Bitcoin

Coinbase Struggles Lead To Mounting Consumer Complaints

What happens to a company when demand is so high that it can’t scale fast enough? What happens when bad guys make off with the cryptocurrencies its supposed to be trading, unauthorized charges gather steam or glitches snowball?

If you’re cryptocurrency exchange Coinbase, with a $1.5 billion valuation and financial backing from names like the New York Stock Exchange (NYSE) and Spark Capital, the complaints start to pile up.

Bloomberg reported Monday (Feb. 19) that Coinbase, among the most visible of cryptocurrency exchanges, has been seeing a surge in customer complaints filed with the U.S. Consumer Financial Protection Bureau (CFPB), as evidenced by the government watchdog’s website.

Complaints totaled 293 between January and August 2017, and that number has skyrocketed to more than 900 thus far in 2018. Disgruntled Coinbase users have also brought their grievances to sites like Reddit.

Among payments-related complaints are unauthorized charges accrued to credit cards, money that went missing from individuals’ accounts and, in other cases, bank accounts that “were drained to nothing.”

In the wake of those occurrences, The Verge reported Sunday that payments processor Visa had been reversing the transactions that had erroneously hit users accounts and resulted in unauthorized withdrawals and fees.

The problems and negativity mounts as Coinbase found it difficult to navigate a surge in trading caused by a rise in bitcoin and other cryptocurrencies’ prices last year to the tune of thousands of percentage points. The exchange itself enjoyed a notable boost in subscribers, with 100,000 individuals signing up during a single 24-hour period in 2o17. An overload at the time meant subscribers were unable to get trades and pay other bills on time, however.

In other cryptocurrency exchange news, U.S.-based Robinhood Financial announced it was getting into crypto trading. Robinhood is currently gathering licenses in several states, boosting its own customer support systems and noting it will charge less to trade cryptos than competitor Coinbase.

Coinbase has been similarly increasing its own customer support staff to 500 members from 200.

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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