Localbitcoins Falling Feedback

As mentioned here a few days ago, LocalBitcoins made major changes to their feedback system.

One of the biggest requests from users was that incomplete trades not be allowed to leave feedback. Localbitcoins chose to do the opposite and instead made the feedback from incomplete trades MORE IMPORTANT than before.

This caused two major problems.

The first is in how sellers do business. Previously if someone was a scammer, didn’t have the right payment, or refused to follow the terms of an ad a seller could refuse to trade with them. If the buyer left negative feedback it was “unconfirmed” because the trade had not been completed and did not effect the score.

Now scammers and bad users have the opportunity to blackmail someone with the threat of negative feedback by if the seller refuses to complete the trade. This change effectively takes the control away from the seller and gives it to users with deceitful intent. We have already seen this happen and LocalBitcoins reply is the form response they sent to everyone “We don’t edit feedback.”

The second issue this caused is that traders with previously good feedback, lost that in one day. Older, incomplete trades that had been previously ignored are now factored into reputation percentage. Many users saw automatic drops in their overall score even though they hadn’t recently traded.

Because LBC uses a ranking system that places sellers’ ads with those who have the highest feedback percentage at the top, this was a huge blow to many in the volume of business they received.

We posed the question to Nikolaus of LBC what sellers should do now that they cannot refuse to complete a trade without that scammer reducing their feedback. At the time of this posting none of LBC’s staff have not responded.

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