Quote from: barbstap on October 22, 2012, 01:15:57 PM

I want moderators and admin's help so i can get my money back. I am really disappointed that i have submitted my fraud issue yesterday on USD between MTGOX <--> DWOLLA topic. But no admin or experienced member tried to contact me or help me Sad

Unfortunately, about the only time an admin or experienced member can help is by providing advice before there's a problem.

A topic on the home page of the Bitcoin wiki is titled:
"Best practices for traders"
- http://en.bitcoin.it/wiki/Secure_Trading

It provides suggestions that, if followed, would likely have protected you from this situation.

That wiki article contains a link to -otc Recommendations, which read:

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When you trade OTC you engage in a transaction with people you possibly know nothing about. You may send your BTC to the person, and never get anything back. Or you may send your $currency to the person expecting BTC, and get nothing in return. This is a highly undesirable outcome for you, and you should do your best to guard against that.

- http://wiki.bitcoin-otc.com/wiki/Using_bitcoin-otc#Risk_of_fraud

The advice you might have received is that for a transaction in the size of $500, perhaps using an escrow would have been beneficial.

In this instance, you would wait until your escrow partner has received (and redeemed) the Mt. Gox redeemable code / voucher. Then you would send to Jermainé the Dwolla payment, and then Jermainé would instruct the escrow partner to release the escrowed funds to you. Since there is no fee for using Mt. Gox redeemable codes, using an escrow intermediary adds no expense other than the fee the escrow partner charges.

The reason this helps to lessen the risk is that if your escrow is not released, you can make your case to the escrow partner who can arbitrate. If this was an intentional scam attempt, likely the scammer would refuse to enter a trade where escrow is employed. So for that reason, there rarely are these types of issues when escrow is used.

Additionally, there is a trust history system called the #Bitcoin-otc marketplace Web of Trust (WoT):
- http://bitcoin-otc.com/viewratings.php

Another benefit from using the -otc WoT is that it also helps to ensure that your trading partner is really the party they clam to be. How do you know that you really did a trade with Jermainé rather than some hacker who happened to have Jermainé's forum credentials (username and password)? Had you used the -otc WoT, you would know it truly was Jermainé because in nearly all instances only that same person would be able to authenticate to the WoT. (When sending Dwolla, you at least know the account number that you had sent payment to so there is some way to know after the fact whether or not it truly was Jermainé who you sent the money to, fortunately.)

Additionally, let's say Jermainé tells Dwolla that he did send to you the Mt. Gox code? (or that he sent bitcoins or describes some other method in which he believes he completed his end of the trade?) How will Dwolla be able to arbitrate? (I didn't even know they would intervene ... they are a cash transfer system and you requested, electronically, that they transfer cash and that's they did ... so I would believe that their work is done.)

[Update: Additionally, Dwolla's terms of service agreement specifically reads:]

Quote from: Stephen Gornick on May 16, 2012, 12:10:57 AM

You understand and agree that you will not engage in the following activities:
- Use the Dwolla System without written consent in association with any online credit or virtual currency system;

How can you prove that Jermainé didn't already give you a Mt. Gox redeemable code? That's where the necessity for using GPG signed communications comes in. If I am sending non-reversible bitcoins and accepting a reversible payment method like Dwolla for a transaction in the range of $500, I'm going to want to make damn sure I can prove that I really did deliver whatever it was we agreed to. Since Mt. Gox doesn't provide the ability for a third party to see who redeemed a redeemable code, or when it was redeemed even, I don't know I would do a trade with that payment method, at least with someone I don't already have a trading history with. At least with Bitcoin there is a publicly visible transaction ledger where if the agreement is that N bitcoins are to be sent to X address, any third party can verify that has truly occurred.

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This allows either party to go public if the trade has become sour and stops your trading partner from claiming the details of the agreement were somehow different.

- http://en.bitcoin.it/wiki/Secure_Trading#Make_sure_both_parties_agree_to_the_terms_of_the_trade_with_signed_messages

Another recommendation is to break a transaction down into smaller parts. The -otc recommendations read:

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For a larger transaction, you can split up your trade into smaller chunks. So, e.g., instead of sending all 100 btc at once to your counterparty and then waiting for payment, you could exchange it in chunks of 10 btc, so your maximum possible loss due to fraud is only 10 btc, rather than the whole 100.

- http://wiki.bitcoin-otc.com/wiki/Using_bitcoin-otc#Risk_of_fraud

With Dwolla this is easy -- the fee per transfer is just $0.25. So even without using an escrow intermediary, ... had you broken this down into four transfers of $125 each, you would be out at most $125 at this point.

Hopefully you can get this resolved with Jermainé. Best of luck to you!