Originally posted by @Michael Mueller:
Originally posted by @Brad L.:
In Cozy’s defense, and I don’t even utilize their services, this could happen on any payment platform as the reversal wasn’t done by the platform itself but by the tenants financial institution. Just takes a shady tenant.
No, I think your are wrong. The problem is particular to Cozy (and similar platforms or intermediaries), as it was not a direct ACH transfer from the renter to the landlord, but rather Cozy probably did an ACH pull, followed by and ACH push from Cozy to the landlord. (Correct me if I'm wrong.) The landlord has several problems: 1. He did not pull from the tenant's account, therefore he cannot directly fight the reversal. He is dependent on Cozy fighting for him. Cozy's terms and conditions probably state that reversals from tenants results in reversals from the landlord's account. 2. It was an ACH pull from the tenant's account, which I'm speculating might be easier to reverse than a push. Even if the ACH from Cozy to the landlord was a push, Cozy is probably protected by their T&C that the landlord agreed to. 3. The landlord used a business account. Curious how the situation would have turned out had it been a personal account.
By contrast, a direct ACH payment is very difficult to reverse. The only reason to reverse an ACH payment that has a chance of success, is online fraud, i.e. the sender claims that he was not the one who authorized the payment. This can then be easily fought by showing the rental agreement, and showing that the sender is indeed the tenant. It would be very hard (impossible) for the tenant to argue that a third party fraudster hacked into his bank account and sent the money on behalf of the tenant to the tenant's landlord, which would make no sense, especially if the rent is indeed due. For disputed ACH payments, the receiving bank is obliged to investigate and consider evidence presented by the recipient (the landlord).
I anticipated this problem and therefore never use Cozy for rent collection. Another blatant problem is that last time I checked, a landlord cannot disable credit card payments, which are by magnitudes easier to reverse than ACH payments.
Using Cozy for rent collection is a bad, bad idea.
Also, many tenants who used Cozy and are unhappy for whatever reason, or for no reason at all, will google how to get their money back, many will find this thread, and know what to do.
"The problem is particular to Cozy (and similar platforms or intermediaries)".
That's exactly what I said. Any direct transfer app like Zelle, Cash app, etc. by which the funds are going directly from Tenant to Landlord I definitely would not consider to be a "payment platform". Do they transfer money? Sure, but that's where similarities end.
Literally just had a storage unit rent payment (ACH) reversed 20 days after I received, not on Cozy but on a different platform.
Don't really care enough to discuss any further, was just stating that in Cozy's defense, their platform isn't the only one that is vulnerable. Which is fact.
