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Stripe banned us for payment disputes but we never had a single dispute

(justuseapp.com)
693 points hienyimba | 4 comments | 14 Sep 21 10:51 UTC | HN request time: 0.855s | source
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jeroenhd ◴[14 Sep 21 12:10 UTC] No.28523473[source]▶
Offtopic but I'm amazed you can legally hand out free (virtual) credit cards like these without anything close to a banking license.

The sales pitch, to pay for services anonymously, would make it trivial to use this service for money laundering. I hope the website is lying about how private those transactions really are.

I'm also a little sketched out by the fact the business resides in Wyoming while the person writing the blog says that Stripe wasn't available "in my country". The company has two directors, both of which are a vague "Cloud Peak Law" company which owns a bunch of unrelated LLCs, but no reference to any foreign owners. That's not very confidence inspiring either, in my opinion. I can find a similarly named company from Nigeria but there's no clear connection between the two.

Edit: the company's Cloud Peak Law P.C. "director" is a service used by a Wyoming company set up specifically to allow anonymous registration of a business, set up there specifically because anonymous businesses are allowed by the state. I wouldn't be surprised if one of this law company's other clients used their anonymous-business-as-a-service for something sketchy, causing Stripe to go up the chain and mark the entire Cloud Peak Law "person" as unreliable and disputed. After all, going by the public record, the company is actually run by this law company, not the person writing this blog post. That may be why Stripe is able to claim a dispute that doesn't exist in their own management system. I don't know if that's the reason, of course, because there's little transparency from other side here.

I don't think Stripe should be lying about the nonexistent disputes, but if I were to design a money laundering detection algorithm, this kind of stuff is exactly what I would watch out for. I'm guessing Stripe's machine learning triggered on this company and that they just picked a random TOS bullet point to end the contract by knowing that you won't be able to sue them for it anyway.

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hienyimba ◴[14 Sep 21 12:23 UTC] No.28523634[source]▶
Hey, the blog post says we incorporated in the U.S from abroad. We did that with FirstBase.io.

Concerning the cards, we do KYC before the cards are issued and we submit same to Stripe. In extreme cases, we ask for users Govt-issued IDs. Our service might be anonymous to the outside facing world but our users are not anonymous to us and Stripe.

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LurkingPenguin ◴[14 Sep 21 13:09 UTC] No.28524185[source]▶
Earlier, your website apparently had the statement:

> Our credit card comes with a U.S. billing address, so you can unlock features restricted to the U.S or Western markets especially if you don't live there.

Allowing customers to easily "spoof" their billing address could be very problematic for me as a merchant. There are countries that I don't want to serve customers in, and in some cases am even prevented (by law or agreement) from serving customers in.

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diebeforei485 ◴[14 Sep 21 19:04 UTC] No.28529405[source]▶
This is no different than using any virtual PO Box as a billing address.

There is a (very) large number of people who do this, especially in Canada, because US credit cards offer vastly better rewards even after taking foreign transaction fees into consideration.

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1. LurkingPenguin ◴[14 Sep 21 23:47 UTC] No.28533136[source]▶
Are you talking about American citizens residing in Canada, or Canadian citizens? Issuers are required by law to know certain things about you, which includes where you reside. Some US issuers will allow you to apply with an ITIN instead of a social security number but if you have no credit history in the US, your chances of approval are slim.

You cannot use a PO box as your residential address when you apply for a credit card. Assuming you have an SSN or ITIN, if you use a private mailbox as your residential address on a credit card application in the US, your mileage will vary. Some financial institutions maintain databases of private mailbox addresses and flag these if you use them but no matter what, falsely representing that you reside in the US on a credit card application by using a private mailbox with a US address will always put you at risk of an account closure.

Many issuers will allow you to set a mailing address that's different from your residential address. This can typically include a PO address. That's not the same thing as lying about your country of residence.

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2. diebeforei485 ◴[15 Sep 21 00:23 UTC] No.28533432[source]▶
I'm referring to people who are not US citizens, living in other countries (Canada is a popular one).

As long as you get your foot in the door and pay the bills on time, your credit history only grows -- and it is extremely unusual for accounts in good standing to be closed. In theory they can close your account at any time, yes. In practice, this rarely happens, because it's common for people to move around the world these days and it doesn't make sense to close someone's account for that.

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3. LurkingPenguin ◴[15 Sep 21 01:18 UTC] No.28533943[source]▶
I've worked in fintech (lending specifically) and your claim that "there is a (very) large number of people who do this" is simply not true.

To get access to the half decent rewards credit cards in the US will at a minimum require you to have an ITIN. To obtain an ITIN, you need to submit an application to the IRS and provide a bunch of documentation related to your identity and foreign status. This documentation needs to be original or certified. If you don't use your ITIN at least once to file a tax return in 3 years, it will expire.

If you jump through the hoops to get an ITIN, as I mentioned, financial institutions usually have a database of private mailbox addresses. Technically these are called CMRAs - commercial mail receiving agencies. If you use a CMRA address when applying for a credit card, there's a good chance it will be detected. So you're going to need a friend or family member in the US to let you use their address. Also, if you apply with a foreign IP address, this too will likely be detected. Use of a VPN can trigger extra scrutiny.

The American credit cards that offer attractive rewards have the highest requirements in terms of credit score. If you have no credit history, you will not be approved for these. The average non-resident foreign national isn't spending enough every year on their credit cards to gain any meaningful benefit from a crappy American rewards credit card, or to spend years building up a credit history to get a better card.

As for people moving around the world, it's imminently easier for American citizens to keep their credit cards and get new ones when they become expats, especially if they don't change their addresses or set up alternative US addresses (with friends or family) before they move abroad.

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4. diebeforei485 ◴[21 Sep 21 00:23 UTC] No.28600686{3}[source]▶
> If you jump through the hoops to get an ITIN

You make this sound way more complicated than it actually is to get an ITIN. There are very few hoops to jump through. Having an account with a US-based stock broker is usually sufficient, there are even companies that will handle the entire application for you for a fee.

> financial institutions usually have a database of private mailbox addresses. Technically these are called CMRAs

They get this list from the USPS, and anyone can use the USPS website to see if an address is on the CMRA list or not.

> The American credit cards that offer attractive rewards have the highest requirements in terms of credit score. If you have no credit history, you will not be approved for these.

Like I said above, once you get your foot in the door (if you have zero history, there are companies that will give you secured cards, against a deposit, that help you build history), your credit history only grows. You don't need "years" of credit history to get a good rewards card, it's pretty much two years.

> The average non-resident foreign national isn't spending enough every year on their credit cards to gain any meaningful benefit from a crappy American rewards credit card, or to spend years building up a credit history to get a better card.

The average non-resident foreign national probably buys more stuff online delivered from the US than you think. Two years of spending roughly $800/month on average would do it (this is not as much as it seems, because it includes all international travel spend -- and Canadians who are getting US cards are in the demographic that visits the US frequently).