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> And it's not because they are trying to be assholes, it's because fraud and money laundering are commonplace Actually, in large part, they are just being gre

> And it's not because they are trying to be assholes, it's because fraud and money laundering are commonplace Actually, in large part, they are just being greedy assholes that are doing this because they can get away with it, and because it is profitable. They largely invented the freezing game, and they know how profitable it is. Of course fraud and money laundering are issues, however that is far from the OP's use case. Before they freeze hundreds of thousands of dollars, you would think they would at least look at his site for a few minutes.

deleted 14y ago
[deleted]
InclinedPlane 14y ago
What part of the law requires they look at his site? What part of having a really spiffy site on the internet instantly translates into someone running a legitimate company rather than a shell corporation? To be frank, you're talking out of your ass here. You have no idea of the problems that paypal is facing, and you are imaging that frozen funds are somehow identical to profit for paypal. That's not the case at all. In reality paypal has to deal with a veritable army of fraudsters and organized crime members on a daily basis. And they are hugely sophisticated, well funded, and impressively capable. Paypal's successes against such folks happen in the dark, because typically these guys aren't going to go blogging and tweeting up a storm about how paypal shut down their international money laundering operation. But it happens all the time. And that's why paypal is often so aggressive in these cases. Because they've seen the "clueless international student with a side-business and no paperwork but a really fancy website" gambit played out a thousand times already. How do you tell the difference? Easy, when the legitimate operation goes and gets its legal issues sorted out, gets a business license, gets a tax ID, EID, inputs an SSN, etc. and sorts out any other legal or ToS violations they have then paypal won't have a cause for freezing the funds anymore. Now, you might say that we should change the rules, and make it easier for anyone and everyone to toss around hundreds of thousands of dollars across international borders without any documentation or the involvement of any sort of registered business entity. I'm somewhat sympathetic to such notions, but such changes would entail a plethora of complex and thorny ramifications that I think most people who implicitly hold such ideals almost certainly haven't thought through. There is one complaint against paypal that is sensible and backed up by evidence, and that is that they often have crappy customer service. That does indeed suck, and it aggravates these sorts of situations beyond a level that is reasonable, and, of course, generates a lot of antipathy toward paypal that isn't fully warranted. If people want to switch to paypal alternatives, they are certainly able to try. Of course, one wonders why there are so few which have a global reach and the convenience of paypal. It couldn't be that the problem of peer-to-peer international payments is at its core fundamentally quite difficult and that only one company has done the immensely challenging work to actually make it possible, could it? Surely not. Paypal sux.
- chris_wot 14y ago
  So if they don't look at his site, or his business, then how do they know he's a money launderer? The problem is not that they freeze accounts, but there is no recourse to appeal. They require ID after freezing the account, but they should get this before setting up the account. If they are so upset about fraudsters, then I'd have thought they would attempt to ascertain the identity of their patrons before getting their knickers in a twist that their patrons aren't identified fully.
  - InclinedPlane 14y ago
    At small volumes it's not practical for paypal to care about such risks, at large volumes things change. Imagine this situation without any financial institutions involved. Say that you are a visiting student from Venezuela without a work visa has earned $200k in cash in the US and then packed that money into a briefcase and went to head back to Venezuela. That money would be 20 banded stacks of $100 bills. Imagine what happens when you go to cross the US border and proceed to casually declare that you have $200k in cash you are taking with you. You have no work visa, you have no tax ID number, you have no business license. All you have is a website and a pile of cash. How do you think that will go? What do you think would happen if you took $200k in cash to Western Union and asked about wiring all of it to Venezuela? Our country has decided to push a level of responsibility for tracking illegal financial transactions and for tax evasion onto financial institutions. And that's what paypal is doing here. They aren't doing it because it somehow makes them richer to have this money frozen for a while, that's at best a tiny effect. They are doing it because the alternative of ignoring fraud, tax dodging, and money laundering is that 1: chargeback rates go up, which will increase paypal's financial losses and could cause credit card processors to increase the rate they charge paypal for transactions, 2: governments confiscate the funds, 3: governments don't allow paypal to operate there. The idea that there is some big mean paypal asshole twirling his mustache and waiting for an opportunity to screw over some hard working paypal user and steal their money is a very seductive one but it is massively wrong. The reality is that paypal has an enormously difficult job and sometimes good people get caught up in the complications. The idea that someone can set up an international business and earn $200k in less than a year and somehow expect that operating without any documentation or having to go through any legal hoops is extraordinarily naive.

deleted 14y ago

[deleted]

InclinedPlane 14y ago

What part of the law requires they look at his site? What part of having a really spiffy site on the internet instantly translates into someone running a legitimate company rather than a shell corporation? To be frank, you're talking out of your ass here. You have no idea of the problems that paypal is facing, and you are imaging that frozen funds are somehow identical to profit for paypal. That's not the case at all. In reality paypal has to deal with a veritable army of fraudsters and organized crime members on a daily basis. And they are hugely sophisticated, well funded, and impressively capable. Paypal's successes against such folks happen in the dark, because typically these guys aren't going to go blogging and tweeting up a storm about how paypal shut down their international money laundering operation. But it happens all the time. And that's why paypal is often so aggressive in these cases. Because they've seen the "clueless international student with a side-business and no paperwork but a really fancy website" gambit played out a thousand times already. How do you tell the difference? Easy, when the legitimate operation goes and gets its legal issues sorted out, gets a business license, gets a tax ID, EID, inputs an SSN, etc. and sorts out any other legal or ToS violations they have then paypal won't have a cause for freezing the funds anymore. Now, you might say that we should change the rules, and make it easier for anyone and everyone to toss around hundreds of thousands of dollars across international borders without any documentation or the involvement of any sort of registered business entity. I'm somewhat sympathetic to such notions, but such changes would entail a plethora of complex and thorny ramifications that I think most people who implicitly hold such ideals almost certainly haven't thought through. There is one complaint against paypal that is sensible and backed up by evidence, and that is that they often have crappy customer service. That does indeed suck, and it aggravates these sorts of situations beyond a level that is reasonable, and, of course, generates a lot of antipathy toward paypal that isn't fully warranted. If people want to switch to paypal alternatives, they are certainly able to try. Of course, one wonders why there are so few which have a global reach and the convenience of paypal. It couldn't be that the problem of peer-to-peer international payments is at its core fundamentally quite difficult and that only one company has done the immensely challenging work to actually make it possible, could it? Surely not. Paypal sux.

chris_wot 14y ago
So if they don't look at his site, or his business, then how do they know he's a money launderer? The problem is not that they freeze accounts, but there is no recourse to appeal. They require ID after freezing the account, but they should get this before setting up the account. If they are so upset about fraudsters, then I'd have thought they would attempt to ascertain the identity of their patrons before getting their knickers in a twist that their patrons aren't identified fully.
- InclinedPlane 14y ago
  At small volumes it's not practical for paypal to care about such risks, at large volumes things change. Imagine this situation without any financial institutions involved. Say that you are a visiting student from Venezuela without a work visa has earned $200k in cash in the US and then packed that money into a briefcase and went to head back to Venezuela. That money would be 20 banded stacks of $100 bills. Imagine what happens when you go to cross the US border and proceed to casually declare that you have $200k in cash you are taking with you. You have no work visa, you have no tax ID number, you have no business license. All you have is a website and a pile of cash. How do you think that will go? What do you think would happen if you took $200k in cash to Western Union and asked about wiring all of it to Venezuela? Our country has decided to push a level of responsibility for tracking illegal financial transactions and for tax evasion onto financial institutions. And that's what paypal is doing here. They aren't doing it because it somehow makes them richer to have this money frozen for a while, that's at best a tiny effect. They are doing it because the alternative of ignoring fraud, tax dodging, and money laundering is that 1: chargeback rates go up, which will increase paypal's financial losses and could cause credit card processors to increase the rate they charge paypal for transactions, 2: governments confiscate the funds, 3: governments don't allow paypal to operate there. The idea that there is some big mean paypal asshole twirling his mustache and waiting for an opportunity to screw over some hard working paypal user and steal their money is a very seductive one but it is massively wrong. The reality is that paypal has an enormously difficult job and sometimes good people get caught up in the complications. The idea that someone can set up an international business and earn $200k in less than a year and somehow expect that operating without any documentation or having to go through any legal hoops is extraordinarily naive.