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Tell HN: Do not store any funds in PayPal or use them for anything critical

703 points by ciguy 4y ago

I know this has been covered over and over, but I always thought there must be more to the story when someones account was permanently banned. Well, it happened to me, one of the most plain and boring consumer users of PayPal ever. I have used PayPal for over a decade, usually once or twice a month to make small purchases when buying something off Craigslist or Facebook marketplace. I also occasionally use it to split dinner with friends. I don't use it for business and I don't use it for anything sketchy. I recently received an email from PayPal saying that my account had been permanently banned. No appeal, no reason given. I logged in separately to make sure this was a real email, at first I thought it must be phishing. It was real. The only thing I can think of which might have precipitated this. I got a few invoice requests though PayPal a while ago from people/businesses I had never heard of. This is a well known and documented scam where they spam invoices en-masse and hope some people pay them accidentally (I did not pay them, but the PayPal UI makes this very easy to do and there is no way to decline or dismiss the requests). Not a big deal for me since I don't use PayPal for anything critical, but I figured a reminder was in order in case anyone still thinks it won't happen to them. If it could happen to me, it can happen to anyone.

kuroguro 4y ago
> one of the most plain and boring consumer users of PayPal ever Yeah it seems kindof arbitrary. I've abused my account doing weird stuff for years and it's still fine.
AlbertCory 4y ago
I already closed my PayPal because of this and other stuff.
arthurcolle 4y ago
I know PayPal spun out of Ebay a long time ago and that PayPal is especially evil and sociopathically unscrupulous but... EBay just banned my account last week for listing a Macbook Pro with stock image, removing it to adjust the title, relisting it with a photo of the "About this Mac" to show that the specs were correct. (Can't think of anything else that would even be remotely related). Also, the messages component of the Ebay web app was completely down the whole time so it made it impossible to respond to any users that were asking questions about the MacBook Pro. Completely insane. Apparently making listings is "harmful to the [Ebay] community"
- ciguy 4y ago
  It's just algorithms out of control all the way down. They are probably ok with some number of false positives, but they don't account for how much these situations erode customer trust across the board.
  - arthurcolle 4y ago
    But also, this just happened to me: https://news.ycombinator.com/item?id=34840250 https://news.ycombinator.com/item?id=34840250 and thankfully backed up all my critical data, but still have not been able to get a hold of anyone at Amazon. It seems like our ability to interact with a corporate entity has become an afterthought + that all the machinery driving customer interactions (UIs, special support chat hidden, dark patterns everywhere...) have become a total impediment to actually getting something fixed.
- FireBeyond 4y ago
  Meanwhile, my stolen phone was for sale on a prolific local seller's account (IMEI was listed, but two digits transposed - looks like a genuine error, but also stifles searching, fails checksum. Every other phone for sale by same seller has the same thing). 100+ phones. Mostly "activation locked", all "no charger, no accessories". 50+ laptops, all "no charger, no accessories". All blatantly stolen goods.
  - arthurcolle 4y ago
    That is insane! How did you even manage to find them with digits transposed? By local seller, you must mean actually local to you? Sorry you got your stuff stolen, I once had a Giant e-bike stolen in Jersey City, so I know how much it sucks. I firmly believe everything should have some kind of tracker if it is more than $2K in cost.
    - ChrisMarshallNY 4y ago
      Pretty much everything you get from Apple is trackable. That's both good and bad; depending on who you ask, but they know where every device is, as soon as it's turned on. That's why I wonder at folks stealing iPhones and iPads. They are basically unsellable.
zachlatta 4y ago
We just had this happen too https://news.ycombinator.com/item?id=34803684 https://news.ycombinator.com/item?id=34803684
paulpauper 4y ago
People have been warning against keeping too much funds in PayPal since 2004. Consumer protection is nearly nonexistent.
- bjornsing 4y ago
  > Consumer protection is nearly nonexistent. Surely you can take them to court (if you have time to burn)?
  - ciguy 4y ago
    I'm sure it's possible, but they probably count on having more money for lawyers than most of their customers.
  - orthecreedence 4y ago
    If it's less than the small claims maximum, it's absolutely worth taking them to court. They probably won't even show up and you'll get a default judgement in your favor. Usually the horror stories are tens of thousands of dollars (far past the small claims threshold) and believe me when I tell you that suing someone, especially someone with deep pockets, is a clusterfuck nightmare.
    - JohnFen 4y ago
      > suing someone, especially someone with deep pockets, is a clusterfuck nightmare. Absolutely correct. Even worse, winning the lawsuit does not mean you'll see the money. It only gives you the right to do things like attach liens onto their assets. You have to actually do all that footwork (and pay the associated expenses) yourself. So suing is a clusterfuck nightmare, and after winning, collecting what you're owed is a second clusterfuck nightmare.
  - malfist 4y ago
    I'm sure their EULA has an arbitration clause
    - 4y ago
jawns 4y ago
In these cases, has anyone had luck getting their money back via either arbitration or small-claims court? I am sure their user agreement gives them some leeway to hold the funds for some period of time, but I would be surprised if the law allows them to permanently keep the money, with no legal recourse.
- ciguy 4y ago
  The email I got said my funds would be held for 180 days after which they may be released at PayPals discretion. I am guessing their discretion almost never releases the funds. Thankfully I had no funds in PayPal since I had always heard the warnings.
christkv 4y ago
If you are in Europe most countries let you bring them to small claims court if you have funds trapped in the account.
donatj 4y ago
I get a ton of those fake invoices. I hope and suspect that isn't reason enough to ban an account.
jake_morrison 4y ago
I went through a Kafkaesque experience with PayPal's Know Your Customer verification process. They screwed something up internally and decided that my company was in a different country. https://www.cogini.com/blog/paypal-know-your-customer-failure/ https://www.cogini.com/blog/paypal-know-your-customer-failur...
- ciguy 4y ago
  Sounds like par for the course.
- ofchnofc 4y ago
  I had to find the god damn CTO's email address to spam him a couple of times before my issue was fixed. I'm out of the country, I complete 4x $20 payments to a friend I'm visiting. I try to do the 5th and it wants to me to "Add a Mobile Number" to verify my identity. Brilliant PayPal. You already have my email+mobile on file. It says confirmed. I have 2FA enabled. And now, to verify my identity, you need me to enroll a "new" phone number. How in the **, exactly, is that going to verify my identity. And how screwed up are your systems that your left brain and right brain are out of sync. Granted, I basically have to call them every 2 years for some similar sort of "your website just told me to go F myself, can you press the magic buttons to fix it since you can't, you know, actually fix your systems.". EDIT: The clencher to this story is calling PayPal and getting the sweetest older lady from Texas that, without asking me any further verification questions, pressed a button and said "okay, try again", and wouldn't tell me anything else. Only to hit the same issue ~24 hours later. I have a story like this for Schwab. I have a story like this for both my credit unions. Capitalism driven banking baby. What a joy.
idiotsecant 4y ago
This happened to me when I was using paypal income to pay my rent while I was in school. They only locked up a few thousands dollars but that was life-or-death kind of money for me at the time. Taught me a very expensive lesson about never keeping money in paypal and never giving paypal your bank information. USe credit cards as your buffer between paypal and you. Paypal is like fire - you can harness it usefully, but it will burn you if given the chance.
- etrautmann 4y ago
  Great and succinct analogy, that was helpful
- bombcar 4y ago
  If you have to give PayPal banking information make sure it's a separate bank from your "main" one - it should be easy enough to get a free online bank account you can use as an intermediary.
  - abc_lisper 4y ago
    Thank you for this. I just removed my main bank account with them.
  - jszymborski 4y ago
    I knew not to rely on PayPal to not lock my account but I never really thought about them withdrawing incorrect sums from my bank account. Will be removing my bank account from it right now.
    - shortcake27 4y ago
      Another reason to remove your bank details is one-time login codes. PayPal is testing a feature that lets users log in using a 6-digit code sent over SMS, bypassing both password and TOTP/hardware authenticator, and the feature can’t be disabled. I refuse to use SMS as a second factor, so using it as the _only_ factor for what is effectively a bank account is absolutely batshit insane. They’ve completely lost their mind. https://www.paypal-community.com/t5/Managing-Account/How-do-I-disable-one-time-codes/td-p/2835147 https://www.paypal-community.com/t5/Managing-Account/How-do-...
amelius 4y ago
Who you gonna call? Ombudsman! https://en.wikipedia.org/wiki/Ombudsman https://en.wikipedia.org/wiki/Ombudsman
napsterbr 4y ago
Yet another post from 23 days ago: https://news.ycombinator.com/item?id=34597862 https://news.ycombinator.com/item?id=34597862 I'll repeat the advice I gave there: run away from PayPal as soon as possible. It's not worth the risk.
- sacrosancty 4y ago
  Except the horror stories are appearing with Stripe now. Really, the only safe way to transfer money is with traditional banks. But they have higher transaction fees and are slow, so maybe an occasional loss to Paypal is actually better than accumulated wire transfer fees in the long term.
  - HoppyHaus 4y ago
    I can only hope that FedNow works as promised and maybe, just maybe, we may have something a bit better than our current situation
  - telchior 4y ago
    Paypal vs wire fees is often the choice, unfortunately. I earn residuals from a company that only allows those two options. But when the money lands in Paypal, I immediately transfer it out, and I've considered going with wires just out of pure paranoia. Amazing that Paypal chugs along even with its hideous reputation.
  - carlosjobim 4y ago
    Businesses don't use Stripe or PayPal to transfer money, they use them to accept card payments. Bank transfers are much cheaper, but customers want to pay with their cards.
- cryptoegorophy 4y ago
  I have the opposite experience with PayPal as a seller. Never had any issues with blockage. I did have some issues with customers trying to scam and sellers have a dedicated email support with a real person at PayPal that actually helps. Same with eBay. You must get to the right person that actually cares. I run a small company 20-30 people and the amount of times that I have to correct my employee responses to customers emails is insane no matter how much I train. It is a principal agent problem. No one cares about your business more than you do and with PayPal serving MILLIONS of people it reinforces support to care less rather going above and beyond to help. Oh and with scammers I learned by selling online that everyone is a scammer until proven innocent. People that you would’ve never think of being a scammer turn out to be scammers.
trident5000 4y ago
Happened to me. I did absolutely nothing nefarious; I'm the most boring person you can imagine. It was clearly some internal logistics they screwed up. When I called them they said "they couldnt tell me the reason why" and that was that.
atum47 4y ago
I have deleted my account with them based on previous shady stuff they were pulling. Had to create a new account in order to get paid from other websites (turbsquid, cgtrader, thingyverse...) Most of these websites only uses PayPal as a method of payment, kinda forcing the user to do the same.
- TjZkxkxeky 4y ago
  Be the unreasonable minority. It takes 3% of a population to flip the script: https://medium.com/incerto/the-most-intolerant-wins-the-dictatorship-of-the-small-minority-3f1f83ce4e15 https://medium.com/incerto/the-most-intolerant-wins-the-dict... Tell them you can't purchase with them because they don't offer alternative payment.
  - atum47 4y ago
    > Tell them you can't purchase with them because they don't offer alternative payment. it's the other way around, in my case, they pay me using PayPal.
jononomo 4y ago
So PayPal just randomly steals people's money? WTF??
- thedanbob 4y ago
  They grant themselves the right to steal your money (from your linked bank account, no less) in their TOS: https://news.ycombinator.com/item?id=33348913 https://news.ycombinator.com/item?id=33348913
  - jononomo 4y ago
    Thanks. I'm going to deactivate my PayPal account.
    - jononomo 4y ago
      "We've removed your card. We're still processing any pending payments on it." It sounds like they've removed my card from the UI, but they can still charge it if they want. In any case, I'm going to close my PayPal account and hopefully cancel that card within a few weeks.
- latchkey 4y ago
  Not your keys, not your coins. The government can do this with your bank accounts too.
rdedev 4y ago
I had created a PayPal account and tried to use it to get money off from a gift card (read online that it might work). PayPal banned me for it even though there was possibly no other activity in the account. I was able to get it unbanned after reaching out to customer care. For them false positives is just the cost of doing business
breck 4y ago
And people say crypto is a scam. The truth is trust no banks—I had Mercury Bank and First Republic help someone steal over $120,000 from me—I'm not kidding! Trust no one-distribute your money in lots of places so if one is crooked you are not dead.
- marcosdumay 4y ago
  If crypto worked, had a stable valuation, and low transaction tariffs, it would be a very valuable thing. But the people creating and maintaining crypto wants neither of the above, because they all detract from its value as a scam.
  - breck 4y ago
    > If crypto worked I have never had a problem sending someone crypto (I'll admit though, offramping can be a b*tch). I often lose hours of my life on hold with banks when they block a payment and/or freeze an account for a regular transaction. > low transaction tariffs If you avoid BTC and ETH and use something like XLM or NEAR you can get dirt cheap fees and fast settlement times. > stable valuation Yes I 100% agree with you there. > But the people creating and maintaining crypto I would agree with you and say perhaps between 30% and 90% of people creating and maintaining crypto only care about short term gains, but I'm an optimist and think the minority that believes in it will triump in the end.
- latchkey 4y ago
  Spread out is key. Franchise Tax Board of California felt like I owed them taxes (which I didn't) and emptied one of my bank accounts without even giving any advance notice. Luckily it was a smaller one. A year later and I still haven't gotten my funds back, even after having my accountant spend hours on the phone with them and them promising to give it back. And you're right... people on this site time and again keep going after crypto as being a horrible scam... yet they keep on using Paypal. Well, if you hate crypto so much, what would be a better solution to the Paypal problem? Op posted this before: https://news.ycombinator.com/item?id=30269141 https://news.ycombinator.com/item?id=30269141
aintgonnatakeit 4y ago
Is anyone working on a payment service with escrow, or does another good alternative to PayPal goods and services exist already?
deleted 4y ago
[deleted]
MadSudaca 4y ago
I’m gonna be that guy: cryptocurrency fixes this.
- Heston 4y ago
  Cryptocurrency suffers from the same problems if not worse. There have been billions stolen in cryptocurrency due to no regulations and a lack of accountability. In many cases the one robbing the exchanges were the owners themselves...
- ipaddr 4y ago
  Imagine paypal as a crypto exchange holding your keys. Same outcome. The issue is trust and paypal.
  - latchkey 4y ago
    That's why we have decentralized exchanges.
  - deleted 4y ago
    [deleted]
  - weberer 4y ago
    Don't put your wallet in someone else's computer.
- JohnFen 4y ago
  It might prevent you from being banned without reason, but it also eliminates the ability to claw back scammed money.
  - junofan 4y ago
    You mean the PayPal buyer protection program? How does it work?
    - JohnFen 4y ago
      I mean using cryptocurrency to pay for things.
nullbyte808 4y ago
I recently just closed my Paypal. You have to close your paypal credit accounts before they let you close it. They only approved me for $300, while AMEX approved me for $6000 last year, so not a big loss. They asked why and I said its a garbage service. I tried using it and it could not verify my identity, even though I uploaded a passport picture. I would suggest Stripe or even Coinbase commerce. At least no one can chargeback your stablecoin!
- AnAnonymousDude 4y ago
  Stripe will do the same crap. Don't trust them, either. A few years ago they locked my business account with around $20k in it. On Christmas Eve. An account that had been in service for 5 years and had processed a few million in charges with not a single chargeback. With almost 0 information on what I needed to do to restore the service. And without providing any way to get in touch with anyone aside from support tickets, which took 20+ hours between replies. A good reminder for me that I still need to move off of their platform.
mortigi 4y ago
I can't think of a business I've worked for where PayPal hasn't done something like this in some way. Best thing I can recommend is complain to your state regulatory agencies. Even a one week suspension can be a major headache and revenue hit. It's incredible to me that they haven't been hit with more scrutiny given US banking regulations.
muhammadusman 4y ago
I've learned from HN posts over the last 10 years that Paypal and Ebay are two of the worst places to do any kind of business, let alone hold any money there.
astura 4y ago
>small purchases when buying something off Craigslist or Facebook marketplace Seems like this is might be the case of it? I'd imagine one of these people turned out to be scamming people they'd ban accounts that have transacted with them? > I don't use it for anything sketchy. Sending money to strangers seems sketchy to me. I certainly wouldn't do it. shrug Anyway, PayPal isn't "special" - you risk being banned from literally any financial institution for seemingly no reason. You can read a million stories about people being banned from credit cards and banks online.
- JohnFen 4y ago
  I don't see where the OP said he was sending money to strangers. But even if he was, what's sketchy about it? I've purchased things from strangers and sent them money with PayPal before. Is that not legit?
cenourinhapt 4y ago
My advice: Don't use Paypal ever again.
- ciguy 4y ago
  Well it seems like I don't even have that option anymore. Thankfully I don't need them anyway it's just a minor inconvenience. But I wanted to warn others who may be put in a bad situation.
shortcake27 4y ago
I don’t understand why PayPal isn’t regulated like a bank. You’d think after thousands of horror stories where PayPal literally steals people’s money, someone would step in and enforce them to provide a minimum level of service when closing an account, ie a way to get your funds out.
- filmgirlcw 4y ago
  It's the greatest scam. PayPal isn't a bank -- even though it looks like a bank and acts like a bank, but it crucially IS NOT a bank -- and thus, has none of the same protections of a bank. I can't remember the exact legal/technical wizardry they've used to get around this, but this has always been a crucial part of the PayPal business model. It's not a bank, it just makes people think that it is one. As others have said, don't keep any money in PayPal and if possible, try to attach a secondary bank account to your PayPal account to limit your exposure. I've had a PayPal account since I was a teenager and knock on wood have never had any problems, but I always immediately transfer the money out of PayPal as soon as possible.
  - libraryatnight 4y ago
    When I was a teenager there was no reason not to transfer the money out immediately. It was understood it was a middleman that allowed us to accept payment online without a merchant account. So we treated that way. It felt like a hack. It still feels like a hack, but as you say they've taken on the look of a bank. Once they started offering cards you could use to debit from your account etc, people started leaving the money behind more and more.
  - justinclift 4y ago
    Apparently in the EU PayPal is registered as a Luxembourg bank: https://en.wikipedia.org/wiki/PayPal#Offices https://en.wikipedia.org/wiki/PayPal#Offices But, I've heard several times they have most of the law firms in Luxembourg on retainer. So, it's extra difficult taking them to court (with representation), due to "conflict of interest" with this majority of Luxembourg law firms. There are many further examples of their EU legal approach here on HN, if that helps. eg: * https://news.ycombinator.com/item?id=32742258 https://news.ycombinator.com/item?id=32742258 * (lots more from a quick search)
throw8383833jj 4y ago
everytime i see something like this I feel disgusted about using paypal. I'll definately sweep funds out of there even more frequently now. financial institutions that don't understand the value of trust, can't be trusted!
GTP 4y ago
To anyone who got problems with PayPal, you may be interested in reading this [1]. It is how an American attorney got his PayPal account back after it was locked for no reason, with all the steps explained. It was sent here on hn months ago. [1] https://jessesingal.substack.com/p/i-fought-the-paypal-and-i-won https://jessesingal.substack.com/p/i-fought-the-paypal-and-i...
- ciguy 4y ago
  Thanks for this. I won't be using PayPal ever again but hopefully it can help someone in need.
- SMAAART 4y ago
  Most useful link of the year.
- munchler 4y ago
  Summary: This person initiated arbitration per PayPal’s user agreement (a simple process), and PayPal decided to reinstate his account before the hearing occurred.
  - snapetom 4y ago
    I wrote and posted on HN about my experience taking a home warranty company to arbitration a few months ago. My experience was the same as this lawyers and IANAL. The company settled immediately for almost all that I asked for and paid the arbitration cost. There are legitimate reasons companies pushed for arbitrtion. Namely streamlining and keeping away frivolous lawsuits, but there's the side bonus (for them) of scaring people away. Like that author described, companies make arbitration out to be this big, scary, unwinnable process, but it's really not like that at all.
    - fl0ps 4y ago
      Thankyou for writing about your experience. I hope I never have to consult it, but I'm glad it's there.
    - 4y ago
blindriver 4y ago
There needs to be well-defined consumer rights when accounts get banned like this, from everyone of these companies. They shouldn't be allowed to arbitrarily ban without enough proof. They have gotten to the point where they are almost like utilities. Can we create a petition or a California Proposition to get this done?
ofchnofc 4y ago
> I always thought there must be more to the story when someones account was permanently banned. Well, it happened to me, one of the most plain and boring consumer users of PayPal ever. That self-exceptionalism? Yeah, most of everyone that hasn't already internalized not to use PayPal will do the same thing you did. It's futile. Let me guess, do you use a Password Manager (bonus, other than LastPass?)? Here's another futile one, you, yes, you, really need to make backups and replicate time-snapshots off-site.
- mtrower 4y ago
  > Here's another futile one, you, yes, you, really need to make backups and replicate time-snapshots off-site. Yeah, but... you know... I'm like, busy and stuff. And realistically it'll never happen to me anyway.
unxdfa 4y ago
If your money isn't in either cash in your hand or in a fully regulated bank somewhere then you're probably fucked. When doing business I expect to be paid by direct bank to bank transfer, regardless of how small the amount is. Even between friends, we send bank transfers. No cheques, no 3rd parties, no escrow.
latchkey 4y ago
This happened to OP 5 months ago... https://news.ycombinator.com/item?id=32855559 https://news.ycombinator.com/item?id=32855559
- VBprogrammer 4y ago
  Upvoted because I think it's a good find and does being into question the OPs motives. But there is enough evidence out there to suggest absolutely minimising PayPal's access to your funds regardless.
  - youssefabdelm 4y ago
    How does it bring into question his motives? Did he say anything contradictory in this post? He did say it happened recently, but 5 months is still recent -- He may have simply been reminded of the pain of that experience recently
    - joemi 4y ago
      The more that someone posts about their single bad experience, the more bad experiences people will remember, since they likely won't remember if it's the same person posting about the same experience multiple times. Although admittedly, in this case it looks like their previous post was just a comment somewhere, not a full Tell HN post like this one. So I wouldn't get too bent out of shape over this case.
  - latchkey 4y ago
    It isn't just paypal though, it is literally every traditional banking institution out there. People get locked out of their accounts (or even better, funds withdrawn by the government), all the time. I've had it happen to me. This site also has a very very US focused attitude, especially around banking and finance. I wish comments from people from other countries with far deeper issues would speak up more so that people on this site would get a better understanding of what happens to them and why this is a bigger issue than just paypal.
moremetadata 4y ago
> must be more to the story when someones account was permanently banned UK banks do this as well, could be anything from having direct debits not sent despite plenty of funds in the account, so you lose things like domain names, websites, to being banned from accessing funds from your account and caught in a regulatory loophole with the banks refusing to talk to you. Their internet surveillance of customers is excellent! I've been locked out of my bank account for 6 weeks with the banks refusing to talk to me, Cahoot (Satander), GiffGaff are the latest to mess me around, basically they can d546dcddb8d207a80fe40e762023fbee ! Because I remember what the employees of the state did to me as a kid. Scopolamine is used on infant age primary school kids right here in the UK.
rqtwteye 4y ago
It’s nuts that they can ban you without explanation. There should be a regulation that when somebody gets banned that they * are notified of the ban * there is an explanation * some process to appeal This will get even worse the bigger the tech players get. They can afford to throw a lot of people under the bus because they are only a small percentage of users.
- reify_this 4y ago
  It is because of regulation that they are closing accounts without explanation. I used to run a debit card program with about 250K active accounts. The account closures are driven by the BSA/AML process (and briefly by operation chokepoint). By law, we are not allowed to tell the account holder the reason for the account closure - this is to prevent scammers (and the overwhelming majority of closures were of shady accounts) from learning the detection pattern and changing their behavior. So, don't blame the banks/card programs - blame the regulators.
  - p0pcult 4y ago
    Crazy! What's the relevant law?
  - rqtwteye 4y ago
    Sure, let's blame the regulators. Companies could still implement a process to appeal though.
elevation 4y ago
I'm developing an custom software service for an Australian customer; I'd like to charge them $1-5k/mo USD which I'd need to convert from their Australian currency. As the largest international money transmitter, Paypal is the obvious option, but I hesitate to do business with them because of years of posts like this. Any other recommendations for invoicing Australians for software/SaaS from the US?
- redox99 4y ago
  Probably a very unpopular opinion here in HN, but stablecoins (USDC, USDT) are among the best ways to send money internationally. It's so much better than SWIFT.
  - TomGullen 4y ago
    I'd like to see a total conversion rate once all fees are taken into account - I bet it's not actually that competitive when all is said and done. Also, you're exposing yourself to a non zero risk of whatever exchanges you're using at the time to process your transaction/withdrawal go bust.
    - redox99 4y ago
      Coinbase is relatively trustworthy (publicly traded US company). I believe trading stablecoins has 0.001% fee, and ACH withdrawals and deposits are free[1]. And on the crypto side, USDT transfers on Ethereum (the most expensive chain) are usually less than $5. Currently about $3.40[2] SWIFT is much more expensive and slower, feel free to check SWIFT numbers. [1] https://help.coinbase.com/en/exchange/trading-and-funding/exchange-fees https://help.coinbase.com/en/exchange/trading-and-funding/ex... [2] https://etherscan.io/gastracker https://etherscan.io/gastracker
- TomGullen 4y ago
  Stripe, bank transfers or Wise.com should all be pretty good options.
- notpushkin 4y ago
tabtab 4y ago
It's not intended to replace a bank. For one, bank-related regulations that protect consumers are missing from PayPal. It's best used for buying random nick-nacks, and never keep more than a couple hundred in your PayPal account. Venmo etc. probably have similar risks. Use a credit card for more expensive stuff. If you are not able to get a credit card for some reason, I'm not sure what to recommend as an alternative. Suggestions?
VadimPR 4y ago
I run an open source project and we're channelling out finds into PayPal. What's a good alternative to switch to?
orangesite 4y ago
Thank you for the overdue reminder to finally get round to deleting my old paypal account! (Not that they make it easy, mind you)
more_corn 4y ago
Had my PayPal account frozen by a tech support person out of spite. 2 week delay. Killed my whole project. Never again.
marcrosoft 4y ago
I can’t believe people still use PayPal in 2023. They’ve been known to be terrible for like 15 years.
motohagiography 4y ago
To close my account, I emptied my balance into a random purchase, and I still want to close my account, but because there are a few dollars in it, they won't close it without a bunch of additional PII and hoops. I don't care about the money, I really just want zero risk exposure to them in my life. Maybe I should just try to get banned instead?
annoyingnoob 4y ago
I got banned from Paypal because I used an expletive in a support email after they removed the requirement that I login before making a purchase (paypal would assume my login status based on cookies or browser fingerprints). I did not ask for that feature and I did not want it - I wanted to have to login each time I use Paypal, I had no desire to remove security features from my account. Well, I've been better off without Paypal, their ban did me a favor. Paypal will die in a fire of its own making.
H1Supreme 4y ago
I just use Paypal as a proxy to a checking account. No funds are actually stored there.
enahs-sf 4y ago
What about venmo? Same thing?
irthomasthomas 4y ago
Don't use the PayPal mafia? Is it 2005? PayPalsucks.org has been online for 20 years. Yelling into the void. I do agree, though. https://web.archive.org/web/20040325150958/http://www.paypalsucks.org/ https://web.archive.org/web/20040325150958/http://www.paypal...
spzb 4y ago
People still keep money in their Paypal account? After all these years?
AussieWog93 4y ago
Bizarre. I was a pretty serious PayPal user back in the day (~150k/year through my eBay store) and every issue I ran into was fixed with a 15 minute call to support. This was 10 years ago, to be fair, but have you tried simply calling support and explaining what happened?
coolgoose 4y ago
Another year, another story (I could argue another week another story). Please keep in mind PayPal is NOT a bank, so use it as a transactional service, and that's it.
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CodeWriter23 4y ago
I canceled PayPal after 20 years the day they put out the TOS change to deduct $2500 from customer accounts for posting misinformation. They subsequently claimed it wasn’t intended to be their policy. And then they said oh yeah it actually is our policy.
Moonman08 4y ago
You also can’t report the spam requests via PayPayl’s UI. I received one of those requests, and the only way I could report the spam was via an email. PayPal is garbage.
jiggywiggy 4y ago
I've heard these warnings about pretty much all payment providers, even stripe, Mollie but also banks. Not sure anyone you can fully trust.
code_duck 4y ago
> there is no way to decline or dismiss the requests I used PayPal as a primary payment source for a business I had 10 years ago. I’m still receiving messages about someone “canceling a payment request” from 2010, so there is definitely a way to do so.
quickthrower2 4y ago
This is whey crypto, for all it’s awful flaws does have an advantage: no one can confiscate funds (by design) or be allowed to draw down arbitrary amounts. Technical design. Obviously you can be coerced by force
- momirlan 4y ago
  design can be overruled by regulation. i started my account at Coinbase at a time when noone cared about who you are, so used an alias instead of my real name. fast forward a number of years, and i cannot access my account anymore because KYC and other regulation requires identification, which doesn't match the account name. there were just over $100 in the account, but they are not mine anymore.
bbarn 4y ago
This problem will only go away with regulation. Sadly the minds in our industry are so focused on "disrupting the system" that little progress has been made. In the US, Venmo, paypal, etc. are still a thing and in most of the world - they simply aren't. Government regulated banking and an interchange standard is the way to go here. In Iceland where I previously lived, anyone could transfer reasonable amounts of money to any other person for free, through a government run banking system, regardless of what bank you had. I am normally against government intervention, but this is a case where a single standard and rule actually makes sense. The only people it doesn't make sense to are those trying to circumvent fees which should only be applied to business transactions. The argument against it is the cost to transfer money internationally, but.. those same benefits are the problem with systems like this - no regulation
- hackernewds 4y ago
  The west should follow how revolutionary India's UPI system is. Even illiterate vegetable sellers use it in the villages - it's fast, reliable, cross-banking and does KYC stunningly well.
supernova87a 4y ago
I was just commenting to a colleague about how ridiculous it is to still have a US payment/checking system that allows "pull" transactions from anyone with your account numbers, rather than a "push" system where you explicitly have to authorize sending money from your bank accounts. Like every other modern country you might think of. Our ACH system (plus the uncertainty of money clearing, holding periods, fraudulent checks / debits) creates such bad side effects for everyone, this PayPal situation included. I know there are some efforts to initiate a Fed-administered transfers system, but have no idea how it's going. We (with US government as a mediating authority) don't seem to be in control of having an effective banking system, and it's just getting more confusing over time.
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LegitShady 4y ago
Stop using paypal period. Just stop giving them money. You don't have to worry about trusting them if you never ever do business with them.
opportune 4y ago
Maybe I am just too young to understand PayPal’s history and place in the payments world, but it seems like it’s really a nightmare payment platform with only one major benefit: it’s very friendly to issuing chargebacks to purchasers. With that in mind, it doesn’t even make sense to me why payment receivers accept it, because there would be huge adverse selection in who uses PayPal - if the only value add is that it makes it really easy to chargeback, your customers using it are probably much more likely to chargeback. Of course chargebacks can be justified, but they can also be used to steal things. In the old school internet where everybody was afraid of handing over credit card details it might have made sense to use PayPal - maybe it still does in countries with low CC adoption - but it doesn’t seem to be generally useful outside of that context, except for chargebacks. And then on top of the chargebacks you get all the jank inherent in a really old legacy product working in a regulated space, that is also integrated with tons of other payment platforms owned by the same company, which likely share a lot of policies/code in a way that creates tons of bugs and edge cases.
- mynameishere 4y ago
  You could sign up for an account, put a button on your website, and get payments presto. I think this was pretty innovative 20+ years ago. I suspect a Visa merchant account gave more grief then for someone making 100/month selling knickknacks.
jamiepenney 4y ago
I will never use Paypal ever again. I created my account when I was still at university, around 2005 I think. They wanted a phone number for verification so I gave them my home phone number (if I remember correctly, they didn't support mobile numbers in my country at this point). Later, they added mobile number support so I added my mobile and moved on. 16 years later, I get a 2FA prompt on login and they will only accept my original home phone number as the phone to use. I haven't had that number for 13 years at that point, there was no way to use it. I called them and asked if I could verify with _any_ of the other numbers on my account but they refused, and said the only thing I could do was close the account. Luckily the only subscription linked to it was my Nintendo Switch online account, and that was easy to fix. I didn't have any funds stored in the account luckily, but there's no way I'm risking anything else with them given the experience I had with customer support.
jmyeet 4y ago
The problem here is a lot bigger than PayPal. Consider people who sell through Amazon or even use Amazon for distribution. Amazon can arbitrarily decide you’ve violated their TOS, suspend your account and freeze any funds you’re due for things you may have already shipped. You may be in limbo for months. It might be impossible to reach a human to resolve it if you’re not of sufficient size. I get the need to combat fraud but what we have here is a financial incentive for companies to freeze and basically steal your money. Even if you eventually get it back just holding it has value. That’s a problem.
jonathantf2 4y ago
One thing to take note is that money in PayPal isn't FSCS protected - because it's not technically a bank.
MrBra 4y ago
Is it possible to setup PayPal to automatically forward received money to a bank account or a credit card, without allowing them any withdrawal rights on that bank account or credit card? Would it be safe to use it that way?
sys_64738 4y ago
PayPal should die.
grapesurgeon 4y ago
[dead]
ninjakeyboard 4y ago
My new rule for any centralized entity is no more than 5k or 5 hours on there. Even my bank account has been mostly dumped today. I'm a crypto futures day trader and have been doing it for a full year 60 hours a week. Sums can start to explode in good market conditions - I just keep drawing stuff and throwing it elsewhere.
rubans 4y ago
I had a weird issue with them once. I sent some money to a colleague's PayPal account who was collecting money for another colleague's leaving collection. I used the name of the colleague who was leaving as the note/reference on the payment. A few days later I received an email from PayPal asking me to provide the date of birth of the colleague who was leaving and that the money would be held until the request was resolved. They claimed it was to meet regulatory obligations. I called them and said I refuse to provide the info because I felt it breached GDPR laws and besides, it had nothing to do with them. The money was eventually returned.
deterministic 4y ago
Don’t EVER use PayPal! They will routinely lock your account for 6 months based on a single false claim of your downloadable product not “being delivered”. With zero options to simply reimburse the customer or in any other way resolve the situation. They have done it for years and continue to do it. Don’t use PayPal!
zesammy 4y ago
My story, I have created paypal account while I was below the age of their term of service. Let's say 1-2 decade later, I have been requested to provide my ID for KYC purpose. And then my account were banned...
puntofisso 4y ago
I reported about my own similar experience a few years back (https://puntofisso.medium.com/paypal-closed-my-account-with-no-explanation-it-could-happen-to-you-6ff0ba4ea95f https://puntofisso.medium.com/paypal-closed-my-account-with-...). What's really stuck with me is that it seems that anti-fraud legislation in many countries allows PayPal and, most importantly, traditional banks to accuse a customer of fraud and close their account without having to provide the actual reason that triggered the anti-fraud checks.
alectivism 4y ago
You should file an arbitration claim against PayPal (I have done this successfully in the past). My former employer FairShake makes this easy and lends credibility to your claim, otherwise you can go through the process (mailing a demand letter to the dispute address in their terms & conditions).

703 points by ciguy 4y ago

kuroguro 4y ago

> one of the most plain and boring consumer users of PayPal ever Yeah it seems kindof arbitrary. I've abused my account doing weird stuff for years and it's still fine.

AlbertCory 4y ago

I already closed my PayPal because of this and other stuff.

arthurcolle 4y ago

I know PayPal spun out of Ebay a long time ago and that PayPal is especially evil and sociopathically unscrupulous but... EBay just banned my account last week for listing a Macbook Pro with stock image, removing it to adjust the title, relisting it with a photo of the "About this Mac" to show that the specs were correct. (Can't think of anything else that would even be remotely related). Also, the messages component of the Ebay web app was completely down the whole time so it made it impossible to respond to any users that were asking questions about the MacBook Pro. Completely insane. Apparently making listings is "harmful to the [Ebay] community"

ciguy 4y ago
It's just algorithms out of control all the way down. They are probably ok with some number of false positives, but they don't account for how much these situations erode customer trust across the board.
- arthurcolle 4y ago
  But also, this just happened to me: https://news.ycombinator.com/item?id=34840250 https://news.ycombinator.com/item?id=34840250 and thankfully backed up all my critical data, but still have not been able to get a hold of anyone at Amazon. It seems like our ability to interact with a corporate entity has become an afterthought + that all the machinery driving customer interactions (UIs, special support chat hidden, dark patterns everywhere...) have become a total impediment to actually getting something fixed.
FireBeyond 4y ago
Meanwhile, my stolen phone was for sale on a prolific local seller's account (IMEI was listed, but two digits transposed - looks like a genuine error, but also stifles searching, fails checksum. Every other phone for sale by same seller has the same thing). 100+ phones. Mostly "activation locked", all "no charger, no accessories". 50+ laptops, all "no charger, no accessories". All blatantly stolen goods.
- arthurcolle 4y ago
  That is insane! How did you even manage to find them with digits transposed? By local seller, you must mean actually local to you? Sorry you got your stuff stolen, I once had a Giant e-bike stolen in Jersey City, so I know how much it sucks. I firmly believe everything should have some kind of tracker if it is more than $2K in cost.
  - ChrisMarshallNY 4y ago
    Pretty much everything you get from Apple is trackable. That's both good and bad; depending on who you ask, but they know where every device is, as soon as it's turned on. That's why I wonder at folks stealing iPhones and iPads. They are basically unsellable.

zachlatta 4y ago

We just had this happen too https://news.ycombinator.com/item?id=34803684 https://news.ycombinator.com/item?id=34803684

paulpauper 4y ago

People have been warning against keeping too much funds in PayPal since 2004. Consumer protection is nearly nonexistent.

bjornsing 4y ago
> Consumer protection is nearly nonexistent. Surely you can take them to court (if you have time to burn)?
- ciguy 4y ago
  I'm sure it's possible, but they probably count on having more money for lawyers than most of their customers.
- orthecreedence 4y ago
  If it's less than the small claims maximum, it's absolutely worth taking them to court. They probably won't even show up and you'll get a default judgement in your favor. Usually the horror stories are tens of thousands of dollars (far past the small claims threshold) and believe me when I tell you that suing someone, especially someone with deep pockets, is a clusterfuck nightmare.
  - JohnFen 4y ago
    > suing someone, especially someone with deep pockets, is a clusterfuck nightmare. Absolutely correct. Even worse, winning the lawsuit does not mean you'll see the money. It only gives you the right to do things like attach liens onto their assets. You have to actually do all that footwork (and pay the associated expenses) yourself. So suing is a clusterfuck nightmare, and after winning, collecting what you're owed is a second clusterfuck nightmare.
- malfist 4y ago
  I'm sure their EULA has an arbitration clause
  - 4y ago

jawns 4y ago

In these cases, has anyone had luck getting their money back via either arbitration or small-claims court? I am sure their user agreement gives them some leeway to hold the funds for some period of time, but I would be surprised if the law allows them to permanently keep the money, with no legal recourse.

ciguy 4y ago
The email I got said my funds would be held for 180 days after which they may be released at PayPals discretion. I am guessing their discretion almost never releases the funds. Thankfully I had no funds in PayPal since I had always heard the warnings.

christkv 4y ago

If you are in Europe most countries let you bring them to small claims court if you have funds trapped in the account.

donatj 4y ago

I get a ton of those fake invoices. I hope and suspect that isn't reason enough to ban an account.

jake_morrison 4y ago

I went through a Kafkaesque experience with PayPal's Know Your Customer verification process. They screwed something up internally and decided that my company was in a different country. https://www.cogini.com/blog/paypal-know-your-customer-failure/ https://www.cogini.com/blog/paypal-know-your-customer-failur...

ciguy 4y ago
Sounds like par for the course.
ofchnofc 4y ago
I had to find the god damn CTO's email address to spam him a couple of times before my issue was fixed. I'm out of the country, I complete 4x $20 payments to a friend I'm visiting. I try to do the 5th and it wants to me to "Add a Mobile Number" to verify my identity. Brilliant PayPal. You already have my email+mobile on file. It says confirmed. I have 2FA enabled. And now, to verify my identity, you need me to enroll a "new" phone number. How in the **, exactly, is that going to verify my identity. And how screwed up are your systems that your left brain and right brain are out of sync. Granted, I basically have to call them every 2 years for some similar sort of "your website just told me to go F myself, can you press the magic buttons to fix it since you can't, you know, actually fix your systems.". EDIT: The clencher to this story is calling PayPal and getting the sweetest older lady from Texas that, without asking me any further verification questions, pressed a button and said "okay, try again", and wouldn't tell me anything else. Only to hit the same issue ~24 hours later. I have a story like this for Schwab. I have a story like this for both my credit unions. Capitalism driven banking baby. What a joy.

idiotsecant 4y ago

This happened to me when I was using paypal income to pay my rent while I was in school. They only locked up a few thousands dollars but that was life-or-death kind of money for me at the time. Taught me a very expensive lesson about never keeping money in paypal and never giving paypal your bank information. USe credit cards as your buffer between paypal and you. Paypal is like fire - you can harness it usefully, but it will burn you if given the chance.

etrautmann 4y ago
Great and succinct analogy, that was helpful
bombcar 4y ago
If you have to give PayPal banking information make sure it's a separate bank from your "main" one - it should be easy enough to get a free online bank account you can use as an intermediary.
- abc_lisper 4y ago
  Thank you for this. I just removed my main bank account with them.
- jszymborski 4y ago
  I knew not to rely on PayPal to not lock my account but I never really thought about them withdrawing incorrect sums from my bank account. Will be removing my bank account from it right now.
  - shortcake27 4y ago
    Another reason to remove your bank details is one-time login codes. PayPal is testing a feature that lets users log in using a 6-digit code sent over SMS, bypassing both password and TOTP/hardware authenticator, and the feature can’t be disabled. I refuse to use SMS as a second factor, so using it as the _only_ factor for what is effectively a bank account is absolutely batshit insane. They’ve completely lost their mind. https://www.paypal-community.com/t5/Managing-Account/How-do-I-disable-one-time-codes/td-p/2835147 https://www.paypal-community.com/t5/Managing-Account/How-do-...

amelius 4y ago

Who you gonna call? Ombudsman! https://en.wikipedia.org/wiki/Ombudsman https://en.wikipedia.org/wiki/Ombudsman

napsterbr 4y ago

Yet another post from 23 days ago: https://news.ycombinator.com/item?id=34597862 https://news.ycombinator.com/item?id=34597862 I'll repeat the advice I gave there: run away from PayPal as soon as possible. It's not worth the risk.

sacrosancty 4y ago
Except the horror stories are appearing with Stripe now. Really, the only safe way to transfer money is with traditional banks. But they have higher transaction fees and are slow, so maybe an occasional loss to Paypal is actually better than accumulated wire transfer fees in the long term.
- HoppyHaus 4y ago
  I can only hope that FedNow works as promised and maybe, just maybe, we may have something a bit better than our current situation
- telchior 4y ago
  Paypal vs wire fees is often the choice, unfortunately. I earn residuals from a company that only allows those two options. But when the money lands in Paypal, I immediately transfer it out, and I've considered going with wires just out of pure paranoia. Amazing that Paypal chugs along even with its hideous reputation.
- carlosjobim 4y ago
  Businesses don't use Stripe or PayPal to transfer money, they use them to accept card payments. Bank transfers are much cheaper, but customers want to pay with their cards.
cryptoegorophy 4y ago
I have the opposite experience with PayPal as a seller. Never had any issues with blockage. I did have some issues with customers trying to scam and sellers have a dedicated email support with a real person at PayPal that actually helps. Same with eBay. You must get to the right person that actually cares. I run a small company 20-30 people and the amount of times that I have to correct my employee responses to customers emails is insane no matter how much I train. It is a principal agent problem. No one cares about your business more than you do and with PayPal serving MILLIONS of people it reinforces support to care less rather going above and beyond to help. Oh and with scammers I learned by selling online that everyone is a scammer until proven innocent. People that you would’ve never think of being a scammer turn out to be scammers.

trident5000 4y ago

Happened to me. I did absolutely nothing nefarious; I'm the most boring person you can imagine. It was clearly some internal logistics they screwed up. When I called them they said "they couldnt tell me the reason why" and that was that.

atum47 4y ago

I have deleted my account with them based on previous shady stuff they were pulling. Had to create a new account in order to get paid from other websites (turbsquid, cgtrader, thingyverse...) Most of these websites only uses PayPal as a method of payment, kinda forcing the user to do the same.

TjZkxkxeky 4y ago
Be the unreasonable minority. It takes 3% of a population to flip the script: https://medium.com/incerto/the-most-intolerant-wins-the-dictatorship-of-the-small-minority-3f1f83ce4e15 https://medium.com/incerto/the-most-intolerant-wins-the-dict... Tell them you can't purchase with them because they don't offer alternative payment.
- atum47 4y ago
  > Tell them you can't purchase with them because they don't offer alternative payment. it's the other way around, in my case, they pay me using PayPal.

jononomo 4y ago

So PayPal just randomly steals people's money? WTF??

thedanbob 4y ago
They grant themselves the right to steal your money (from your linked bank account, no less) in their TOS: https://news.ycombinator.com/item?id=33348913 https://news.ycombinator.com/item?id=33348913
- jononomo 4y ago
  Thanks. I'm going to deactivate my PayPal account.
  - jononomo 4y ago
    "We've removed your card. We're still processing any pending payments on it." It sounds like they've removed my card from the UI, but they can still charge it if they want. In any case, I'm going to close my PayPal account and hopefully cancel that card within a few weeks.
latchkey 4y ago
Not your keys, not your coins. The government can do this with your bank accounts too.

rdedev 4y ago

I had created a PayPal account and tried to use it to get money off from a gift card (read online that it might work). PayPal banned me for it even though there was possibly no other activity in the account. I was able to get it unbanned after reaching out to customer care. For them false positives is just the cost of doing business

breck 4y ago

And people say crypto is a scam. The truth is trust no banks—I had Mercury Bank and First Republic help someone steal over $120,000 from me—I'm not kidding! Trust no one-distribute your money in lots of places so if one is crooked you are not dead.

marcosdumay 4y ago
If crypto worked, had a stable valuation, and low transaction tariffs, it would be a very valuable thing. But the people creating and maintaining crypto wants neither of the above, because they all detract from its value as a scam.
- breck 4y ago
  > If crypto worked I have never had a problem sending someone crypto (I'll admit though, offramping can be a b*tch). I often lose hours of my life on hold with banks when they block a payment and/or freeze an account for a regular transaction. > low transaction tariffs If you avoid BTC and ETH and use something like XLM or NEAR you can get dirt cheap fees and fast settlement times. > stable valuation Yes I 100% agree with you there. > But the people creating and maintaining crypto I would agree with you and say perhaps between 30% and 90% of people creating and maintaining crypto only care about short term gains, but I'm an optimist and think the minority that believes in it will triump in the end.
latchkey 4y ago
Spread out is key. Franchise Tax Board of California felt like I owed them taxes (which I didn't) and emptied one of my bank accounts without even giving any advance notice. Luckily it was a smaller one. A year later and I still haven't gotten my funds back, even after having my accountant spend hours on the phone with them and them promising to give it back. And you're right... people on this site time and again keep going after crypto as being a horrible scam... yet they keep on using Paypal. Well, if you hate crypto so much, what would be a better solution to the Paypal problem? Op posted this before: https://news.ycombinator.com/item?id=30269141 https://news.ycombinator.com/item?id=30269141

aintgonnatakeit 4y ago

Is anyone working on a payment service with escrow, or does another good alternative to PayPal goods and services exist already?

deleted 4y ago

[deleted]

MadSudaca 4y ago

I’m gonna be that guy: cryptocurrency fixes this.

Heston 4y ago
Cryptocurrency suffers from the same problems if not worse. There have been billions stolen in cryptocurrency due to no regulations and a lack of accountability. In many cases the one robbing the exchanges were the owners themselves...
ipaddr 4y ago
Imagine paypal as a crypto exchange holding your keys. Same outcome. The issue is trust and paypal.
- latchkey 4y ago
  That's why we have decentralized exchanges.
- deleted 4y ago
  [deleted]
- weberer 4y ago
  Don't put your wallet in someone else's computer.
JohnFen 4y ago
It might prevent you from being banned without reason, but it also eliminates the ability to claw back scammed money.
- junofan 4y ago
  You mean the PayPal buyer protection program? How does it work?
  - JohnFen 4y ago
    I mean using cryptocurrency to pay for things.

nullbyte808 4y ago

I recently just closed my Paypal. You have to close your paypal credit accounts before they let you close it. They only approved me for $300, while AMEX approved me for $6000 last year, so not a big loss. They asked why and I said its a garbage service. I tried using it and it could not verify my identity, even though I uploaded a passport picture. I would suggest Stripe or even Coinbase commerce. At least no one can chargeback your stablecoin!

AnAnonymousDude 4y ago
Stripe will do the same crap. Don't trust them, either. A few years ago they locked my business account with around $20k in it. On Christmas Eve. An account that had been in service for 5 years and had processed a few million in charges with not a single chargeback. With almost 0 information on what I needed to do to restore the service. And without providing any way to get in touch with anyone aside from support tickets, which took 20+ hours between replies. A good reminder for me that I still need to move off of their platform.

mortigi 4y ago

I can't think of a business I've worked for where PayPal hasn't done something like this in some way. Best thing I can recommend is complain to your state regulatory agencies. Even a one week suspension can be a major headache and revenue hit. It's incredible to me that they haven't been hit with more scrutiny given US banking regulations.

muhammadusman 4y ago

I've learned from HN posts over the last 10 years that Paypal and Ebay are two of the worst places to do any kind of business, let alone hold any money there.

astura 4y ago

>small purchases when buying something off Craigslist or Facebook marketplace Seems like this is might be the case of it? I'd imagine one of these people turned out to be scamming people they'd ban accounts that have transacted with them? > I don't use it for anything sketchy. Sending money to strangers seems sketchy to me. I certainly wouldn't do it. shrug Anyway, PayPal isn't "special" - you risk being banned from literally any financial institution for seemingly no reason. You can read a million stories about people being banned from credit cards and banks online.

JohnFen 4y ago
I don't see where the OP said he was sending money to strangers. But even if he was, what's sketchy about it? I've purchased things from strangers and sent them money with PayPal before. Is that not legit?

cenourinhapt 4y ago

My advice: Don't use Paypal ever again.

ciguy 4y ago
Well it seems like I don't even have that option anymore. Thankfully I don't need them anyway it's just a minor inconvenience. But I wanted to warn others who may be put in a bad situation.

shortcake27 4y ago

I don’t understand why PayPal isn’t regulated like a bank. You’d think after thousands of horror stories where PayPal literally steals people’s money, someone would step in and enforce them to provide a minimum level of service when closing an account, ie a way to get your funds out.

filmgirlcw 4y ago
It's the greatest scam. PayPal isn't a bank -- even though it looks like a bank and acts like a bank, but it crucially IS NOT a bank -- and thus, has none of the same protections of a bank. I can't remember the exact legal/technical wizardry they've used to get around this, but this has always been a crucial part of the PayPal business model. It's not a bank, it just makes people think that it is one. As others have said, don't keep any money in PayPal and if possible, try to attach a secondary bank account to your PayPal account to limit your exposure. I've had a PayPal account since I was a teenager and knock on wood have never had any problems, but I always immediately transfer the money out of PayPal as soon as possible.
- libraryatnight 4y ago
  When I was a teenager there was no reason not to transfer the money out immediately. It was understood it was a middleman that allowed us to accept payment online without a merchant account. So we treated that way. It felt like a hack. It still feels like a hack, but as you say they've taken on the look of a bank. Once they started offering cards you could use to debit from your account etc, people started leaving the money behind more and more.
- justinclift 4y ago
  Apparently in the EU PayPal is registered as a Luxembourg bank: https://en.wikipedia.org/wiki/PayPal#Offices https://en.wikipedia.org/wiki/PayPal#Offices But, I've heard several times they have most of the law firms in Luxembourg on retainer. So, it's extra difficult taking them to court (with representation), due to "conflict of interest" with this majority of Luxembourg law firms. There are many further examples of their EU legal approach here on HN, if that helps. eg: * https://news.ycombinator.com/item?id=32742258 https://news.ycombinator.com/item?id=32742258 * (lots more from a quick search)

throw8383833jj 4y ago

everytime i see something like this I feel disgusted about using paypal. I'll definately sweep funds out of there even more frequently now. financial institutions that don't understand the value of trust, can't be trusted!

GTP 4y ago

To anyone who got problems with PayPal, you may be interested in reading this [1]. It is how an American attorney got his PayPal account back after it was locked for no reason, with all the steps explained. It was sent here on hn months ago. [1] https://jessesingal.substack.com/p/i-fought-the-paypal-and-i-won https://jessesingal.substack.com/p/i-fought-the-paypal-and-i...

ciguy 4y ago
Thanks for this. I won't be using PayPal ever again but hopefully it can help someone in need.
SMAAART 4y ago
Most useful link of the year.
munchler 4y ago
Summary: This person initiated arbitration per PayPal’s user agreement (a simple process), and PayPal decided to reinstate his account before the hearing occurred.
- snapetom 4y ago
  I wrote and posted on HN about my experience taking a home warranty company to arbitration a few months ago. My experience was the same as this lawyers and IANAL. The company settled immediately for almost all that I asked for and paid the arbitration cost. There are legitimate reasons companies pushed for arbitrtion. Namely streamlining and keeping away frivolous lawsuits, but there's the side bonus (for them) of scaring people away. Like that author described, companies make arbitration out to be this big, scary, unwinnable process, but it's really not like that at all.
  - fl0ps 4y ago
    Thankyou for writing about your experience. I hope I never have to consult it, but I'm glad it's there.
  - 4y ago

blindriver 4y ago

There needs to be well-defined consumer rights when accounts get banned like this, from everyone of these companies. They shouldn't be allowed to arbitrarily ban without enough proof. They have gotten to the point where they are almost like utilities. Can we create a petition or a California Proposition to get this done?

ofchnofc 4y ago

> I always thought there must be more to the story when someones account was permanently banned. Well, it happened to me, one of the most plain and boring consumer users of PayPal ever. That self-exceptionalism? Yeah, most of everyone that hasn't already internalized not to use PayPal will do the same thing you did. It's futile. Let me guess, do you use a Password Manager (bonus, other than LastPass?)? Here's another futile one, you, yes, you, really need to make backups and replicate time-snapshots off-site.

mtrower 4y ago
> Here's another futile one, you, yes, you, really need to make backups and replicate time-snapshots off-site. Yeah, but... you know... I'm like, busy and stuff. And realistically it'll never happen to me anyway.

unxdfa 4y ago

If your money isn't in either cash in your hand or in a fully regulated bank somewhere then you're probably fucked. When doing business I expect to be paid by direct bank to bank transfer, regardless of how small the amount is. Even between friends, we send bank transfers. No cheques, no 3rd parties, no escrow.

latchkey 4y ago

This happened to OP 5 months ago... https://news.ycombinator.com/item?id=32855559 https://news.ycombinator.com/item?id=32855559

VBprogrammer 4y ago
Upvoted because I think it's a good find and does being into question the OPs motives. But there is enough evidence out there to suggest absolutely minimising PayPal's access to your funds regardless.
- youssefabdelm 4y ago
  How does it bring into question his motives? Did he say anything contradictory in this post? He did say it happened recently, but 5 months is still recent -- He may have simply been reminded of the pain of that experience recently
  - joemi 4y ago
    The more that someone posts about their single bad experience, the more bad experiences people will remember, since they likely won't remember if it's the same person posting about the same experience multiple times. Although admittedly, in this case it looks like their previous post was just a comment somewhere, not a full Tell HN post like this one. So I wouldn't get too bent out of shape over this case.
- latchkey 4y ago
  It isn't just paypal though, it is literally every traditional banking institution out there. People get locked out of their accounts (or even better, funds withdrawn by the government), all the time. I've had it happen to me. This site also has a very very US focused attitude, especially around banking and finance. I wish comments from people from other countries with far deeper issues would speak up more so that people on this site would get a better understanding of what happens to them and why this is a bigger issue than just paypal.

moremetadata 4y ago

> must be more to the story when someones account was permanently banned UK banks do this as well, could be anything from having direct debits not sent despite plenty of funds in the account, so you lose things like domain names, websites, to being banned from accessing funds from your account and caught in a regulatory loophole with the banks refusing to talk to you. Their internet surveillance of customers is excellent! I've been locked out of my bank account for 6 weeks with the banks refusing to talk to me, Cahoot (Satander), GiffGaff are the latest to mess me around, basically they can d546dcddb8d207a80fe40e762023fbee ! Because I remember what the employees of the state did to me as a kid. Scopolamine is used on infant age primary school kids right here in the UK.

rqtwteye 4y ago

It’s nuts that they can ban you without explanation. There should be a regulation that when somebody gets banned that they * are notified of the ban * there is an explanation * some process to appeal This will get even worse the bigger the tech players get. They can afford to throw a lot of people under the bus because they are only a small percentage of users.

reify_this 4y ago
It is because of regulation that they are closing accounts without explanation. I used to run a debit card program with about 250K active accounts. The account closures are driven by the BSA/AML process (and briefly by operation chokepoint). By law, we are not allowed to tell the account holder the reason for the account closure - this is to prevent scammers (and the overwhelming majority of closures were of shady accounts) from learning the detection pattern and changing their behavior. So, don't blame the banks/card programs - blame the regulators.
- p0pcult 4y ago
  Crazy! What's the relevant law?
- rqtwteye 4y ago
  Sure, let's blame the regulators. Companies could still implement a process to appeal though.

elevation 4y ago

I'm developing an custom software service for an Australian customer; I'd like to charge them $1-5k/mo USD which I'd need to convert from their Australian currency. As the largest international money transmitter, Paypal is the obvious option, but I hesitate to do business with them because of years of posts like this. Any other recommendations for invoicing Australians for software/SaaS from the US?

redox99 4y ago
Probably a very unpopular opinion here in HN, but stablecoins (USDC, USDT) are among the best ways to send money internationally. It's so much better than SWIFT.
- TomGullen 4y ago
  I'd like to see a total conversion rate once all fees are taken into account - I bet it's not actually that competitive when all is said and done. Also, you're exposing yourself to a non zero risk of whatever exchanges you're using at the time to process your transaction/withdrawal go bust.
  - redox99 4y ago
    Coinbase is relatively trustworthy (publicly traded US company). I believe trading stablecoins has 0.001% fee, and ACH withdrawals and deposits are free[1]. And on the crypto side, USDT transfers on Ethereum (the most expensive chain) are usually less than $5. Currently about $3.40[2] SWIFT is much more expensive and slower, feel free to check SWIFT numbers. [1] https://help.coinbase.com/en/exchange/trading-and-funding/exchange-fees https://help.coinbase.com/en/exchange/trading-and-funding/ex... [2] https://etherscan.io/gastracker https://etherscan.io/gastracker
TomGullen 4y ago
Stripe, bank transfers or Wise.com should all be pretty good options.
notpushkin 4y ago

tabtab 4y ago

It's not intended to replace a bank. For one, bank-related regulations that protect consumers are missing from PayPal. It's best used for buying random nick-nacks, and never keep more than a couple hundred in your PayPal account. Venmo etc. probably have similar risks. Use a credit card for more expensive stuff. If you are not able to get a credit card for some reason, I'm not sure what to recommend as an alternative. Suggestions?

VadimPR 4y ago

I run an open source project and we're channelling out finds into PayPal. What's a good alternative to switch to?

orangesite 4y ago

Thank you for the overdue reminder to finally get round to deleting my old paypal account! (Not that they make it easy, mind you)

more_corn 4y ago

Had my PayPal account frozen by a tech support person out of spite. 2 week delay. Killed my whole project. Never again.

marcrosoft 4y ago

I can’t believe people still use PayPal in 2023. They’ve been known to be terrible for like 15 years.

motohagiography 4y ago

To close my account, I emptied my balance into a random purchase, and I still want to close my account, but because there are a few dollars in it, they won't close it without a bunch of additional PII and hoops. I don't care about the money, I really just want zero risk exposure to them in my life. Maybe I should just try to get banned instead?

annoyingnoob 4y ago

I got banned from Paypal because I used an expletive in a support email after they removed the requirement that I login before making a purchase (paypal would assume my login status based on cookies or browser fingerprints). I did not ask for that feature and I did not want it - I wanted to have to login each time I use Paypal, I had no desire to remove security features from my account. Well, I've been better off without Paypal, their ban did me a favor. Paypal will die in a fire of its own making.

H1Supreme 4y ago

I just use Paypal as a proxy to a checking account. No funds are actually stored there.

enahs-sf 4y ago

What about venmo? Same thing?

irthomasthomas 4y ago

Don't use the PayPal mafia? Is it 2005? PayPalsucks.org has been online for 20 years. Yelling into the void. I do agree, though. https://web.archive.org/web/20040325150958/http://www.paypalsucks.org/ https://web.archive.org/web/20040325150958/http://www.paypal...

spzb 4y ago

People still keep money in their Paypal account? After all these years?

AussieWog93 4y ago

Bizarre. I was a pretty serious PayPal user back in the day (~150k/year through my eBay store) and every issue I ran into was fixed with a 15 minute call to support. This was 10 years ago, to be fair, but have you tried simply calling support and explaining what happened?

coolgoose 4y ago

Another year, another story (I could argue another week another story). Please keep in mind PayPal is NOT a bank, so use it as a transactional service, and that's it.

deleted 4y ago

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CodeWriter23 4y ago

I canceled PayPal after 20 years the day they put out the TOS change to deduct $2500 from customer accounts for posting misinformation. They subsequently claimed it wasn’t intended to be their policy. And then they said oh yeah it actually is our policy.

Moonman08 4y ago

You also can’t report the spam requests via PayPayl’s UI. I received one of those requests, and the only way I could report the spam was via an email. PayPal is garbage.

jiggywiggy 4y ago

I've heard these warnings about pretty much all payment providers, even stripe, Mollie but also banks. Not sure anyone you can fully trust.

code_duck 4y ago

> there is no way to decline or dismiss the requests I used PayPal as a primary payment source for a business I had 10 years ago. I’m still receiving messages about someone “canceling a payment request” from 2010, so there is definitely a way to do so.

quickthrower2 4y ago

This is whey crypto, for all it’s awful flaws does have an advantage: no one can confiscate funds (by design) or be allowed to draw down arbitrary amounts. Technical design. Obviously you can be coerced by force

momirlan 4y ago
design can be overruled by regulation. i started my account at Coinbase at a time when noone cared about who you are, so used an alias instead of my real name. fast forward a number of years, and i cannot access my account anymore because KYC and other regulation requires identification, which doesn't match the account name. there were just over $100 in the account, but they are not mine anymore.

bbarn 4y ago

This problem will only go away with regulation. Sadly the minds in our industry are so focused on "disrupting the system" that little progress has been made. In the US, Venmo, paypal, etc. are still a thing and in most of the world - they simply aren't. Government regulated banking and an interchange standard is the way to go here. In Iceland where I previously lived, anyone could transfer reasonable amounts of money to any other person for free, through a government run banking system, regardless of what bank you had. I am normally against government intervention, but this is a case where a single standard and rule actually makes sense. The only people it doesn't make sense to are those trying to circumvent fees which should only be applied to business transactions. The argument against it is the cost to transfer money internationally, but.. those same benefits are the problem with systems like this - no regulation

hackernewds 4y ago
The west should follow how revolutionary India's UPI system is. Even illiterate vegetable sellers use it in the villages - it's fast, reliable, cross-banking and does KYC stunningly well.

supernova87a 4y ago

I was just commenting to a colleague about how ridiculous it is to still have a US payment/checking system that allows "pull" transactions from anyone with your account numbers, rather than a "push" system where you explicitly have to authorize sending money from your bank accounts. Like every other modern country you might think of. Our ACH system (plus the uncertainty of money clearing, holding periods, fraudulent checks / debits) creates such bad side effects for everyone, this PayPal situation included. I know there are some efforts to initiate a Fed-administered transfers system, but have no idea how it's going. We (with US government as a mediating authority) don't seem to be in control of having an effective banking system, and it's just getting more confusing over time.

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LegitShady 4y ago

Stop using paypal period. Just stop giving them money. You don't have to worry about trusting them if you never ever do business with them.

opportune 4y ago

Maybe I am just too young to understand PayPal’s history and place in the payments world, but it seems like it’s really a nightmare payment platform with only one major benefit: it’s very friendly to issuing chargebacks to purchasers. With that in mind, it doesn’t even make sense to me why payment receivers accept it, because there would be huge adverse selection in who uses PayPal - if the only value add is that it makes it really easy to chargeback, your customers using it are probably much more likely to chargeback. Of course chargebacks can be justified, but they can also be used to steal things. In the old school internet where everybody was afraid of handing over credit card details it might have made sense to use PayPal - maybe it still does in countries with low CC adoption - but it doesn’t seem to be generally useful outside of that context, except for chargebacks. And then on top of the chargebacks you get all the jank inherent in a really old legacy product working in a regulated space, that is also integrated with tons of other payment platforms owned by the same company, which likely share a lot of policies/code in a way that creates tons of bugs and edge cases.

mynameishere 4y ago
You could sign up for an account, put a button on your website, and get payments presto. I think this was pretty innovative 20+ years ago. I suspect a Visa merchant account gave more grief then for someone making 100/month selling knickknacks.

jamiepenney 4y ago

I will never use Paypal ever again. I created my account when I was still at university, around 2005 I think. They wanted a phone number for verification so I gave them my home phone number (if I remember correctly, they didn't support mobile numbers in my country at this point). Later, they added mobile number support so I added my mobile and moved on. 16 years later, I get a 2FA prompt on login and they will only accept my original home phone number as the phone to use. I haven't had that number for 13 years at that point, there was no way to use it. I called them and asked if I could verify with _any_ of the other numbers on my account but they refused, and said the only thing I could do was close the account. Luckily the only subscription linked to it was my Nintendo Switch online account, and that was easy to fix. I didn't have any funds stored in the account luckily, but there's no way I'm risking anything else with them given the experience I had with customer support.

jmyeet 4y ago

The problem here is a lot bigger than PayPal. Consider people who sell through Amazon or even use Amazon for distribution. Amazon can arbitrarily decide you’ve violated their TOS, suspend your account and freeze any funds you’re due for things you may have already shipped. You may be in limbo for months. It might be impossible to reach a human to resolve it if you’re not of sufficient size. I get the need to combat fraud but what we have here is a financial incentive for companies to freeze and basically steal your money. Even if you eventually get it back just holding it has value. That’s a problem.

jonathantf2 4y ago

One thing to take note is that money in PayPal isn't FSCS protected - because it's not technically a bank.

MrBra 4y ago

Is it possible to setup PayPal to automatically forward received money to a bank account or a credit card, without allowing them any withdrawal rights on that bank account or credit card? Would it be safe to use it that way?

sys_64738 4y ago

PayPal should die.

grapesurgeon 4y ago

[dead]

ninjakeyboard 4y ago

My new rule for any centralized entity is no more than 5k or 5 hours on there. Even my bank account has been mostly dumped today. I'm a crypto futures day trader and have been doing it for a full year 60 hours a week. Sums can start to explode in good market conditions - I just keep drawing stuff and throwing it elsewhere.

rubans 4y ago

I had a weird issue with them once. I sent some money to a colleague's PayPal account who was collecting money for another colleague's leaving collection. I used the name of the colleague who was leaving as the note/reference on the payment. A few days later I received an email from PayPal asking me to provide the date of birth of the colleague who was leaving and that the money would be held until the request was resolved. They claimed it was to meet regulatory obligations. I called them and said I refuse to provide the info because I felt it breached GDPR laws and besides, it had nothing to do with them. The money was eventually returned.

deterministic 4y ago

Don’t EVER use PayPal! They will routinely lock your account for 6 months based on a single false claim of your downloadable product not “being delivered”. With zero options to simply reimburse the customer or in any other way resolve the situation. They have done it for years and continue to do it. Don’t use PayPal!

zesammy 4y ago

My story, I have created paypal account while I was below the age of their term of service. Let's say 1-2 decade later, I have been requested to provide my ID for KYC purpose. And then my account were banned...

puntofisso 4y ago

I reported about my own similar experience a few years back (https://puntofisso.medium.com/paypal-closed-my-account-with-no-explanation-it-could-happen-to-you-6ff0ba4ea95f https://puntofisso.medium.com/paypal-closed-my-account-with-...). What's really stuck with me is that it seems that anti-fraud legislation in many countries allows PayPal and, most importantly, traditional banks to accuse a customer of fraud and close their account without having to provide the actual reason that triggered the anti-fraud checks.

alectivism 4y ago

You should file an arbitration claim against PayPal (I have done this successfully in the past). My former employer FairShake makes this easy and lends credibility to your claim, otherwise you can go through the process (mailing a demand letter to the dispute address in their terms & conditions).