⛔️ Suspended from Gumroad for Fraud 💰
Hello Indie Hacker friends!
I'm looking to get some advice from the community, we recently had a newsletter on Substack for the past year or so. This gained a decent amount of subscribers.
We then made the decision to turn it into an airtable list, and simply charge for access as opposed to use the newsletter approach.
Gumroad was of course our go to for this. So we set up airtable, built the product on Gumroad and launched it.
We got our first sale, and then started getting notifications from prospective customers that they couldn't access our product on Gumroad anymore. When trying to login, it appeared our account had been suspended.
When querying this with Gumroad, we received the following response:
"Due to the strict regulations of our business partners, we have suspended your account and will not be able to continue working with you. I would recommend contacting your clients to find a different means of payment."
Now, our product was fairly simple, it was an airtable list of websites links for places to receive guest posts. This is something very common on Gumroad and isn't prohibited on their list of things you can't sell.
We pushed a little further to raise some more queries with Gumroad and received the following:-
"Unfortunately, due to the proprietary nature of our risk models and in the interest of maintaining the integrity of those models, we cannot disclose the exact reasons why your account was flagged and suspended.
In regards to handling fraud and risk on our site, we have to abide by the regulations imposed on us by our banking partners, as well as state and federal laws.
Apologies for the inconvenience, but your account has been permanently suspended."
I love Gumroad, but I'm pretty confused as to why this has happened and what in our business has been considered fraudulent?
Has anyone else experienced this?
Thanks in advance for your help!
Adam
Wow, that's horseshit. "You're banned, not gonna tell you why." Like seriously, I will never use gumroad because of this. Thanks for the heads up.
Maybe they're worried about violating Airtable's terms by "reselling" their product? But you'd think they'd just tell you that...
You'd think they'd give you an alternative, like "you can't sell access to an airtable, but you can sell access to a Google Doc."
"Your account has been permanently suspended." Isn't a suspension the opposite of a permanent ban? As if you did something illegal. It sounds like someone's having a bad day, flexing their moderator powers. Why wouldn't they just remove that product, but allow you to try again?
This seriously upsets me. If I had a twitter audience, I'd help you out bro. Good luck anyway.
Not taking sides by any means, but just so you and others know - every single payment processor can and will suspend certain accounts without giving a reason. It's part of their fraud/risk prevention and they have a reason to do that.
Thanks @beeblebrox it is scary that these platforms can affect things so quickly without any real reason defined behind it.
Heya Adam,
Sorry to hear this. The only thing that comes to mind is that they may view your product or business as being in conflict w/ some of the prohibited business activities listed by Stripe or PayPal or your buyers are coming from high risk areas / using risky payment methods.
That feels like a stretch though given what you've shared. Happy to have you on Simple Goods though 😄
Wishing you luck!
Maybe falls under this category: "Sales of online traffic or engagement"?
Definitely try Simple Goods > Gumroad.
Heck of a lot easier to setup too!
Will take a look thanks @sophia_oneal ✌️
@twanlass that's our Simple Goods account now...If you decide to ban me, could you let me know beforehand 🤣
Here is our new product - https://app.simplegoods.co/i/XCYQFCPO
Thanks guys you's are legends
Looks solid Adam! What do buyers get after purchase?
Essentially access to an airtable list with companies looking for guest posters.
To completely undersell it🤣
Haha not undersold at all!
Are you using the Return URL option or some other way to get customers the Airtable link?
Hey @twanlass gonna tag my co-founder in on this as it was more him that set that up.
@alex365 -
Also, my email is [email protected] if you’d like to ask any other Qs👊👊
Gumroad uses Stripe Connect Custom accounts for payments. With Custom accounts the platform (Gumroad) is liable for any fraud that happens with connected accounts. To mitigate that, platforms can utilize Stripe Radar to detect fraud. Radar uses machine learning and "hundreds of signals" to determine the risk level. So my guess is Gumroad is using Radar to detect fraud, something in their hundreds of signals flagged you as too risky, and they aren't telling you the reason why because they might not even know, the system just spit out a risk score that was too high for you.
In this case, it’s better if they display a warning before suspending his account
Yeah, we received no notification that our account was say “suspect fraudulent” - i thought there’d also be an appeal type process but doesn’t seem to be.
That stinks, Adam. Sorry to hear that! My guess is that it's something Stripe or PayPal has flagged.
Hey @denisebakersmith yeah it does! But seems you’re right I think.
Is your enterprise considered high-risk? The threats to your company can destabilize your business and affect your profitability.
Check out this blog article, it unpacks the most common risks and explains how to mitigate them to protect your SaaS business.
Honesty is an increasingly rare quality these days, and fraud is showing up in people's big and small acts alike. I can say for myself that the best solution here is to read https://graduateway.com/essay-examples/integrity/ essays about integrity and it helped me a lot to better understand what experts and scholars put into this concept in general, how often honesty can be both for good and for evil. That's why I think a lot of people should study this in the same school curriculum so that they don't make mistakes later on.
Gumroad is a reseller, so they are responsible for what you sell. I worked with resellers and they also take into account the refund/chargebacks ratio of the products when deciding to work or to stop working with a seller.
Few years ago, when I was signing up with a reseller, they asked me to show them the refund and chargeback ratio of my product before they started working with me.
Is there any reason why you want to use a reseller ?
So sorry this happened to you man, that's legaleze mumbo jumbo mess.
Would be good if you Tweet this and we may hear a response from them.
Sorry to learn this. The main thing that strikes a chord is that they might see your item or business as being in struggle w/a portion of the restricted business exercises recorded by Stripe or PayPal or your purchasers are coming from high gamble regions/utilizing hazardous installment techniques.
https://stripe.com/legitimate/limited organizations
https://www.paypal.com/us/webapps/mpp/ua/acceptableuse-full
That feels like a stretch however considering what you've shared. Glad to have you on Simple Goods however 😄
Wishing you karma!
Any reason why Gumroad instead of Stripe? I am quite sure there could be no code solutions built on top of Stripe to mimic Gumroad like seller.
Not really, we just went for gumroad as it seemed fairly simple to set up. No loyalty to a particular approach👊
got it...I feel you. Gumroad is in a powerful position among creators, they have no regrets to suspend any account even if there is no mistake on your side.
All the best.
Sorry to hear this. This is scary.
This looks like a 'done by mistake' from Gumroad side to me because there are hundreds of people selling Airtable lists using Gumroad. So, I don't think the business is a problem as that's what Gumroad is primarily meant for - Selling digital content.
Did you get a lot of refund requests recently that created a high alarm for Gumroad?
For people saying - 'That's why I don't use Gumroad' or 'I will never use Gumroad' , this problem exists with all payment providers and no one will give an exact reason why they suspended. Because this will attract more bad actors if they publicly reveal the model.
Having said that, if you have already a lot of paying customers, I would suggest you to reach out to any of the Gumroad employees on Twitter and see to personally request for a followup on the case. Hope your account gets restored.
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Would that not still result in a ban potentially? Or is the logic that it removes the banks involvement?
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This. There are hundreds of Airtables being sold on Gumroad. So it really has to be something in your Airtable that caused the suspension.
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