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Ask HN: Stripe holding funds for 120 days for no reason

158 points interesting_att | 4 comments | 22 Oct 22 15:43 UTC | HN request time: 0.809s | source

Hi Guys--

I started a Stripe account (even incorporated through them) for a basic graphic design and web design service business.

I process a few charges and even though I didn't get a single chargeback or dispute, Stripe decided to deactivate my account and said they would refund all the charges that were processed.

Which would have been fine with me. They said they would refund on Oct 17, but that date came and past. So I kept emailing.

Now they're saying they're holding all the funds for 120 days because of "elevated risk".

Which is insane because they have already withdrawn all the funds, meaning their risk would be zero if they refunded everyone.

I am beyond hurt and confused as I did need this money for my daughter. These decisions have real impacts on real families.

What do you do in this scenario? I have tried contacting support at Stripe but seems to be of no help.

1. c7b ◴[22 Oct 22 18:22 UTC] No.33300697[source]▶
Sue them for lost interest. You should have a strong case in principle, however, in practice, it's most likely not worth it for you (which is the real reason why this is happening). But if you have a lawyer friend who can give a first opinion for free, you could give 'em a call.
replies(2): >>33301135 #>>33301774 #
2. shaburn ◴[22 Oct 22 19:04 UTC] No.33301135[source]▶
Sadly, because you are incorporated, I do not think you can go the small claims court route. Maybe hit up the legalist for funding and or check with an attorney who does financial class action in San Francisco. You are probably not alone and considering the nature of your business being small, you may have a claim that it destroyed your operations and ability to earn(which they probably did in reality). *Not a lawyer and not legal advice.
3. gruez ◴[22 Oct 22 20:14 UTC] No.33301774[source]▶
Their ToS probably gives them wide latitude to arbitrarily freeze funds without having to compensate you. Not to mention, any lost interest pales in comparison to any legal fees. The federal funds rate is currently 3.08%. Apply that over 120 days and it's only 1.01%. If a lawsuit cost $10k (very conservative estimate), you'd need to have 990k frozen by stripe for it to be worth it. Even if all it took was a sternly worded letter from a lawyer (estimated cost: $300), you'd to have $30k frozen for it to break even.
replies(1): >>33302406 #
4. c7b ◴[22 Oct 22 21:30 UTC] No.33302406[source]▶
ToS aren't law, what matters in court is what the judge decides, and they can decide that certain ToS terms were never valid. But the question is whether it makes financial sense to do so, where for most accounts the answer will be no (hence why providers can get away with it for a long time).

There are also some small chances that the company will try to reach a settlement to avoid a ruling that would give a lot of customers a strong lever before they can update their ToS (which could mean a much larger payout in return for signing some NDAs), that you are awarded additional punitive damages (pretty unlikely here though, I'd guess), or that you find a consumer rights organization that is willing to cover your legal fees. And of course, some people are willing to fight for their rights even if it doesn't make sense financially (this guy [0] fought and won a 22-year legal battle against Indian Railways over something like 20c).

[0] https://www.bbc.com/news/world-asia-india-62501688