@Nolarockz It is very legal. And, in fact, it is often mandated by federal banking regulations. Remember that Square is a middleman between you and the credit card companies, as well as your bank. Once potential fraud is detected, nothing is simple. Often their hands are tied because they have to follow procedures and regulations that are required by law, even if they inconvenience us.
Obviously, you should quit accepting payments through Square for now. Nothing else makes sense since you know you won’t get your money. You’ve done what they told you. They will, I promise you, contact you once they have done the investigation they are required to do.
There are lots of moving parts here. Square is only one of them, and most likely they are only following the steps that are mandatory for them to follow. If you have to go to cash-only for now, do it. If you have no other ways to accept credit/debit cards, then don’t.
Trust me. This is not always as simple as it seems. Square might be at fault, but Square might also be doing what the law requires them to do. Financial regulations and laws are complex and hopefully they’re to protect us in the end. I know that is no comfort since you can’t get your money. But I’ve seen the ugly side when companies don’t follow the rules when fraud is suspected. It ruins lives.
I hope you resolve this soon.
Chip A.
Square Expert & Innovator and member of the Square Champions group. (But NOT a Square employee, just a seller like you)
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