Consumer complaint received 2022-10-18
Company: Coinbase, Inc.
State: CA
Product: Credit card or prepaid card
Sub-product: General-purpose prepaid card
Issue: Trouble using the card
Sub-issue: Trouble getting information about the card

Complaint:
Coinbase has deactivated my Coinbase prepaid debit card and is refusing to reactivate. Coinbase claims I have violated their terms of service and/or the Coinbase card agreement, but refuses substantiate or provide any evidence of these violations as they are required to do so per their own user agreement ( Coinbase Card, section 1.18 final paragraph below section 1.18.7 ; attached document and also available at https : //www.coinbase.com/legal/user_agreement/united_states # coinbase-card ) : > If Card Transactions, your Card use and/or any or all Coinbase Services are restricted, suspended or terminated in this way, we will ( unless it would be unlawful for us to do so ), provide you with notice of our actions and the reasons for refusal, restriction, suspension, or termination where appropriate, with the procedure for correcting any factual errors that led to the refusal, suspension or termination. 

They have also refused to provide any procedure for correcting factual errors. See attached email dated XXXX containing case # XXXX. Furthermore, as described in that email, Coinbase claims this is my second violation, however I was never notified of an initial violation ; the first time my Coinbase card was disabled, it was stated as due to " suspicious activity '' and was reactivated without any notice of violation. See attached email dated XXXX. 

Reading through the Coinbase agreement and researching online, it seems others customers in similar situations have had similar experiences, with Coinbase providing no evidence of violation. Other customers have guessed at violations involving Money Service Businesses as listed by Coinbase in their Prohibited Use Policy ( attached and also available at https : //www.coinbase.com/legal/prohibited_use ). As set out in that document, a user can request written consent for such usage. I reached out to Coinbase with such a request, using the prescribed means of contact ( see email dated XXXX ) but support claimed I must request permission through phone support. In that call, after much back and forth, the agent told me if the card worked for a transaction, it was approved and allowed under Coinbase 's User Agreement and Card Agreement. They also advised me to try transactions and see the result and told me there was no other way to determine ahead of time if a merchant violated Coinbase 's terms of service. See attached recording of that call ( Support Call ), made with permission of the agent.

I contacted support about *every* transaction made with a new merchant in the 90 days prior to my card being deactivated. Support has, on multiple occasions, claimed that not only are these transactions allowed under the Coinbase card and user agreement, but that any transaction that did would be declined. See attached screenshots of Coinbase support chats dated XXXX and XXXX. Therefore it seems impossible for me to have violated the user agreement with any transactions made. Furthermore, such conversations could also be construed as grants of written permission from Coinbase, thereby authorizing what might otherwise constitute a violation. 

Additionally, most of my recent transactions have been with a bank ( namely XXXX ) ; banks are specifically excluded from the definition of Money Services Businesses provided by XXXX at https : //www.fincen.gov/money-services-business-definition. 

I have contacted the bank that backs the card, XXXX, and have been told there is no violation or restriction from their end. 

I have contacted Coinbase asking to reactivate my card to no avail ( see attached email dated XXXX ). I have dealt with Coinbase in good faith and tried my utmost to adhere to their terms and get permission for transactions made on my card. From their lack of detailed response and the disconnect with the answers I received from support I must only assume Coinbase 's system of agreements and rules is set up in bad faith to try to ensnare users and create an excuse to cease card usage and reward payouts after acquiring a customer. They provide insufficient detail to avoid a violation beforehand, and refuse to even substantiate alleged violations.

Company response to consumer: Closed with explanation