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

158 points interesting_att | 2 comments | 22 Oct 22 15:43 UTC | HN request time: 0s | 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Which is insane because they have already withdrawn all the funds, meaning their risk would be zero if they refunded everyone.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.

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etaioinshrdlu ◴[22 Oct 22 17:50 UTC] No.33300437[source]▶
Sounds exactly like PayPal. Is there a law of nature that forces payment processors to act like this?
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e28eta ◴[22 Oct 22 18:37 UTC] No.33300851[source]▶
Not a law of nature, but there are laws of man against “Tipping-off” [1].

Add in the fact there are people trying very hard all the time to defraud the payment processor.

So now you can directly measure false negatives in fraud detection, but your false positive rate is harder to figure out. And whatever mechanism you use to recover from false positives can be abused by true fraudsters.

So it becomes a hard problem - but it is a problem which customers of the payment processor are paying them to solve. So it’s definitely reasonable to expect better.

1: I think a reasonable-ish definition of tipping off: https://onlinelibrary.wiley.com/doi/10.1002/9780470685280.ch...

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1. maxbond ◴[22 Oct 22 19:24 UTC] No.33301306[source]▶
You're suggesting this likely happens because the payment processor has reported their suspicions to a regulator who isn't getting back to them in a timely manner, and so they can't release the funds until they do? I'm a bit confused because it seems to me that the tip off is when they won't disburse your funds.

ETA: Maybe it's more that they can't give you any information because they can't allow adversaries to differentiate between glitches, random screenings, and investigations?

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2. timmaxw ◴[22 Oct 22 19:49 UTC] No.33301510[source]▶
If a payment processor suspects a business is laundering money, they can hold the funds, but it's illegal for the payment processor to tell the business that they suspect money laundering. So they end up saying something like "we're holding your funds for vague unspecified reasons".

(Disclaimer: Used to work at Stripe, but not on this particular area. Not an expert on either the law or Stripe's policies.)