I live in Kazakhstan (I assume that's one country nobody heard of and would disable in their dashboard) and my bank doesn't even have any UI for chargebacks, nor I ever heard about anyone doing chargebacks. They even explicitly warn me sometimes that I assume all responsibility for that payment. I guess I can go through some process, it's VISA after all, but it's definitely not something I can do easily.
The strongest signal is whether they use an eBank/app that has a one-click button to report transactions as fraudulent. The Apple card(?) seems especially prevalent.
not to mention, thats pretty bad advice for these chargeback frauds. not gonna deny some regions have higher risk of frauds, but these are mostly high-volume automated schemes.
in the case of these "friendly fraud" schemes, they are much more likely to come from more developed regions with strong consumer protection laws like the NA.
if anything in many of those "high risk" regions, chargeback are much less common because fewer consumer protection law e.g. banks would automatically reject chargebacks for transactions with 3DS OTP.
Yeah, they will likely be spoofing their location anyway with residential IPs to let their payments go through easier and maintain identity separation.
I went down a bit of a search looking for counter evidence that crypto is likely less available to them, and it turns out both perspectives are true depending on the scale you look at. At the micro-level, survey data from emerging markets[0] confirms that crypto offers immunity against institutional failure and inflationary currency.
But this QJE article[1] argues there's a ceiling to how far things scale. Concluding that the cost to keep a decentralized network secure scales with its total economic value. So while there is immediate value to it's user, it might not scale well, and can't replace a country's financial system anyway because securing it at a sovereign scale would just be more expensive.
I dont follow. If regular finance to a country is that much distanced from global financial oversight and treaties where crypto (with awful spreads) becomes the norm that doesnt necessarily mean they are victims of international financial order but that regular financially modeling simply cannot manage their unique risk characteristics
Yes, all the time. I usually pay a 1 cent fee and the transaction goes through in seconds. Not sure what you're talking about.
I can send you some if you want to try it out, just drop an address(for a wallet I recommend cakewallet, but any popular open source wallet works).
I'm talking about Monero specifically, but your reply makes no sense because there are cryptos that have 0 transaction fee and instant confirmaiton. But they are less secure and private so I don't use them, I only use Monero.
That's the whole thing with Monero. It's actually used as a currency, not as a get rich quick scam. I believe 99% of crypto is a scam, but Monero is a real improvement for payments. The Monero community actually wants it to be adopted to spend it, it's not a price go up community.
Buy food with Monero on an ebay type platform called xmrbazaar.
That's less because it was Bitcoin and more because the entire effort was a slapdash affair pushed by Bukele in an effort for him and his buddies to profit off the cryptocurrency boom rather than being an inherent knock on cryptocurrency itself.
Also of all the cryptocurrencies Bitcoin is a pretty poor choice since it could be pretty well argued that it has lost the original purpose and devolved into a raw "line go up" financial instrument.
The customer screwed you over, and then their bank did too. Stripe didn't. I'm not sure why Stripe is getting blamed in the title and the article.
Yeah, maybe Stripe could do more without Radar, but I imagine it could also be fraught if Stripe was in the business of blocking customers from their entire network based on one vendor's complaint. Obviously a lot could go wrong with such an approach.
Yes. But Stripe didn't do anything to prevent the next merchant from falling into the same trap. They had all the evidence, and ignored it.
That was the point I tried to make with my blog post. And yes, if it was too easy for merchants to block consumers, that won't be fair either. But surely there's a middle ground here.
Stripe very explicitly told me that they don't do anything with such reports. It's simply ignored.
All 3 of those identifiers can be easily changed by advanced users. I'm curious what you mean by fingerprint their access. Is this like an on demand fingerprinting, I've only seen browser fingerprinting as a tracker for every user.
> They told me they don’t use evidence of chargeback abuse from one merchant to create cross-merchant fraud signals, or to take action against the customer’s card, email, or other details for other merchants.
I'm surprised they were able to get Stripe to actually state all of this clearly. It's nice that Stripe actually communicates details like this. But you can see the logic behind why many other big companies would just respond with an opaque message like "thank you for your report, it will be handled in the appropriate manner". Because saying the truth gets people more upset.
>No, vagueness gets me much more upset, but there's just nothing to write about in those cases.
I think this hits on the spirit behind GP's point. Clarity, leading to an article like the one posted, gets more people upset. The equation (Upset/People x People) results in a larger number -- people, as a whole, are more upset.
>But you can see the logic behind why many other big companies would just respond with an opaque message like "thank you for your report, it will be handled in the appropriate manner". Because saying the truth gets people more upset.
If a company is vague, there's nothing to write about, one person (maybe) gets more upset than they would have facing clarity.
But if the company is clear, there is something to write about, and an article like the one posted makes people, overall, more upset.
No. I would have been far more upset about a vague response. I was still upset that they don't do anything about it.
(it took a bit of back-n-forth to get a clear answer, but I did get a clear one. Their support is still excellent from my experience and communicate well)
Even in the post you're wishy washy about what you want. They offer a product that does enhanced fraud detection but you don't like that. You correctly call out that there's major risks with taking a merchant's report and using it to flag a user's future transactions.
Stripe obviously records data around friendly fraud, (At minimum they implement Visa Compelling Evidence 3.0 https://support.stripe.com/questions/how-does-stripe-support... ) and since you did not include screenshots of the messages sent by Stripe support I suspect they were saying something carefully noncommittal and legally compliant to get you to go away, which then got spun into an outraged blog post.
Happy to share their responses verbatim. It was a rather long back-n-forth. Here's a snippet from the latest email, which I think makes it clear that they do not use the evidence I provided:
I can assure you that I will take note of your feedback and pass it to our team. Your point about post-transaction abuse detection is valid - while Stripe has robust network-level fraud detection, there does appear to be a gap in utilizing merchant-provided evidence of confirmed fraud to protect the broader merchant ecosystem. This type of feedback from merchants who have direct evidence is valuable for improving these systems.
The problem is that, as patio11 once described in detail (https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...), there are genuine tradeoffs here that people get outraged by the mention of. How many legitimate sales should Stripe block in order to more effectively fight this kind of fraud? Merchants don't want to hear it, and consumers don't either. So financial companies invariably conclude that it's better to raise the question only in careful, indirect ways which could not be misinterpreted as a statement that fraud is good or OK or acceptable.
> Stripe obviously records data around friendly fraud
My only nit with Stipe is they don't allow me to delete card details for an ongoing subscription I don't plan to renew and already set it not to renew on the service billing page.
That link says the customer's undisputed transactions 4 - 12 months ago with you may establish their disputed transaction was actually legitimate, but the article is about someone who only made disputed purchases within a week or two.
What's your point? Do you think it matters what stripe said? What is something that they could've said that wouldn't have justified the outraged blog post?
The author thinks it matters what Stripe said, since they chose to use it as the title for their blog post. To the extent that it was just meant to be a lament that it's hard to be a small online merchant in an era of strong consumer protections, sure, I sympathize. But they seem to think it's a problem with Stripe that could be fixed if Stripe behaved better.
Stripe has a customer's bank saying "the customer says they didn't make this payment" and you saying "the customer told me they did make this purchase and got the item and they're making fun of me".
They have no way to know if your evidence is real, any more than the bank has a way to know if their customer's evidence is real. Either one (or both) of you could be full of shit.
In that world, what would you like Stripe to do better?
I got hit with a fraudulent chargeback (claim was the purchase was unauthorized and the person showed up in person to a class) and it was doubly bad because they paid via Link which means that Stripe actively verified them via 2FA.
Can someone explain to me why Stripe (or a competitor) doesn't offer a setting "refuse transactions for cards that have filed > x chargebacks with <acquirer> merchants this year"?
Yeah, though this rule sounds a bit tricky. Like what if someone legitimately had their card abused.
The thing that gets me is that Stripe boasts about their machine learning radar rules etc etc, but somehow can't feed it actually valuable data.
Stripe support saw the emails from the customer boasting about defrauding me, they completely agreed that this is a clear case of friendly-fraud, but did nothing with this info.
Do you imagine someone got a stolen credit card, made a linkedin with that name, used the card to attend a live class under the fake ID, or are you just doing the classic hacker news aaaaactually?
Comments like this have ruined this site. We all know that’s never happened once in history.
If you care about the quality of the site, consider the guidelines about not responding to a bad comment with a worse one and not griping about how HN has gotten terrible or turned into reddit or what there you. Downvote, flag, and move on to better discussion, and you'll spend a lot more time engaging and contributing to good discussions.
Contributing to good discussions is the highest leverage way to promote the quality of the site. Spending time in poor discussions is what makes it feel like HN has gone to crap.
I don't know this is the reason, but if I were asked to build such a system, I'd be pretty worried that it constitutes a consumer report under the terms of the Fair Credit Reporting Act.
Certainly I wouldn't want the inevitable news drama about it. "I'm just a poor innocent grandma, I'm a trusting person when it comes to Facebook ads, and Stripe punished me for getting scammed by banning me from half the stores on the Internet!"
If your card is actually stolen then you should have the card number changed to prevent additional fraud and then the disputes would be against the old card number rather than the new one, right?
If your card is stolen you should, but not necessarily if you fall for a Facebook ad that ships you a pile of rocks or a paper photo of the product you thought you bought.
Isn't that exactly when you should have your card number changed? You gave your card info to a blatant fraudster. If they're willing to ship you a pile of rocks then there's a significant chance they're willing to use the card info you gave them to make fraudulent purchases.
At this point I’m fairly convinced Stripe is Paypal 2.0, at least in spirit:
* Turns a blind eye to misdeeds on its platform
* Locks out adult creators/vendors after taking their money
* Is ubiquitous, but not well liked
I love that Stripe changed the game of fintech and made it accessible to more parties in a programmatic way, but I find myself repeating “avoid Stripe” to a lot of folks asking me for advice on dealing with payment nowadays for those reasons.
I don’t have one at the moment, at least for my circles (artisans, craftspeople, adult creators in general). Much of it has fallen back on PayPal for folks without an LLC to hide behind, or Square if they’re incorporated as a business. The trick has been discretion and operating in a gray area: “novelty goods”, “graphic design work”, and “outerwear” as item descriptors or db entries, obscuring the actual content without actually lying or deceiving the payment processor.
Most paypros, most of the time, won’t look too hard unless there’s a problem or you’re tripping some internal security measure (like raking in a lot of cash in weird amounts). Of late they’ve been more intrusive due to some weird eTeen puritans, but that’s quieting down again as they remember they like making money, and throwing legal content off their platforms can very quickly cause an exodus of customers looking to avoid having their funds seized.
A friend of mine has a "1 dispute and your banned rule"... sounds like it could help in this situation. He'll catch wind of someone disputing they didn't receive a product he makes, despite his OCD with packaging, and gets a chargeback. He sits down each week with all the chargebacks he's gotten and bans them from future sales. It's not often but when he does, he complains about it when I see him.
I am pretty convinced that friendly fraud is about 90% of chargebacks. I have seen some genuine fraud, but dwarfed by friendly fraud over time across 3 companies.
There aren't any screenshots of conversations with Stripe support in the blog post, but I'm guessing one other reason is that support agents are incentivised to close tickets or end conversations as quickly as possible.
I had a customer do something similar with a thousand-dollar product. They had signed for delivery and provided no evidence, but banks always side with the customer.
Suing someone in the Philippines probably won’t be worth the effort for an $18 product. And the FBI probably will not care much about a $18 international fraud.
"Friendly fraud" is when the cardholder is in on it. They or an accomplice they've given access to their credit card go to a merchant, order and receive an expensive item with the card and then file a chargeback claiming they didn't make the purchase so they can keep both the item and the money.
What would be there to gain? The merchant loses money to the credit card processing fees, chargeback fees, and shipping cost along with the loss of the product, they gain nothing. Its a pretty expensive way to send a customer a free thing.
When a problem is industry-wide, people are naturally going to complain about the most prominent companies, but that's not necessarily even wrong. The most prominent companies are the ones in the strongest position to actually do something about it (e.g. develop better detection for friendly fraud or lobby for sensible regulatory changes), and have a stronger incentive to when they're the ones who keep getting blamed.
Nothing, it’s a 5% bobcat problem. The card processors can force the merchants to eat it and there’s nothing you can do save not accepting cards, which loses you the other 95% of the market.
That's fine for some things but my grandma is not going to buy from an online store that only takes crypto. Crypto as a payment option works well for computer-related merchants or for privacy-focused merchants. Like it wouldn't be uncommon to rent a VPS with crypto but it would be strange for an online candy store to accept it.
My suggestion is to just ban specific regions or countries and you can cut 80% of this fraud.
I'm not going to name those countries outright but you should never ever be launching globally until you have these safeguards in place.
Once you are known to be vulnerable to a certain scheme, it quickly becomes known in that region/country.
Again and again I'm reminded why high trust societies remain high trust and why low trust societies rarely transform into high trust society.
I've got 13 chargebacks over the last 4 years for my biz. Out of these, 10 came from US based cards. The other 3 came from Australia(my country).
Be careful when taking verbatim advice from internet strangers.
I live in Kazakhstan (I assume that's one country nobody heard of and would disable in their dashboard) and my bank doesn't even have any UI for chargebacks, nor I ever heard about anyone doing chargebacks. They even explicitly warn me sometimes that I assume all responsibility for that payment. I guess I can go through some process, it's VISA after all, but it's definitely not something I can do easily.
+1 almost all from the US.
The strongest signal is whether they use an eBank/app that has a one-click button to report transactions as fraudulent. The Apple card(?) seems especially prevalent.
not to mention, thats pretty bad advice for these chargeback frauds. not gonna deny some regions have higher risk of frauds, but these are mostly high-volume automated schemes.
in the case of these "friendly fraud" schemes, they are much more likely to come from more developed regions with strong consumer protection laws like the NA.
if anything in many of those "high risk" regions, chargeback are much less common because fewer consumer protection law e.g. banks would automatically reject chargebacks for transactions with 3DS OTP.
Yeah, they will likely be spoofing their location anyway with residential IPs to let their payments go through easier and maintain identity separation.
13 over 4 years is tiny sample compared to what I've seen on international scale.
Great advice which is why data is what I'm relying on vs anecdotes.
How big is your business and where does it sell?
One chargeback a quarter is a lot, depending.
Just because the card is US-based doesn't mean the user is.
or American.
This case was Canada.
The US and I imagine Canada are known for the ease of chargebacks.
My experience in Europe is that it's a very tough process to even initiate (as a consumer)
Accept crypto for those countries, it doesn't have chargebacks and helps those vulnerable to the financial system.
I went down a bit of a search looking for counter evidence that crypto is likely less available to them, and it turns out both perspectives are true depending on the scale you look at. At the micro-level, survey data from emerging markets[0] confirms that crypto offers immunity against institutional failure and inflationary currency.
But this QJE article[1] argues there's a ceiling to how far things scale. Concluding that the cost to keep a decentralized network secure scales with its total economic value. So while there is immediate value to it's user, it might not scale well, and can't replace a country's financial system anyway because securing it at a sovereign scale would just be more expensive.
[0]: https://www.mdpi.com/1911-8074/17/10/467 [1]: https://academic.oup.com/qje/article/140/1/1/7824430
I dont follow. If regular finance to a country is that much distanced from global financial oversight and treaties where crypto (with awful spreads) becomes the norm that doesnt necessarily mean they are victims of international financial order but that regular financially modeling simply cannot manage their unique risk characteristics
Have you ever actually used crypto to buy something? The transaction fees are exorbitant and prohibitive, and it's slow as balls.
Yes, all the time. I usually pay a 1 cent fee and the transaction goes through in seconds. Not sure what you're talking about.
I can send you some if you want to try it out, just drop an address(for a wallet I recommend cakewallet, but any popular open source wallet works).
I'm talking about Monero specifically, but your reply makes no sense because there are cryptos that have 0 transaction fee and instant confirmaiton. But they are less secure and private so I don't use them, I only use Monero.
That depends on the currency you use. I've only ever used Monero and the transfer fees are fractions of a cent.
Man people are still using the "it's a currency" grift when discussing crypto, did the El Salvador failure really teach you nothing?
https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador
That's the whole thing with Monero. It's actually used as a currency, not as a get rich quick scam. I believe 99% of crypto is a scam, but Monero is a real improvement for payments. The Monero community actually wants it to be adopted to spend it, it's not a price go up community.
Buy food with Monero on an ebay type platform called xmrbazaar.
(https://xmrbazaar.com/search-category/food/)
Donate to non-profits in Monero
(https://donatemonero.org)
GrapheneOS says it's the only crypto that they regularly get recurring small donations in.
That's less because it was Bitcoin and more because the entire effort was a slapdash affair pushed by Bukele in an effort for him and his buddies to profit off the cryptocurrency boom rather than being an inherent knock on cryptocurrency itself.
Also of all the cryptocurrencies Bitcoin is a pretty poor choice since it could be pretty well argued that it has lost the original purpose and devolved into a raw "line go up" financial instrument.
Crypto does have the distinct cash like advantage of not having chargebacks. I don’t know of any other digital payment system with that property.
> I'm not going to name those countries outright
Why?
I would assume it’s not that relevant to the advice. And people will always argue about the countries if you list them.
X isn’t bad. You should include Y. You only added/omitted Z because of $stereotype/$racistView/$otherAllegation.
Probably just not worth the hassle.
The customer screwed you over, and then their bank did too. Stripe didn't. I'm not sure why Stripe is getting blamed in the title and the article.
Yeah, maybe Stripe could do more without Radar, but I imagine it could also be fraught if Stripe was in the business of blocking customers from their entire network based on one vendor's complaint. Obviously a lot could go wrong with such an approach.
Yes. But Stripe didn't do anything to prevent the next merchant from falling into the same trap. They had all the evidence, and ignored it.
That was the point I tried to make with my blog post. And yes, if it was too easy for merchants to block consumers, that won't be fair either. But surely there's a middle ground here.
Stripe very explicitly told me that they don't do anything with such reports. It's simply ignored.
Stripe did the right thing here. They cannot be arbitrators of every little edge cases that comes up. That's not their role.
Also I just wanna throw some praise at Stripe Support. They have an excellent team and go above and beyond to help.
Agree on Stripe support. They're excellent.
I don't think Stripe did the right thing here. They can do better to protect their own customers.
I run a saas and we get this every now and then.
As a rule of thumb, when you get a chargeback you need to completely ban the customer from your db. This includes:
- card ban - email address ban - fingerprint their access and ban
This will save you a lot of hassle when they try to signup/buy your product again and cause you the same amount of grief.
Exploiters easily get around this. its a small group of people doing all of the abuse.
All 3 of those identifiers can be easily changed by advanced users. I'm curious what you mean by fingerprint their access. Is this like an on demand fingerprinting, I've only seen browser fingerprinting as a tracker for every user.
Use DeviceCheck if iOS app too. Uber does this to ban across accounts
I imagine most fraudsters wouldn't be using iOS. I'm curious if the android app fingerprinting solutions go cross user profile.
You'd better be promptly responsive to legitimate customer support inquiries if you are going to have a policy like that
> They told me they don’t use evidence of chargeback abuse from one merchant to create cross-merchant fraud signals, or to take action against the customer’s card, email, or other details for other merchants.
I'm surprised they were able to get Stripe to actually state all of this clearly. It's nice that Stripe actually communicates details like this. But you can see the logic behind why many other big companies would just respond with an opaque message like "thank you for your report, it will be handled in the appropriate manner". Because saying the truth gets people more upset.
No, vagueness gets me much more upset, but there's just nothing to write about in those cases.
>No, vagueness gets me much more upset, but there's just nothing to write about in those cases.
I think this hits on the spirit behind GP's point. Clarity, leading to an article like the one posted, gets more people upset. The equation (Upset/People x People) results in a larger number -- people, as a whole, are more upset.
>But you can see the logic behind why many other big companies would just respond with an opaque message like "thank you for your report, it will be handled in the appropriate manner". Because saying the truth gets people more upset.
If a company is vague, there's nothing to write about, one person (maybe) gets more upset than they would have facing clarity.
But if the company is clear, there is something to write about, and an article like the one posted makes people, overall, more upset.
No. I would have been far more upset about a vague response. I was still upset that they don't do anything about it.
(it took a bit of back-n-forth to get a clear answer, but I did get a clear one. Their support is still excellent from my experience and communicate well)
This is just fraud.
"Friendly fraud" is accidental or with the correct intentions – such as the customer not recognising the charge and charging back.
Yes, and Stripe could do much better to prevent it. And doesn't.
What would you like them to do?
Even in the post you're wishy washy about what you want. They offer a product that does enhanced fraud detection but you don't like that. You correctly call out that there's major risks with taking a merchant's report and using it to flag a user's future transactions.
Stripe obviously records data around friendly fraud, (At minimum they implement Visa Compelling Evidence 3.0 https://support.stripe.com/questions/how-does-stripe-support... ) and since you did not include screenshots of the messages sent by Stripe support I suspect they were saying something carefully noncommittal and legally compliant to get you to go away, which then got spun into an outraged blog post.
Happy to share their responses verbatim. It was a rather long back-n-forth. Here's a snippet from the latest email, which I think makes it clear that they do not use the evidence I provided:
> I suspect they were saying something carefully noncommittal and legally compliant to get you to go away
If their total dismissal of the problem is itself deception, that's not a particularly big improvement!
The problem is that, as patio11 once described in detail (https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...), there are genuine tradeoffs here that people get outraged by the mention of. How many legitimate sales should Stripe block in order to more effectively fight this kind of fraud? Merchants don't want to hear it, and consumers don't either. So financial companies invariably conclude that it's better to raise the question only in careful, indirect ways which could not be misinterpreted as a statement that fraud is good or OK or acceptable.
> Stripe obviously records data around friendly fraud
My only nit with Stipe is they don't allow me to delete card details for an ongoing subscription I don't plan to renew and already set it not to renew on the service billing page.
That link says the customer's undisputed transactions 4 - 12 months ago with you may establish their disputed transaction was actually legitimate, but the article is about someone who only made disputed purchases within a week or two.
What's your point? Do you think it matters what stripe said? What is something that they could've said that wouldn't have justified the outraged blog post?
The author thinks it matters what Stripe said, since they chose to use it as the title for their blog post. To the extent that it was just meant to be a lament that it's hard to be a small online merchant in an era of strong consumer protections, sure, I sympathize. But they seem to think it's a problem with Stripe that could be fixed if Stripe behaved better.
Author here. What makes you think Stripe cannot do better here?
Stripe has a customer's bank saying "the customer says they didn't make this payment" and you saying "the customer told me they did make this purchase and got the item and they're making fun of me".
They have no way to know if your evidence is real, any more than the bank has a way to know if their customer's evidence is real. Either one (or both) of you could be full of shit.
In that world, what would you like Stripe to do better?
I got hit with a fraudulent chargeback (claim was the purchase was unauthorized and the person showed up in person to a class) and it was doubly bad because they paid via Link which means that Stripe actively verified them via 2FA.
Can someone explain to me why Stripe (or a competitor) doesn't offer a setting "refuse transactions for cards that have filed > x chargebacks with <acquirer> merchants this year"?
Yeah, though this rule sounds a bit tricky. Like what if someone legitimately had their card abused.
The thing that gets me is that Stripe boasts about their machine learning radar rules etc etc, but somehow can't feed it actually valuable data.
Stripe support saw the emails from the customer boasting about defrauding me, they completely agreed that this is a clear case of friendly-fraud, but did nothing with this info.
claim was the purchase was unauthorized and the person showed up in person to a class
Certainly a person showed up in person to a class, but how do you know it was the person whose credit card was used?
It matched their LinkedIn photo.
I didn’t realize LinkedIn photos were a legitimate form of identification. Good thing they can’t be faked or changed readily.
Do you imagine someone got a stolen credit card, made a linkedin with that name, used the card to attend a live class under the fake ID, or are you just doing the classic hacker news aaaaactually?
Comments like this have ruined this site. We all know that’s never happened once in history.
If you care about the quality of the site, consider the guidelines about not responding to a bad comment with a worse one and not griping about how HN has gotten terrible or turned into reddit or what there you. Downvote, flag, and move on to better discussion, and you'll spend a lot more time engaging and contributing to good discussions.
Contributing to good discussions is the highest leverage way to promote the quality of the site. Spending time in poor discussions is what makes it feel like HN has gone to crap.
While funny, I literally just used my LinkedIn picture in a legal case of mistaken identity on behalf of a US state.
Not kidding.
Their business model is to allow as many possible "valid" transactions, not to serve their "clients". They're a PSP...
I don't know this is the reason, but if I were asked to build such a system, I'd be pretty worried that it constitutes a consumer report under the terms of the Fair Credit Reporting Act.
Certainly I wouldn't want the inevitable news drama about it. "I'm just a poor innocent grandma, I'm a trusting person when it comes to Facebook ads, and Stripe punished me for getting scammed by banning me from half the stores on the Internet!"
If your card is actually stolen then you should have the card number changed to prevent additional fraud and then the disputes would be against the old card number rather than the new one, right?
If your card is stolen you should, but not necessarily if you fall for a Facebook ad that ships you a pile of rocks or a paper photo of the product you thought you bought.
Isn't that exactly when you should have your card number changed? You gave your card info to a blatant fraudster. If they're willing to ship you a pile of rocks then there's a significant chance they're willing to use the card info you gave them to make fraudulent purchases.
At this point I’m fairly convinced Stripe is Paypal 2.0, at least in spirit:
* Turns a blind eye to misdeeds on its platform
* Locks out adult creators/vendors after taking their money
* Is ubiquitous, but not well liked
I love that Stripe changed the game of fintech and made it accessible to more parties in a programmatic way, but I find myself repeating “avoid Stripe” to a lot of folks asking me for advice on dealing with payment nowadays for those reasons.
That’s just the nature of these industries.
1) Incumbent is slow, clunky, unpleasant to deal with due to years of accumulated constraints to deal with
2) Newcomer can differentiate themselves by being nimble and pleasant to work with, taking market share
3) Over time newcomer has to deal with increasing amount of scrutiny, fraud, overhead, CYA type practices, etc
4) Newcomer is now incumbent, goto 1)
Who do you recommend as an alternative?
I don’t have one at the moment, at least for my circles (artisans, craftspeople, adult creators in general). Much of it has fallen back on PayPal for folks without an LLC to hide behind, or Square if they’re incorporated as a business. The trick has been discretion and operating in a gray area: “novelty goods”, “graphic design work”, and “outerwear” as item descriptors or db entries, obscuring the actual content without actually lying or deceiving the payment processor.
Most paypros, most of the time, won’t look too hard unless there’s a problem or you’re tripping some internal security measure (like raking in a lot of cash in weird amounts). Of late they’ve been more intrusive due to some weird eTeen puritans, but that’s quieting down again as they remember they like making money, and throwing legal content off their platforms can very quickly cause an exodus of customers looking to avoid having their funds seized.
A friend of mine has a "1 dispute and your banned rule"... sounds like it could help in this situation. He'll catch wind of someone disputing they didn't receive a product he makes, despite his OCD with packaging, and gets a chargeback. He sits down each week with all the chargebacks he's gotten and bans them from future sales. It's not often but when he does, he complains about it when I see him.
I am pretty convinced that friendly fraud is about 90% of chargebacks. I have seen some genuine fraud, but dwarfed by friendly fraud over time across 3 companies.
There aren't any screenshots of conversations with Stripe support in the blog post, but I'm guessing one other reason is that support agents are incentivised to close tickets or end conversations as quickly as possible.
So I can crack open a Backwoods, stick my weed in there, and then glue back together with Ciglue? That's pretty cool.
Thank you. Haha, yes. My product is focused on cigar repair, but I know some weed smokers that use cigar glue (mine or other brands) for blunts.
Use EMV 3DS 2.x authentication with liability shift protection?
I had a customer do something similar with a thousand-dollar product. They had signed for delivery and provided no evidence, but banks always side with the customer.
I thought that banks were less likely to side with the customer compared with credit cards.
Most credit cards are issued by banks.
You know enough about the buyer to sue them or report them to the FBI.
Suing someone in the Philippines probably won’t be worth the effort for an $18 product. And the FBI probably will not care much about a $18 international fraud.
Yeah. This case Canada. Not sure where to report but seems unlikely to do anything. Will happily report out of principle so any tips welcome.
To be fair, from stripe's point of view, how would they know that you and the alleged customer are not in on it for some reason they don't know?
"Friendly fraud" is when the cardholder is in on it. They or an accomplice they've given access to their credit card go to a merchant, order and receive an expensive item with the card and then file a chargeback claiming they didn't make the purchase so they can keep both the item and the money.
What would be there to gain? The merchant loses money to the credit card processing fees, chargeback fees, and shipping cost along with the loss of the product, they gain nothing. Its a pretty expensive way to send a customer a free thing.
? in on what?
Isn't this a property (and longstanding value judgement) of the entire payment card ecosystem?
When a problem is industry-wide, people are naturally going to complain about the most prominent companies, but that's not necessarily even wrong. The most prominent companies are the ones in the strongest position to actually do something about it (e.g. develop better detection for friendly fraud or lobby for sensible regulatory changes), and have a stronger incentive to when they're the ones who keep getting blamed.
https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra... Classic patio11 article.
Then what are the better alternatives?
Nothing, it’s a 5% bobcat problem. The card processors can force the merchants to eat it and there’s nothing you can do save not accepting cards, which loses you the other 95% of the market.
https://xkcd.com/325/
Monero or honestly any crypto. There's no chargebacks and it can be more private.
That's fine for some things but my grandma is not going to buy from an online store that only takes crypto. Crypto as a payment option works well for computer-related merchants or for privacy-focused merchants. Like it wouldn't be uncommon to rent a VPS with crypto but it would be strange for an online candy store to accept it.
Don't most crypto exchanges ban Monero?
Signifyd (company) solves this issue.
how so?
https://www.signifyd.com/fearless-conversions/
They have a comprehensive customer ID system and let you adjust desired risk levels for various forms of fraud.
Epic username btw lol