Twitch was making money off subscriptions to permabanned channels. Thanks to streamers getting loud about it, refunds are on the way.

Twitch‘s ban system can be baffling. ‘Ban’ is a heavy word, and on other platforms often means creators permanently lose access to their accounts. But in Twitch’s case, bans are usually only temporary, can be reversed or lessened based on public feedback, and have no long-term consequences. Twitch only recently annnounced that it’s finally cracking down a little bit by limiting monetization for temp-banned streamers who violated TOS around things like sexual content, gambling, and violence.

But sometimes, Twitch actually does ban streamers forever.

And then, according to an investigation by Dexerto, it might keep paying them, and itself–with money from former subscribers’ wallets.

On April 3, Dexerto published findings that some permabanned streamers were still receiving monthly subscription payouts, despite that being explicitly against Twitch’s TOS. According to the TOS, a permabanned streamer loses access to monetization tools, and all recurring viewer subscriptions will cease autorenewing at the end of that month. The way it’s supposed to work, they’ll receive one final payout for revenue generated before their ban, and then will be cut off.

Dexerto found this has been an ongoing problem since at least 2022. In September that year, permabanned streamer Tempest tweeted that his fans should manually cancel their subscriptions, because he’d noticed they were still being charged after his channel was no longer active.

“idk how it’s even possible twitch can ban me and still take 50% of revenue on a channel that they won’t unban but it’s quite literally robbing people,” he said.

Another banned streamer, Incoxicated, tweeted earlier this year that he’d been paid $60 CAD one month, all from subscription revenue, after his channel was terminated. “You are still charging my recurring subs their monthly fee and paying me out despite incorrectly indefinitely banning me after 6 years with only 2 infractions,” he tweeted. “What the hell is going on over there?”

Dexerto found numerous other instances of banned streamers continuing to receive payouts from recurring subscriptions–in some cases for months, with one subscriber who’d prepaid for six months not receiving a refund despite the streamer being banned during that period. It also found that streamers had regularly been trying to inform Twitch about this issue on its User Voice page.

What’s worth noting here is that this issue isn’t just about banned streamers still earning money, despite in some cases being banned for heinous behavior. Twitch by default gets 50% of subscription revenue (sometimes 30%, depending on its deals with individual streamers). So it too was profiting off these dead channel subscriptions.

When Dexerto contacted Twitch about this issue, some streamers who were mentioned in the article had their formerly indefinite bans mysteriously lifted.

“In line with Twitch policy, when a channel is deleted or is indefinitely suspended, subscriptions to that channel are not renewed. The examples shared appear to be edge cases, and we’re working to quickly resolve those issues,” the platform said in a statement. It added that in “certain cases” where viewers are charged subscriptions for dead channels, they’re supposed to get a refund.

Now, after the investigation and threat of a potential class action lawsuit, Twitch is issuing those refunds. Based on what we’ve seen on X, Twitch isn’t reaching into banned streamers’ pockets to take money back; instead, it’s eating the full refund cost to subscribers. The platform hasn’t issued another statement, but emails are going out to notifying people that their subscriptions have been cancelled and they can expect refunds.

As for that class action lawsuit, it might still be on. Tom Kherkher, who’s both an attorney and a YouTuber who specializes in suing megacorporations, has been tweeting about how this issue “is bigger than I thought,” and is actively asking people to reach out to him if they want to be part of a class action suit.

He later said during a podcast episode that “a lot of victims” had approached him, plus streamers who’d been receiving wrongful payouts.

He believes what’s been happening is “between negligence on the low end and affirmative fraud on the other,” he said. “I believe it’s some form of deceptive trade practice. You can’t be willfully ignorant and collect that much money.”

Kherkher said Twitch can expect a lawsuit will be filed “very shortly.”