Stripe is wrongly suspending accounts
context: We are a SaaS for martial arts academies located in Europe. We are using Stripe for our payment integrations and all our academies have their own account connected to our platform using Stripe Connect (standard), since the last couple of days 2 accounts have been suspended due to "suspicious activity".
Stripe has implemented a new fraud detection system that is clearly flawed here. These customers are small gyms in local areas with accounts active for the last 11 months without no issues whatsoever, now all of a sudden they were both suspended (and payout blocked) due to suspicious activity. The suspicious activity is disputed payments, which for SEPA DD (the main payment method used) can simply be that the customer has no money in the bank account.
The Stripe response so far has been vague, to say the least. Has this happened to you?
I believe Stripe is a very good product and we have had no issue with them until now, but this situation is deteriorating trust very fast. Do they literally have the power of taking your funds hostage over a "suspicious" fraudulent activity that is clearly due to a bug in their automatic detection system?
Please let me know if you know someone that can help us here
Monthly HN Stripe customer support thread
At this point, I don’t know how any founder on HN doesn’t make their business…
1) Multi-cloud
and…
2) Multi-payment processor
These stories are horrifying. These cloud and payment processors simply do not care. They print money and provide no human support. Any venture that I make in the future will be cloud-agnostic containers on several cloud providers with at least two payment processors handling an even share of the load. Double work be damned. Stripe and GCP simply do not care.
Can you email me (smca@stripe.com) with more detail? I'll look into this.
We don’t typically comment in detail on individual cases, but we do think it’s important for onlookers to know that we take every single case like this seriously. It looks like what happened here was an edge case involving SEPA payments that resulted in a dispute rate that’s far in excess of what’s generally permitted by financial partners. When we do this, our interventions are partly to protect financial partners/Stripe, partly to protect end customers, and in part to protect the businesses themselves. (For example, Visa will fine businesses that maintain high dispute rates.) This case is actually a bit more complicated still, since you said that you’re using Connect. In these cases, we also take seriously the importance of defending the platform (i.e. you) against users who are trying to defraud you.
More broadly, we work hard to balance the rules of the financial ecosystem, ease of use, protection against fraudulent businesses, consumer protection, and continuity for businesses. We support millions of businesses across dozens of countries and payment methods, and we discover new scenarios every day. We plan to blog about our work here in more detail before too long (including some of our key metrics). If any HNers have suggestions as to what we should include, feel free to reply here. We’ll try to share anything helpful that’s not too sensitive.
SEPA payments also support chargebacks. Gyms are notorious for making it easy to sign up and hard to cancel, so the other explanation is that people are upset with some of your gyms and disputing the subscription renewals.
Stripe customer support is beyond useless, so I totally get your frustration, but I would encourage you to get to the bottom of this and verify that that your "insufficient funds" theory is correct by calling the customers with the failed payments.
The suspicious activity is disputed payments, which for SEPA DD (the main payment method used) can simply be that the customer has no money in the bank account.
Sudden changes of circumstances like trading for 11 months and then seeing multiple declined payments from multiple parties does sound quite suspicious to be fair. I imagine Stripe have extensive amounts of data about that sort of thing. That's not to say Stripe are in the right here, but I can see why they wouldn't just assume their threat model is wrong based on your word that the payments are valid.
A small business nightmare with stripe this year. Given a small online subscription business, we don't have techie 24x7. We started receiving micro-payments from credit cards every other second on our stripe account. We immediately reported to stripe as soon as we noticed, multiple times. Every time same response. We will look into it. We wanted to avoid deactivating and hiring techies to reintegrate again. Eventually we did not get any support from Stripe. So, we did the nuclear option and deactivated stripe all together and also hired a techie to do it as we are not really sure.
Then our real nightmare happened. We are subject to potential dispute fee running to several tens of thousands of dollars. We wanted to avoid disputes and so we requested Stripe to help us immediately refund all the money so we can avoid disputes. They again did not respond to solve. So, we painstakingly manually returned every payment, one payment at a time. Finally they agreed to cover the dispute fee (which would have sunk our company) of whatever was disputed (thanks to them). But they warned us they won't cover next time. uff, how do we even control that.
And then, they briefly suspended our account. And then revoked after some days saying it was a mistake. And then we activated security radar, which basically is blocking most genuine payments now. But, we don't know what the alternative is. Is there an alternative?
This is terrible. I'm going to start looking into alternatives, which is shame, because we initially built around the Stripe API.
We recently had one customer forget to cancel their subscription, and then without contacting us first they filed a dispute for 6 months of charges. That's 6 individual disputes, each with a $15 ($90) dispute fee. We got in touch and mentioned we'd have investigated, found the license unused, and refunded for those months. They contacted their bank to withdraw, but the bank and Stripe are just pushing ahead.
A small business nightmare with stripe this year. Given a small online subscription business, we don't have techie 24x7. We started receiving micro-payments from credit cards every other second on our stripe account. We immediately reported to stripe as soon as we noticed, multiple times. Every time same response. We will look into it. We wanted to avoid deactivating and hiring techies to reintegrate again. Eventually we did not get any support from Stripe. So, we did the nuclear option and deactivated stripe all together and also hired a techie to do it as we are not really sure.
Then our real nightmare happened. We are subject to potential dispute fee running more than $50-80k. We wanted to avoid disputes and so we requested Stripe to help us immediately refund all the money. They again did not respond. So, we painstakingly manually returned every payment one payment at a time. Finally they agreed to cover the dispute fee (which would have sunk our company). With the promise that they won't cover next time. uff, how do we even control that,
And then, they briefly suspended our account. And then revoked after some days saying it was a mistake. And then activated security radar, which basically is blocking all genuine payments now. But, we don't know what the alternative is. Is there an alternative?
We are constantly working on the nightmare that any
'Thank you very much Stripe, for suspending and killing my business accounts for little to no reason.'. [1] [2] [3] [4]
Thank you.
[1] https://news.ycombinator.com/item?id=28085706
[2] https://news.ycombinator.com/item?id=33299222
This is a B2B service. Do they really demand a "we can terminate at our discretion" clause? Can your lawyers negotiate better terms when you sign up, like 30 days notice and termination only if binding arbitration says the provider can do it?
Had a similar thing happening. Never any problems. Then account disabled.
I thought, well this is Stripe, they’re awesome. I’ll email them. They’ll help.
Well, big surprise. Customer support was just bots and boilerplate answers, after weeks of waiting.
Mentioned my issue in passing on a thread here (I resent having to make a fuss on social media just to get some special attention). I was told to contact one of their people directly. I did that a few months ago. And he actually did email me back. But then he first forgot about my case for another two weeks. And then he said he would look into it immediately, but all I got is a bunch of automated emails asking me to validate my email address and things kind that. I did all of that, but it changed nothing. And my account is still suspended.
I will continue to use Stripe for MVPs and such. But I now consider it a toy solution that can’t be trusted for running a business.
Stripe cut off my revenue and deactivated customer facing payment pages. They did so without giving me prior notice, and I haven’t found a single person to talk to who would know what is going on in almost half a year now.
They’re putting their customers in serious risk of financial losses and potential insolvency. And they do not care, do not help and do not even explain.
That is the inverse of customer obsession. I wonder if the Collison brothers have lost interest in running their business like Bezos did with Amazon a few years ago.
I'm sorry you're going through this. I'm sure someone from Stripe will pop-in here and help out. If they do not, you have other payment providers:
- Paddle
- Mollie
- Paypal
Many upstart small businesses will face false fraud inquiries, but you have to roll with the punches and move to a new processor if Stripe is not responsive.
You should research this more. Stripe is not a good product because this problem is widespread.
Good advise is always to have a backup processor (similar to ESP). The thing is while initially regular MSP may not want to do business with you, if you get Stripe account in somewhat good standing for 3 months, you will have hard time finding MSP that will not accept you to process. Once you have 3 months with Stripe, which I imagine you didn't start with tens of thousands of dollars in processing day one, get yourself another MSP which should be top priority. Either have your system split 25% second MSP, first the rest, OR if you are unable, at least do few "test" transactions a month to make sure your backup gateway remains open. Without backup sad thing is that its irrelevant whether Stripe had standing or you got suspended as an error - the bottom line is you cannot process and that hits your bottom line.
Hope this advise helps someone going forward.
I have the same problem.
If only there were a system to transfer money between two people that didn't require a trusted third party...
Seems like the payment processing is monopolised by stripe - Are there any good alternatives to stripe?
Maybe add Mollie.com as backup?
sounds like you need to use https://www.twispay.com/en
Just waiting for Stripe to send in that Edwin guy for the 900th time instead of fixing their support
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Use monero.
Go Crypto!! There are stable coins that you can use for payments.