6 ms·

At the risk of being perceived as the devil's advocate, let me ask a question. I've heard of dozens of stories about Paypal along a similar vein. "They locked

by geuis 15y ago

At the risk of being perceived as the devil's advocate, let me ask a question. I've heard of dozens of stories about Paypal along a similar vein. "They locked my account for unreasonable reason X and now are keeping the money". Most of these stories seem anecdotal. Can someone point to a rigorously documented set of cases where both Paypal and the customer's side of things are reviewed? Over the last few years, all of these "Paypal screwed me" stories have sounded like all the complaints a few years ago about Apple seeming to reject apps arbitrarily. As far as I know, the complaints about Apple from devs have largely died down since we've had a fairly straight-forward list of do's and don'ts to work from. If most of the people reporting problems with Paypal are doing things that are inconsistent with their policies and then saying publicly how they're being screwed, then that creates a negative reputation for other people who have never personally had a problem with Paypal.

LearnYouALisp 15y ago
A friend of mine down the street tried to sell an online account via PayPal. The would-be buyers sent the money to his PayPal account, got the online account credentials from him, then took the money out of PayPal. The money was lost but the admins for the software he used the account on reinstated it to him since this happens a lot. There are scammers with deep penetration into PayPal.
- jeltz 15y ago
  I have also experienced one such scammer when selling software using Paypal. Now for me it was nothing important since no physical object was lost. But that time I learned that Paypal chargebacks are an excellent way to scam vendors, and that the conflict resolution tools of Paypal are a joke.
- deleted 15y ago
  [deleted]
dangrossman 15y ago
I've yet to see a "PayPal horror story" that didn't fit into one of the "any payment processor in the world would consider this high risk and temporarily or permanently freeze the account" slots. If this discussion with the customer service rep did occur as written, it's the most ridiculous one I've seen yet, though. It's a major customer service fail even if the original reason for freezing the account was valid.
- wdewind 15y ago
  Absolutely: that every other payment processor in the world would do the same thing is hugely relevant. Paypal is just the only one it's easy enough to set stuff up with, so they get all the bad press.
- SCdF 15y ago
  Can you explain how the OP's situation is high risk?
  - dangrossman 15y ago
    Any change in average processing volume and ticket size is a red flag at any payment processor. An individual/business suddenly getting a ton of "donations" is going to look suspicous. An individual/business that hasn't told their processor their plans, and gets a ton of "donations", is going to have to convince that processor the donations are really donations and are going to end up going towards what they said they'd go towards -- because if they don't, all those donors may charge back the payments, the fundraiser may disappear, and the processor is on the hook for all the costs. OP's situation is pretty weird. If that conversation actually occurred, it wasn't handled well at all, and PayPal may well have done a lot wrong here. That doesn't mean it wasn't a high risk situation when PayPal initially froze the account to stop it from getting riskier. I also think the OP's wrong about losing fees on everything twice even though the payments were refunded. When you refund something through PayPal, PayPal refunds its fees to you, even if it was a credit card transaction.
    - asto 15y ago
      The problem didn't seem to be that the volume/value of transactions suddenly went up. The Paypal representative didn't say that at any point in the conversation. Even if that was indeed the case, a simple investigation of the issue would have cleared things up. Businesses are supposed to work with customers, not fuck them over at the first sign of trouble.
      - megablast 15y ago
bphogan 15y ago
I can't. I replied elsewhere in these comments that it happened to a client of mine. I made a lot of money in one weekend doing emergency "I told you so" payment gateway switching for him so he could take reservations. But it's my recollection they're not a bank, and so they have no real obligation to act like one. So when they do this kind of stuff, I'm not surprised. And I wouldn't want to be them. They probably deal with fraud and schemes on the scale none of us could possibly imagine. PayPal - the Mos Eisley of e-commerce.
- brazzy 15y ago
  Actually, Paypal's European operation is officially registered as a bank in Luxemburg.
  - Silhouette 15y ago
    Thank you. I didn't know that before. I'm in the UK and one of my companies is in the typical start-up bind right now: we want to take on-line payments, heavyweight Merchant Account and Payment Gateway services are a bureaucratic nightmare to set up with lead times often running into months, but the cheap 'n' cheerful services like Paypal have terrible reputations for customer service and reportedly a tendency to steal merchants' money arbitrarily. Does anyone here know anything about whether, in practice, such horror stories are mitigated in the EU by PayPal's registration as a bank? We don't see them as a long-term prospect for handling our payments, but today we'd settle for something we can set up in hours rather than weeks so we can launch our service and get some sort of trading history going. If nothing else, that would deal with a lot of the headaches of applying for the more "serious" services, which tend to be very risk-averse if you approach them as a start-up with no trading history and wanting recurring payment authority on credit cards to implement your subscription model.
sp332 15y ago
The problem isn't so much being cut off as having no recourse. PayPal didn't just freeze the assets temporarily, pending investigation. They arbitrarily decided that this organization shouldn't be allowed to access the customers' money. No appeal or review is offered. That's the horror story.
- einhverfr 15y ago
  Of course you have recourse. It's called "District Court." Unfortunately you have to sue them where the court has jurisdiction, which means hiring a lawyer where they are located.....
Shenglong 15y ago
A lot of us have similar experiences with Paypal. When something like this has happened to you personally, it's a lot easier to accept that it's true. What I'm having trouble understanding, is how he even got through to someone who spoke English.
einhverfr 15y ago
My business account was frozen by Paypal for a similar non-reason. I am not going into the details here but I chose to simply wait it out ($2 balance at the moment) and take my business to Amazon Payments. The issue in my case was not me. It had to do, iirc, with someone my wife had done business on regarding Paypal, and we were required to verify all info on all accounts that had ever been accessed from our IP address. In other words they froze my account because someone unrelated to me was arguably (though maybe not certainly) violating their terms of service. Since that included my brother in law's account and he was abroad at the time, it was too much of a headache. I have basically taken up advocating to all of my customers not to rely on Paypal.
Zarathust 15y ago
A lot of dev complaints toward Apple was that there was no strict guidelines. Applications seemed to be rejected for stuff outside the boundaries of the actual terms. I'm pretty sure the process is much more straightforward now, which checklists and cheatsheets
schmrz 15y ago
Also, have any of these people contacted paypal before using their services? I'v spent around an hour waiting for and talking with paypal support to make sure that I'm able to use paypal for my new project without any problems.

by geuis 15y ago

LearnYouALisp 15y ago

A friend of mine down the street tried to sell an online account via PayPal. The would-be buyers sent the money to his PayPal account, got the online account credentials from him, then took the money out of PayPal. The money was lost but the admins for the software he used the account on reinstated it to him since this happens a lot. There are scammers with deep penetration into PayPal.

jeltz 15y ago
I have also experienced one such scammer when selling software using Paypal. Now for me it was nothing important since no physical object was lost. But that time I learned that Paypal chargebacks are an excellent way to scam vendors, and that the conflict resolution tools of Paypal are a joke.
deleted 15y ago
[deleted]

dangrossman 15y ago

I've yet to see a "PayPal horror story" that didn't fit into one of the "any payment processor in the world would consider this high risk and temporarily or permanently freeze the account" slots. If this discussion with the customer service rep did occur as written, it's the most ridiculous one I've seen yet, though. It's a major customer service fail even if the original reason for freezing the account was valid.

wdewind 15y ago
Absolutely: that every other payment processor in the world would do the same thing is hugely relevant. Paypal is just the only one it's easy enough to set stuff up with, so they get all the bad press.
SCdF 15y ago
Can you explain how the OP's situation is high risk?
- dangrossman 15y ago
  Any change in average processing volume and ticket size is a red flag at any payment processor. An individual/business suddenly getting a ton of "donations" is going to look suspicous. An individual/business that hasn't told their processor their plans, and gets a ton of "donations", is going to have to convince that processor the donations are really donations and are going to end up going towards what they said they'd go towards -- because if they don't, all those donors may charge back the payments, the fundraiser may disappear, and the processor is on the hook for all the costs. OP's situation is pretty weird. If that conversation actually occurred, it wasn't handled well at all, and PayPal may well have done a lot wrong here. That doesn't mean it wasn't a high risk situation when PayPal initially froze the account to stop it from getting riskier. I also think the OP's wrong about losing fees on everything twice even though the payments were refunded. When you refund something through PayPal, PayPal refunds its fees to you, even if it was a credit card transaction.
  - asto 15y ago
    The problem didn't seem to be that the volume/value of transactions suddenly went up. The Paypal representative didn't say that at any point in the conversation. Even if that was indeed the case, a simple investigation of the issue would have cleared things up. Businesses are supposed to work with customers, not fuck them over at the first sign of trouble.
    - megablast 15y ago

bphogan 15y ago

I can't. I replied elsewhere in these comments that it happened to a client of mine. I made a lot of money in one weekend doing emergency "I told you so" payment gateway switching for him so he could take reservations. But it's my recollection they're not a bank, and so they have no real obligation to act like one. So when they do this kind of stuff, I'm not surprised. And I wouldn't want to be them. They probably deal with fraud and schemes on the scale none of us could possibly imagine. PayPal - the Mos Eisley of e-commerce.

brazzy 15y ago
Actually, Paypal's European operation is officially registered as a bank in Luxemburg.
- Silhouette 15y ago
  Thank you. I didn't know that before. I'm in the UK and one of my companies is in the typical start-up bind right now: we want to take on-line payments, heavyweight Merchant Account and Payment Gateway services are a bureaucratic nightmare to set up with lead times often running into months, but the cheap 'n' cheerful services like Paypal have terrible reputations for customer service and reportedly a tendency to steal merchants' money arbitrarily. Does anyone here know anything about whether, in practice, such horror stories are mitigated in the EU by PayPal's registration as a bank? We don't see them as a long-term prospect for handling our payments, but today we'd settle for something we can set up in hours rather than weeks so we can launch our service and get some sort of trading history going. If nothing else, that would deal with a lot of the headaches of applying for the more "serious" services, which tend to be very risk-averse if you approach them as a start-up with no trading history and wanting recurring payment authority on credit cards to implement your subscription model.

sp332 15y ago

The problem isn't so much being cut off as having no recourse. PayPal didn't just freeze the assets temporarily, pending investigation. They arbitrarily decided that this organization shouldn't be allowed to access the customers' money. No appeal or review is offered. That's the horror story.

einhverfr 15y ago
Of course you have recourse. It's called "District Court." Unfortunately you have to sue them where the court has jurisdiction, which means hiring a lawyer where they are located.....

Shenglong 15y ago

A lot of us have similar experiences with Paypal. When something like this has happened to you personally, it's a lot easier to accept that it's true. What I'm having trouble understanding, is how he even got through to someone who spoke English.

einhverfr 15y ago

My business account was frozen by Paypal for a similar non-reason. I am not going into the details here but I chose to simply wait it out ($2 balance at the moment) and take my business to Amazon Payments. The issue in my case was not me. It had to do, iirc, with someone my wife had done business on regarding Paypal, and we were required to verify all info on all accounts that had ever been accessed from our IP address. In other words they froze my account because someone unrelated to me was arguably (though maybe not certainly) violating their terms of service. Since that included my brother in law's account and he was abroad at the time, it was too much of a headache. I have basically taken up advocating to all of my customers not to rely on Paypal.

Zarathust 15y ago

A lot of dev complaints toward Apple was that there was no strict guidelines. Applications seemed to be rejected for stuff outside the boundaries of the actual terms. I'm pretty sure the process is much more straightforward now, which checklists and cheatsheets

schmrz 15y ago

Also, have any of these people contacted paypal before using their services? I'v spent around an hour waiting for and talking with paypal support to make sure that I'm able to use paypal for my new project without any problems.