Paypal Does it Again
regretsy.com
regretsy.com
Same post as most of the time. Someone takes money through Paypal for a product that does not (yet) exist, without reading Paypals terms, then money gets frozen, then people start to cry.
PayPal Acceptable Use Policy: "(d) are for the sale of certain items before the seller has control or possession of the item [...] collecting donations as a charity or non-profit organization"
Paypal terms (and here my English might not be good enough): "Initiation of transactions considered to be cash advances or assisting in cash advances; [...] and listing items for sale that have a delayed delivery date of 20 days or more after the transaction list."
I also found that interesting: "Use of an anonymizing proxy;"
I've got a client who does this every year - he starts taking pre-orders for the new version of his book in September, gets his PayPal withdrawals suspended in October, ships his books late December, and gets his money around the end of January. He's happy to keep doing it that way, 'cause he's using the pre-orders to accurately gauge demand and to decide how many copied to get printed, rather than as a way of pre-funding the production or printing costs.
(The fact that it's played out identically for ~4 years now also includes the bit where he gets a bit drunk over xmas/newyear and rings up any PayPal phone number he can find and swears abuse at whoever answers… It's much more likely to be that which ends up getting him banned from PayPal than the $20 or $30k of transactions who's funds they get to hang on to for 3 or 4 months every year)
If you fail to deliver the product then whoever processed the credit card orders is going to be on the hook for payments when the consumers run chargebacks. Obviously they don't want this risk.
So if you want to do this you need to come to an arrangement with your credit card company before-hand (for example letting them hold onto all the cash until you've delivered the goods).
The owner just won't be able to unsuspended the account because they're in violation of the rules. If they weren't in violation they could just supply the required verification documents and get their account unsuspended.
Worse, it's prone to expensive scaling laws, and more so if you want to catch edge cases, and much more so if avoiding false positives is critical.
Any PayPal successor which is successful enough to become an interesting target for fraud will have to deal with exactly the same problems, possibly causing service to break down in similar (or equally problematic) ways.
Obviously YMMV, but that's just my experience with risk tiers.
We ended up switching to a merchant bank that was better for online transactions. Cynergy ultimately released the funds as three different disbursements after we closed our account and decided to charge us account activity fees for those three months as well. It was frustrating to say the least.
Your merchant account has a limit. When you're about to blow it out of the water, you pick up the phone and call your merchant and talk about it, not wait for everything to go into automatic investigation fraud hell.
There are no flawless , fire and forget payment solutions that scale to any amount out there, there are just too many variables.
From what I understand they have tiers for assessing risk level, if you're not approved for a higher tier and try to cross the threshold your account will be flagged and cut off automatically until they can investigate/approve.
I had Paypal instate a 21-day holding period on all money coming into my account for a while, making buying/selling of things (I sell X, and I buy Y as an upgrade) nearly impossible. I'd never had any refund problems on my account- ever. Emailing support got canned responses about how this is for my safety, and partially because I don't do regular business that they can pattern out on my account.
Then about 8 months later, they removed it. No reason why I was suddenly more safe than before. I've had the account over 10 years. Zero problems. Yet, they seemed to think there was a problem for a while.
He doesn't strike me as the Mafia type. The founders of paypal have long gone. Initially paypal wasn't all bad but the got worse over time and after the sale to ebay the customer relationships (or lack thereof) dropped through the floor.
Don't downvote me. This is a true design principle about Bitcoin.
But I know the answer to the question "Is there anyone else who can match PayPal feature for feature?" The answer is a clear and resounding no.
But Sweet Moses, I wish there was!
But there is no equivalent substitute for PayPal. There is no no-monthly-fee, no-credit-check, no-application 3rd party processor that lets you accept all major credit cards, eChecks, bank transfers, and includes all 190 countries and regions PayPal supports, including those where credit cards are uncommon and Google/Amazon/etc do not offer accounts.
I'm sure one reason they move so slowly is to give everybody involved enough time to notice if money is missing and fraud has occurred. In which case PayPal will still have the money to issue a refund. I do appreciate that as a buyer. But as a seller, the way they're handing it can be disastrous for a business that is relying on their service.
When I called the customer service for the first time, gave them a few details, up until the point I was from Romania.. their (clearly shocked) reaction: "Aaah, you're from Romania ? Let me redirect you to our India office". WHAT ?!? Are you kidding me ? Romania was in the European Union back then already, and I was already assigned to the Ireland branch of Paypal (an email about that was sent).
Wrong, the CSR never makes judgment. This is for services like Account Review. So you can yell at or sweet talk to the guy on the phone, it won't change much.
Anyway it's sad that PayPal shows almost no progress year after year to handle legitimate "small" business, especially when they cancel transactions of goods already delivered. But people need to READ THE TOS. We're talking about MONEY, being on a shiny Internet website does not change that fact.
Instead, they just stonewall you, keep the fees, hold your money and provide no way for you to make things right.
I have heard of people coming to the call center with baseball bat to get their money, so paying a place ticket is not that stupid :)
Now, as in a lot of companies, you can try to be an asshole, call again and again, ask to be called back, send mail after mail, ask to speak to a senior agent etc. At some point it can trigger a special handling of your case, but everyone want you to disappear.
I'm going to try and get in touch with customer service, but I have the feeling I'm going to get a stock response that's cut/pasted.
Last week, Google decided to ban my Adsense account and refund advertisers because my website was a risk. The money was there for years and I removed Adsense from my blog YEARS ago. I can't contact anyone about it and can't enter Adsense now for any new website I would make.
In the phone call I had with a PayPal executive after the Christmas debacle, It was stated to me that when an account is frozen for bringing in too much money too quickly, the CS representative taking calls is asked to "make a judgment call. " In our case, "they made a very, very incorrect one."
That's my entire complaint with this process. In any other business, a good customer who makes you money gets dedicated customer service. Your account is treated carefully. That's not how they do it there.
I also want to say that I understand the compulsion to lay blame at the feet of the person being screwed over in stories like these ("They used the wrong button!" "They didn't read the TOU!"). Human nature is such that we have to find fault with the person on the receiving end of treatment like this. We desperately want to believe that if we'e very good, nothing bad will ever happen to us.
It honestly does not work that way.
I'd say this is roughly 50/50. While Paypal's customer service is legendarily bad, and there's no excuse for not providing a method to talk to a live human, there's also no excuse for not reading the T&C and knowing what you can and cannot do, moreso if you're a business. This is a friggin' payment processor. One of your lifelines as a business. Not reading the terms is one of the dumbest possible things I can think of doing.
And this isn't a case of fine print, either. It's not hard to find Paypal's policy on preorders, or other things which you are specifically not supposed to do, and in fact agreed in advance not to do when you signed up.
You'd think that people knowing in advance that they're dealing with the devil would make them scrutinize the details that much more...
You are right about the human nature. Marketing is also to blame. You read "Accept money now ! click here and be ready in 5 minutes." so that's what you start doing, and it works great for a moment.
And then, that's why layers make fortune I guess.
If so, lets put aside the question of whether it is "right" to put the responsibility of service abuse on the service provider, but instead ask the question: is any of this really in our best interests? It seems to me that a consumer population would be better served by not being artificially protected and thus completely off-guard when they do get caught in a scam. Any payment processed online should be done with the same amount of wariness and forethought that a purchase at a brick-and-mortar retailer would be.
Now, it's possible that I'm wrong here and Paypal is actually doing all of this as some sort of verification service to provide a fraud-free environment for payers (i.e. paying with paypal will never be a scam). If that's the case , then this is a really ineffective way of going about it. It seems like a great deal more upfront investigation and analysis would be appropriate. I would take some of the peer-to-peer lending services as a model.
>are going to these customer-service-destroying efforts at fraud prevention because the regulatory environment forces them to do so.
Again, the problem isn't the automated risk prevention system, the problem is the complete lack of customer service if/when it happens to you.
First, it's not always "small claims." In the case of our charity fundraising at Christmas, we had collected $20,000 for those kids. That means real court, with real lawyers, and going up against PayPal's legal department. They will file motion after motion after motion and bankrupt your legal fund.
And really, public airing of corporate bad deeds is extremely effective. After we publicly shamed PayPal for keeping fees on charity donations they forced us to refund, they were embarrassed enough to donate $20,000 to 200 needy families.
Traditional court is not where individuals really have power.
Good luck with that.
Whoever has more money for lawyers, wins.
I do realize that this is sort of thing often comes with collateral damage. I for one don't want to see government in my life. Their function is to do a few things, do them well and stay as invisible as possible. This is far from what we have today.
Yet I wrestle with this issue of monopolies, particularly when they behave as badly as PayPal, Google, eBay and others seem to be doing with some frequency. Because they are monopolies they don't encounter any force that might compel them to fix some of these issues. Under a normal competitive environment participants would improve their offerings at many levels in order to gain points here and there. This would include improvements in customer service because this is most-definitely one item that could sway customers to use one service over the other. Examples of this effect abound.
However, once a monopoly takes root the leverage disappears. The company who owns the market can then focus its attention on activities and policies that benefit them the most. Customer service is hard and it is expensive. Internet companies would much rather have algorithms make decisions. These are cheap and you don't have to feed them. Here the decision is simple: If the collateral damage caused by the brutality of a system without any semblance of customer service is but a rounding error in our revenue: Go forth and prosper. And that's how you end-up with what we are seeing happen with alarming regularity today.
The fact that your business might go down in flames because of their algorithmic decisions is a rounding error in their revenue stream. Devoid of competition there is no incentive to expend any effort chasing after rounding errors.
And so I search for solutions and can't seem to find any. A startup to compete with PayPal? Google? eBay? Not likely. Huge barrier to entry. They are in-effect, monopolies. It could happen, but I would not bet on this approach.
How about a united front of users, bloggers, etc., making a lot of noise in very public ways? Hmmm. Well. If you are in good standing with PayPal and Google, do you want to risk the wrath of the machine and get banned for life? Because that is exactly what will happen in one way or another?
How about suing them? Same issue. You almost can't exist on the internet without using services from these giants. Who wants to risk their wrath? For example, I'd sue eBay and Paypal in a second if I had the financial support and had a reasonable good certainty of a positive outcome. They have both caused me damage in the past with unfair unilateral/totalitarian actions. The problem is that when you look around you can't find a solid way to replace them. I'm willing to bet that thousands upon thousands of people just take it on the chin and move on precisely because of this effect.
And so, that leads me to where I really didn't want to go: Governmental action. The only way to kick these giants in the nuts seems to be to meet force with force. As consumers of the services of monopolistic companies we have no leverage whatsoever. None. However, we do have the ability to get our government/s to take note and take action with overwhelming force. This is just about the only kind of fight that monopolies are afraid of. Everything else might very well be an exercise in futility.
So, how does one get the ball rolling on something like this? While I have not been affected at the level that some of these stories relate I've had enough of a taste of how these machines work to be very concerned that one day I could incur tens or hundreds of thousands of dollars of damage because of these unfair practices. I would prefer to see them corrected before that happens.
What's the consensus among HN users? Is this something worth pursuing?
A bank can't do it. A stock trading brokerage can't do it. There are even laws to protect you from a company deciding suddenly that your gift card money is all theirs. (These laws are newish -- they can charge a small maintenance fee after x mos, but THE MONEY IS YOURS.)
There's no reason why Google or PayPal should get away with more theft than Macy's Gift Cards department.
Whenever this perennial "PayPal screwed us out of X monies" comes up (and I've seen it about 7 times in the last 3 years), no-one seems willing, or able, to actually understand why it happens.
It's this simple:
PayPal is an American company, and so has to obey US law, and in particular, financial regulations over money laundering.
[i]Section 351: Amendments Relating to Reporting of Suspicious Activities
This Section expands immunity from liability for reporting suspicious activities and expands prohibition against notification to individuals of SAR filing. No officer or employee of federal, state, local, tribal, or territorial governments within the U.S., having knowledge that such report was made may disclose to any person involved in the transaction that it has been reported except as necessary to fulfill the official duties of such officer or employee.
Section 352: Anti-Money Laundering Programs
Requires financial institutions to establish anti-money laundering programs, which at a minimum must include: the development of internal policies, procedures and controls; designation of a compliance officer; an ongoing employee training program; and an independent audit function to test programs.
Section 356: Reporting of Suspicious Activities by Securities Brokers and Dealers; Investment Company Study
Required the Secretary to consult with the Securities Exchange Commission and the Board of Governors of the Federal Reserve to publish proposed regulations in the Federal Register before January 1, 2002, requiring brokers and dealers registered with the Securities Exchange Commission to submit suspicious activity reports under the Bank Secrecy Act.
Section 359: Reporting of Suspicious Activities by Underground Banking Systems
This amends the BSA definition of money transmitter to ensure that informal/underground banking systems are defined as financial institutions and are thus subject to the BSA.[/i]
http://www.fincen.gov/statutes_regs/patriot/
PayPal is legally required to both freeze accounts for review under the Patriot act when large sums of money quickly flow into accounts from non-US sources, [b]and[/b] legally required not to disclose the reasons for freezing said funds.
There's plenty more regulations for companies out there, however it amuses me no end to see the short-sighted band-wagon get going.
If you're ignorant of the way these companies work, and even worse, ignorant about what the [i]law of your own country[/i] demands of companies, then please: do the world a favour, and step out of the discussion.
Or, you know, protest against the people who wrote the Patriot Act.
/looking on with amazement
I can understand that to a first approximation, pretty much everyone whose account they freeze is committing fraud. But there are exceptions, and their processes don't seem to take account of that fact.
For instance the site is, right now, taking pre-orders, not orders. There is no published timeframe when they'll actually ship the books that I can see. Paypal only allows you to accept pre-orders up to 20 days in advance of shipping the product to buyers, and even then they can demand significant additional proof.
Because, unfortunately, pre-orders are the classic setup of too many scams (which some random agent probably won't easily be able to eliminate), and it's the domain where PayPal ends up holding the bag. 5000 people pre-ordered some cool internet controller and then maker disappears, etc.
We've been hearing these sorts of "horror" stories for years (wow do people not understand how hard and exclusive the payment process used to be!), yet despite PayPal still being relatively small -- especially compared to the banks and credit card companies -- no one is credibly doing what they do. Maybe because they're doing something rather hard?
I'm not sure what the general worldwide fact is for all kinds of payment processing. But it is general practice (not federal law, as I thought before editing this) in the United States that a seller can't actually get money from a transaction paid by a credit card unless the item ordered has actually entered the shipment process.
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre28.shtm
That's the way Amazon has always billed me, and I think it's the reason that Amazon sends me partial shipments even when I didn't ask for separate shipments when I order several items at once.
That might be one of the reasons, but I'm sure the usual reason is that the items are coming from different warehouses and the logistics are easier (/cheaper) for each to ship to you directly than for them to shuffle their product around so they can send everything to you in one box.
(PayPal now supports this through PayPal X, but did not at the time that Kickstarter was being first released. Getting access to this API from PayPal requires more authorization than from Amazon, but the result is also more powerful: you can hold tokens with no expiration and seemingly no cap.)
https://cms.paypal.com/cms_content/US/en_US/files/developer/...
Certainly not hard enough to prevent your CS people from even giving out a phone number to call for support. Most certainly not hard enough to not be able to address quickly.
Financial transaction analysis is an old science. Experienced people are hard to find, but not exceedingly hard. Systems already exist to mine the hell out of data to tell the scammers apart form the genuine people. An of course, you can build your own system and whatever analysis you want.
And how big do you have to be to be able to afford this? Not large at all. I think you overestimate the difficulty of catching bad guys.
You should note that the recurring complaint is NOT "PayPal froze my funds". The complaint is "PayPal froze my funds and then refused to communicate at all with me". This points to incompetence and lack of consideration much more so than "This shit's hard, yo!"
So, no, financial transaction analysis is not hard enough to screw over your customers.
As for Regretsy's continual lack of ability to get CS from PayPal, as someone who has often spent egregious amounts of time talking to PayPal, I honestly think Regretsy is doing something wrong. I also personally feel like PayPal should just ban them from using the service: they don't seem to understand how online payments work, and their reaction to normal procedures is to raise a public shit storm... it's just lame, and it shouldn't be getting play on HN.
Customer service != fraud department. Google, Netflix & Paypal seem to have similar methods of dealing with "suspicious accounts". Those methods usually involve something along the lines of shutting the account down and then rebuffing attempts to communicate with the people who made the decision. Customer service evaporates once you've been ostracized by their security systems.
I rather liberally misused scam to mean "sloppy or negligent financials" -- like "let's take lots of pre-orders and with those funds maybe we'll be able to make something happen!" When businesses need to front-load financing from their future customers, the likelihood of failure increases dramatically.
"Big reserves on deposit" is what I was told.
It's probably not quite as simple as that, but I suspect being able to demonstrate a degree of financial solvency (airlines? really?) and having funds in reserve would go a long way towards paypal working with you more. In fact, I think paypal ends up holding some of your funds for you as a reserve against chargebacks after certain conditions are triggered, no?
If I'm not mistaken, if this were an actual, say, visa merchant account, all parties would have much clearer rules laid out. The customer would be protected "they didn't deliver, I'm not paying". The merchant doesn't get "credit" per-se..... they have to deliver goods or the charge-backs start, at which point they are up shit creek, along with possibly their substantial deposit with their merchant provider.
Paypal does not work like a normal merchant account for credit cards - people need to remember that - that's why we have these horror stories. If a credit card processor tried to pull this stuff they'd have their visa contract yanked in a heartbeat and thir merchant banks would drop them like a hot potato.
Don't make the mistake of imagining that because you've worked in the same space as paypal that you have a grasp on the true scale of the problems they face.
"The origins of Palantir go back to PayPal, the online payments pioneer founded in 1998. A hit with consumers and businesses, PayPal also attracted criminals who used the service for money laundering and fraud. By 2000, PayPal looked like “it was just going to go out of business” because of the cost of keeping up with the bad guys, says Peter Thiel, a PayPal co-founder.
The antifraud tools of the time could not keep up with the crooks. PayPal’s engineers would train computers to look out for suspicious transfers—a number of large transactions between U.S. and Russian accounts, for example—and then have human analysts review each flagged deal. But each time PayPal cottoned to a new ploy, the criminals changed tactics. The computers would miss these shifts, and the humans were overwhelmed by the explosion of transactions the company handled.
PayPal’s computer scientists set to work building a software system that would treat each transaction as part of a pattern rather than just an entry in a database. They devised ways to get information about a person’s computer, the other people he did business with, and how all this fit into the history of transactions. These techniques let human analysts see networks of suspicious accounts and pick up on patterns missed by the computers. PayPal could start freezing dodgy payments before they were processed. “It saved hundreds of millions of dollars,” says Bob McGrew, a former PayPal engineer and the current director of engineering at Palantir."
[http://www.businessweek.com/magazine/palantir-the-vanguard-o...]
They refuse to tell you why you're blocked.
They refuse to allow you to talk to someone to appeal the decision.
PayPal's CS is absolutely _horrible_. This magnifies any other issues you may have with them.
They have no business arbitrarily freezing accounts for months. None. It doesn't matter how much or how little customer support they have. That's wrong.
Welp. It's your own fault. Read the paperwork next time.
The freezes would be reduced to an inconvenience instead of an all-hands emergency if they didn't go out of their way to avoid talking to you. I cannot fathom what kind of boneheaded moron decided that an automatic system flagging your account means you are now persona-non-grata.
I reiterate: I don't care what their T&C says. It's not good business practice to freeze an account for months with no recourse. Period, paragraph.
If paypal was letting chargebacks run out of control because they refused to police fraud they would have to raise the fee percentage to something like 10%, assuming they could even continue to have any sort of relationship with credit card processors. If that happened their customers would be screaming bloody murder and demanding they do something about fraud to keep things under control.
Not only that, but they would be shut down in just about every country in the world for helping to support terrorism and organized crime by failing at basic do diligence in stopping money laundering et al.
What I do have a problem with is freezing accounts for 180 days with basically no input from their legitimate customers. Yes, I have had Paypal accounts frozen in the past. They are extremely trigger happy here and they do not work with their customers to unfreeze accounts or even get customer information for their review process. Every other processor I know of including ones which address high risk areas of processing (like porn sites), engages in such freezes largely on the short term while review is done in order to determine what steps need to be done in order to bring the site into compliance or terminate the account. In no case is money held for such a period of time or with so little feedback.
It's also reserved for stupid, uneducated opinions. Saying that "no, they shouldn't freeze accounts, no matter what, full stop, regardless of how good their CS is" not only adds nothing to the discussion, it's completely silly and flies in the face of the very logical and sensical reasons why accounts are blocked.
I'll say it again here: The problem isn't the automated blocking (which all payment processors do), it's the lack of an appeals process.
It's a totalitarian hit-them-with-a-hammer approach that truly needs to end.
I don't know what it will take for this to change but it has to change. For example, AdSense alone has left a trail of destruction like no other service out there. You read stories all the time about legitimate businesses being cutoff for no apparent reason without even the possibility to engage in dialog.
This thing with PayPal is downright scary. Having done tens of thousands of dollars of business with PayPal its one of those things that can keep you up at night.
The problem isn't the suspension of accounts for investigation. I welcome a responsible approach to preventing fraud at all levels, as a consumer and a vendor.
No, the problem lies in the fact that they don't engage in any kind of mutually-constructive dialog in order to try to determine whether or not there's a real problem. By not doing so they can ruin people's lives and, because they have so much money, they don't really care because it causes them no pain at all.
I for one hate government burrowing too deeply into anyone's affairs. However, this is one case where I find myself really hoping that one day we'll see Congressional action here in the US in order to protect us from the monsters that these huge corporations have become. Remember, vendors are customers too, not just the end-users/buyers of products and services.
This, very plainly, is wrong and evil.
I can also see why you're being downvoted here.
And that's why things are not changing.
Down-vote away.
It'd be easy to implement a set of rules that could make it fair. For example, limit the rate of change on any given post so that it can't be attacked by a barrage of down votes by fan boys. This would open up a post to a wider non-ideological audience and allow it to float or sink on its merits rather than whether or not the author pandered to the fan-boy culture's point of view on all fronts.
Further to that, nobody should be allowed to down-vote silently. That's chicken-shit. If you down-vote you need to state why you are doing so and subject your view to the same peer review, if you will.
Another interesting idea is that down-voting costs you a significant amount of karma points. And, if you go below a certain number you are ejected from HN. Now people are likely to think twice before down-voting on ideological basis because they'll stand to loose something.
All said, HN is still tolerable but it really is frustrating to be down-voted when purely on ideological basis rather than on based on the merit, accuracy or veracity of a post.
Anyhow, the PayPal, Google, eBay, etc. problem is not likely to be solved by yelling and screaming on blogs and HN. I firmly believe that massive legal action, and, more than likely, in the US, Congressional action, is the only light at the end of the tunnel. They are too big and just can't be hurt or bothered with any other approach.
Be careful what you wish for. Congressional action forcing PayPal, Google, et. al to provide better customer service sounds great for consumers, but unless the legislation is very narrowly focused, it will just end up being another piece of regulation that protects incumbents and punishes newcomers (e.g. by imposing an untenable customer support burden on bootstrapping companies).
The company obviously realizes it has a large number of false positives, and it's probably decided that it's worth it.
This would be akin to having airport security send anyone who sets off the metal scanner to a maximum security prison without right of appeal.
Not so loud, TSA will hear you.
The problem is in the attitude. Being French, I'm well-trained in dealing with soulless bureaucracies; but with the French administration (or probably any public administration in most countries) there is always a way to escalate the issue; and if you were right, you very usually win.
But these companies are judge, jury, police and executioner. This can't go on forever.
In my mind, this behaviour can be explained as the one of a monopoly. PayPal is probably a great service in the vast majority of cases, but the behave unacceptably in a number of exceptions. And it would not even be very hard to solve, because it seems to be mostly about process, transparency and communication.
This is quite similar to the treatment you get from many government services, which happen to be organized monopolistically as well.
Once there is a true choice for these basic services like text ads, auctions and online payment, this would likely end quite quickly.
There is probably something in the structure of these businesses that makes them come pretty close to natural monopolies. Maybe internet users should actively start to pick always the second biggest provider for everything in this space. But I would not be able to tell you a name for payment service and auctions site that was to fit that description.
I try not to buy of ebay or use paypal now (it wasn't difficult to open a another account - different card/address), I would rather pay a little more and buy off Amazon who in my experience have the best customer service I have ever experienced.
But then, how do we fix this?
I always said that the service of all online companies is great until something goes wrong. How they handle mistakes and problems is the real test.
PayPal is a direct subsidiary of Ebay Inc. which has around 11 billion dollars in revenue, so compared to American Express, which has 29 billion in revenue, it is smaller but in the same sort of ballpark.
You know, despite their tiny size, I think they might just about have the available funds and resources to work out fairly quickly if a book for a known cancer charity featuring popular authors is likely to be fraudulent or not. And to provide proper arbitration.
Let people spend their money how they want, be it scam or not. The only monitoring Paypal should do is that accounts aren't getting hacked.
Consider that criminal gangs are huge multi-million dollar businesses that run complex scams and money routing tricks that can confuse governments[1] it's not surprising that PayPal wants to try to protect itself.
In fact, they might order the allegedly scammed buyer to simply destroy the thing you sold them instead of letting you refund the money and take it as a return:
http://www.cbsnews.com/8301-501465_162-57352136-501465/paypa...
Here's something else. When we were planning on setting up PayPal payments to integrate with our app, we went thru the process blah de blah, upgraded our account to Web Payments Pro III or whatever, and suddenly… we weren't able to access our money any more. They decided to hold 30% of all our revenue for 90 days. Forever.
Not just via this new mechanism. But every dollar that passed through our account.
This was after years and years of happily using PayPal and having hundreds of thousands of dollars pass through the account without incident or customer complaint.
Meanwhile when we were a brand new LLC without a credit record to our name, we had no problem getting set up with real "big boy" credit card processing, merchant account, etc., all of which deposits daily. No 30-day holds.
More importantly, if there ever were an issue, these companies have clear, firm policies, and great phone support. I loathe Auth.net for all kinds of reasons, but if you call them, they actually help you. There's none of this "No, I cannot discuss it, and no, you cannot talk to anyone else" crap that PayPal loooooves to pull.
So, while PayPal would like you to think that they actually offer better service, that their hands are tied, that it's somehow not due to them being total capricious assholes… that's just one big stinking lie.
Attempting to resolve the issue with them resulted in an unending series of demands, many of which were asinine (e.g.: show the original manufacturer invoice for this used piece of clothing you sold on ebay, or show us a contract with the creator of the software you're selling proving you have the right to sell it-- I was the creator, and obviously, of course, a contract from me, signed by me would not be acceptable to them.)
I sent them endless amounts of documentation, but they demanded more, and they lost half of it. Their CSR reps are complete and total assholes-- after all, according to them, I was committing fraud otherwise I wouldn't be dealing with the fraud department, right? (this despite not a single chargeback or dispute on paypal from customers.)
The sad thing was, I did many tens of thousands in business thru them, payed them thousands in fees, had very few customer complaints (and issued refunds when I did or otherwise resolved it)... but they don't care.
I think that my experience and others experience has been out there for over a decade. I'm shocked that people actually use this company-- they are not trustworthy. As far as I'm concerned, they are straight up thieves. (and I'd LOVE them to sue me for saying so-- I'd love to go to court on that issue.)
You do business with paypal, you do it at your own risk. They are not a reputable business.
I don't like Amazon (for a variety of reasons) but at least they are a reputable business. I have my beefs with other companies, but they aren't criminals.
Paypal is a criminal organization, as far as I'm concerned.
In the end, they managed to steal about $600 from me. (I was lucky it wasn't more.)
I have a similar story with Amazon. I was doing business with them for a couple of years. I passed all of their tests (in the beginning, your account is put on hold for 30 days).
2 months ago, I had my first complaint (I have nearly 100% feedback, no complaints, and if there are any problems, I always pay return shipping and give a full refund).
The customer was nasty, spiteful, and didn't want to send me back my goods (it was worth $100+). This was after I immediately apologized for any issues (which to this day, I'm still not sure the exact problem. The message I received was a babbling mess of terrible English) and gave them a return label. I think they scammed me.
Amazon takes the customer's side and gives them a full refund and they got to keep the item. When you email them for support, you get automated responses signed with a name. In the automated response, they told me that I most likely just didn't make the customer happy enough. I should have answered their messages faster (I answered within 5 minutes on a Friday night at 10pm), or I should have made it easier for them to return my product (they just needed to print out the pre-paid label and mail it back).
2 days after this, my account was permanently suspended without warning (they are also keeping $5K of my cash for 3 months). I called them many times and was told that I can only get support through email (this was from a call center in India).
Email support gets you absolutely nowhere. I don't even know if there's a person on the other end. Just automated cookie-cutter responses signed with a name. They most likely do this because they pay people peanuts to answer emails and don't want the backlash of having broken English in the responses. Amazon is also the biggest marketplace for sellers besides Ebay, and they know they can get away with it.
As a marketplace seller, I was giving them thousands of dollars per-month in fees+$50/month for a pro account.
They don't respect sellers at all and I advise anyone wanting to business with them to steer clear.
What gets me is why these people don't go to court. It would be the best to win in a court of law and plaster that everywhere that that corporation is a crook not publish stories of butthurt and how life's is unfair.
my 2c.
I live in Indiana, where I believe the limit for small claims is 5000$. It costs 135$ to file with the court. Then you are given a date 1-4 months out on a random non-Friday weekday. And you are at the mercy purely of the judge. The last case I was in (medical bills owed), the judge read a spy novel.
The court systems aren't made for any sort of speed or cost. And there's that possibility that you'll lose. Maybe that judge didn't get to smoke his favorite cigar...
Unfortunately they are a necessary evil until somebody disrupts them.
It's not really something a payment service SHOULD be deciding. That's the job of small claims court.