Originally Posted by
DKhanna
So I got invited to Venmo a week ago, and was very excited about it. I started accepting payments on it for my small company, and encouraged my clients and friends to join it. It seemed really cool, allowing customers to pay with their cellphones, or by credit card. But my company doesn't have very much liquidity, what I get paid I use to pay my provider etc. So cash flow is very important.
Being careful, before I accepted payments, I made sure that my bank account was properly linked. I then accepted payments and immediately tried to withdraw those funds to my bank account. Then, my clients received e-mails from Venmo telling them to prove their identity, and they froze my account. Myself and all my clients have to provide a ridiculous amount of information and worst of all we have to sign a legally binding document asserting that we didn't violate the Terms of Service and other things. The problem with this is two-fold. One, my clients don't know the law and won't sign a legal document like this. And two, the TOS, are literally of book length, and until I seek legal counsel I can't sign a document of that nature myself. In fact, if you read the TOS you would likely never use their service, it says that they can confiscate $2500 of your funds for little or no reason with no recourse.
So I have about $15,000 in frozen funds. It says pending to my bank account, it has said this for a while, but my clients can't pay me and it tells them that I'm frozen. I need these funds to pay my bills, because I already provided the product to my clients, who to no fault of their own, already paid. While the TOS are Orwellian, if they confiscated 2500, and let me keep the rest while things are pending, at least I'd be able to pay off my bills. But right now they are violating their own TOS.
I'd advice EVERYONE, to stay away from venmo until these types of issues are resolved. At least be very careful with the funds you put in. I am racking up credit card interest and this is turning out to be very expensive.
I will update you if things change, I'm not just a hater, I actually liked this service, until they stole all my money.
If you run a business (well, even with personal finances), you can't afford to not read the T&C of anything you touch. Period! You will run into bankruptcy in no time!
Venmo says that it is a small operation intended for small amounts of money and by small they mean the cost of splitting a meal or a movie between friends ($10-15)!
When you get close to their limit you get flagged. In your case you were big time abusive of their system. They can't eat the cost of the CC transactions.
I agree that what they request to undo the freeze is a joke. In your case the fiasco is huge as you can't ask them to reverse the payments since you already provided the goods (it will be hard to get paid for the stuff you already provided). I think you should ask them to pay their expenses about 3-4% of the total and release the money to your bank.
I feel bad for you but you can only blame yourself.