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Stripe is friendly to “friendly fraud”

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Re: Stripe is friendly to “friendly fraud”

#41

Post by gyomu »

stego-tech wrote: post #30

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 deali…

That’s just the nature of these industries.

1) Incumbent is slow, clunky, unpleasant to deal with due to years of accumulated constraints to deal with

2) Newcomer can differentiate themselves by being nimble and pleasant to work with, taking market share

3) Over time newcomer has to deal with increasing amount of scrutiny, fraud, overhead, CYA type practices, etc

4) Newcomer is now incumbent, goto 1)

Re: Stripe is friendly to “friendly fraud”

#42

Post by 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.

Re: Stripe is friendly to “friendly fraud”

#43

Post by AnthonyMouse »

SpicyLemonZest wrote: post #21
bberenberg wrote: post #14

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 merchants this year"?

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 th…

If your card is actually stolen then you should have the card number changed to prevent additional fraud and then the disputes would be against the old card number rather than the new one, right?

Re: Stripe is friendly to “friendly fraud”

#44

Post by edflsafoiewq »

zuzululu wrote: post #28

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…

> I'm not going to name those countries outright

Why?

Re: Stripe is friendly to “friendly fraud”

#45

Post by nathanmills »

varenc wrote: post #16

> 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 woul…

No, vagueness gets me much more upset, but there's just nothing to write about in those cases.

Re: Stripe is friendly to “friendly fraud”

#46

Post by lunchbucket »

mattmaroon wrote: post #39
jagged-chisel wrote: post #26

Earlier quoted context omitted.

[flagged]

Do you imagine someone got a stolen credit card, made a linkedin with that name, used the card to attend a live class under the fake ID, or are you just doing the classic hacker news aaaaactually? Comments like this have ruined this site. We all know that’s never happened once in history.

If you care about the quality of the site, consider the guidelines about not responding to a bad comment with a worse one and not griping about how HN has gotten terrible or turned into reddit or what there you. Downvote, flag, and move on to better discussion, and you'll spend a lot more time engaging and contributing to good discussions.

Contributing to good discussions is the highest leverage way to promote the quality of the site. Spending time in poor discussions is what makes it feel like HN has gone to crap.

Re: Stripe is friendly to “friendly fraud”

#47

Post by AnthonyMouse »

ios-contractor wrote: post #11

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?

"Friendly fraud" is when the cardholder is in on it. They or an accomplice they've given access to their credit card go to a merchant, order and receive an expensive item with the card and then file a chargeback claiming they didn't make the purchase so they can keep both the item and the money.

Re: Stripe is friendly to “friendly fraud”

#48

Post by SpicyLemonZest »

Dylan16807 wrote: post #24
sbierwagen wrote: post #4

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.

> 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!

The problem is that, as patio11 once described in detail (https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...), there are genuine tradeoffs here that people get outraged by the mention of. How many legitimate sales should Stripe block in order to more effectively fight this kind of fraud? Merchants don't want to hear it, and consumers don't either. So financial companies invariably conclude that it's better to raise the question only in careful, indirect ways which could not be misinterpreted as a statement that fraud is good or OK or acceptable.

Re: Stripe is friendly to “friendly fraud”

#49

Post by AnthonyMouse »

tptacek wrote: post #29

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

When a problem is industry-wide, people are naturally going to complain about the most prominent companies, but that's not necessarily even wrong. The most prominent companies are the ones in the strongest position to actually do something about it (e.g. develop better detection for friendly fraud or lobby for sensible regulatory changes), and have a stronger incentive to when they're the ones who keep getting blamed.
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