7 ms·

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

• 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-...
      • b112 4y ago
        Like google, they badly want your mobile number, for tracking and additional Pii/identity purposes. This is what it boils down to, not security. I cannot log in without a phone any more to paypal. At all. My mobile phone doesn't even work on my property, I live in a rural area, with no cell phone service for 1km. I have a phone. Email. I could set up 2fa via the internet. Nope. Because of course, cell phones are always reachable?!
        • AlexandrB 4y ago
          > Because of course, cell phones are always reachable?! I don't get what you're supposed to do when travelling? Incur international texting charges?
          • shortcake27 4y ago
            People enforcing SMS login/MFA don't care. As someone who's frequently away my home country, I often find it difficult to log into services that are necessary for my survival (like banking), let alone regular apps which more and more frequently are ditching email address signup in favour of mobile numbers (BeReal, Artifact etc). At _minimum_ I need to swap the physical SIM card in my phone which for some reason breaks iMessage for a few days every time I do it. However roaming doesn't work in every country, so, sometimes I'm just fucked. eSIM could make the first problem easier, but it actually makes it harder. With a physical SIM, if I lose or break my phone I still have my home SIM so I can still access SMS on a new phone. With eSIM, if I lose or break my phone my home SIM is lost along with it. No problem, just provision a new eSIM, that's the whole point right? Well, one of my telcos doesn't support eSIM yet, but they enforce SMS MFA, so I can see where this is going. I'll only be able to provision a new sim if I have access to the old one. Absolutely braindead. Another of my telcos doesn't allow eSIMs to be provisioned digitally; you need to obtain a physical QR code from a shop or have it posted to an address within the country (they won't send one overseas). It's actually unbelievable how telcos have managed to make eSIMs less convenient than physical SIMs. Anyway, this means I need to return to my home country if I lose or break my phone because without SMS I won't be able to access banking. This is beyond infuriating, but I'm an edge case so no one cares. It should be illegal for critical services, banking/finance/govt etc to depend on SMS.
  • blamazon 4y ago
    I'm not sure how folks regard privacy.com (the domain is a little... lofty?) but I use that to present my bank to PayPal as if it was a credit card. I change charge limits on the fly to be just a bit more than I need.
    • 1f60c 4y ago
      Revolut offers free (disposable) virtual debit cards and isn't limited to just the US. (No affiliation; I'm just a happy customer.)
      • shp0ngle 4y ago
        Isn’t Revolut just for Europeans?
        • input_sh 4y ago
          Not exclusively European countries, but also not the whole Europe: https://www.revolut.com/change-country/ https://www.revolut.com/change-country/ I was able to get my hands on one of their cards, but it was useless to me as I couldn't actually put any money on it from my unsupported country.
          • shp0ngle 4y ago
            Ah but it is available in USA…I didn’t know that!
        • deleted 4y ago
          [deleted]
        • momirlan 4y ago
          they closed their Canadian operations a couple of years ago. good riddance.
      • account-5 4y ago
        Revolut seems less trustworthy that PayPal. And there appears to be a lot less protection for you as their customer.
  • unxdfa 4y ago
    This. They can and will steal money out of your account if your cards don't work.
  • bigape911 4y ago
    didnt know companies can just take money from your account. broken bankings system
    • pc86 4y ago
      The only two things you need to take money out of an account are the routing number and account number. There are a lot of checks on top of that which individual banks may or may not implement or care about, but at the end of the day those two numbers get you 99% of the way there. And for an organization the size of PayPal they're really going to be given the benefit of the doubt by banks.
      • chongli 4y ago
        So why aren’t criminals doing this to drain accounts all the time? They traffic in stolen credit cards, why not banking info?
        • schoen 4y ago
          I think that was why Donald Knuth stopped issuing checks for rewards for people finding errors in his books -- people would post images of the checks online to brag about having received them, and then criminals would initiate fraudulent ACH transfers. Also not sure why that's not more common in comparison to credit card fraud. Edit: I guess credit card fraud can be easier to cash out (for physical goods or services), while ACH fraud requires mules to act as intermediaries to receive the fraudulent deposits, which might be harder to come by and sustain.
        • addled 4y ago
          I'm sure they do, but it might be less common because it takes more effort to launder than credit cards. There's millions of retailers that accept credit info in exchange for goods and services. You can't use ACH to buy Wal-Mart gift cards.
        • bityard 4y ago
          They certainly try. But it's not like there are no protections in place. The US banking system can be summarized as "withdraw first, ask questions later." The whole system is based around auditing after the fact. If at the end of the day (or week, or month), the numbers don't balance out, a flag is raised, and someone investigates it. And in many cases, there is a waiting period before you can access funds transferred. Outside the US, people find this whole thing crazy, but that's how it is and it actually works well enough. My understanding is that banks are moving to a more modern system, but it's a slow process given how much is built around the current system.
  • hairui 4y ago
    hadn't considered this, thanks
  • dotancohen 4y ago
    What free online banks would you trust more than (rightfully untrustworthy) Paypal? Adding a free online bank account sounds like a way to add more points of failure.
    • ptero 4y ago
      The main argument for another small bank account to interface with PayPals of this world is not that it cannot fail, but if it does it is an easily survivable event.
      • dotancohen 4y ago
        Why is it easily survivable any more than Paypal taking money out of your regular bank? If you don't pay it, the bank will come after you.
        • ptero 4y ago
          PayPal cannot take more money out of your account than what is in the account. If you have $500 in an account the bank will not let PayPal withdraw $5000 from it. It's not different from writing a check for $5000, which will just bounce. The bank is not in the business of allowing overdrafts and then somehow collecting the difference.
          • dotancohen 4y ago
            > The bank is not in the business of allowing overdrafts > and then somehow collecting the difference. But one's main bank is? I don't see how the intermediary is any different in that regard?
            • ptero 4y ago
              No bank will honor your check for more money than is in your account. The amount in your account gives a hard stop on the amount you can lose. Having a separate account with enough for the current Paypal transaction (that you refill from the main bank account as needed, in a few mouse clicks) means you limit your losses from a transaction gone wrong with a major company. Can a malicious player try pulling money from your main account? Absolutely. But the chances of a large company, like Paypal, hitting you like this on an account not registered with them is zero. And your bank's fraud protection should stop an attempt to pull a large sum from your account by an unknown company in a sketchy country.
  • quickthrower2 4y ago
    Can US bank accounts get overdrawn? If they can the intermediary doesn’t help it just gives you debt and bank charges.
    • larsrc 4y ago
      Oh, boy, can they ever! And the fees can be hefty. Even with a credit union back in the early 2000s, we were talking $10 _per day_, I don't expect it has gotten any cheaper.
    • prirun 4y ago
      Yes, and banks routinely charge $35 for each transaction on an overdrawn account. This is particularly easy to do if multiple people share a bank account with a low balance.
      • AlexandrB 4y ago
        They also sometimes sequence transactions largest to smallest when settling to maximize the number of charges[1]. [1] https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-banks-are-reordering-your-transactions-and-charging-overdraft-fees/?sh=9d87026daa36 https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-b...
        • bombcar 4y ago
          The law was changed to forbid this, though that's not to say they don't sometimes still "allow" it to happen.
  • AlbertCory 4y ago
    At least at Wells Fargo, it's simple to set up a second checking account. I use that for all my book-related expenses and (heh, heh) royalties.
  • StanislavPetrov 4y ago
    Very good advice. Paypal can be convenient, and even necessary, for certain websites that only accept paypal as payment (yes, they exist). I keep $5 in the bank account I have connected to paypal for exactly this reason.
• wolongong942 4y ago
  > never giving paypal your bank information Why?
  • toomuchtodo 4y ago
    Because they can pull funds from your account and it'll be a hassle to get it back if not authorized. If you must, you tie it to a burner deposit account you can immediately sweep into our out of at your discretion. Sending funds? Sweep just enough in from another account. Receiving funds? Sweep out as soon as the funds land via ACH.
    • ldjb 4y ago
      Have there been any examples of PayPal stealing money from people's bank accounts?
      • ChickenNugger 4y ago
        I literally just selected your question and searched brave: https://arstechnica.com/tech-policy/2022/01/paypal-stole-users-money-after-freezing-seizing-funds-lawsuit-alleges/ https://arstechnica.com/tech-policy/2022/01/paypal-stole-use...
        • newaccount74 4y ago
          The article you linked talks about Paypal holding funds, not about Paypal taking money from bank accounts.
      • bennysonething 4y ago
        Happened to me in 2007, they took 750 GBP from my back account. I complained, it was never explained what happened. They paid the money back to me over a period of about 4 months. It was utterly ridiculous.
      • wolongong942 4y ago
        I vaguely recall this happening to a guy who scammed someone then got charge-backed after withdrawing from Paypal, he somehow got the bank to reverse his transaction to Paypal and kept the funds. I think this is why Paypal stop you from withdrawing/spending your incoming payment for a few weeks in some cases.
• mattgreenrocks 4y ago
  If I unlink my bank account, how can I get my money out of PayPal?
  • thestepafter 4y ago
    Create a second account with your bank that is only for PayPal withdrawals.
  • neltnerb 4y ago
    please no one say crypto ;-) but I definitely have the same question, I always deposit anything sent to me via paypal, venmo, whatever right away so there's zero balance. good luck telling a bank to un-authorize someone from being able to deposit or remove money from your account though, I had to call them up and they didn't even seem to know how to do it. somehow it isn't just a checkbox, it seems to me like revoking that permission should be vastly easier than providing it...
  • jethro_tell 4y ago
    link to a not main account and only setup one way transfers from one to the other i.e. You have your main account, and you have your paypal receivables account. Paypal receivables account has no overdraft protection and not overdraft allowance. If a withdrawl over the value of the account comes in, it is denied. Connect that account to paypal. Next, in the Paypal receivables account, setup an external transfer from the receivables account to the main account. You will have to validate the ownership of the second account usually by posting two small transactions that were auto posted to the account as part of the validation process. This takes a couple days. Once that is done, you can transfer money from receivables account to main account but not the other way. Transfer money out of paypal to the receivables account, transfer money from receivables to main. Use a credit card to spend money with paypal. You can set up two way transfers if you need to put cash into that account for transactions and you still get a similar level or separation, I just prefer to use a CC instead because they'll help you out if you want to dispute or reverse a transaction and paypal may not.
    • shortcake27 4y ago
• unxdfa 4y ago
  Actually you don't want to use credit cards between yourself and PayPal. They play a finger pointing game that can last months. Been there. I eventually had to small claims the CC company (MBNA Europe, now LLoyds) which took weeks. They didn't contest the claim or even turn up and judgement was made in favour in their absence then they did nothing until bailiffs were appointed then wrote the whole account off and closed it. Had numerous run ins with paypal unfortunately as a seller and a buyer.
• lowercased 4y ago
  to the extent possible, it may make sense to just have multiple banks/accounts anyway. i use a big megacorp bank, my wife has money at a small local bank, we have other money in some online accounts. most stuff is handled day to day via one main account, but I've had cards suspended out of the blue in the past, and having 'all eggs in one basket' seems to be what often bites a lot of people when something causes a bank to freeze/suspend an account.
• arecurrence 4y ago
  Paypal stranded me in Atlanta when I rented a room for a week and they denied the charge. So I called their customer service and got the worst customer service experience of my life. The rep would talk over me, literally speak gibberish, and then hung up. That was the end of my interactions with PayPal.
  • rhino369 4y ago
    I couldn't even get them to speak to them. Their system denied my payment dispute (for which I could show obvious fraud) instantly--within 20 seconds. And then when I called they refused to talk since it was denied. Luckily I paid through my credit card on Paypal since I disputed it through them. If I had linked my checking account, they would have help a fraudster steal 700 dollars from me.
• fwungy 4y ago
  Interesting thing happened to me a couple of years ago. I went to another state to pick up a car I had bought. I needed to pull $10k of my own money in cash out of the my banks to pay the seller. I checked with the banks before I left to make sure it would be OK. I arrived in Utah to meet the seller and we go to the bank to do the transaction, and my banks suddenly don't want to let me cash out that much money. I ended up having to kludge the transaction together with some my cash and credit card advances. I didn't quite make the full sale amount so the seller let me take the car and sent me the pink slip later. Second fact: online banking used to do instant bill pays. Now anything above a trivial amount has to be scheduled. It didn't used to be that way. Combining these two suggests to me there is a liquidity shortage in the retail banking system. Paypal may be under the same liquidity pressures and using fuzzy TOS reasons to hold money because they don't have the liquidity to handle all of their transaction demand.
  • csours 4y ago
    It's not liquidity, it's fraud protection
  • winphone1974 4y ago
    Liquidity to support your 10k transaction seems unlikely. More likely fraud and CYA by the banks
    • fwungy 4y ago
      The bank workers told me they don't keep a lot of cash on hand to minimize robberies. The thing I wonder about is why did online banking start requiring scheduled payments for anything over a $100 or so about five years ago? Now they often make me wait a few days to clear a payment, unless it's internal to the bank itself (e.g. my checking account to pay off my same bank cc account). I'm sure they're investing my money short term and the holds give them more time and flexibility to do so. However, tying up account money in short term invesments means their liquidity will be reduced. If you were PayPal would you not invest user funds overnight (or longer) based on projections of inflow/outflow? If not you'd be cheating your shareholders. However the temptation to hold on to user funds as long as possible would be constantly present. That's almost certainly what's happening.