Coinbase blames Visa as it fields overcharging complaints

16 Feb 2018437 Views

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Coinbase app. Image: dennizn/Shutterstock

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Coinbase is responding to a number of customers complaining about money being withdrawn from their accounts without consent.

Cryptocurrency exchange Coinbase said the appearance of inexplicable charges on customers’ credit and debit card statements is down to a problem with its credit card processing rails.

The problem, Coinbase said, can be traced back to Visa reversing and recharging past charges after deciding to classify Coinbase transactions as ‘cash advances’.

Coinbase says a categorisation change is to blame

Numerous complaints emerged on forums that the app had been charging them multiple times for different transactions.

Last week, most banks and card issuers changed the merchant category code for Coinbase-related activity to cash advances, meaning a typically higher fee is issued. None of the extra fees end up at Coinbase and the company could see a dip in users as many may be put off buying cryptocurrency with their cards entirely.

Purchases that occurred between 22 January and 11 February 2018 may have been refunded and reprocessed.

The San Francisco-based digital wallet and exchange start-up has stated that every affected consumer will be fully refunded for any erroneous charge over the next few days. “ Some customers might experience a delay between the issuance of the new charge and the offsetting refund but ultimately, customers should only have a single charge on their card statement.

“We deeply apologise for any frustration this may cause. We are actively working with banks, processors and networks to improve the digital currency purchasing experience.”

Visa distances itself

Visa is flatly denying it had anything to do with the duplicate transactions, telling CNET: “Visa has not made any systems changes that would result in the duplicate transactions that are being reported. We are also not aware of any other merchants who are experiencing this issue.

“We are reaching out to this merchant’s acquiring financial institution to offer assistance and to ensure cardholders are protected from unauthorised transactions.”

Coinbase users have been sharing their stories on Reddit: “My bank account went from very comfortable to negatives balance, not to mention extra $5 charges, and overdraft fees. As a result my rent check bounced, and my bank went further into negative for a NSF charge for $25. My landlord is not a nice person and is on my CASE and I have nothing to offer him. I am FREAKING OUT.”

Coinbase app. Image: dennizn/Shutterstock

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com