Stripe is friendly to "friendly fraud"

(gingerlime.com)

86 points | by gingerlime 1 hour ago

13 comments

  • zuzululu 7 minutes ago
    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.

  • shash7 54 minutes ago
    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.

    • wahnfrieden 38 minutes ago
      Use DeviceCheck if iOS app too. Uber does this to ban across accounts
    • shawnz 10 minutes ago
      You'd better be promptly responsive to legitimate customer support inquiries if you are going to have a policy like that
  • sbierwagen 1 hour ago
    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.
    • Dylan16807 17 minutes ago
      > I suspect they were saying something carefully noncommittal and legally compliant to get you to go away

      If their total dismissal of the problem is itself deception, that's not a particularly big improvement!

    • 8cvor6j844qw_d6 31 minutes ago
      > Stripe obviously records data around friendly fraud

      My only nit with Stipe is they don't allow me to delete card details for an ongoing subscription I don't plan to renew and already set it not to renew on the service billing page.

    • benoau 1 hour ago
      That link says the customer's undisputed transactions 4 - 12 months ago with you may establish their disputed transaction was actually legitimate, but the article is about someone who only made disputed purchases within a week or two.
    • bfkwlfkjf 1 hour ago
      What's your point? Do you think it matters what stripe said? What is something that they could've said that wouldn't have justified the outraged blog post?
      • SpicyLemonZest 58 minutes ago
        The author thinks it matters what Stripe said, since they chose to use it as the title for their blog post. To the extent that it was just meant to be a lament that it's hard to be a small online merchant in an era of strong consumer protections, sure, I sympathize. But they seem to think it's a problem with Stripe that could be fixed if Stripe behaved better.
  • varenc 37 minutes ago
    > 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 quite surprised they were able to get Stripe to actually state all of this clearly. Its 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.

  • tptacek 5 minutes ago
    Isn't this a property (and longstanding value judgement) of the entire payment card ecosystem?
  • hdndjsbbs 15 minutes ago
    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.
  • bberenberg 41 minutes ago
    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"?

    • cperciva 31 minutes ago
      claim was the purchase was unauthorized and the person showed up in person to a class

      Certainly a person showed up in person to a class, but how do you know it was the person whose credit card was used?

      • bberenberg 28 minutes ago
        It matched their LinkedIn photo.
        • jagged-chisel 13 minutes ago
          I didn’t realize LinkedIn photos were a legitimate form of identification. Good thing they can’t be faked or changed readily.
    • mriet 18 minutes ago
      Their business model is to allow as many possible "valid" transactions, not to serve their "clients". They're a PSP...
    • SpicyLemonZest 29 minutes ago
      I don't know this is the reason, but if I were asked to build such a system, I'd be pretty worried that it constitutes a consumer report under the terms of the Fair Credit Reporting Act.

      Certainly I wouldn't want the inevitable news drama about it. "I'm just a poor innocent grandma, I'm a trusting person when it comes to Facebook ads, and Stripe punished me for getting scammed by banning me from half the stores on the Internet!"

  • ValentineC 57 minutes ago
    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.
  • ios-contractor 50 minutes ago
    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 44 minutes ago
    So I can crack open a Backwoods, stick my weed in there, and then glue back together with Ciglue? That's pretty cool.
  • dentemple 1 hour ago
    Then what are the better alternatives?
    • bombcar 1 hour ago
      Nothing, it’s a 5% bobcat problem. The card processors can force the merchants to eat it and there’s nothing you can do save not accepting cards, which loses you the other 95% of the market.

      https://xkcd.com/325/