
Stripe Atlas is nothing but a bad marriage - viet_nguyen
https://medium.com/nguyen/4bf7c8a52c35
======
thedz
The initial analogy made me cringe, and to be honest, the rest of the post
didn't change that impression too much. Reading past the prose and paeans to
loyalty, a couple points stick out to me:

> "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!

~~~
privateSFacct
No kidding. This guy is so vague about his business. What does he actually
make / sell? Socks?

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.

~~~
amyjess
I like to call this "Eddie Haskell Syndrome".

After some quick googling, it appears I'm not the only one to use this term.

------
jtchang
> The percentage of volume on your account that has been disputed (you are
> currently 44.82%)

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.

~~~
tehwebguy
Indeed, approaching 1% is enough to get you kicked off any non-high risk
payment platform.

------
ajeet_dhaliwal
I can sympathize because it was just one business unit that he had apparently
recently acquired that was responsible for this and the rest of his businesses
were ok. The biggest lessons are to be aware of what you are acquiring and the
issues they are having, make sure it's very clear to customers how they can
contact YOU to get a refund and finally, it's probably a good idea to have
separate accounts for different businesses on Stripe.

~~~
owenversteeg
That sounds like the real lesson here: have separate accounts for separate
sites.

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.

~~~
nsp
My company uses 3 stripe accounts on the advice of our stripe representative,
so I believe they’re ok with it.

~~~
corobo
When you're all talking about separate accounts - Are you talking separate
login accounts or separate accounts as in the top left on your dashboard
switch between these accounts

------
holman
Details of fraud and chargebacks aside, I want to point out that this post
really doesn't have to do with Stripe Atlas, insomuch as Stripe Atlas doesn't
give you carte blanche to commit fraud on the Stripe platform.

FWIW, I'm a pretty happy Stripe Atlas customer, and it's pretty WYSIWYG, for
better and for worse.

------
bobbytherobot
The Stripe Christmas Surprise: destroying your competitor's holiday season
earnings by issuing a well-placed chargeback.

~~~
ajeet_dhaliwal
In all seriousness do they have any way to detect sabotage of this sort?

~~~
metalliqaz
From the article, it appears they can't even detect obvious fraud, so I'm
assuming that the answer is no.

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.

------
Liron
My business had a 6% chargeback rate at one point because our biggest client's
mom didn't recognize us and disputed hundreds of charges. Stripe sent me this
same email, but they let me work it out and continue operating.

IMO if this questionable post is the worst story out there about Stripe, it
shows that Stripe is doing a great job.

~~~
charlesdm
"our biggest client's mom"

What are you selling?

~~~
Liron
Relationship coaching. It wasn't a kid though; a lot of people in their 20s
aren't financially independent.

------
Meekro
It sounds like he acquired a business that wasn't actually sending out the
products that they were charging customers for. What surprises me is that he
only discovered this after the chargebacks started coming in.

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.

~~~
amyjess
Yeah, this has to be a deliberate fraud outlet.

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...](https://www.ripoffreport.com/reports/specific_search/Queen+Fashions)

[1]
[https://www.resellerratings.com/store/Queen_Fashions](https://www.resellerratings.com/store/Queen_Fashions)

~~~
dmuth
When it gets to that level, I would recommend reaching out to your state's
Attorney General Consumer Protection unit. They usually have a form that you
can fill out, and (unlike the BBB), they have actual enforcement powers and
can take action against businesses like the one you described.

------
jasonlotito
6.5% chargeback rate.

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.

~~~
faitswulff
I would count myself in the category of people who don't know exactly how this
all works, but this email[0] makes it sound even worse by the end:

> 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](https://cdn-
images-1.medium.com/max/1600/0*8f0gZoASFf20_-lM).

~~~
badwolf
These rates are generally dictated by the card companies. We recently had a
spike in chargebacks in one of our Stripe accounts, which put us over the
warning threshold.

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.

~~~
SyneRyder
And for others who aren't aware - the standard Visa threshold is 1%. [1]
Supposedly with a warning at 0.75% from Visa and at 0.5% from Mastercard.

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...](https://www.braintreepayments.com/blog/changes-to-visa-chargeback-
and-fraud-monitoring-programs/)

[2] (see "Chargeback Compliance Program")
[https://www.citibank.com.sg/gcb/credit_cards/pdf/Fraud_Charg...](https://www.citibank.com.sg/gcb/credit_cards/pdf/Fraud_Chargeback_Compliance_Program_May2010.pdf)
[PDF]

------
jlg23
TL;DR: OP is using a single stripe account for several, distinct businesses.
One had a dispute rate so high that the overall dispute rate of this single
stripe account went above some threshold imposed by stripe's upstream
financial services partners. Account gets closed. Stripe offers OP to just
open a new account. OP spends more time to write a public complaint than it
would take to set up a new account.

------
metalliqaz
Sounds like the Paypal horror stories.

------
TheForumTroll
Well at least they are expensive. So they got that going for them!

