Etsy caused a stir Thursday morning when it sent an email to sellers requiring them to verify their bank account information. The reason it gave was in order for the company “to comply with anti-money laundering regulations.”
While verifying bank account information causes concern among some sellers who say they’ve had trouble in the past, the real anxiety among some sellers was over how Etsy is requiring them to verify the information. Sellers must use a third-party service called Plaid, which asks sellers to enter not only their banking information, but their bank-account password.
After running a test last month, Etsy added information to its help page that showed an option that would be an alternative to having to provide their bank-account passwords to Plaid, called a manual option – but it results in a 5-day hold on seller funds. That leaves sellers having to choose between risking security or facing payment holds.
You can find details on the AuctionBytes Blog, and the text of the letter Etsy sent to sellers in the US on Thursday with the subject line, “Verify your bank account to keep getting paid,” follows:
To comply with anti-money laundering regulations, we’re required to verify your bank account to confirm that you own it.
Here’s how to verify your info:
1) On Etsy.com, click “Shop Manager”
2) Click “Finances”
3) Click “Payment settings”
4) Then follow the instructions in the yellow banner
Keep in mind if you’re unable to verify your bank account in the next 30 days, you’ll no longer be able to receive funds from your Etsy sales.
Need help? Check out this handy article.
7 thoughts on “Etsy Said It’s Required to Force Sellers to Verify Their Bank Accounts”
I’m comfortable waiting the 5 days.
Good Night’s Sleep……
Etsy asked me to verify an account I verified this past spring. Pushing this Plaid on me, it asks for my online banking password, but my bank says if I give anyone my password, I lose all banking protections from them. Why would any business require this? After Googling Plain, it seems they have been sued, and lost, by many State Attorneys General. Why would Etsy use such an untrustworthy company? Kick backs?
I’ll bet THEY SOLD ETSY !
That’s the Only reason this would happen……
of all the people and places i would consider giving my password to, i think online marketplaces would be near the last!
It’s a nightmare to change your bank account. There is no option to do that and Etsy support will take at least a week to help you.
If you opt in to manual, not only do you have to enter in the small deposit amounts, but they require a code that most banks do not display. You have to call your bank and ask them for that 3 digit code. Some know what you are talking about, some do not.
Any change to your bank account, including verifying it will place a 5 day hold on your account. It is not just for the manual option.
Plaid has been forced by DOJ to pay out $58 million to users for the mishandling and data mining of bank accounts. The suit claims that Plaid collected more information than necessary to verify account information. Plaid denies any wrong doing. Google Plaid and lawsuit. It is recent – 2022. Does not give me a warm fuzzy about giving out my information.
I suggest to anyone doing this that you immediately change you banking password and security questions after verifying with Plaid.
I am seriously considering closing my shop over this. There are many other ways to verify banking info. Stating that Etsy must use Plaid is bullshit. They could verify themselves or use a different company for third party verification.
Yeah, check out the Wikipedia page on them. Especially towards the end.
Oh well, birds of a feather….
I would close my Etsy store before giving my banking password. Period.
Same goes for any online venue that requires the password to my bank account. I think it takes brass to even ask! Why do they need it, I can’t help but wonder.
My bank specifically states that I lose all protection if I give my password to anyone.
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