Dwolla has stated up front from when I first heard about them that ACH chargebacks were possible.
We all know ACH chargebacks between the depositor and Dwolla are possible. That wasn't the issue. The issue is whether Dwolla will pass on the chargeback to the merchant if an ACH chargeback occurs. They specifically said they would not:
Remember, these are cash-based transactions! No credit card fees, chargeback concerns, or signing necessary!
http://www.dwolla.org/blog/retail-merchants-rejoice-web-kiosk-online/And they had, and still have, no legal grounds to do so. The transfer from Dwolla to the merchant was approved by Dwolla. So they cannot claim the transfer to the merchant was unauthorized by the originator of that transfer.
Dwolla still has not claimed the right to pass on chargebacks to indirect recipients. All they have said is that they can chargeback the sender and they can claw back funds prior to arbitration. So if I put $100 in my Dwolla account and then reverse that deposit, they can deduct $100 from
my Dwolla account without going to arbitration. They have never claimed the right to deduct from other people's Dwolla accounts, yet they have done so.
The receiving party of a transaction may be subject to chargebacks occurring within the account if claims are made by the sending party or by the financial institution. In the event fraud occurs, funds may be reversed and arbitration will begin with both parties.
https://www.dwolla.com/dialogs/terms_and_conditions.aspxThis clearly says that it is about chargebacks
within the account. It doesn't say anything about charging back Jack's account because Jeff issued a dispute. The last part also doesn't say they can charge back Jack because Jeff did something fraudulent.