Coinbase Overcharges Users and Emptying Their Bank Accounts

On February 15, numerous customers of the Coinbase cryptocurrency exchange were complaining that exchange withdrew unauthorized money out of their accounts. Coinbase overcharges users  and in some cases, this drained their linked bank accounts below zero, resulting in overdraft fees.
The company said that it is working on correcting the technical issues. At the same time, Coinbase claimed that the problem was directly related to the actions of the Visa payment system.

Coinbase overcharges users

Coinbase’ customers started to complain on Reddit forum. One user wrote that he purchased Bitcoin, Ether, and Litecoin for a total of $300 on February 9th. A few days later, the transactions occurred again five times for a total of $1.500, even though the user had not proceed more purchases. That was enough to empty his bank account, resulting in fees.

“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.”, the user stated.

The number of such complaints has increased dramatically in the past two days. So, one of the users wrote that exchange withdrew $1000 17 times . Some customers have even stated that they plan to file a lawsuit against Coinbase.
Coinbase acknowledged that the problem exists and asked users to inform the support service, indicating the amounts and dates.
This was not the first time Coinbase has double-charged its users. The similar issue occurred in May 2016.

Coinbase announced the launch of an investigation into the facts of duplicate transactions. It suggested that the problem occurred due to a changes in the MCC code by payment systems.
“”We have determined that the erroneous credit and debit charges are the result of Visa reversing and recharging transactions. This was not done by Coinbase. We are working with Visa to ensure all affected customers are reimbursed.” wrote Coinbase in Twitter on February,16.

Worldpay and Visa are reversing duplicate transactions

Visa did not agree with accusations in its address.
“Visa has not made any systems changes that would result in the duplicate transactions cardholders are reporting. 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.”

However, later, on Friday, Coinbase published a joint statement by Visa and Worldpay, the payment operator of the trading platform. According to this statement the problem arose not on the side of the exchange.
“Worldpay and Coinbase have been working with Visa and Visa issuing banks to ensure that duplicate transactions have been reversed and appropriate credits have been posted to cardholder accounts. This issue was not caused by Coinbase.”
The companies involved in the incident did not specify the reasons why this problem occurred. They just reported that they have returned most of the funds to legitimate owners.

Brian Armstrong, Coinbase CEO, said that he was glad that the situation resolved in favor of his company. “We’ll have to do a better job getting ahead of issues like this in the future”, he added.

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