 3,214 missed calls and 23,512 emails within about 36 minutes. Customers generally don't call their banks until multiple attempts to contact the business have failed, and something is deeply broken if the chargebacks are your first sign of trouble.
This entire blog post reads like other posts of its type from people who don't understand credit card processing or how it all works.
"Shortly after sending the above information we discovered that the specific charges flagged as fraudulent were not fraudulent charges. They were, in fact, due to chargebacks related to a recently acquired eCommerce store where fulfillment was lagging heavily during the transition which led to some dissatisfied customers who opted to dispute charges."
No, the transactions weren't fraudulent. However, selling something and not delivering is grounds for a chargeback and would be labeled as fraud, and to any reasonable person, would be considered fraud.
"Somehow we moved from an issue of fraudulent activity to whether or not we’re allowed to sell specific products."
Yes, because with such a high chargeback rate, they are going to reevaluate your entire business. It's called Know Your Customer (KYC), and it's critical.
But seriously, 6.5% chargeback rate. Even when I was still working in an industry know to be high risk, I never had a rate that high.
"Stripe is quick to put all blame and responsibility on us by claiming that it is not their responsibility to prevent fraud."
Because in the end, yes, that's where the fault lies. Don't believe me? Go to a bank and get your own merchant account and see what happens when you just let whatever you want go through your system. Just because it's on a computer doesn't change the fact that you are responsible for the fraud you are swiping through your system.
tl;dr: a legit 6.5% chargeback rate.
Back in 2009, I ordered a pair of boots for a Halloween costume online. They sent me an email telling me a window when the boots were supposed to ship, and I specifically ordered two-day shipping. Of course, they charged my card right away, which I didn't know at the time was a red flag.
They missed the shipping window. I thought "no big deal, there's a huge holiday coming up, so they're probably just backlogged, I'll wait another day". Another day passed. I sent an email asking what's wrong. No response. No phone number listed on their website, either; that's a red flag. Another day passed. And another. Another email sent. No response. Another day. By this point, it's been about a week after the boots were supposed to arrive, and they haven't even shipped; it's Friday, so I send them an email telling them that if it doesn't ship by Monday, I'm filing a chargeback. No response either.
Right after I sent that last email, I got curious and googled the name of the store. There were pages on Ripoff Report [0], Reseller Ratings [1], and other sites detailing the fact that they just take people's money and never ship anything. I also discovered that they used to have a phone number listed on their site, but they took it off. The BBB had listed them as an F, but it appears that's since been scrubbed from their website.
Well, fuck.
I contacted Chase and filed a chargeback that day. No way am I waiting till Monday now that I know it's a scam. After going into my whole spiel about how they never responded to my emails and I found all this dirt online about them, the person I spoke to just said "Wait, they said it was going to arrive on [date] and it still hasn't shipped?". I said yes, and she immediately approved my chargeback. I was surprised: I was expecting to have to fight them for it.
Also, according to the websites I found, whenever people issued chargebacks against them, they had a habit of running the charge again, sometimes from a different merchant account, again and again and again. People had to report their credit cards as stolen to get it to stop. I watched my statement like a hawk for months, and thankfully it never happened to me, but I just got lucky.
Also, just out of sheer spite, I filed a BBB complaint against them. A few weeks later, the BBB sent me an email telling me they closed my complaint because every attempt to contact the company failed. They didn't answer their phone or respond to any emails or letters.
Reading Viet's post and your comment, I am reminded of that incident. There is no way in hell the business wouldn't have known they weren't shipping product. People don't just issue chargebacks out of the blue. We call and email and do whatever we can to get the damn product into our hands first and only as a last resort do we light the bridge on fire by issuing a chargeback. And I wonder how many people just gave up and never even bothered to issue chargebacks.
[0] https://www.ripoffreport.com/reports/specific_search/Queen+F...
It only takes a little bit of reading between the lines to see the author bought a site that sold fraudulent gear, didn’t realise this for a bit and then shut it down.
If stripe hadn’t frozen payouts they would be stuck holding the bag for 44 percent of the total charges in the account.
The new account thing does sound beuracratic but I guess it restarts the KYC process.
I don’t think that’s the case. It looks like they bought a flipping or drop ship site and they botched the transition process; orders weren’t getting fulfilled and customers were rightfully pissed about it, hence the chargebacks.
Stripe has a lot of rough edges once you have to talk to a person due to outlier activity, but this could’ve been mitigated by isolating businesses into their own Stripe accounts, as well as better handling the business acquisition that took place.
> We calculate the dispute rate a number of ways, but the two most common are:
> 1. The percentage of charges on your account that have been disputed (you are currently 23.74%)
> 2. The percentage of volume on your account that has been disputed (you are currently 44.82%)
[0]: https://cdn-images-1.medium.com/max/1600/0*8f0gZoASFf20_-lM.
Stripe could have handled it a lot better. They withheld payments from us (over 250k) No notifications, or anything else. They waited until we contacted their support on why our payouts weren't processing before they lectured us on how we should be doing fraud review (we do. We also pay way to much to SiftScience to mitigate that as well)
tl;dr though, Visa, Mastercard, Amex, Discover, etc... all have their own hard limits.
If you go above that, Visa reserves the option of "potential disqualification from the payment system" [2]. That is, you can be banned from accepting Visa cards ever again.
[1] https://www.braintreepayments.com/blog/changes-to-visa-charg...
[2] (see "Chargeback Compliance Program") https://www.citibank.com.sg/gcb/credit_cards/pdf/Fraud_Charg... [PDF]
OP is definitely in the 'fraudster' category, and deep into it! I am surprised Stripe didn't flag way sooner.
If you get put into a monitoring program, it gets real expensive, real fast. Though Stripe would probably rather just ban you.
Thank you faitswulff for preserving the text at least for posterity.
Also keep in mind that for such a large number of users to go through the trouble of filing the chargebacks, it means that A) it's been long enough that they seriously believe your shop is fraudulent and you have no intention of shipping them what they paid for, and B) your communication and customer support is so terrible that they felt this was their only recourse.
Agree with the shipping delay points.
We really need to call out these types of scammers better. Nothing you can do to stop me selling my crap fake "Apple" charges on amazon (amazon should be doing a much better job screening), my "ecommerce store" that is experiencing "fraudulant transactions" == trying to scam users by not shipping anything, too I bought a container of "north face" gear from china and there is nothing you can do to stop me.
In all these cases, the seller had a reasonable ability to think - hey, this is probably a fraud and stop doing what they are doing.
Seriously, for reputation reasons North Face and many other brand retailers do not sell containers of product on "clearance" to rando third party retailers.. Some even destroy amazing amounts of product to avoid to entering into this scammy reseller chain.
Your post did not consider the high likelihood that a container of product on "clearance" from north face is counterfeit.
My point is simple. We have to have less tolerance of the willful ignorance by scammers. The brand should not need to pursue this.
Stipe / Atlas CAN and SHOULD shut down merchants who exhibit characteristics of fraud. Amazon should shut down the fake apple product sellers.
And yes, my job interects with fraud / ripoff detection, and I've worked with folks like you. My advice to folks in business and elsewhere, someone that willfully ignorant is not someone you want to do business with.
I think folks like you confuse something not having a law against it as something that prevents honest businesses from doing anything about the issue. That is misinformation.
I'll let this lie here because you seem both unwilling to consider the source of the container, but unwilling to consider this a useful or meaningful business standard.
