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Paypal Horror Story 40k Frozen No Answers

404 points by sabslaurent 10y ago

sabslaurent 10y ago
I've processed successfully hundreds of thousands of dollars with my Paypal account over the pat 4-5 years. My account has been on review a few different times because of volume spikes (around the holiday season, I do ecommerce). When that happens, I usually reach out to Paypal and we discuss like humans, I explain where I'm coming from, they make suggestions and we get it settled. Around November 2016 Paypal reached out and told me due to the disputes coming in they need a $5000 set reserve + a 10% rolling reserve which will be released 90 days after a transaction. I accepted and since then Paypal has called me on 3 different occasions to check up on me and my efforts to reduce the dispute rate. We discussed and the calls seemed to go very well without them having any requests or EVER telling me my account is at risk of being limited and shut down due to disputes. Towards the end of January I myself realized I tired of the disputes (seemed to be a quality issue with the product which got hundreds of 5 star reviews on my site but still disputes were coming in at around 2%) so I slowly stopped the business meaning I stopped advertising and the only sales coming in were trickling in organically. My volume went down from $200k a month to about $10k a month. On Wednesday I log in to my Paypal account and it says it's limited they need more information. They asked for Photo ID, bank statement, proof of address, supplier invoice, supplier contact info and proof of delivery for the last 5 transactions. I provided everything but the proof of delivery for the last 5 transactions. From the resolution center whenever I clicked proof of delivery it brought me to a page with no transactions so of course I could not provide proof of delivery for transactions that don't exist. I contacted Paypal letting them know I submitted everything but proof of delivery since there's a bug in their system, they said no worries i'll get an email requesting the transactions they need tracking for and I could just reply back. I never got that email, but I did wake up Thursday morning with an Appeal Denied automated email saying my account is closed and the money will be frozen for 180 days. That's $20k CAD in my reserve + $15k USD in my available balance. Keep in mind in the past 30 days I processed less than $10k usd on Paypal in total. I reached out to a supervisor at Paypal and told him what his happening simply doesn't make sense, i provided everything they needed except for what their system was unable to request/receive and that if they had any issue with what I provided they should tell me what it is and help me resolve instead of giving me the hammer for no reason. He said he couldn't help me but opened a ticket for both his supervisor and a supervisor from the limitation team to call me within 24 hours. The limitation department supervisor never called me back but the business support manager called me back a few hours later. He called me from an unknown number in the evening, told me there's been a mistake, they added a second set of eyes to my account and they agree with me the limitation was unnecessary and wrongfully made. He said he just has a few questions and I will either get a restored access email in a couple hours or a call asking for more information in order to get it settled but he said there's a small chance of that happening, realistically the account will just be restored within a couple hours. I never got an email or call again, so I called the following day. When I called the rep basically told me there's no evidence of a call and there are no notes on my account from that person/call and nothing was moved forward for a review. I told him that is nonsense and to look harder. He eventually tells me there's evidence of a call but no notes, they tried to reach out to that supervisor and he wasn't available so there's nothing they could do for me, the decision is final. I'm being treated like a fraud and a criminal when I'm a legitimate entrepreneur who's processed 10's of thousands of transactions successfully. I also paid them thousands of dollars in fees, never had a negative balance or anything of the sort that would put Paypal at risk. Now whenever I call they are extremely rude telling me the account is closed they're holding the money and there's absolutely nothing I can do. They have been rude, lying, inconsistent, unfair and have made 0 effort to resolve this amicably. They have 0 logical reason to hold $40k of my money for 180 days, the only reason I can think of is they do this on 10's of thousands of accounts and gain big money off the interest. When I log in to my account there's a notification saying they need more information from me. When I click on that notification it brings me to a page that says the account is limited because they need more information regarding my recent sales, they do not say what information or how to provide information. That is straight up illegal and a complete abuse of power. I know there are thousands of Paypal horror stories but I genuinely feel abused. I have expenses, a family and so on and need that cash flow and no one at Paypal can be consistent for more than one phone call or help me resolve my issue, it's pathetic. Just had to vent and hopefully this will give them some of the negative attention they deserve.
- throwaway_374 10y ago
  You have my sympathies. A firmly drafted lawyer's letter should get their attention very quickly. This will cost you a small amount but it will bypass CS protocol and get you a senior.
  - gpm 10y ago
    I wonder if you could/should include the cost of the lawyer in the amount you demand from them... this seems like the sort of case that fee shifting was designed for after all.
    - walshemj 10y ago
      And bill then for a day of your time at say 2x your normal day rate
- jasode 10y ago
  >My account has been on review a few different times because of volume spikes (around the holiday season, I do ecommerce) What type of products do you sell? That also affects the triggers for reviews and freezes. >but still disputes were coming in at around 2% 2% is really high. A lot of non-Paypal CC payment processors will flag your account when chargebacks exceed 1%.
  - cpncrunch 10y ago
    >2% is really high. A lot of non-Paypal CC payment processors will flag your account when chargebacks exceed 1%. Yes, 2% is insanely high. I do about 2k/month through paypal and haven't had a chargeback in years. I think the last one was a few years ago, and that was just because a customer had their credit card stolen and just charged back all transactions they didn't recognise.
    - kweks 10y ago
      Depends on the product. I've seen businesses run at 10%, and others at 0%. Until you have a massive, public facing product that sells internationally across many facets of customer - you've probably never experienced the hell of CB management. Typically, you'll get: - Stolen cards (obvious ones) - Stolen cards (very insidious ones - all customer information, proxies that match the customer address, etc). Typically the only way to catch these guys is to have a hugely expensive 'express delivery' option, and manually filter each order that comes through on this option. - Dumb thieves (chargeback the day after delivery) - Smarter thieves (chargeback the day after posting) - Horrible people (chargeback months later) - Idiots (Unable to use a product, so chargeback) - Assholes (Weaponise chargebacks to blackmail you) Words to anyone struggling to fight CBs / fraud: - Use machine learning, ie SiftScience (or similar) to screen all transactions. - If you use Stripe, use their Radar feature. - If an order gets one flag, place it into a review queue, and manually process it 24 - 72 hours later. Emailing a customer smokes out the majority of fraud. - If an order gets two flags - blackhole the order (refund the card, if charged) The biggest thing is making your fraud processes opaque to scammers. If your site returns true/false responses, they'll just keep hammering until they find a combo of cards / proxies / etc that works. The only way around it is to shadow-ban: - Send blackholed orders to an approval page. - Send blackholed orders an approval email. Train your customer service to know which orders were banned, which weren't. If scammers have to wait 1 - 4 weeks to know if their order worked or not.. they will move onto easier targets.
nummy 10y ago
i think u got hax0red bro ... that link may have been a bogus page for you to submit your bank statements, etc.
fermigier 10y ago
IIRC this is not the first time this kind of bad behaviour has been reported about Paypal. I suppose you were aware of that. Did you consider Paypal's reputation when you chose to do business with them? Were there alternatives that you considered at the time and if so, why did you stick with Paypal?
- rbinv 10y ago
  Depending on where, what and how you're selling, offering PayPal is pretty much mandatory due to customer expectations.
  - pharrlax 10y ago
    I don't see anything PayPal offers that Stripe can't do better. Why put yourself at risk of arbitrary catastrophe at the hands of a company like PayPal that wants to act like a bank while weaseling around the legal protections against bank malfeasance?
    - foepys 10y ago
      Outside of the US and Canada credit cards are not as widespread as they need to be to base your business solely on Stripe.
      - henrikschroder 10y ago
        It would be interesting to see where in the world PayPal is big. In most parts of Europe, PayPal is pretty much unheard of, because our banks don't suck, so PayPal never offered any improvements over just regular bank transfers.
        thesimon 10y ago
        >In most parts of Europe, PayPal is pretty much unheard of Thats depends a lot on the country though. Not accepting PayPal in Germany would probably be the same as not accepting credit card in the US. In the UK however only offering credit cards might work.
TimMeade 10y ago
We quit using paypal 8 years ago for exactly this kind of treatment. Seems it has not changed.
- mee_too 10y ago
  Why would it? Obviously there are plenty of fools, who continue to do business with PayPal.
  - ikeboy 10y ago
    I sell on eBay, and if you don't accept PayPal very few people will buy from you.
    - Neliquat 10y ago
      I found as long as you could take a card, most people were good. Only some ebay addicts were tied to paypal. Ymmv.
ziszis 10y ago
Traditional customer service channels are increasingly broken since they are seen as a cost center to be reduced by many companies. In particular, if you are trying to cancel service or withdraw money it is even "worse" because not only do they have to pay the salary for the rep, they also lose money helping you. If after one or two calls you don't get what you want, it is not worth retrying. I gave up after being placed in queue for an hour with Comcast. After finally getting ready to speak to a rep, I was informed by an automated message that they were closed for the day and to call back tomorrow. Here is what I find works: 1) Least likely - Traditional customer support channel. Try once or twice at most. 2) More likely - Contact publicly on social media like Twitter (Comcast is actual great about this). 3) Most likely - Getting upvoted and written about here and elsewhere. I would wait to engage with a lawyer as there is a good chance that someone from Paypal will popup in this thread. It is probably already surfacing in some internal emails at Paypal now. Good luck.
- sandworm101 10y ago
  It is more than jusy cost. Many decisions seem like customer service but in fact are legal matters. Releasing funds isnt like reseting a password or reconnecting a telephone service. For those decisions that legally bind a company or that may violate various regs one often has to get management approval. Something as small as releasing a few hundred dollars, if that money is held due to a red flag, might even require board approval or at least be reportable to shareholders. It is silly that our laws dont have perspective, that a 100$ prize to the author of a story about syria is subject to the same rules as a 400k payment to a shadowy syrian bank operating out of a russian flat, but blame the people writing the laws. Or, dont treat or trust paypal like they were a bank. The OP seems to be canadian. Canadian banks have a stellar rep. Trust them, not some US money-moving website.
  - deleted 10y ago
    [deleted]
- chillacy 10y ago
  What worked for me with Comcast was ultimately filing an FCC complaint, at which point someone from their executive customer relations team was assigned to me and was actually very responsive. It's just a shame I had to file an official complaint before getting decent support.
Exuma 10y ago
Yeah... pretty much the exact reason I don't leave any significant amount of money in PayPal at one time.
uptown 10y ago
Apparently no details either. Where's the story?
- pas 10y ago
  https://news.ycombinator.com/item?id=13851124 https://news.ycombinator.com/item?id=13851124
JumpCrisscross 10y ago
Under U.S. federal law, PayPal is not a bank [1]. This is important. From the government's perspective, you give PayPal money and then PayPal gives you money. Between those events, it's not your money. PayPal has enormous discretion around what they can do with those funds, how and under what circumstances they get to decide to give it to you and if they get to keep it forever. What state do you live in? Do you do business through an entity, e.g. an LLC? If so, where is it registered? PayPal is, varyingly, registered as some form of a money transmitter in many states [2]. While your federal protections are probably limited to antifraud, protections you're probably outside of (PayPal has good lawyers--you agreed to surrender lots of privileges when you opened an account), there may be state regulations you can use to, if not force action, encourage it. Going forward, I tend to consider any business using PayPal for mission critical processes as being negligent with important risks. If you can't avoid using PayPal for certain lines of business, set up a nightly sweep from PayPal to a proper bank account. [1] http://www.zdnet.com/article/fdic-decides-paypals-no-bank/ http://www.zdnet.com/article/fdic-decides-paypals-no-bank/ [2] http://law.bepress.com/cgi/viewcontent.cgi?article=1153&context=expresso http://law.bepress.com/cgi/viewcontent.cgi?article=1153&cont... Disclaimer: I am not a lawyer. Only a lawyer can give you good legal advice. Don't take legal advice from Internet comments.
- oblib 10y ago
  "set up a nightly sweep from PayPal to a proper bank account" That is by far the best advice one can get, and it's not hard to do.
  - pmlnr 10y ago
    So, how does one set this up in the automated way?
    - Negitivefrags 10y ago
      Paypal has this as a feature. It's buried but you should be able to find it. It's called Auto Sweep.
jccooper 10y ago
We use PayPal for a few scattered customers who have problems paying with a card and the occasional eBay sale, so I don't pay much attention to it. Whenever I see a PayPal horror story, I transfer all funds out of there to my bank. It's not the most effective sweep method, but it works depressingly well. I wonder what PayPal's cash balance would be if it had a reputation as being a safe place to keep a balance?
- digler999 10y ago
  > but it works depressingly well I dont think it "works" though. paypal can withdraw funds from your linked bank accounts too. I think you would need to create an LLC , open a bank acct under that LLC, then sweep funds out of that LLC account to be "safe".
  - damontal 10y ago
    Or just immediately pull your money out of the linked account to an unlinked account.
dawhizkid 10y ago
I had this happen to me. I filed a complaint with the CFPB and within a week had my account unfrozen (i.e. still shut down but ability to transfer funds out)
oblib 10y ago
I make invoicing software that I sell using PayPal and it lets my users add a "Pay with PayPal" button to their invoices and over the years several of my clients have called me and related stories similar to this and they all had some common traits. They all processed quite a bit of money via PayPal and they all had issues with customer's requesting refunds which they disputed or didn't issue in a timely manner, and they all sold something which had the potential to be a bit shady. One of them sold aircraft parts to Iran, which may have had some legal restrictions that applied. Another sold guns. Since I sell access to web based software I don't have to ship anything and the product is "delivered" instantly. I also process refunds immediately and without any question. PayPal most certainly doesn't like getting caught up in refund issues. In my case most of the customers who've requested a refund contacted me first and I issued it promptly with a "Thanks for trying my software" note attached. The few that have contacted PayPal first resulted in PayPal sending me a notice about the request for a refund and, again, I issued it immediately, but their notice makes it clear that is what they expect and if I recall correctly they put a time limit on that. Take from this what you want but what I've taken from it is when a customer requests a refund issue the refund as quickly as possible and try hard to make that as easy as possible for your customers and to minimize the potential for them asking for one.
- tyingq 10y ago
  There's all sorts of other ways PayPal can decide to hold your funds as well. For example, they have a really simplistic implementation of OFAC regulatory compliance. Make a transaction that has the right strings in it, even in a comment, and it gets your whole account frozen. And some of these magic strings are very common names. Such that if someone named John Smith ends up on the OFAC list, any transaction with that string in it, anywhere, triggers chaos. That's just one additional way they can choose to freeze funds. Many others exist.
- user5994461 10y ago
  > One of them sold aircraft parts to Iran, which may have had some legal restrictions that applied. Shady is an understatement. In the EU countries I do business with, that falls under sensitive hardware being send to a sensitive country. Not only do you need to get extensive approval from the national-export-agency-thing, but it's also special goods that's likely to be used for military purpose, thus you are required to contact the feds on your own initiative to disclose the full details of the order and the clients and get yet another level of approval and background checks. By "just sending the goods" you are in a very serious breach of regulations. Don't be surprised when your shipment is stopped at the border and the payments are frozen, because that's 100% guaranteed to happen if you get a control. Even if you try to get away with it. The intermediate providers like the shipping company and the payment provider still have to follow the law and they take it seriously.
grahamburger 10y ago
One of my top-ten rules for staying sane on the Internet is 'Never leave any money in your PayPal account.' Served me well so far - I had my account frozen but there was only $2 in the account. PayPal is horrible.
- Kenji 10y ago
  You are wise. I had money on my PayPal accont once. It was payment for a software feature I wrote for someone. Soon after I received the payment, they wrote an E-mail that it was a fraudulent transaction and froze my account. Of course I disputed it. Then my account dropped into negative balance: The payment was taken away and a fee was taken from me for disputing the claim. Of course, I refused to pay up my negative balance, despite their frequent reminders. After half a year or so (I was in negative balance for all that time), I got my money back, but they kept the fee for disputing the claim. PayPal - never again. Do not leave a dime on that account.
  - buserror 10y ago
    If you get any money on your paypal account without a bank account linked, you can't 'move' it. So I just let Mrs BusError loose on a shopping spree immediately! that usually clears the balance in no time at all.
- endgame 10y ago
  On top of that, never link a debit account to PayPal. If they try funny business with my credit card I can dispute the charges.
- endgame 10y ago
  On top of that, never link a debit account to PayPal. If they try funny business with my credit card I can dispute the charges.
adamio 10y ago
You stopped advertising and still had passive income of 10k monthly ?
- chillydawg 10y ago
  Probably on a steeply declining trajectory.
  - allannienhuis 10y ago
    and I suspect that's revenue, not income
- sabslaurent 10y ago
  Yes, when I was advertising I was doing close to $300k a month - I advertised on FB, there are still thousands of people who have my shared ad on the top of their newsfeed to this day. On top of that, I rank #1 on Google for my main keyword..
  - bbcbasic 10y ago
    are you on IndieHackers?
    - sabslaurent 10y ago
      Nope, not sure what that is even.
      - bbcbasic 10y ago
        https://www.indiehackers.com https://www.indiehackers.com "Learn from profitable businesses and side projects." People like you get interviewed to inspire those who want to do side project or start a business.
wayn3 10y ago
This is a case of KYC. Paypal wants to get to know you. Just talk to them. This looks scary to people who dont deal with banks and entities that act like banks, but paypal is doing this because they need to protect themselves from aiding people in money laundering, which is a pretty big deal. If you explain to them what youre doing and come up with some proof, they will release your money. They do not want to steal it. Almost all these cases revolve around someone not communicating with paypal and then acting surprised when they freeze funds. Any bank would do that. If my bank is hit wit ha 100k transfer and I don't say a word about it and then appear at the local branch and demand to cash it all out without an explanation of whats going on, they will refuse that, as well. And probably call the cops just to cover their asses. Seriously. Talk to them.
remx 10y ago
I wouldn't move large volumes through Paypal. PP is useful for small donations and shuttling small amounts around, but not for the amounts being discussed here, because the larger the amount, the more it hurts you when things go awry.
deleted 10y ago
[deleted]
rgbrenner 10y ago
2% dispute rate?! That would get you shut down at every merchant account provider I've ever dealt with. In fact, it's usually 0.5% or 1% max. One major bank gave me 0.25% max. I've never seen an agreement that said 2% was ok. That's a very serious fraud problem. I've run an ecommerce store -- the chargeback rate was 0.1% (seriously, I calculated this from actual #s). Nothing in this story (except maybe the customer service issues) would be out of the ordinary for any merchant account. Edit: fixed chargeback rate
- sabslaurent 10y ago
  Not sure what kind of volume you were doing to get that chargeback rate. I was doing 500 sales a day, approximately $250k a month in volume when I was running, my dispute rate was high but chargebacks lost were minimal. Despite that, Paypal were aware of my dispute rate when they negotiated the terms of our agreement ($5000 set reserve + 10% rolling reserve) - they then woke up one day and closed my account without letting my appeal or negotiate or provide any information. I just get the run around...
elastic_church 10y ago
How surprising, I've never heard of this happening before (this is sarcasm, for people who actually never heard of this happening before)
mhoad 10y ago
I very recently (as in this was resolved about 72 hrs ago) was in a a similar situation where I had $20k withheld by PayPal. I would switch all of my business billing to stripe in a second if they had the ability to pay out to accounts in different currencies like I can do with PayPal. Despite the fact that I run an Australian business I usually bill in USD but because I travel so much sometimes I'd like to have it in EUR or GBP etc for practical purposes. However with Stripe I am forced to convert it into AUD before I can do anything at all with it meaning I usually have to eat currency conversion fees twice before I can use it in a practical sense. Hence PayPal sadly....
- samwillis 10y ago
  You should be able to get a USD bank account in AU, then receive your payments from stripe without any conversion.
  - mhoad 10y ago
    As far as I know that isn't an option either. Stripe only pays out in the same currency of the country the account is setup in. Rumours are this is changing, if anyone from Stripe reads this and is looking for beta testers please get in touch (contact details in profile)
    - Tomdarkness 10y ago
      I think this depends on the country your account is setup in. Some countries allows you to have bank accounts in alternative currencies: https://support.stripe.com/questions/which-currencies-does-stripe-support#supportedcurrencies https://support.stripe.com/questions/which-currencies-does-s...
      - metafunctor 10y ago
        That list is a bit misleading. In most countries, you can add a bank account in USD, but that bank account must be in the US.
kaffee 10y ago
As someone paying for products, I detest PayPal. I'm forced to do it rarely enough that I would pay 5-10% extra to avoid doing it. I realize I'm just one data point but perhaps there's a market here? One case where it's especially frustrating is Etsy. There are many vendors on Etsy who refuse to accept any payment other than PayPal. (One can't use an Etsy gift card.) Edit: add etsy note
- mirimir 10y ago
  I also avoid PayPal whenever possible.
lquist 10y ago
One of the most valuable lessons I've learned from HN was to autosweep my PayPal account. I am thankful that I was fortunate enough to learn this lesson before starting my company and running tens of millions through PayPal. I can't say for sure that I would still be in business if I hadn't.
- sabslaurent 10y ago
  I have a CAD Paypal account - but I charge customers in USD. To withdraw money I have to pay Paypal's exchange rate, they won't let me attach a Canadian USD bank account. That means I have to pay exchange rate to take money out, then pay exchange rate again to convert the money to USD to pay my supplier and Facebook Ads in USD. It makes much more sense keeping my money in Paypal, that they are a fraud of a company is a different story.
  - allannienhuis 10y ago
    Have you thought of setting up a USD account with a US Bank? Canadians can do that without a problem at most branches near a border, and I expect it could be done remotely. Another alternative is to set up an account with RBC(USA) https://www.rbcbank.com/banking-in-the-us/checking-accounts/index.page https://www.rbcbank.com/banking-in-the-us/checking-accounts/....
    - kirykl 10y ago
      That would probably raise a flag to the IRS. I suspect the purpose for using Paypal, and a contributing factor for the freeze, could be tax issues
      - allannienhuis 10y ago
        I think people use Paypal because it's easy to use in general, not because it makes tax evasion easier (I suspect it's a pretty dumb choice for that :) ). Taxes need to be paid regardless of how the money get brought into the country, and Canada and the US have a pretty well understood tax treaty. When I opened up my account at the BOA, it seemed to be a very well used and smooth process - they mentioned that the number of Canadians holding accounts at that branch (close to the border) was a significant percentage of their total. I really doubt it raises any red flags on it's own - there are a lot of legitimate legal reasons for the arrangement.
deleted 10y ago
[deleted]
puppetmaster5 10y ago
It's not PayPal fault. It is your fault for using PayPal.
chygrynskiy 10y ago
https://www.paysap.co.ke/ https://www.paysap.co.ke/
- ryanlol 10y ago
  Does this really work as a marketing strategy?
chygrynskiy 10y ago
https://www.paysap.co.ke/ https://www.paysap.co.ke/
sabslaurent 10y ago
An update for anyone who cares...I tweeted this link and tagged Paypal, they reached out saying they are sorry to hear and submitted my case for a review. I replied via DM how can they review ny case without asking any new information or telling me what the issue is, got no reply back. Just got an email saying "Appeal Denied" Paypal account closed for security reasons. Which security reasons I have absolutely no idea. There's no contact info on the email, just says it's a do not reply address.
- skeletonjelly 10y ago
  Wow. What next?
  - sabslaurent 10y ago
    No idea, clearly they aren't paying attention to anything I say and just send automated replies. No one to talk to, nothing to do. I'm assuming complaints with different organizations to see if they can help.
    - jxi 10y ago
      I learned this lesson years ago when I was 12 and selling some software online. Paypal for no reason froze my account which still had 300$ in it (which is a ton of money at that age!). All appeal attempts failed, and they just didn't give a shit. I vowed never to ever do anything related to Paypal again (hence I don't use ebay). They're a scumbag company.
    - NamTaf 10y ago
      I'd say keep the battle public. The more bad press they seem to have as it drags on, the more likely they'll do something about it.
kelvin0 10y ago
OK, so when I click this post, I go directly to HN's comments section. Where is the original story? Missing URL?
- sabslaurent 10y ago
  https://news.ycombinator.com/item?id=13851124 https://news.ycombinator.com/item?id=13851124
- deleted 10y ago
  [deleted]
eonw 10y ago
this has been going on as long as paypal has been around. i never allow anyone to send more then a $1k to my paypal, everything larger than that gets check or wire. First time i got a $5k wire, they locked me out and held my monies for 90 days.... doesnt really help a growing business to have money locked. this was in 2002.
ahmetyas01 10y ago
I worked with paypal almost 10 years. I can tell you this. Paypal is an evil company.
mastazi 10y ago
I don't understand, this post has no link and no text body, just a recursive link to this discussion page. Where is the "horror story" mentioned in the title? EDIT: Oh I see, the original post is buried down in the thread, because it has been posted as a comment. Perhaps the mods could fix this?
funkyy 10y ago
It might sound bad, but usually, when I was doing volume, and I would travel to the different country, region, I would call PayPal central and let them know. While I am all about privacy, this always made them put some comment on my account that helped me pass all the bad things. "We need more documents" issue? Solved in hours. $20K spike of revenue in few days? Not a problem!
Buge 10y ago
Where is the story? This post doesn't link to any article or anything.
- frankzinger 10y ago
  I was also wondering. The OP put it in a comment which is quite far down the page currently: https://news.ycombinator.com/item?id=13851124 https://news.ycombinator.com/item?id=13851124
ArtDev 10y ago
I deleted my Paypal business account, never going back.
mstaoru 10y ago
If you're outside of the US, it gets even more interesting. First, you need to be VERY careful about using VPN or letting remote team members access Paypal. One misstep with, say, Hong Kong account being accessed from Ukrainian IPs, and you're blocked for a security review which drags for days and weeks. Second, they completely neglect any special international shipping methods' unique constraints. Sometimes when you ship from China, the tracking will only appear when the package reaches destination country. This is considered an outright fraud by Paypal, which promptly returns money to the client and you're left with a loss. On top of that, they will impose 3% commission for currency conversion. Did you ever hear of a bank taking 3% to convert between your multi-currency accounts? Well, "Paypal is not a bank". Add to the mix their robotic support with that condescending tone. No. I wouldn't touch Paypal with a ten-foot pole.
- Markoff 10y ago
  they are luxembourgish bank in Europe actually
coupdejarnac 10y ago
I'm looking at using Paypal for my next business, and it scares me that there is no recourse whenever an issue arises. I need to receive payments and send payments to workers, mostly in Europe. I'm doing a marketplace for jobs kind of like Upwork. I'm based in the USA, so Paypal makes it possible. Are there any alternatives to Paypal? I've been talking with Payoneer, but they have not inspired much confidence. I had my paypal account frozen about 10 years ago for a bullshit reason, and I'd like to avoid using them again.
- Markoff 10y ago
  they are both horrible, payoneer failed to reactivate my account or even answer to my request plus they have very steep fees also if you have their card with some balance they ask insane 30$ yearly fee PayPal is similarly bad, takes around 5% of my received income, but sadly 2 of my vendors don't accept any other payment solution and i can't afford to lose that income
- gravyboat 10y ago
  Did you check out Stripe connect?: https://stripe.com/connect https://stripe.com/connect I'm not sure if that will work for your business but it's worth checking into.
- Markoff 10y ago
  i am using this market places and PayPal requirement would be very off putting, why not just use wire transfer? wire fees sure are much lower than 5% PayPal robbery they are committing when i am receiving money, I would much rather take off wire fee from money i am suppose to receive than deal with PayPal
  - coupdejarnac 10y ago
    Wire transfer is definitely the way to go if transactions are only Europe to Europe or USA to USA. Unfortunately, I'm doing business in UAE, too, which creates huge problems. :/
    - 10y ago
Markoff 10y ago
yeah, lifting my limits work further verification was online ordeal for like 2 or more weeks since apparently my ID card with address and full name issued months ago is not good enough, my printed bank record from internet banking is not enough, in the end had to send them two other bank records from different bank to have my bank account back to regular also don't get me started they steal 5% of my income and don't have live chat service to resolve issues and their FAQ is referring to website layout from years ago with most of the steps wrong sadly still two of my vendors don't offer to me other payment solutions (well one does wire transfer but only for large amounts i can collect in months) so i still have to use this horrible service to not lose income
teilo 10y ago
If the OP were running an entirely legitimate business, they would have no issue revealing what product they are selling. They clearly do not want us to know what that product is. This is no doubt because we would have no sympathy for them if we knew. That being the case, I'm calling bullshit.
- sabslaurent 10y ago
  LOL buddy where I come from you don't disclose an extremely profitable niche on a public forum online where the majority of the community is familiar with ecommerce and business online is general. I'm not saying what I sell because I don't need 10 more competitors. What I sell is 100% legit, it's been approved on Paypal, it sells by the thousands daily on both Amazon and Ebay.
  - teilo 10y ago
    This particular public forum also has a lot of people who know that a lot of "100% legit" digital-only crap sold on Amazon and eBay is anything but. Does that describe your product? Only grandma knows...
    - sabslaurent 10y ago
      It's a physicial product with proof of tracking shipped from the USA man. It's an accessory that retails in countless physical stores. You're just trying to find a way to delegitimize my story and that's fine but it would be nicer if you asked questions instead of just calling bullshit with no back up.
      - cpncrunch 10y ago
        Can you give us an idea of what type of accessory it is? Or at least, what are the concerns you had about quality? Is this something you have commissioned a manufacturer to build? Is it a dodgy supplement with claims that aren't backed up by science?
- faet 10y ago
joeclark77 10y ago
Queen Victoria supposedly told her daughter on her wedding night, "Just lie back and think of England." Whenever I have to deal with PayPal, I think to myself "Just lie back and think of SpaceX." If Paypal helps Elon Musk take us to Mars, maybe it's worth putting up with at least occasionally. (You can think of Tesla if you prefer.)

404 points by sabslaurent 10y ago

I've processed successfully hundreds of thousands of dollars with my Paypal account over the pat 4-5 years. My account has been on review a few different times because of volume spikes (around the holiday season, I do ecommerce). When that happens, I usually reach out to Paypal and we discuss like humans, I explain where I'm coming from, they make suggestions and we get it settled. Around November 2016 Paypal reached out and told me due to the disputes coming in they need a $5000 set reserve + a 10% rolling reserve which will be released 90 days after a transaction. I accepted and since then Paypal has called me on 3 different occasions to check up on me and my efforts to reduce the dispute rate. We discussed and the calls seemed to go very well without them having any requests or EVER telling me my account is at risk of being limited and shut down due to disputes. Towards the end of January I myself realized I tired of the disputes (seemed to be a quality issue with the product which got hundreds of 5 star reviews on my site but still disputes were coming in at around 2%) so I slowly stopped the business meaning I stopped advertising and the only sales coming in were trickling in organically. My volume went down from $200k a month to about $10k a month. On Wednesday I log in to my Paypal account and it says it's limited they need more information. They asked for Photo ID, bank statement, proof of address, supplier invoice, supplier contact info and proof of delivery for the last 5 transactions. I provided everything but the proof of delivery for the last 5 transactions. From the resolution center whenever I clicked proof of delivery it brought me to a page with no transactions so of course I could not provide proof of delivery for transactions that don't exist. I contacted Paypal letting them know I submitted everything but proof of delivery since there's a bug in their system, they said no worries i'll get an email requesting the transactions they need tracking for and I could just reply back. I never got that email, but I did wake up Thursday morning with an Appeal Denied automated email saying my account is closed and the money will be frozen for 180 days. That's $20k CAD in my reserve + $15k USD in my available balance. Keep in mind in the past 30 days I processed less than $10k usd on Paypal in total. I reached out to a supervisor at Paypal and told him what his happening simply doesn't make sense, i provided everything they needed except for what their system was unable to request/receive and that if they had any issue with what I provided they should tell me what it is and help me resolve instead of giving me the hammer for no reason. He said he couldn't help me but opened a ticket for both his supervisor and a supervisor from the limitation team to call me within 24 hours. The limitation department supervisor never called me back but the business support manager called me back a few hours later. He called me from an unknown number in the evening, told me there's been a mistake, they added a second set of eyes to my account and they agree with me the limitation was unnecessary and wrongfully made. He said he just has a few questions and I will either get a restored access email in a couple hours or a call asking for more information in order to get it settled but he said there's a small chance of that happening, realistically the account will just be restored within a couple hours. I never got an email or call again, so I called the following day. When I called the rep basically told me there's no evidence of a call and there are no notes on my account from that person/call and nothing was moved forward for a review. I told him that is nonsense and to look harder. He eventually tells me there's evidence of a call but no notes, they tried to reach out to that supervisor and he wasn't available so there's nothing they could do for me, the decision is final. I'm being treated like a fraud and a criminal when I'm a legitimate entrepreneur who's processed 10's of thousands of transactions successfully. I also paid them thousands of dollars in fees, never had a negative balance or anything of the sort that would put Paypal at risk. Now whenever I call they are extremely rude telling me the account is closed they're holding the money and there's absolutely nothing I can do. They have been rude, lying, inconsistent, unfair and have made 0 effort to resolve this amicably. They have 0 logical reason to hold $40k of my money for 180 days, the only reason I can think of is they do this on 10's of thousands of accounts and gain big money off the interest. When I log in to my account there's a notification saying they need more information from me. When I click on that notification it brings me to a page that says the account is limited because they need more information regarding my recent sales, they do not say what information or how to provide information. That is straight up illegal and a complete abuse of power. I know there are thousands of Paypal horror stories but I genuinely feel abused. I have expenses, a family and so on and need that cash flow and no one at Paypal can be consistent for more than one phone call or help me resolve my issue, it's pathetic. Just had to vent and hopefully this will give them some of the negative attention they deserve.

throwaway_374 10y ago
You have my sympathies. A firmly drafted lawyer's letter should get their attention very quickly. This will cost you a small amount but it will bypass CS protocol and get you a senior.
- gpm 10y ago
  I wonder if you could/should include the cost of the lawyer in the amount you demand from them... this seems like the sort of case that fee shifting was designed for after all.
  - walshemj 10y ago
    And bill then for a day of your time at say 2x your normal day rate
jasode 10y ago
>My account has been on review a few different times because of volume spikes (around the holiday season, I do ecommerce) What type of products do you sell? That also affects the triggers for reviews and freezes. >but still disputes were coming in at around 2% 2% is really high. A lot of non-Paypal CC payment processors will flag your account when chargebacks exceed 1%.
- cpncrunch 10y ago
  >2% is really high. A lot of non-Paypal CC payment processors will flag your account when chargebacks exceed 1%. Yes, 2% is insanely high. I do about 2k/month through paypal and haven't had a chargeback in years. I think the last one was a few years ago, and that was just because a customer had their credit card stolen and just charged back all transactions they didn't recognise.
  - kweks 10y ago
    Depends on the product. I've seen businesses run at 10%, and others at 0%. Until you have a massive, public facing product that sells internationally across many facets of customer - you've probably never experienced the hell of CB management. Typically, you'll get: - Stolen cards (obvious ones) - Stolen cards (very insidious ones - all customer information, proxies that match the customer address, etc). Typically the only way to catch these guys is to have a hugely expensive 'express delivery' option, and manually filter each order that comes through on this option. - Dumb thieves (chargeback the day after delivery) - Smarter thieves (chargeback the day after posting) - Horrible people (chargeback months later) - Idiots (Unable to use a product, so chargeback) - Assholes (Weaponise chargebacks to blackmail you) Words to anyone struggling to fight CBs / fraud: - Use machine learning, ie SiftScience (or similar) to screen all transactions. - If you use Stripe, use their Radar feature. - If an order gets one flag, place it into a review queue, and manually process it 24 - 72 hours later. Emailing a customer smokes out the majority of fraud. - If an order gets two flags - blackhole the order (refund the card, if charged) The biggest thing is making your fraud processes opaque to scammers. If your site returns true/false responses, they'll just keep hammering until they find a combo of cards / proxies / etc that works. The only way around it is to shadow-ban: - Send blackholed orders to an approval page. - Send blackholed orders an approval email. Train your customer service to know which orders were banned, which weren't. If scammers have to wait 1 - 4 weeks to know if their order worked or not.. they will move onto easier targets.

nummy 10y ago

i think u got hax0red bro ... that link may have been a bogus page for you to submit your bank statements, etc.

fermigier 10y ago

IIRC this is not the first time this kind of bad behaviour has been reported about Paypal. I suppose you were aware of that. Did you consider Paypal's reputation when you chose to do business with them? Were there alternatives that you considered at the time and if so, why did you stick with Paypal?

rbinv 10y ago
Depending on where, what and how you're selling, offering PayPal is pretty much mandatory due to customer expectations.
- pharrlax 10y ago
  I don't see anything PayPal offers that Stripe can't do better. Why put yourself at risk of arbitrary catastrophe at the hands of a company like PayPal that wants to act like a bank while weaseling around the legal protections against bank malfeasance?
  - foepys 10y ago
    Outside of the US and Canada credit cards are not as widespread as they need to be to base your business solely on Stripe.
    - henrikschroder 10y ago
      It would be interesting to see where in the world PayPal is big. In most parts of Europe, PayPal is pretty much unheard of, because our banks don't suck, so PayPal never offered any improvements over just regular bank transfers.
      - thesimon 10y ago
        >In most parts of Europe, PayPal is pretty much unheard of Thats depends a lot on the country though. Not accepting PayPal in Germany would probably be the same as not accepting credit card in the US. In the UK however only offering credit cards might work.

TimMeade 10y ago

We quit using paypal 8 years ago for exactly this kind of treatment. Seems it has not changed.

mee_too 10y ago
Why would it? Obviously there are plenty of fools, who continue to do business with PayPal.
- ikeboy 10y ago
  I sell on eBay, and if you don't accept PayPal very few people will buy from you.
  - Neliquat 10y ago
    I found as long as you could take a card, most people were good. Only some ebay addicts were tied to paypal. Ymmv.

ziszis 10y ago

Traditional customer service channels are increasingly broken since they are seen as a cost center to be reduced by many companies. In particular, if you are trying to cancel service or withdraw money it is even "worse" because not only do they have to pay the salary for the rep, they also lose money helping you. If after one or two calls you don't get what you want, it is not worth retrying. I gave up after being placed in queue for an hour with Comcast. After finally getting ready to speak to a rep, I was informed by an automated message that they were closed for the day and to call back tomorrow. Here is what I find works: 1) Least likely - Traditional customer support channel. Try once or twice at most. 2) More likely - Contact publicly on social media like Twitter (Comcast is actual great about this). 3) Most likely - Getting upvoted and written about here and elsewhere. I would wait to engage with a lawyer as there is a good chance that someone from Paypal will popup in this thread. It is probably already surfacing in some internal emails at Paypal now. Good luck.

sandworm101 10y ago
It is more than jusy cost. Many decisions seem like customer service but in fact are legal matters. Releasing funds isnt like reseting a password or reconnecting a telephone service. For those decisions that legally bind a company or that may violate various regs one often has to get management approval. Something as small as releasing a few hundred dollars, if that money is held due to a red flag, might even require board approval or at least be reportable to shareholders. It is silly that our laws dont have perspective, that a 100$ prize to the author of a story about syria is subject to the same rules as a 400k payment to a shadowy syrian bank operating out of a russian flat, but blame the people writing the laws. Or, dont treat or trust paypal like they were a bank. The OP seems to be canadian. Canadian banks have a stellar rep. Trust them, not some US money-moving website.
- deleted 10y ago
  [deleted]
chillacy 10y ago
What worked for me with Comcast was ultimately filing an FCC complaint, at which point someone from their executive customer relations team was assigned to me and was actually very responsive. It's just a shame I had to file an official complaint before getting decent support.

Exuma 10y ago

Yeah... pretty much the exact reason I don't leave any significant amount of money in PayPal at one time.

uptown 10y ago

Apparently no details either. Where's the story?

pas 10y ago
https://news.ycombinator.com/item?id=13851124 https://news.ycombinator.com/item?id=13851124

JumpCrisscross 10y ago

Under U.S. federal law, PayPal is not a bank [1]. This is important. From the government's perspective, you give PayPal money and then PayPal gives you money. Between those events, it's not your money. PayPal has enormous discretion around what they can do with those funds, how and under what circumstances they get to decide to give it to you and if they get to keep it forever. What state do you live in? Do you do business through an entity, e.g. an LLC? If so, where is it registered? PayPal is, varyingly, registered as some form of a money transmitter in many states [2]. While your federal protections are probably limited to antifraud, protections you're probably outside of (PayPal has good lawyers--you agreed to surrender lots of privileges when you opened an account), there may be state regulations you can use to, if not force action, encourage it. Going forward, I tend to consider any business using PayPal for mission critical processes as being negligent with important risks. If you can't avoid using PayPal for certain lines of business, set up a nightly sweep from PayPal to a proper bank account. [1] http://www.zdnet.com/article/fdic-decides-paypals-no-bank/ http://www.zdnet.com/article/fdic-decides-paypals-no-bank/ [2] http://law.bepress.com/cgi/viewcontent.cgi?article=1153&context=expresso http://law.bepress.com/cgi/viewcontent.cgi?article=1153&cont... Disclaimer: I am not a lawyer. Only a lawyer can give you good legal advice. Don't take legal advice from Internet comments.

oblib 10y ago
"set up a nightly sweep from PayPal to a proper bank account" That is by far the best advice one can get, and it's not hard to do.
- pmlnr 10y ago
  So, how does one set this up in the automated way?
  - Negitivefrags 10y ago
    Paypal has this as a feature. It's buried but you should be able to find it. It's called Auto Sweep.

jccooper 10y ago

We use PayPal for a few scattered customers who have problems paying with a card and the occasional eBay sale, so I don't pay much attention to it. Whenever I see a PayPal horror story, I transfer all funds out of there to my bank. It's not the most effective sweep method, but it works depressingly well. I wonder what PayPal's cash balance would be if it had a reputation as being a safe place to keep a balance?

digler999 10y ago
> but it works depressingly well I dont think it "works" though. paypal can withdraw funds from your linked bank accounts too. I think you would need to create an LLC , open a bank acct under that LLC, then sweep funds out of that LLC account to be "safe".
- damontal 10y ago
  Or just immediately pull your money out of the linked account to an unlinked account.

dawhizkid 10y ago

I had this happen to me. I filed a complaint with the CFPB and within a week had my account unfrozen (i.e. still shut down but ability to transfer funds out)

oblib 10y ago

I make invoicing software that I sell using PayPal and it lets my users add a "Pay with PayPal" button to their invoices and over the years several of my clients have called me and related stories similar to this and they all had some common traits. They all processed quite a bit of money via PayPal and they all had issues with customer's requesting refunds which they disputed or didn't issue in a timely manner, and they all sold something which had the potential to be a bit shady. One of them sold aircraft parts to Iran, which may have had some legal restrictions that applied. Another sold guns. Since I sell access to web based software I don't have to ship anything and the product is "delivered" instantly. I also process refunds immediately and without any question. PayPal most certainly doesn't like getting caught up in refund issues. In my case most of the customers who've requested a refund contacted me first and I issued it promptly with a "Thanks for trying my software" note attached. The few that have contacted PayPal first resulted in PayPal sending me a notice about the request for a refund and, again, I issued it immediately, but their notice makes it clear that is what they expect and if I recall correctly they put a time limit on that. Take from this what you want but what I've taken from it is when a customer requests a refund issue the refund as quickly as possible and try hard to make that as easy as possible for your customers and to minimize the potential for them asking for one.

tyingq 10y ago
There's all sorts of other ways PayPal can decide to hold your funds as well. For example, they have a really simplistic implementation of OFAC regulatory compliance. Make a transaction that has the right strings in it, even in a comment, and it gets your whole account frozen. And some of these magic strings are very common names. Such that if someone named John Smith ends up on the OFAC list, any transaction with that string in it, anywhere, triggers chaos. That's just one additional way they can choose to freeze funds. Many others exist.
user5994461 10y ago
> One of them sold aircraft parts to Iran, which may have had some legal restrictions that applied. Shady is an understatement. In the EU countries I do business with, that falls under sensitive hardware being send to a sensitive country. Not only do you need to get extensive approval from the national-export-agency-thing, but it's also special goods that's likely to be used for military purpose, thus you are required to contact the feds on your own initiative to disclose the full details of the order and the clients and get yet another level of approval and background checks. By "just sending the goods" you are in a very serious breach of regulations. Don't be surprised when your shipment is stopped at the border and the payments are frozen, because that's 100% guaranteed to happen if you get a control. Even if you try to get away with it. The intermediate providers like the shipping company and the payment provider still have to follow the law and they take it seriously.

grahamburger 10y ago

One of my top-ten rules for staying sane on the Internet is 'Never leave any money in your PayPal account.' Served me well so far - I had my account frozen but there was only $2 in the account. PayPal is horrible.

Kenji 10y ago
You are wise. I had money on my PayPal accont once. It was payment for a software feature I wrote for someone. Soon after I received the payment, they wrote an E-mail that it was a fraudulent transaction and froze my account. Of course I disputed it. Then my account dropped into negative balance: The payment was taken away and a fee was taken from me for disputing the claim. Of course, I refused to pay up my negative balance, despite their frequent reminders. After half a year or so (I was in negative balance for all that time), I got my money back, but they kept the fee for disputing the claim. PayPal - never again. Do not leave a dime on that account.
- buserror 10y ago
  If you get any money on your paypal account without a bank account linked, you can't 'move' it. So I just let Mrs BusError loose on a shopping spree immediately! that usually clears the balance in no time at all.
endgame 10y ago
On top of that, never link a debit account to PayPal. If they try funny business with my credit card I can dispute the charges.
endgame 10y ago
On top of that, never link a debit account to PayPal. If they try funny business with my credit card I can dispute the charges.

adamio 10y ago

You stopped advertising and still had passive income of 10k monthly ?

chillydawg 10y ago
Probably on a steeply declining trajectory.
- allannienhuis 10y ago
  and I suspect that's revenue, not income
sabslaurent 10y ago
Yes, when I was advertising I was doing close to $300k a month - I advertised on FB, there are still thousands of people who have my shared ad on the top of their newsfeed to this day. On top of that, I rank #1 on Google for my main keyword..
- bbcbasic 10y ago
  are you on IndieHackers?
  - sabslaurent 10y ago
    Nope, not sure what that is even.
    - bbcbasic 10y ago
      https://www.indiehackers.com https://www.indiehackers.com "Learn from profitable businesses and side projects." People like you get interviewed to inspire those who want to do side project or start a business.

wayn3 10y ago

This is a case of KYC. Paypal wants to get to know you. Just talk to them. This looks scary to people who dont deal with banks and entities that act like banks, but paypal is doing this because they need to protect themselves from aiding people in money laundering, which is a pretty big deal. If you explain to them what youre doing and come up with some proof, they will release your money. They do not want to steal it. Almost all these cases revolve around someone not communicating with paypal and then acting surprised when they freeze funds. Any bank would do that. If my bank is hit wit ha 100k transfer and I don't say a word about it and then appear at the local branch and demand to cash it all out without an explanation of whats going on, they will refuse that, as well. And probably call the cops just to cover their asses. Seriously. Talk to them.

remx 10y ago

I wouldn't move large volumes through Paypal. PP is useful for small donations and shuttling small amounts around, but not for the amounts being discussed here, because the larger the amount, the more it hurts you when things go awry.

deleted 10y ago

[deleted]

rgbrenner 10y ago

2% dispute rate?! That would get you shut down at every merchant account provider I've ever dealt with. In fact, it's usually 0.5% or 1% max. One major bank gave me 0.25% max. I've never seen an agreement that said 2% was ok. That's a very serious fraud problem. I've run an ecommerce store -- the chargeback rate was 0.1% (seriously, I calculated this from actual #s). Nothing in this story (except maybe the customer service issues) would be out of the ordinary for any merchant account. Edit: fixed chargeback rate

sabslaurent 10y ago
Not sure what kind of volume you were doing to get that chargeback rate. I was doing 500 sales a day, approximately $250k a month in volume when I was running, my dispute rate was high but chargebacks lost were minimal. Despite that, Paypal were aware of my dispute rate when they negotiated the terms of our agreement ($5000 set reserve + 10% rolling reserve) - they then woke up one day and closed my account without letting my appeal or negotiate or provide any information. I just get the run around...

elastic_church 10y ago

How surprising, I've never heard of this happening before (this is sarcasm, for people who actually never heard of this happening before)

mhoad 10y ago

I very recently (as in this was resolved about 72 hrs ago) was in a a similar situation where I had $20k withheld by PayPal. I would switch all of my business billing to stripe in a second if they had the ability to pay out to accounts in different currencies like I can do with PayPal. Despite the fact that I run an Australian business I usually bill in USD but because I travel so much sometimes I'd like to have it in EUR or GBP etc for practical purposes. However with Stripe I am forced to convert it into AUD before I can do anything at all with it meaning I usually have to eat currency conversion fees twice before I can use it in a practical sense. Hence PayPal sadly....

samwillis 10y ago
You should be able to get a USD bank account in AU, then receive your payments from stripe without any conversion.
- mhoad 10y ago
  As far as I know that isn't an option either. Stripe only pays out in the same currency of the country the account is setup in. Rumours are this is changing, if anyone from Stripe reads this and is looking for beta testers please get in touch (contact details in profile)
  - Tomdarkness 10y ago
    I think this depends on the country your account is setup in. Some countries allows you to have bank accounts in alternative currencies: https://support.stripe.com/questions/which-currencies-does-stripe-support#supportedcurrencies https://support.stripe.com/questions/which-currencies-does-s...
    - metafunctor 10y ago
      That list is a bit misleading. In most countries, you can add a bank account in USD, but that bank account must be in the US.

kaffee 10y ago

As someone paying for products, I detest PayPal. I'm forced to do it rarely enough that I would pay 5-10% extra to avoid doing it. I realize I'm just one data point but perhaps there's a market here? One case where it's especially frustrating is Etsy. There are many vendors on Etsy who refuse to accept any payment other than PayPal. (One can't use an Etsy gift card.) Edit: add etsy note

mirimir 10y ago
I also avoid PayPal whenever possible.

lquist 10y ago

One of the most valuable lessons I've learned from HN was to autosweep my PayPal account. I am thankful that I was fortunate enough to learn this lesson before starting my company and running tens of millions through PayPal. I can't say for sure that I would still be in business if I hadn't.

sabslaurent 10y ago
I have a CAD Paypal account - but I charge customers in USD. To withdraw money I have to pay Paypal's exchange rate, they won't let me attach a Canadian USD bank account. That means I have to pay exchange rate to take money out, then pay exchange rate again to convert the money to USD to pay my supplier and Facebook Ads in USD. It makes much more sense keeping my money in Paypal, that they are a fraud of a company is a different story.
- allannienhuis 10y ago
  Have you thought of setting up a USD account with a US Bank? Canadians can do that without a problem at most branches near a border, and I expect it could be done remotely. Another alternative is to set up an account with RBC(USA) https://www.rbcbank.com/banking-in-the-us/checking-accounts/index.page https://www.rbcbank.com/banking-in-the-us/checking-accounts/....
  - kirykl 10y ago
    That would probably raise a flag to the IRS. I suspect the purpose for using Paypal, and a contributing factor for the freeze, could be tax issues
    - allannienhuis 10y ago
      I think people use Paypal because it's easy to use in general, not because it makes tax evasion easier (I suspect it's a pretty dumb choice for that :) ). Taxes need to be paid regardless of how the money get brought into the country, and Canada and the US have a pretty well understood tax treaty. When I opened up my account at the BOA, it seemed to be a very well used and smooth process - they mentioned that the number of Canadians holding accounts at that branch (close to the border) was a significant percentage of their total. I really doubt it raises any red flags on it's own - there are a lot of legitimate legal reasons for the arrangement.

deleted 10y ago

[deleted]

puppetmaster5 10y ago

It's not PayPal fault. It is your fault for using PayPal.

chygrynskiy 10y ago

https://www.paysap.co.ke/ https://www.paysap.co.ke/

ryanlol 10y ago
Does this really work as a marketing strategy?

chygrynskiy 10y ago

https://www.paysap.co.ke/ https://www.paysap.co.ke/

sabslaurent 10y ago

An update for anyone who cares...I tweeted this link and tagged Paypal, they reached out saying they are sorry to hear and submitted my case for a review. I replied via DM how can they review ny case without asking any new information or telling me what the issue is, got no reply back. Just got an email saying "Appeal Denied" Paypal account closed for security reasons. Which security reasons I have absolutely no idea. There's no contact info on the email, just says it's a do not reply address.

skeletonjelly 10y ago
Wow. What next?
- sabslaurent 10y ago
  No idea, clearly they aren't paying attention to anything I say and just send automated replies. No one to talk to, nothing to do. I'm assuming complaints with different organizations to see if they can help.
  - jxi 10y ago
    I learned this lesson years ago when I was 12 and selling some software online. Paypal for no reason froze my account which still had 300$ in it (which is a ton of money at that age!). All appeal attempts failed, and they just didn't give a shit. I vowed never to ever do anything related to Paypal again (hence I don't use ebay). They're a scumbag company.
  - NamTaf 10y ago
    I'd say keep the battle public. The more bad press they seem to have as it drags on, the more likely they'll do something about it.

kelvin0 10y ago

OK, so when I click this post, I go directly to HN's comments section. Where is the original story? Missing URL?

sabslaurent 10y ago
https://news.ycombinator.com/item?id=13851124 https://news.ycombinator.com/item?id=13851124
deleted 10y ago
[deleted]

eonw 10y ago

this has been going on as long as paypal has been around. i never allow anyone to send more then a $1k to my paypal, everything larger than that gets check or wire. First time i got a $5k wire, they locked me out and held my monies for 90 days.... doesnt really help a growing business to have money locked. this was in 2002.

ahmetyas01 10y ago

I worked with paypal almost 10 years. I can tell you this. Paypal is an evil company.

mastazi 10y ago

I don't understand, this post has no link and no text body, just a recursive link to this discussion page. Where is the "horror story" mentioned in the title? EDIT: Oh I see, the original post is buried down in the thread, because it has been posted as a comment. Perhaps the mods could fix this?

funkyy 10y ago

It might sound bad, but usually, when I was doing volume, and I would travel to the different country, region, I would call PayPal central and let them know. While I am all about privacy, this always made them put some comment on my account that helped me pass all the bad things. "We need more documents" issue? Solved in hours. $20K spike of revenue in few days? Not a problem!

Buge 10y ago

Where is the story? This post doesn't link to any article or anything.

frankzinger 10y ago
I was also wondering. The OP put it in a comment which is quite far down the page currently: https://news.ycombinator.com/item?id=13851124 https://news.ycombinator.com/item?id=13851124

ArtDev 10y ago

I deleted my Paypal business account, never going back.

mstaoru 10y ago

If you're outside of the US, it gets even more interesting. First, you need to be VERY careful about using VPN or letting remote team members access Paypal. One misstep with, say, Hong Kong account being accessed from Ukrainian IPs, and you're blocked for a security review which drags for days and weeks. Second, they completely neglect any special international shipping methods' unique constraints. Sometimes when you ship from China, the tracking will only appear when the package reaches destination country. This is considered an outright fraud by Paypal, which promptly returns money to the client and you're left with a loss. On top of that, they will impose 3% commission for currency conversion. Did you ever hear of a bank taking 3% to convert between your multi-currency accounts? Well, "Paypal is not a bank". Add to the mix their robotic support with that condescending tone. No. I wouldn't touch Paypal with a ten-foot pole.

Markoff 10y ago
they are luxembourgish bank in Europe actually

coupdejarnac 10y ago

I'm looking at using Paypal for my next business, and it scares me that there is no recourse whenever an issue arises. I need to receive payments and send payments to workers, mostly in Europe. I'm doing a marketplace for jobs kind of like Upwork. I'm based in the USA, so Paypal makes it possible. Are there any alternatives to Paypal? I've been talking with Payoneer, but they have not inspired much confidence. I had my paypal account frozen about 10 years ago for a bullshit reason, and I'd like to avoid using them again.

Markoff 10y ago
they are both horrible, payoneer failed to reactivate my account or even answer to my request plus they have very steep fees also if you have their card with some balance they ask insane 30$ yearly fee PayPal is similarly bad, takes around 5% of my received income, but sadly 2 of my vendors don't accept any other payment solution and i can't afford to lose that income
gravyboat 10y ago
Did you check out Stripe connect?: https://stripe.com/connect https://stripe.com/connect I'm not sure if that will work for your business but it's worth checking into.
Markoff 10y ago
i am using this market places and PayPal requirement would be very off putting, why not just use wire transfer? wire fees sure are much lower than 5% PayPal robbery they are committing when i am receiving money, I would much rather take off wire fee from money i am suppose to receive than deal with PayPal
- coupdejarnac 10y ago
  Wire transfer is definitely the way to go if transactions are only Europe to Europe or USA to USA. Unfortunately, I'm doing business in UAE, too, which creates huge problems. :/
  - 10y ago

Markoff 10y ago

yeah, lifting my limits work further verification was online ordeal for like 2 or more weeks since apparently my ID card with address and full name issued months ago is not good enough, my printed bank record from internet banking is not enough, in the end had to send them two other bank records from different bank to have my bank account back to regular also don't get me started they steal 5% of my income and don't have live chat service to resolve issues and their FAQ is referring to website layout from years ago with most of the steps wrong sadly still two of my vendors don't offer to me other payment solutions (well one does wire transfer but only for large amounts i can collect in months) so i still have to use this horrible service to not lose income

teilo 10y ago

If the OP were running an entirely legitimate business, they would have no issue revealing what product they are selling. They clearly do not want us to know what that product is. This is no doubt because we would have no sympathy for them if we knew. That being the case, I'm calling bullshit.

sabslaurent 10y ago
LOL buddy where I come from you don't disclose an extremely profitable niche on a public forum online where the majority of the community is familiar with ecommerce and business online is general. I'm not saying what I sell because I don't need 10 more competitors. What I sell is 100% legit, it's been approved on Paypal, it sells by the thousands daily on both Amazon and Ebay.
- teilo 10y ago
  This particular public forum also has a lot of people who know that a lot of "100% legit" digital-only crap sold on Amazon and eBay is anything but. Does that describe your product? Only grandma knows...
  - sabslaurent 10y ago
    It's a physicial product with proof of tracking shipped from the USA man. It's an accessory that retails in countless physical stores. You're just trying to find a way to delegitimize my story and that's fine but it would be nicer if you asked questions instead of just calling bullshit with no back up.
    - cpncrunch 10y ago
      Can you give us an idea of what type of accessory it is? Or at least, what are the concerns you had about quality? Is this something you have commissioned a manufacturer to build? Is it a dodgy supplement with claims that aren't backed up by science?
faet 10y ago

joeclark77 10y ago

Queen Victoria supposedly told her daughter on her wedding night, "Just lie back and think of England." Whenever I have to deal with PayPal, I think to myself "Just lie back and think of SpaceX." If Paypal helps Elon Musk take us to Mars, maybe it's worth putting up with at least occasionally. (You can think of Tesla if you prefer.)