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.
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.
"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.
Yet my PayPal account that I used twice and had a $6 balance got closed permanently. Along with millions of others.
>You assume malice. It’s not.
Yes it is. Like many tech companies, they’ve “algorithm’d” something that used to take human investigation work. And their algorithm sucks. Their support sucks. This is all intentional so they can save money on labor. So they’re not stealing my money directly. So what? They’re freezing my funds and forcing me to take them to court so they can operate with lower labor costs. That’s theft — it doesn’t matter if they don’t use my money. If I rob you of some cash and then burn it, is it not still robbery?
That sounds like bullshit. Why would a mere suspicion of fraud, in the absence of a subpoena or court/gag order, mean that they aren't allowed to tell the account holder that they are suspecting fraud?
If they came back and said "oh, we banned you because you made multiple, small transaction to high risk countries", well then you could just not do it next time.
https://monzo.com/blog/2019/04/04/why-we-block-freeze-close-...
Isn't that what they want?
If they told you what the checks were, you could easily come up with a scheme to not be flagged.
What they miss is that all serious criminals know someone who works for a bank and can just tell the criminals what the checks are at that bank.
Where I'm from you gotta file in person and there's a fee for filing and you pay someone to serve the defendant. Then you gotta show up at the court date. That's a bunch of fees and two days off from work before you even get a decision. I understand that this is the process, but it's not so simple for a lot of people to take days off from work, come up with money for fees (especially if their paypal is frozen), etc. It just doesn't serve the regular Joe all that well.
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.
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.
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.
Edit: wow, downvotes for just plainly stating what actually happens? Thanks HN /s
https://jessesingal.substack.com/p/i-fought-the-paypal-and-i...