7 ms·

"PayPal took $80k from me and banned me"

• dncornholio 3y ago
  Has it been 180 days yet?
• lovegrenoble 3y ago
  it's better to avoid PayPal anyway, so sorry for you, hope your post will be in the top.
  • triyambakam 3y ago
    Alternative?
    • hnben 3y ago
      depends on your location and your target audience. e.g. the swiss use TWINT for almost everything and it works great
  • smileybarry 3y ago
    The problem is a lack of "I want to pay you but don't want to give you my credit card" processors out there. That's 99% of the reason I use PayPal (with just one case of using buyer protection because the vendor just forgot about my order for months and didn't respond). Google Pay & Apple Pay helps with this now (and the fact they're implemented as a payment type like VISA and not a processor like PayPal helps a lot to prevent lockout cases like this) but they're nowhere near as widespread as PayPal, at least from my experience.
    • TheCapeGreek 3y ago
      I don't understand this "I want to pay without giving my card" thing. Payment gateways process your card, not the app. "Paying without giving my card" is not what that feature is, but rather "card details are saved so you have a lower barrier to spend more".
      • smileybarry 3y ago
        A well-designed app offloads the "enter your payment details" dialog to the processor (e.g.: Stripe), but many shops don't. You're handing off your details to the vendor's website, which then promises to process your payment with Payments R Us. But (A) I can't be sure of that, (B) maybe their forwarding/processing method is insecure and (C) maybe their server is already compromised and a man in the middle will save my card details. Compared to PayPal that are a clear redirection in-browser and result in the vendor getting (at most) a "payment cookie" that can be completed to transfer X USD from Y to Z. Or Apple Pay where your (ephemeral) payment details are E2EE to the payment processor's server, even if they go through the vendor's website/servers.
  • is_true 3y ago
    It's hard to avoid, what you should do is move the money out of paypal as fast as you can.
• lovegrenoble 3y ago
  And why did you keep so much money in your account, there's must be an explication?
  • javcasas 3y ago
    Because victim blaming, that's why.
  • junaru 3y ago
    Never used paypal as a merchant but think funds are held for x days before you can transfer them.
  • dkjaudyeqooe 3y ago
    Paypal, and other payment processors, will hold funds to cover potential chargebacks. If he really was doing 6 figures in sales then roughly 10% being withheld is in the ballpark of reasonable.
• devaiops9001 3y ago
  Businesses will abuse you like this unless you know how 1.] to sue 2.] how to make a threat to sue sound credible 3.] be strong on #2 with articulation on punitive damages. A well written letter can get things moving pretty quick.
  • bluescrn 3y ago
    There's not many businesses that'll take $80K of your money and refuse to give any explanation, though. Especially businesses that have a long history of similar incidents.
    • devaiops9001 3y ago
      Heh. I wish it were so uncommon that it were unheard of. Ya gotta have a great legal team or else you'll get hosed. There are days I'd rather have spent coding rather than working with legal.
  • madsbuch 3y ago
    As I wrote on another thread: PayPal is exploiting the fact that they exist in several jurisdictions. So you don't just need to be able to sue. You need to be able to sue across borders, several borders – Good luck with that.
    • devaiops9001 3y ago
      "Good luck, I'm behind seven borders".
  • y7 3y ago
    Punitive damages are not a thing in a large part of the world. In particular in the European countries where Paypal or some of its subsidiaries reside.
• deleted 3y ago
  [deleted]
• mcv 3y ago
  $80k sounds like it's worth a lawsuit. PayPal is terrible and unreliable and should be avoided, but if they confiscate your money, I would expect you should be able to sue them for it.
• MrThoughtful 3y ago
  I thought the finance industry is highly regulated? Can a company really "hold any funds in your account for up to 180 days" just willy-nilly? And what does this mean: Fun bonus, they hold $80,000 I won't get back. Has anybody ever really been completely robbed by PayPal and never gotten their money?
  • madsbuch 3y ago
    I thought it was common knowledge at this point that there is this risk using PayPal and it was generally not recommended for anything but hobby use. PayPal has been seen using several jurisdictions, eg. Luxembourg, France, Germany. When maltreated customer try to sue and get their funds back, they will ping-pong people around in different orgs across these jurisdictions. In the end you would need several very persistent lawyers across several jurisdictions, which is more expensive than loosing 100.000 EUR. (There is a specific case on this that was shared on HN some time back).
    • dewey 3y ago
      Paypal only being for hobby projects is a bit of an exaggeration if you see almost every e-commerce store at least in Germany supporting it.
      • madsbuch 3y ago
        Many people do risky stuff against recommendations. And yes, I am aware that PayPal is particularly popular in Germany.
        • dewey 3y ago
          Every third party integration a company relies on is risky, I just take an issue with spreading FUD and calling a probably top 5 by market share payment provider only fit for hobby projects. If you are searching for Stripe or any bank you'll find an equal amount of horror stories which are of course always louder than the millions of accounts and transactions that go on without an issue.
• deleted 3y ago
  [deleted]
• SilverBirch 3y ago
  One of the things that fascinates me about silicon valley is that there's this very clear playbook that goes along the lines of: We're going to 'disrupt' X industry with technology. And disrupt often has a veneer of technological progress, but really is primarily just regulatory arbitrage. Paypal: We're going to be a bank, but we're not going to adhere to banking regulations. Crypto: We're going to be a stock exchange, but we're not going to adhere to SEC regulations. Uber: We're going to be a taxi company, but we're going to ignore all local taxi regulations. Uber/Doordash/Gig economy: We're going to employ people, but we're going to ignore employment law. Not only is it interesting that this keeps happening, and successfully. But we're like 25 years down the line since Paypal started, and Paypal is still acting in ways that you wouldn't expect a bank/payment processor to be allowed to behave by regulators. Like, if I were a regulator I would seriously be considering just going through Uber's behaviour since the company started and prosecuting every single violation they committed. Let's see how well that business model holds up. It's not good enough to say "Oh we're all billionaires now and we floated on the stock exchange so I guess now we'll think about abiding by the law".
  • kalleboo 3y ago
    > Paypal: We're going to be a bank, but we're not going to adhere to banking regulations There is nothing in banking regulations that stops what PayPal is doing here. Any credit card processor will not hesitate in putting a hold on your payouts if they want to investigate your business. Heck one of our credit card processors wouldn't even pay out before 90 days as standard.
  • is_true 3y ago
    The problem here is that Paypal wants to look like a bank to increase it's stock value.
• tainted_blood 3y ago
  Wouldn't have happened with Bitcoin.
  • lm28469 3y ago
    Yes, since he'd probably lose 95% of his paying customers
  • ggm 3y ago
    Forgot the /s (rugpulls)
    • tainted_blood 3y ago
      Bitcoin can't do rugpulls, what you are talking about is "crypto", which is indeed a scam.
  • AniseAbyss 3y ago
    [dead]
• rtsil 3y ago
  Wild speculation: some of the AI-generated headshots sold by the company were used for fraudulent activities. Real outrage: how can a company take $80K of someone else's money ("I won't get back"). Decline to do business, sure, hold until an investigation is done, why not? But this is outrageous. Did they refund it to the buyers at least?
• ggm 3y ago
  Spend $200,000 and up, you might recover it, on the court steps. Or not.
• mpeg 3y ago
  Ok so I know a bit about this as I had the same exact thing happen to me in the past. The reason this probably happened is that their business was getting a high % of chargebacks from paying customers, paypal is not a specialist payment provider that wants to handle what they consider high-risk business like that, so they block your account and hold your funds for 180 days and during that time keep processing chargebacks. After the 180 days, Paypal will give you the remainder of the money back, so the title is clickbait, they will get back their money. The best thing to do if you operate a business which gets a lot of chargebacks is to find a payment processor that is okay with that, when I had this issue I ended up looking at which payment processors porn sites used and picked one of them, which had no problems. That was a long time ago, so I'm sure there's more options now.
  • geek_at 3y ago
    does that mean if a group of people don't like you they can chargeback-bomb you and get you banned?
    • danpalmer 3y ago
      Yes, although in general this will happen with any payment provider. Stripe for example will decline your business after a certain point, and in a few cases have banned entire product categories that were having significant issues with chargebacks. There are payment providers that specialise in high chargeback rate industries, but they cost a lot more.
    • Crosseye_Jack 3y ago
      Pretty much, and if your avg payment is rather low you could end up owing PayPal money as you don’t just pay for the refund of the order, but you have to pay additional charges for the chargeback. Let’s say your avg payment is $15, one chargeback means that not only have you lost the payment from the customer who charged back but as you now also owe the chargeback fee you technically lost the payment on a sale which wasn’t charged back. Edit: just a quick note. Chargebacks are different than “PayPal Claims”, chargebacks are initiated by the card issuer, claims are initiated by the customer in the PayPal interface, so claims cost less than chargebacks, but PayPal will still ding your account if you get too many of them. Edit the second: the 180 day hold is to cover not only chargebacks (which generally have a shorter period the customer can start one) but also PayPals own “protection program” claims which is 180 days iirc.
• forinti 3y ago
  The last paragraph indicates he'll get his money eventually. Nice idea for a business, by the way.
• tjbiddle 3y ago
  This is precisely why on all my PayPal accounts I have a auto-sweep enabled so that anything over $6,000 is sent to my account daily. I could set it to a lower threshold, but my AOV is ~$2,000 so I prefer to have enough for refunds - otherwise PayPal needs to debit my checking and then it takes very long for the customer to get their money back.
• gregjor 3y ago
  Not enough information, no context. PayPal has terms of service and laws they have to comply with. Probably a story here but unlikely PayPal just shut him down and kept his money for no reason.
  • TheCapeGreek 3y ago
    You can find other examples of this with PayPal, Wise and others online. Hiding behind KYC/AML laws makes these bans completely opaque in every possible scenario. Whether or not you think Danny is innocent or not, the point is not even he could know why there's suddenly a problem. There's no recourse.
    • gregjor 3y ago
      That's just speculation. We don't know if PayPal "hid" behind KYC/AML laws. More likely the account got too many chargebacks -- I've seen processors cut people off for that reason, but after multiple notices. I don't know what happened, just what the victim posted, but that's not enough to know the chain of events. Accusing PayPal of closing an account and keeping $80k with no additional information seems like a serious charge, but with no additional facts I don't know what to make of it. I suppose it plays well for people who hate PayPal. I have nothing to do with PayPal, for the record.
      • TheCapeGreek 3y ago
        Chargebacks are also speculation right now. That's kind of my point. These situations never have any usable info. How can any action by a financial/payments company be trusted in this case? We all suck it up and move on so we can make money, but that doesn't make it any better.
        • gregjor 3y ago
          > How can any action by a financial/payments company be trusted in this case? We don't know the details in this case. But we do know that millions of companies manage to work with and trust payment providers and financial institutions, because those providers are regulated and protections exist for customers and merchants. That's not to say that payment processors and banks never do anything wrong, or screw up, or freeze and close accounts arbitrarily. But that's clearly not the norm -- we're focusing on the relatively rare shark attack rather than the millions of swimmers who don't encounter sharks. I have multiple customers using Stripe and PayPal (or PayPal-owned Braintree). The only times I've seen a processor take any action against a merchant had to do with fairly clear terms of service violations: excessive chargebacks, and operating a business that appears to skirt the law or the processor's allowed merchant types (it was consumer financial "services" in my experience, basically marketing shady lenders). So if I have to guess what happened, I'd guess chargebacks, because that's the main reason things like this happen. When I've seen that the merchant was getting a lot of chargebacks, and the processor sent multiple notices about that -- they didn't just shut it down with no warning.
• thriftwy 3y ago
  "Comrade Stalin, a terrible mistake is happening!" Well PayPal is known to do that for two decades now, it would take a huge amount of self-confidence to keep $80k there.
• gndk 3y ago
  I have nightmares about this. The comments here saying that PayPal is just for hobby projects and should be avoided are living in a different reality. For me (e-commerce business, mainly in Germany), PayPal makes up around 70-80% of revenue and isn't easily replacable. I'm sure some customers would whip out their creditcard (if they even have one) or enter their long IBAN bank account numbers for direct debit, but many probably wouldn't. The convenience of PayPal is unmatched.
  • helsinkiandrew 3y ago
    What about adding Stripe/Google Pay/Amazon Pay as a choice, or if you have enough revenue history VISA etc through a merchant account. The real issue is that if you start getting chargebacks - you will be liable for them. A bank might ask for payment, Paypal just grabs any money in your account and locks it. If you keep an eye on the level of chargebacks you should be able to sleep better!
    • pbmonster 3y ago
      > What about adding Stripe/Google Pay/Amazon Pay as a choice Not even close in popularity in Germany. People just don't use it. Would be surprised if more than 10% of transactions would move to that if offered while PayPal is still there.
    • gndk 3y ago
      Adding more payment methods is definitely key. But like the sibling comment says, they don't come close to PayPal's popularity. So its a reasonable fallback, but I wouldn't remove PayPal voluntarily. Chargebacks are interesting in our case, since we barely get any and if we do, we solve any cases super quick. I remember a few years ago, I talked to some PayPal representative from their business team (so higher level, not normal support) and they mentioned how they had never seen an account with such a low amount of cases. Keeping that up is a big focus for us.
    • Degorath 3y ago
      Do any of those support German bank accounts? (PayPal does) Plus, as far as I can tell, Google Pay only works on mobile phones.
• ThePowerOfFuet 3y ago
  I cannot comprehend why any seller would leave a balance in PayPal instead of enabling autosweep into their bank account daily. Mind blown. FAFO.
  • dvko 3y ago
    I never even knew this was an option, despite relying on them for well over 10 years now for well over half of my business' revenue (with 0 issues whatsoever, fwiw). Just enabled it.
• djakaitis 3y ago
  This guy also had his stuff deleted from Heroku. I get the feeling he might be in the wrong here and isn’t telling the whole story.
  • ramon156 3y ago
    They don't just consider your payments high risk based off of some numbers, there's 100% something shady that happened
  • dannypostma 3y ago
    This guy here (Danny). This is bane of our existence as digital nomads. High chance to get flagged for using lots of locations
    • trogdor 3y ago
      Looking at your HN history, your PayPal situation is not at all surprising. Before this one, your most recent comment on HN was written ten months ago, promoting your website. One person replied to that comment. This is what they wrote: “I signed up on profilepicture.ai and paid, but have changed my mind before uploading photos. There is no way to contact you through the site for a refund because the live chat isn't working and there isn't a support email. Also, when I search the help desk no content is returned. How can I reach you?” You ignored that person. It’s no wonder you are getting lots of chargebacks.
• xyst 3y ago
  TIL: from reading comments here. PayPal, an American company, is very popular with German businesses and consumers. As an American, I only used PayPal to send and receive money to/from dad. I have seen a few pushes to use PP, but mostly in the e-commerce space for some promotion. “Use PayPal, get extra X% off price!” Personally, I am not a fan of the debit/credit world. I will use them simply out of necessity and “cashless” society. But there are much better ways to pay people and businesses that don’t involve a sea of middleman siphoning off percentages or pennies of each transaction.
• gndk 3y ago
  He got his account reinstated - https://twitter.com/dannypostmaa/status/1757411996989825200 https://twitter.com/dannypostmaa/status/1757411996989825200
  • justinclift 3y ago
    For me, that's not loading: Something went wrong. Try reloading. Tried reloading several times. :(
    • gndk 3y ago
      Seems like he deleted that tweet and reposted it here https://twitter.com/dannypostmaa/status/1757411405266067865 https://twitter.com/dannypostmaa/status/1757411405266067865
      • justinclift 3y ago
        Thanks, yep that one's working for me too. :)
  • is_true 3y ago
    And then deleted all the tweets about it, seems like Paypal's PR team was the reason he got is account back. Haha. A bit egotistical from him.
• is_true 3y ago
  The guy just got is account back. But this thread is now hidden on HN's frontpage. This is an isolated case, do not expect Paypal to solve your issues if you don't get this level of visibility.
  • coolspot 3y ago
    We call them “PayPal mafia” for a reason.
• willardsherrie 3y ago
  [dead]