Coinbase

Coinbase Promises Refunds After Repeatedly Charging Users Erroneous Fees

The company is blaming Visa for the issue.
Coinbase Promises Refunds After Repeatedly Charging Users Erroneous Fees
Image credit: Shutterstock
3 min read
This story originally appeared on Engadget

A number of Coinbase customers found themselves hit with duplicate charges for a single card-based purchase over the past few days. Some even reported losing tens of thousands after being charged 17even 50, times.

In a blog post updating customers about the situation, the cryptocurrency exchange has promised to "ensure that each affected customer will be refunded in full for any erroneous charge." The company said that after conducting an internal investigation, it has determined that the problem was a result of Visa reversing and then recharging transactions. As you know, it usually takes a while for both debit and credit card refunds to show up.

In a tweet elaborating on the results of its investigation, Coinbase said that Visa payments on its website glitched, because the credit card network has changed the Merchant Category Code (MCC) for digital currency purchases. The new code apparently allows credit card providers to treat cryptocurrency buys as "cash advance" in order to charge additional fees. A Coinbase staff member revealed the code change in a Reddit post in early February, shortly before a bunch of banks decided to ban digital coin purchases using credit cards. The banks cited cryptocurrency's volatile nature and the risks associated with it as the reason behind the ban.

Visa, however, denied that it's to blame for the incidents. Its official statement published by CNET reads:

"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 unauthorized transactions."

Regardless of who's at fault, Coinbase VP Dan Romero said it's "working closely with Visa to ensure affected customers are being refunded as soon as possible." The company will also contact customers who made transactions over the past few weeks to make sure they check their banks and CC statements. On Twitter, the exchange revealed that it's working with major credit card networks to create a brand new MCC for cryptocurrency purchases -- one that won't charge customers additional cash advance fees.

 

More from Entrepreneur

Grow Your Business at Entrepreneur LIVE! Join us on Nov. 16 in Brooklyn, NY, to learn from legends like Danica Patrick and Maria Sharapova, pitch our editors, meet with investors, and potentially walk away with funding!
Register here

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.