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I wish lawmakers would urge (or force?) PayPal to actually give you a detailed reason when they freeze your account and effectively confiscate your money. I st

by mikece 3y ago

I wish lawmakers would urge (or force?) PayPal to actually give you a detailed reason when they freeze your account and effectively confiscate your money. I still have hundreds of dollars tied up in the limbo of "your account is frozen but we won't tell you why."

zerr 3y ago
Try withdrawing again. They unblock it without any notification while keeping the account limited.
KptMarchewa 3y ago
It's the other way around. If you're flagged for AML investigation, telling you it would be tipping off and explicitely illegal.
- Detrytus 3y ago
  If you are engaged in money laundering then the very fact that your funds were frozen is enough of the tip-off. If you’re not then they might as well tell you about their suspicions. If you were mixed up in some money laundering scheme involuntarily you might even be willing to help the investigation
  - antihero 3y ago
    Maybe, but not legally.
    - KMag 3y ago
      Exactly. I spent 11+ years in a Fortune 500 financial services company, and my annual anti-money laundering training always stressed (and included one quiz question) that if you saw something fishy, escalate to Compliance, and UNDER NO CIRCUMSTANCES share suspicions with clients. Even if some aspect of the regulation doesn't make much sense, you do not cross the regulators.
  - bee_rider 3y ago
    If the only confirm cases where the user isn’t suspected of money laundering, the non-confirmation becomes equivalent to confirmation that the user is suspected of money laundering.
- yamtaddle 3y ago
  It does kinda seem like if it's flagged for investigation... like, eventually an investigation should happen, right? And then you either get your money back or are charged with a crime? I get that that's not what actually happens, but it's pretty weird that it doesn't. They can't tell you about it because it's flagged for investigation. When's the investigation? Never.
zinekeller 3y ago
Actually, PayPal's action are definitely not just hostile customer support but something about their risk protection (which includes US government data) has tripped off and they can't legally tell you (the legal term is "tipping-off"). PayPal has many questionable decisions but this one is not even PayPal's fault (or more alternatively the US government forces every financial institution to act hostile "in the name of [US national] security"). Edit: wow, downvotes for just plainly stating what actually happens? Thanks HN /s
- andylynch 3y ago
  Not just the US. Most, if not all, developed economies have similar laws.
londons_explore 3y ago
> your account is frozen but we won't tell you why If they suspect fraud, they aren't allowed to tell you about it. They also aren't allowed to give you your money back (incase the money is laundered). The only way to get your money back is to get a court to order them to give it back. The process is fairly simple - go to a small claims court, and ask the court to order them to give the money back. They won't contest it, they will just return your money and close the account. That way, if it turns out that it wasn't your money, or you are a terrorist, paypal is no longer liable - they were just doing what the court ordered.
- foooorsyth 3y ago
  Pretty amazing how nonchalant you’re talking about theft. I guess the approved strategy for legal theft is as follows. 1. Create a payments company that accepts deposits and holds balances (a bank — but don’t call it that) 2. Create a broken AML algorithm that flags X% of deposits as fraud 3. Force the falsely accused to take you to court to get their money back 4. Keep the rest. Most people won’t contest What a great “business” model.
  - G3rn0ti 3y ago
    I think they are required by law to do so. At least in the US.
    - denton-scratch 3y ago
      What law?
      - G3rn0ti 3y ago
        https://en.wikipedia.org/wiki/Bank_Secrecy_Act https://en.wikipedia.org/wiki/Bank_Secrecy_Act "A financial institution is not allowed to inform a business or consumer that a SAR [suspicious activity report] is being filed." Laws like this exist in many countries (including my own) that turn banks into agents spying their customers on behalf of the government. Calling it even a "bank secrecy act" is downright cynical. I understand that law enforcement agencies need to be able to go after criminals but I think the balance between freedom and security has been way off for a long time already. That's exactly the reason why Switzerland used to have the strictest bank secrecy laws world wide. It was not to become a safe haven for criminals but to maintain the financial freedom of its citizens.
valdiorn 3y ago
They have specific laws that BAN them from giving detailed reasons for why they froze your accounts. Giving you a reason, or sometimes even hinting that there might be a problem, would be classified as "tipping off", which is a federal crime and can land even the lowliest finance worker in jail. People need to read up on AML (anti-money laundering) laws. They are a bit insane. Know them because I've worked in regulated financial companies for years and have had to do the mandatory training about a dozen times.
- denton-scratch 3y ago
  So even if there are no suspicions of money-laundering, they can't tell you why the account is frozen? Because otherwise, if they won't tell you why, it must be AML?
antihero 3y ago
I don’t understand why people keep their money inside these platforms. Surely if you are getting a lot of money, you should be depositing it in your bank regularly?
- pavon 3y ago
  He said he had hundreds of dollars tied up. That is a fairly small balance for someone who does (did) a lot of business with paypal and is transferring it out regularly.
Quillbert182 3y ago
Not sure if this is relevant to your situation, but I found this blog post interesting: https://jessesingal.substack.com/p/i-fought-the-paypal-and-i-won https://jessesingal.substack.com/p/i-fought-the-paypal-and-i...
mjhay 3y ago
They want to earn interest on your money.
alistairSH 3y ago
The AML should really be update to something like... Freeze the account, refer immediately to law enforcement, if LE doesn't take action within XX days, unfreeze the account. AMLs exist for a reason. It's the "freeze the account with no end in sight" that's the real problem. It's not like freezing the account isn't going to tip off any actual money laundering operation, so the freeze is only partially doing what we want.

by mikece 3y ago

zerr 3y ago

Try withdrawing again. They unblock it without any notification while keeping the account limited.

KptMarchewa 3y ago

It's the other way around. If you're flagged for AML investigation, telling you it would be tipping off and explicitely illegal.

Detrytus 3y ago
If you are engaged in money laundering then the very fact that your funds were frozen is enough of the tip-off. If you’re not then they might as well tell you about their suspicions. If you were mixed up in some money laundering scheme involuntarily you might even be willing to help the investigation
- antihero 3y ago
  Maybe, but not legally.
  - KMag 3y ago
    Exactly. I spent 11+ years in a Fortune 500 financial services company, and my annual anti-money laundering training always stressed (and included one quiz question) that if you saw something fishy, escalate to Compliance, and UNDER NO CIRCUMSTANCES share suspicions with clients. Even if some aspect of the regulation doesn't make much sense, you do not cross the regulators.
- bee_rider 3y ago
  If the only confirm cases where the user isn’t suspected of money laundering, the non-confirmation becomes equivalent to confirmation that the user is suspected of money laundering.
yamtaddle 3y ago
It does kinda seem like if it's flagged for investigation... like, eventually an investigation should happen, right? And then you either get your money back or are charged with a crime? I get that that's not what actually happens, but it's pretty weird that it doesn't. They can't tell you about it because it's flagged for investigation. When's the investigation? Never.

zinekeller 3y ago

Actually, PayPal's action are definitely not just hostile customer support but something about their risk protection (which includes US government data) has tripped off and they can't legally tell you (the legal term is "tipping-off"). PayPal has many questionable decisions but this one is not even PayPal's fault (or more alternatively the US government forces every financial institution to act hostile "in the name of [US national] security"). Edit: wow, downvotes for just plainly stating what actually happens? Thanks HN /s

andylynch 3y ago
Not just the US. Most, if not all, developed economies have similar laws.

londons_explore 3y ago

> your account is frozen but we won't tell you why If they suspect fraud, they aren't allowed to tell you about it. They also aren't allowed to give you your money back (incase the money is laundered). The only way to get your money back is to get a court to order them to give it back. The process is fairly simple - go to a small claims court, and ask the court to order them to give the money back. They won't contest it, they will just return your money and close the account. That way, if it turns out that it wasn't your money, or you are a terrorist, paypal is no longer liable - they were just doing what the court ordered.

foooorsyth 3y ago
Pretty amazing how nonchalant you’re talking about theft. I guess the approved strategy for legal theft is as follows. 1. Create a payments company that accepts deposits and holds balances (a bank — but don’t call it that) 2. Create a broken AML algorithm that flags X% of deposits as fraud 3. Force the falsely accused to take you to court to get their money back 4. Keep the rest. Most people won’t contest What a great “business” model.
- G3rn0ti 3y ago
  I think they are required by law to do so. At least in the US.
  - denton-scratch 3y ago
    What law?
    - G3rn0ti 3y ago
      https://en.wikipedia.org/wiki/Bank_Secrecy_Act https://en.wikipedia.org/wiki/Bank_Secrecy_Act "A financial institution is not allowed to inform a business or consumer that a SAR [suspicious activity report] is being filed." Laws like this exist in many countries (including my own) that turn banks into agents spying their customers on behalf of the government. Calling it even a "bank secrecy act" is downright cynical. I understand that law enforcement agencies need to be able to go after criminals but I think the balance between freedom and security has been way off for a long time already. That's exactly the reason why Switzerland used to have the strictest bank secrecy laws world wide. It was not to become a safe haven for criminals but to maintain the financial freedom of its citizens.

valdiorn 3y ago

They have specific laws that BAN them from giving detailed reasons for why they froze your accounts. Giving you a reason, or sometimes even hinting that there might be a problem, would be classified as "tipping off", which is a federal crime and can land even the lowliest finance worker in jail. People need to read up on AML (anti-money laundering) laws. They are a bit insane. Know them because I've worked in regulated financial companies for years and have had to do the mandatory training about a dozen times.

denton-scratch 3y ago
So even if there are no suspicions of money-laundering, they can't tell you why the account is frozen? Because otherwise, if they won't tell you why, it must be AML?

antihero 3y ago

I don’t understand why people keep their money inside these platforms. Surely if you are getting a lot of money, you should be depositing it in your bank regularly?

pavon 3y ago
He said he had hundreds of dollars tied up. That is a fairly small balance for someone who does (did) a lot of business with paypal and is transferring it out regularly.

Quillbert182 3y ago

Not sure if this is relevant to your situation, but I found this blog post interesting: https://jessesingal.substack.com/p/i-fought-the-paypal-and-i-won https://jessesingal.substack.com/p/i-fought-the-paypal-and-i...

mjhay 3y ago

They want to earn interest on your money.

alistairSH 3y ago

The AML should really be update to something like... Freeze the account, refer immediately to law enforcement, if LE doesn't take action within XX days, unfreeze the account. AMLs exist for a reason. It's the "freeze the account with no end in sight" that's the real problem. It's not like freezing the account isn't going to tip off any actual money laundering operation, so the freeze is only partially doing what we want.