Just received a very strange email from Bill.com:
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Hello,
We wanted to let you know that as of March 21st, 2022 we enabled a new feature called Bill.com balance for your account. We apologize for not communicating this ahead of time which is our standard practice.
This new Bill.com balance capability enables you to pre-fund your Bill.com account, store funds for payment flexibility, and enable faster payment delivery times with no additional fees.
It’s important to note that this change means that as of March 21st all payments received through Bill.com are automatically routed to your Bill.com balance instead of your connected bank accounts. As long as Bill.com balance is activated, the funds will continue to be routed this way.
To withdraw funds from your Bill.com balance:
From the Overview section of your Bill.com account, select Manage Balance
In the Manage Balance section, select the three dots, then select Withdraw Money
Enter the amount you want to withdraw in the Amount field, choose which connected account you want to withdraw the money to, and select the Withdraw button
Withdrawals initiated by 5pm pacific time will lead to funds being available next business day by 10am pacific time
Once you’ve withdrawn all funds from your Bill.com balance, you can also choose to turn the feature off.
To turn Bill.com balance off:
In your Bill.com account, select Settings, then select Bank & Payment Accounts, then select Bill.com balance
Select the Turn off button
Questions? Learn more about Bill.com balance or contact us by clicking HERE. We’re here to help.
Thank you,
The Bill.com Team
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This seems genuinely crazy. Like without warning, without prior opt-in authorization, a company that's responsible for vast amounts of business to business payments, made the call that it was OK to, just, not actually send money onwards to their customers? Not as a feature they enabled, or even something that's a little aggressively pitched, they just silently did it.
So a customer of yours decides to send you money, and they thought they'd sent it to you, but instead it never got to you, your payment intermediary just held it in some kind of new payments account they decided to assign in your name without even getting your permission. And without telling you.
After receiving this email I just went into my Bill.com account where I discovered a six figure balance that they just decided not to give me and didn't tell me about (even now, this email doesn't say that. I had to go look) and I certainly never gave them permission to do that. Even when looking at this balance, the button to withdraw money is hidden.
Like they aren't making it clear they unilaterally decided to keep enough money for me to buy a house in a quasi-bank account I never opened and don't fucking want. And I have customers that paid me that I assumed had not paid me who had. I have an A/R person emailing client statements asking them for overdue payment when they actually did pay me last month.
It's absolutely appalling, I'm sort of speechless. Wondering if anyone else experienced this or has any personal knowledge of what's going on and what severely misguided executive decided this was OK.
Here are the old terms.[2] And the new terms.[3] The big changes are in the "Agent of the Payee" section.
Old text:
When You use the Accounts Receivable Service to originate ACH debits to Your Customer’s account or when You use Real Time Payments, You appoint Bill.com to act as Your agent in connection with the receipt of funds from Your Customer. Receipt of funds from Your Customer by Bill.com will be deemed to be receipt of funds by You, and will satisfy any payment obligations of Your Customer even if payment is not received by You.
New text:
When You use the Accounts Receivable Service, You appoint Bill.com to act as Your agent in connection with the receipt of funds from Your Customer. Receipt of funds from Your Customer by Bill.com will be deemed to be receipt of funds by You, and will satisfy any payment obligations of Your Customer even where You have elected to receive the payment from Your Customer through Our expedited payment services or are enabled to receive Vendor Direct payments or are enabled for a Bill.com Balance (collectively “Vendor Payment Methods”). When at least one of these Vendor Payment Methods is elected or enabled, You authorize Bill.com to designate a Bill.com account held for the benefit of Our customers as Your primary receiving account for receipt of funds for all payments or transfers made from Your Customers to You. The Bill.com account will serve as Your Bill.com primary and default account for receipt of the funds from Your Customers. All other bank accounts that You may have added to Your Bill.com profile as Payment Accounts will be secondary to the Bill.com primary account.
Note the new text:
You authorize Bill.com to designate a Bill.com account held for the benefit of Our customers as Your primary receiving account for receipt of funds for all payments or transfers made from Your Customers to You.
At this point, if you're a Bill.com customer, you need legal advice.
Questions to ask as a customer:
- Where is this Bill.com account held?
- Are you a creditor of Bill.com, or do you have a fiduciary relationship with Bill.com and actually own the funds in a shared bank account elsewhere?
- Does FDIC coverage extend to said shared account? (See this FDIC document.[3])
Here are Bill.com's financial statements filed with the SEC.[5] They're losing money at a rather high rate, $80 million in Q4 2021. Revenue and losses both increased substantially in the last year. They're already a public company, so the funding round phase is over. Their biggest expense is "Sales and Marketing", also about $80 million per quarter, which is how they manage to lose money in what ought to be a highly profitable business.
Their biggest asset is $3 billion in "funds held for customers", which, if they show that on their balance sheet, is not the property of the customer. It's money they owe their customers. They're acting as a bank.
Uh oh.
If you have substantial funds in Bill.com, having an accountant and a lawyer look really hard at those documents might be a good idea.
[1] https://help.bill.com/hc/en-us/articles/4422858850701-Update...
[2] https://web.archive.org/web/20211110201725/https://www.bill....
[3] https://www.bill.com/legal/terms-of-service
[4] https://www.fdic.gov/deposit/diguidebankers/documents/fiduci...
[5] https://www.sec.gov/edgar/search/#/category=form-cat1&ciks=0...