Last month, when Square disclosed its financial results, it said it had swung to a $106 million loss for the quarter and reported that it was increasing the cash it had on hand by 290 percent to hedge against future losses.
But many businesses whose money has been withheld said it was unfair for them to contribute to Square’s financial cushion when they had shown no signs of being an increased risk.
Sean Weber, the owner of Legal Knock, a company near Los Angeles that builds websites for law firms, provided documents showing that he had used Square for two years and never had a customer ask for money back. Yet Square began withholding money from him in May, totaling around $4,000, he said.
Mr. Weber said the only warning he had gotten was an email right before the first deductions, with little explanation. When he called Square to ask what he had done wrong, he initially had trouble getting through. The company later told him that it was a general policy imposed as a result of the risks caused by the pandemic.
“I told him: ‘That’s not my problem. Why do I have to bear the burden of that?’” Mr. Weber said he had responded. He was told there was no appeals process or method for getting the money released, he added.
Mr. Weber said he had since had to miss the $3,000 monthly mortgage payment on his home while looking for a new payment processor. When he complained about Square’s policy on Twitter, the company blocked him, something it has also done to other customers who have publicly brought up the issue.
Nikol de Riso, the owner of EGA Solutions in Palmetto, Fla., said she could not get a response from Square for two weeks about the money it had held from her business, which provides various legal and practical services for small businesses. When she finally got someone on the phone, she said, she was told that the withholding was a general policy and not a result of any risks in her business.
Article source: https://www.nytimes.com/2020/06/23/technology/square-jack-dorsey-pandemic-withholding.html
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