Stripe is friendly to “friendly fraud”

dentemple

Then what are the better alternatives?

sbierwagen

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.

ValentineC

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.

shash7

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.

ios-contractor

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?

NDlurker

So I can crack open a Backwoods, stick my weed in there, and then glue back together with Ciglue? That's pretty cool.

bberenberg

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"?

varenc

> 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.

hdndjsbbs

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.

zuzululu

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.

tptacek

Isn't this a property (and longstanding value judgement) of the entire payment card ecosystem?

stego-tech

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.

bix6

Signifyd (company) solves this issue.

nostromo

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.

Suppafly

You know enough about the buyer to sue them or report them to the FBI.

danpalmer

This is just fraud. "Friendly fraud" is accidental or with the correct intentions – such as the customer not recognising the charge and charging back.

phonon

Use EMV 3DS 2.x authentication with liability shift protection?

mchusma

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.

reactordev

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.

GuardCalf

Solid post. The key takeaway for me was Stripe admitting they won't use post-dispute evidence of friendly fraud to build cross-merchant signals in Radar. That, plus the customer literally bragging about it after winning the chargeback, shows how lopsided the system is against indie sellers. Thanks for sharing.