12 ms·
Etsy sellers say their bank accounts were emptied in major billing snafu
- chx 8y agoThis is the kind of mistake that potentially kills the company. Or would if it still would be a small artist umbrella but it's now only a small portion. Because after this, a lot of small artists will pull out for sure because as you very well know 40% of Americans can't cover a $400 emergency expense so they equally can't afford to hand their financial info to a company which might just trigger such an expense. This is a problem. I liked the small artist half of etsy. Where do you get your small artist stuff now? In a way, Feltsewfantastic's Corgi felt keychain key ring / bag charm / ornament is my support animal... etsy has brought me a lot of joy.
- pmoriarty 8y ago"People who sell crafts and other goods on Etsy, an e-commerce site focused on handmade and small-batch products, say they woke up to a nasty surprise Friday morning when thousands of dollars were withdrawn from the bank accounts and credit cards sellers are required to have on file in order to have an Etsy storefront." Why do sellers have to have credit cards on file? Buyers I can understand, but sellers?
- pgrote 8y agoTo pay the fees associated with selling.
- gondo 8y agowhy isn't the fee deducted from the selling price before money are wired from etsy to seller?
- anoncoward111 8y agoBecause Etsy wants to have the ability to force people to give them short term loans, kind of like the IRS
- AnssiH 8y agoTraditionally buyers paid via PayPal directly to the seller's account without Etsy seeing the money. This is still a supported option for grandfathered sellers and for sellers in countries where Etsy Payments does not operate, it is called "standalone PayPal". A couple of months ago, for those sellers that use Etsy Payments, Etsy actually switched to deducting the fees from the sales like you suggest. But that still doesn't cover the cases where buyers want a refund afterwards, or if the seller had no sales to cover the listing fees.
- jeromegv 8y agoYou need to pay for listing as well, regardless if you sold or not.
- astura 8y agoSome platforms work like this (Amazon) and some have fees you have to pay after the fact (eBay). Big reason why eBay works like this is it has listing fees for high volume sellers and they have to be paid even if the item doesn't sell. Also, in the early days payment wasn't handled by eBay itself, it was decided entirely between buyer and seller. eBay auto is still like this (as far as I know). But even with Amazon you have to have a credit card on file and they'll charge it if your seller account goes negative. Your seller account can go negative if you have a return or if you paid for FBA shipping and haven't made sale since or paid for FBA removal.
- subpixel 8y agob/c Etsy makes money in listing fees as well as transaction fees.
- jasonlotito 8y agoBecause they have to pay for listings and other things from Etsy.
- Animats 8y agoThis seems to be simple theft. Report it as a crime.
- tcj_phx 8y agoMens rea - Latin for “guilty mind” - is the intention to commit a crime, and must be present for many types of prosecutions. https://en.wikipedia.org/wiki/Mens_rea https://en.wikipedia.org/wiki/Mens_rea
- pmoriarty 8y agoI'm interested in how mens rea squares with the oft-cited "ignorance of the law is no excuse" (is there a Latin term for that?). If you don't know you're breaking a law there can be no mens rea, can there?
- danharaj 8y agoIntent to do an action is independent of knowing the legality of that action.
- capnrefsmmat 8y agoMens rea means you intended to do the criminal thing that you did, not necessarily that you knew it was criminal. Homicide is homicide because you intended to kill someone, even if you didn't know that was a crime; if you did not intend to kill someone, you lack the mens rea but may still be guilty of negligent homicide or some related crime. Certain crimes do require knowledge of the law, like tax evasion: the tax code is assumed to be so complicated that to be guilty of criminal tax evasion it must be proven that you knew you were evading taxes. Wikipedia has a summary: https://en.wikipedia.org/wiki/Mens_rea#Ignorance_of_the_law_and_mens_rea https://en.wikipedia.org/wiki/Mens_rea#Ignorance_of_the_law_...
- cperciva 8y agoif you did not intend to kill someone, you lack the mens rea but may still be guilty of negligent homicide The standard varies by jurisdiction, but it's quite common for "intended to cause non-lethal injury but accidentally killed the victim" to be treated as murder; this arises for example in the "eggshell skull rule". Some states also have what is referred to as "constructive murder" whereby you can be convicted of murder if you commit a serious crime and someone dies, regardless of whether the possibility of a death was reasonably forseeable; in Canada this has been ruled unconstitutional on the grounds of lacking mens rea but in the USA courts generally accept that having the intent to commit a serious (but non-lethal) crime meets the requirement.
- ivanstojic 8y agoMistakes happen, even terrible ones. They can be fixed though. The biggest issue is the fact that Etsy is stonewalling the issue and not willing to talk about it openly.
- aikah 8y ago> Then there's a potential tax issue. > Oh, and don't forget the credit score dings that people whose cards went over the limit could potentially suffer. Getting charged $10,000 abusively can put people in a complicated financial situation. And there is the issue of trust between the platform and sellers.
- matthewaveryusa 8y agolawyers and liability -- unless there's something concrete to be gained from being open, being a good samaritan can get you into even hotter water.
- calibas 8y agoHaving people trust you is a concrete gain for being honest. Hiding the truth to avoid liability demonstrates that you're not trustworthy. To me, it's fundamentally unethical, though I know it's often promoted as "practical" in our culture. They should be bending over backwards to try and restore their users' trust. It's insulting that they expect us to go by faith alone.
- segmondy 8y agoI don't think they're stonewalling the issue. They need to figure out what happened, they need to figure out who got affected, they need to figure out how to refund their money, with ACH it's slow. Friday is the worst day, banks are closed Sat, Sun and Mon (Banking holiday, President's day), their customer service lines, emails are probably flooded. Their legal team might have already taken a few calls, their PR department is working as hard as possible, their retention team is also trying hard to keep business. The dev team needs to also find a solution. They need to do all this, and their postmortem report probably needs to be reviewed by legal to reduce any future exposure. Nothing will make the users happy till their money is refunded and that will not happen till Wednesday. Earliest day they can submit refunds will be Tuesday, it will show up on Wed. Same day ACH is not going into effect till Sep 2020.
- megous 8y agoWhy can't people just prepay a credit on the service, and the service provider could deduce fees from the credit? A lot of other services are doing that. It would solve all kind of associated issues with this these kinds of errors, like cancelled cards, overdraft fees, etc.
- scribu 8y agoWhy would you lend a company money, interest-free, when you could put it in a savings account, invest it, pay for something else, etc.?
- pmoriarty 8y agoThere's no reason that the company couldn't pay interest on the money you lent it.
- deleted 8y ago[deleted]
- megous 8y agoWhy not? I've decided to spend the money in the next few months on the service already, so the money is allocated anyway. I do it regularly. It also avoids paying the card companies' fees, because I can just wire the money. A lot of serices are structured this way, anyway. Download services, hosting services, even marketplaces like Etsy. Really, Etsy's model sounds more like an exception from my POV. But I'm not in the US.
- aaaaaaass 8y agoshaybazaar.com is a good alternative
- kyrra 8y agoThings like this are my problem with the pull style payment systems. It would be nice for online systems if you were given an invoice, and you had to tell your bank to push the money to the other party. (or confirm the pull). For recurring bills that are always under a certain amount, he was a customer can give a business some limited amount they are allowed to pull every month. In a system where we turn over our payment information to all these companies and they can accidentally pull any kind of money from your account, it just leads to problems.
- sushikokk 8y agoThat's exactly how it works where I live. The businesses sends the invoices electronically, and I get an e-invoice in the bank and have to confirm it before it is being paid. Nobody has access to my account but me. One can also set up auto-payments with limits per business, like one limit for the energy bill and another for rent.
- segmondy 8y agoUSA NACHA system is old. It's fixed width files transmitted via SFTP or web portals and manually uploaded to other banks.
- pas 8y agoThis sounds like a very weak excuse. Why can't the bank show the account owner the incoming pulls, and let the owner authorize them? (And then send the authorized ones out as proper push transfers in the next ACH batch.)
- YjSe2GMQ 8y agoIt's how banking works nearly everywhere outside of the US, that's why most brokers handle US money transfers on separate forms. PayPal was built on top of this banking insanity, in most other countries PayPal would solve a problem that doesn't exist. Whole thing is kind of like the imperial vs metric system. Which makes me wonder - which other countries have banking systems that routinely allow pull-based access to accounts?
- bellerose 8y agoI’m a buyer and made a couple purchase last night on Etsy. All my credit card info was saved on checkout with no verification required to use the card. Surprised me in comparison to how Amazon or other retailers typically require the full card number be re-entered on checkout. I understand this is different but seems like a bad convenience trade off.
- zaroth 8y agoPlenty of sites, including Amazon, do not require you to re-enter a saved card number. Some sites only require re-entering the card when shipping to a new address.
- bellerose 8y agoYah I think it's a good thing. I have a password manager so it's only a few clicks to paste the card number in. I'm guessing the majority of consumers are annoyed by it.
- _asummers 8y ago> Some sites only require re-entering the card when shipping to a new address. This is what Amazon does, in my experience.
- chriogenix 8y agoamazon has required me to re-enter card numbers when shipping to an address not associated with that card. I have bought on Amazon in the US, Spain and Mexico with this happening each time.
- zenexer 8y agoAmazon doesn’t require re-entry of any details on checkout, at least in the US. I can click a button and immediately purchase something with minimal confirmation. I have never had to confirm any details with Amazon as far as I can remember.
- bellerose 8y ago
- zAy0LfpBZLC8mAC 8y agoIt's strange how the US just can't seem to figure out sensible payment systems. Payment in the eurozone is not exactly perfect, banks being banks and all that, but this kind of thing is almost a non-problem: If there is a SEPA direct debit drawn from your account that you object you, you simply tell your bank (online banks tend to have the option in the online banking interface for every direct debit transaction) and the amount is immediately credited back to your account, with the same value date as the previous debit. It's then the problem for the payee and their bank to sort out.
- segmondy 8y agoIt's already figured out, USA has the first mover's disadvantage, maintaining compatibility with an older system when you have many users.
- mschuster91 8y agoSo what? The SEPA shift was also a compat nightmare - even worse than in the US I'd say. 34 countries with each having their own system of bank and account IDs that all had to be rolled over into one common system, and banks now being allowed only one day of delay (which used to be up to a week for international). The EEA covers over 500M people, way more than the US does, with way more languages. It's not impossible to do such a migration, the difference is that EU legislators were fed up with the brokenness and forced the migration via regulation while the US government believes that "the market will fix everything". No it will not, the market will only deliver what is the lowest acceptable effort.
- willart4food 8y agoThere's not such a thing as a mistake, only lessons. Lessons learned or otherwise. I have 1 special account for these type of things, and I keep it empty or with just enough $ to cover what is rightfully owed. I am no genius. I have learned my lessopn (from PayPal).
- pmoriarty 8y agoYou'd still be liable for overdraft charges, wouldn't you?
- ceejayoz 8y agoYou can decline overdraft "protection".
- coding123 8y agoNot really. I have overdraft protection disabled on my Ally account. I get fees all the time when it is overdrafted anyway. I really do want to punch the person in charge of letting accounts go negative. I would rather get denied at the POS than overdraft and suffer fees.
- skywhopper 8y agoNot all banks are this customer-hostile, luckily. But there may be undocumented ways to truly get this shut down. If not and if possible I’d recommend switching banks.
- mschuster91 8y agoIn Germany, we have special automated loans ("Dispokredit") for this situation. These are expensive (14% p.a.!), but as they are meant to be used only in emergencies and for a short time only, such a situation as here would not incur fees above 1€, as the interest is most often calculated daily.
- 8y ago
- code_duck 8y agoThis is just their billing system, not the way sellers are paid? I was very active in the Etsy community back when they start planning to implement their own payment system. At the time, I perceived them to have a record of continual incompetence paired with insensitive or hostile customer service. I was very wary, along with friends of mine in the community, of something such as this occurring to me. I certainly have never trusted them with my money. The response is typical of the vague, downplaying way I remember them handling problems way back in 2008. “We're aware of a bill payment error affecting a small group of sellers which resulted in some cards being incorrectly charged. We don't expect this error to impact additional sellers going forward.”
- aqwsedopl 8y agoExactly why I never connect real bank accounts to Venmo or even paypal. I only trust credit card companies lol. My Venmo is built up from friends sending me when I paid for them in cash. Also if I were to connect bank accounts, I have several buffer accounts which are low on purpose
- remote_phone 8y agoThe article is really poorly researched. They mentioned that Etsy decided “not to cancel the transactions”. What does that even mean? You can’t cancel a transaction where the money has already been taken out or the account and magically expect it to return. Etsy has to push the money back into the account via a refund. And money refunded is never considered income, so the second part of the article is completely unfounded speculation. Unless Etsy issued 1099s it doesn’t matter how much money they push into the account, it doesn’t mean it will be considered income.
- marcinzm 8y ago>Unless Etsy issued 1099s it doesn’t matter how much money they push into the account, it doesn’t mean it will be considered income. Etsy does issue 1099s to sellers who meet certain criteria although who knows if this will be included.
- tyingq 8y agoThere is a sort of "cancel" for ACH transactions, and they were talking about both credit cards and ACH withdrawals. I'd be concerned about the 1099 thing. They've already demonstrated some poor practice in that area, so it's reasonable to raise the issue before they calculate it wrong.
- gamblor956 8y agoIt doesn't matter whether Etsy issues 1099s, as that's not what makes a payment income... Generally reimbursements are not income.
- astura 8y agoThe 1099 panic is just totally and completely uncalled for, there's no reason to think Etsy's systems would erroneously report reimbursements as income on 1099s. After all, my work issues me both paychecks and expense reimbursements and when I get my W-2 at the end of the year only the paychecks are listed as income, it doesn't include the reimbursements. And even if your 1099 was incorrect, that doesn't mean you'd suddenly owe taxes on the incorrect amount, you'd just report the error to Etsy for them to fix.
- crooked-v 8y agoEtsy's TOS requires mandatory arbitration, unsurprisingly, but I wonder what their reaction would be to thousands of arbitration claims over overdraft fees and other financial hardships.
- dstola 8y agoThe fact that this happened on a Friday with a Monday holiday coming up smells extremely fishy to me. Of course this is completely unfounded, but I have a gut feeling its a hack and we will be hearing more about it in the future. Most electronic heists happen at exactly these times because the banks will not reopen until following Tuesday at which time it can potentially be way too late. One prominent example that I can think off the top of my head is the Bangladesh Bank Robbery [1], but I am sure there are more example to be found [1] https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
- astura 8y agoHere's another example https://krebsonsecurity.com/2018/07/hackers-breached-virginia-bank-twice-in-eight-months-stole-2-4m/ https://krebsonsecurity.com/2018/07/hackers-breached-virgini... >National Bank said the first breach began Saturday, May 28, 2016 and continued through the following Monday. Normally, the bank would be open on a Monday, but that particular Monday was Memorial Day, a federal holiday in the United States. The hackers used hundreds of ATMs across North America to dispense funds from customer accounts. All told, the perpetrators stole more than $569,000 in that incident.
- dsl 8y agoAn interesting data point is that Etsy made charges to cards, but then offered refunds to the bank account on file. This tells me their merchant processing credentials may have been stolen, and since they didn't initiate the debit, they don't have the transaction IDs immediately available to refund/reverse them. (Obviously the processor would be able to provide these on Tuesday when they open back up)
- llamataboot 8y agoI know that there has been a lot of internal handwringing at Etsy over changes in the culture and values of the company over the past few years. I imagine this will be a good chance to see how much of the old Etsy still remains in the DNA and how much has gone CYA corporate. Really hope everyone affected gets made whole. Unexpected large withdrawals that persist for days can be extremely stressful, and in some cases, affect lives for a long time afterwards. -- (I once had a case where a store charged me a ridiculous amount of times, over 40-50 for the same transaction, and then I was charged tons overdraft fees for every duplicate transaction. The store refunded my money but refused to pay for the overdraft fees, the bank refused to refund the overdraft fees demanding the store would pay, and meanwhile I was a 19 year old out of somewhere near $2000 for months and stonewalled by CorpStore and CorpBank. (They eventually each agreed to cover half, which was a bit of a coup for the bank I thought)
- deleted 8y ago[deleted]
- billycole64 8y agoThanks a lot Chang for repairing my credit report and 100% anonymity guarantee. I will advice you to work with him. He is the best I’ve worked with, He helped me increase my credit score to 790 and erased all negative items on my credit report within 2 weeks. He also cleared my $35,000 debts on all my credit card and it showed paid in full. He is genuine and reliable. Get in touch with him for your credit repair on his regular email chang@programmer.net
- nichmill64 8y agoI recommend cyber Frank the “BEST CREDIT REPAIR EXPERT ” My credit score was a real mess till He helped me out of my misery and sleepless night. He helped me increase my credit score to 830 excellent and paid off all the debts on my credit cards that’s maxed out within 2 weeks. He also helped me apply for 2 credit cards with $4k limit each. His services are fast , secured and reliable without stress. Get in touch with him via email for your credit repair cyberfrank666 AT gmail DOT com