Is PayPal Losing It?

First I was a Paypal cheerleader. Personally, I never had a problem with their service. But others, and even people I knew personally, did. As the complaints mounted and the stories became more egregious, I started seeing the other side. After all, basing my opinion on only my personal experience wouldn't be accurate. I never had a problem with Billpoint, Paydirect, Exchangepath and even the infamous Paymentalt. I know people who smoke and don't have lung cancer (yet). Does that mean I should recommend smoking?

So I set up my payment service ratings to present a more balance picture of what a payment service user can expect. I frequented the bulletin boards where people reported their experiences. I chimed in where I could, at times blaming Paypal and at times blaming the poster for contributing to his own problem. I discovered that posting on the boards was a waste of time. The Paypal bashers blamed everything on Paypal and anyone who suggested PP wasn't at fault was branded a cheerleader. The cheerleaders blamed everything on the poster and anyone who suggested that PP's own policies were at fault was a basher. I tried to stay "middle of the road," judging each case on its own merits. When Paypal has numerous customer service issues, I recommended against using them. When it appeared that they were working to resolve these issues, I changed the rating to "recommended with caution." At this point I can only conclude: "recommended for sellers with personal accounts where credit cards will not be used. recommended for buyers only if a credit card is used."

The problem is the Paypal's "protection plan," though probably set up with the best of intentions, has the exact opposite result than what was intended. It protects the guilty and harms the innocent. Because Paypal is run by a bunch of young and arrogant managers, they refuse to admit that there is a problem. So the fraud continues and the number of scammed buyers and sellers continues to mount. Many have found that there are ways to leave Paypal stuck with the bill. So Paypal now has millions in losses to recover. Could this be the reason for the new trend that I am seeing?

I used to get one or two complaint letters a day. In the past week, I am getting a dozen a day. The letters used to be "run-of-the-mill." Someone paid a seller and got cheated. Someone sold an item and the buyer charged it back for no good reason. They were issues between buyer and seller with Paypal bearing only tangential responsibility. But these current problems are far more serious and has Paypal taking an active hand in creating the problem. There has been an increase in accounts restricted by Paypal due to the possibility of fraud. This would be fine if there was a mechanism by which the account holder could contact Paypal and have the matter quickly resolved. But it appears that once Paypal has decided to restrict an account, it takes nothing short of an act of Congress to get them to change their mind. But even as the account stays restricted, Paypal continues to accept money into it. In my eyes this is theft. If the money does not belong to the seller, then it belongs to the buyer. We know for a FACT it does NOT belong to Paypal. There have been a few complaints of possible hacked accounts or credit cards where the writer says he contacted Paypal numerous times about transactions on his account that he did not make and they have refused to do anything about it. We saw a post on Auctionwatch where a buyer says three transactions of over $6,000 each were made from his account in under one minute, hitting his credit card and two bank accounts and we saw Paypal's rep answer that somehow the buyer must have done this accidentally. I defy any of the cheerleaders to enter three transactions into Paypal, have them funded from three different sources and complete the entry in under a minute. You can't do this deliberately but we are supposed to believe that someone did this accidentally?

There have been complaints about Paypal retrieving money from a seller's account that was paid from existing paypal funds because the payer received a fraudulent payment from another party. What kind of nonsense is this? Someone receiving a credit card payment will be careful to validate the source of the payment, but how vigilant can you be when receiving the equivalent of cash? Paypal won't even reveal a scammer's name and address to another party. How can the seller know where the buyer got his money? Can you imagine depositing a money order into your bank account and having your bank confiscate it, telling you "the guy who gave you that money order got cheated by someone else so we're taking it from you"?

What's amazing is that when a buyer gets scammed and files a complaint, Paypal's usual response is, "Yes, you were cheated but the seller emptied his Paypal account so there is nothing we can do." Yet when it is Paypal who gets scammed, they manage to track that money across several accounts and find a way to recover, even if it is from an innocent third party.

There are many policies at Paypal that I believe will not stand up to legal scrutiny. There are currently lawsuits in process which will test these policies. Until the courts speak, the only guarantee with Paypal is that there is a good protection plan in place to protect Paypal and no one else.

The definition of a Paypal cheerleader is someone who hasn't been scammed yet.

Here is a wild thread at Auction Watch:

posted on December 19, 2000 04:41:16 PM new

This happened yesterday, when many sellers who use paypal had their accounts restricted for no reason whatsoever. I have sent them a letter, to appeals@paypal, and will now open my email to responses from AW customers. I will not idly sit by and wait for their phone to answer. Below is the email I sent them.

To: appeal@paypal.com
Add Addresses

This is totally outrageous. You give nothing but a form email with no explanation at all. You are now holding up Christmas shipments to many of my customers who trust you with their money much the same as I trust you with mine.

Enough small talk. I have heard far too many complaints from other users to tolerate this for any length of time.

You will answer this email within 24 hours with a detailed explanation of why this has happened or:

I will proceed with legal action that may or may not include the following:

File a formal complaint with the IRS, and the FBI.
File charges of misappropriation of funds
File charges of false advertising
Contact the appropriate authorities regarding FTC guidlines for proper banking practices

I will be contacting and filing a lawsuit against Travellers Insurance
I will be filing a lawsuit on behalf of myself and ALL my paypal customers against you for any violations my lawyer may deem are applicable regarding punitive and and other damages resulting from this restriction.

Lastly, I will be writing letters to all major periodicals, newspapers, television, media, and all of your sponsors, explaining the situation, and gathering OTHER CLIENTS who have been hurt by your "inexplicable efforts" to restrict other accounts. This, of course, would result in a CLASS ACTION SUIT not only for the funds themselves, but related damages as well.

You now have a choice. You either lift this restriction IMMEDIATELY or I will pursue this furthur with all means at my disposal. This is not a free service any more. I now PAY for this. Big mistake, because now you are a BUSINESS, and are subject to legal proceedings AS a business

I sincerely hope that this has been a misunderstanding on your part and a mistake. I have used paypal reliably for quite some time with no problems. The problem here is the notice that is given with this restriction. THERE IS NO NOTICE. I hope you find the time to answer this, due to the holidays, you will make some very unhappy people and you will find yourself on the end of my litigation; not to mention ANOTHER lost client.

Thank you for your time

OK AW USERS

This is the ground floor to add your name to a list of plaintiffs that will be filed. My email account created for this sole purpose for anonymity is:

pnth@juno.com

What are the two numbers that are floating around for Paypal CSR? I will need these. One is a toll-free, the other is a long distance call. Please post below.

Once these numbers are posted, I encourage every one to ram their phones, what this means is that you will completely tie up their lines. 500 incomings at once will cripple all but the biggest companies. If you have a computer that is online but not used, do an infinite redial on their number, with no hangup until a recorded message occurs.

This is the first and LAST time they will be doing this charade.

damon@paypal IF YOU ARE LURKING HERE I SUGGEST THAT YOU FORWARD THIS TO LEGAL AT ONCE.

AW members who are lawyers? Forward tips and help to

pnth@juno.com

WE WILL SETTLE THIS ONCE AND FOR ALL

pnth

grahamreaper	posted on December 19, 2000 04:59:10 PM new Wow, I agree with you that the form letter was pathetic, and I too was angry, however the restriction was lifted within hours if not less and it was due to an error. I even received an email stating such with an apology no less. I'll wait till there is something more substantial to sue about. Thanks anyway.
Powerhouse	posted on December 20, 2000 06:00:21 PM new Pnth, I agree with your assesment of the situation and concur that legal action should be taken. I myself was never burnt by PrayPal due to the warnings my fellow AW posters gave me. I closed my account. However, you may want to reexamine posting specific actions that may place you under some potential legal liabilities yourself. I am not a lawyer, but it does seem that I recall similiar instances where people were held liable for actions intended to disrupt a business. Maybe you have already considered this, just thought I'd toss that out there. Hope you can get SOME action out of them. Good luck! [ edited by Powerhouse on Dec 20, 2000 06:04 PM ]
ScreamONE	posted on January 1, 2001 06:10:05 PM new For the record, the moment you mention in a letter to a corporation the words "Law", "Legal" or "Lawsuit" you have guaranteed that you will receive no more contact from that agency, company or corporation. Most, not just a few, but far closer to most than to many legal departments of corporations follow company policy that once the words listed above are communicated either by voice or electronic means, all communication must stop and the account and all correspondence is then turned over to the legal department. Likely forgotten unless your threats are backed up with a "Letter of Intent" drafted by a licensed attorney. So those who threaten to sue a company have all but shot themselves in the foot regarding any expedient resolve through email and phone calls except in the most exceptional and unusual cases. But... good luck! Las Vegan stg@the-pentagon.com
doggydunnit	posted on January 7, 2001 12:55:40 PM new pnth@juno.com I just tried to email you at the above address as you posted. But it came back undeliverable. What gives? Aynway, you asked for phone numbers. I found two numbers in various complaint postings, perhaps they are the ones you need. 800-836-1859 and 877-672-9725 doggydunnit
jonculver	posted on January 9, 2001 08:57:10 AM new Here' the phone # I got... Dear PayPal User, You can contact me at 1-402-935-2258 to discuss this issue. Basically, your account has been restricted due to a large number of buyer protection and fraud claims. If you call, be prepared to answer how you intend to resolved each and every claim that is outstanding in your account. The first step will be to issue refunds to every customer that has not received the items that you sold and promised. A quick count indicated at least 15 claims that will need to be resolved before we can move forward. I will be in the office the rest of the week from 6am PST until 4pm PST. Sincerely, Craig PayPal Account Review Department
grahamreaper	posted on January 9, 2001 11:08:37 AM new That ph# doesn't look right. Paypal is in Palo Alto, the 650 area code. I'm not sure of your situation, but if they ask for a password from you don't give it.
lakesideagain	posted on May 3, 2001 08:16:39 AM new I have another phone number, apparently a switchboard. It is 402-935-7733. I've been told (but haven't tried it) that extension 4053 will get you to a real live person that handles problem accounts. I would like to know the corporate address of PayPal and the registered agent name and address(in Oregon)that can beused to file suit against. I would also join any class action suit. My account is not in its 40th day of a fraudulent chargeback and I have not had a reply to my e-mails or phone calls. Not one. Contact me at lakesideagain@home.com
tjchristl	posted on May 16, 2001 10:15:15 AM new Just from the few quick messages I have read I am on the lower end of those involved with this, but I would like to add my name to a class action suit against Paypal. I have been arguing with Paypal for over 3 months now about $225 dispute (small compared to many here, but I am a student, so it is a ton of money to me). Paypal concluded that the seller was at fault, but will do nothing to refund my money. I have filed with the BBB and received a reply via snail mail from Chad E., resolutions manager. His email is cebel@paypal.com. The number they gave me in the letter is 402-935-7733. I am assuming this is a general number that is of no use. Feel free to contact me with any more information at tj@fantom3.com. I have also recently purchased ihatepaypal.net and intend to get a message board up there (call is therapy).
club1man	posted on May 21, 2001 05:31:52 PM new Just like to say that I came home from vacation today and paypal has reversed 3 more accounts dating Dec. and Jan. and they said they had reviewed all my transactions WHEN WILL THEY TELL THE TRUTH.I stopped dealing with them in Feburary. Maybe by next Feb. they will have reversed all of them and all of my customers will have their money back. THANKS PAYPAL. SINCERELY, STONEY BY THE WAY IF YOU WANT TO REACH PAYPAL'S MAIN OFFICE BE AWARE THE PHONE # IS (650) 251-1100 ASK FOR Mr. Sandeep Lal his ext. is 1106 tell him Stoney said to call him.
GaratUlian	posted on December 13, 2001 08:20:29 PM new I would like to know if anyone may be aware of a class action law suit aimed at the incredible behavior of this obviously flawed financial institution. I have a similar story to the ones I see here and at auction suits all over the net of their extremely high handed ways. In my case I made the mistake of simply stating that I was working in malaysia (Though I am an American citizen and resident). The wrote back the following: <b>Dear Gary, Thank you for contacting PayPal. We currently do not provide service to Malaysia. Following an investigation, this account has been permanently locked due to violations of our Terms of Use. This decision may not be appealed. Sincerely, PayPal Account Review</B> Paypal must come under some of the same restrictions as a registered bank. In any case, I am certain that the California Attorney general's Office will take an interest in their high handed ways and their incredibly obtuse approach to things. Not in the above letter they use the familiar saluation "Dear Gary" and then refuse to sign a name to the letter. Frankly this is the most incredible case of consumer abuse I have encountered in my 55 years. Though the amount of money they have frozen, in my case, is quite small, Paypal has given me a reason to feel anger and revulsion not unlike what I felt on 9-11. Paypal, here I come. With regards to fellow victims, Gary N. Davis
paypaldamon	posted on December 13, 2001 09:10:13 PM new Hi GaratUlian, Can you please forward your account email address to me? I would like to have this reviewed by account management. My email is damon@paypal.com. Malaysia, in addition to being a country we do not support, has a high fraud rate.We ask for documentation to protect the user, the user base, and the company from potentially riskly items. These restrictions can be removed (generally) if the user: a) supplies the requested documentation (to make sure the correct party is utilizing the account) b) there isn't a history of problems on the account (scam reports,chargebacks) I certainly apologize that this happened but I would like to have this looked at.
club1man	posted on December 13, 2001 10:34:31 PM new Well at least Damon is going to do something about it. Darn because your living in a foreign country YOUR a fraud. Does that mean all Arabs living in this country are bad? Maybe next it will be the city you live in. Or you rent and don't own. By the way the co-founder of the company is an Russian immigrant.
stopwhining	posted on December 14, 2001 06:47:37 AM new amzn one click does not do business with malaysia either.i sell books on amzn and received an email from a malaysian buyer asking if i would sell him a book. i told him what the actual shipping would be and i have not heard from him(i have a merchant account which will process malaysian charges). a year ago,i received an order on amzn from a customer with an email addr coming from russia,his credit card charge never go thru ,message from amzn is ship at your own risk. i never ship the book.
taoweber	posted on December 15, 2001 04:38:12 AM new It is tru that PayPal seems to develop an "arrogant" attitude towards customers. First my account was restricted because all my family members (5) opened accounts with the same phone number. (Family - same house - same phone number - get the point?) It took an unbelievable 2 weeks!!!! until I had acces to my funds. I have faxed all requested documentation 7!!! times. 6 times they claimed they haven't received it. (Whatever) Everytime I faxed I called, everytime I was told it takes 5 business days. And nowhere else ever have I had a customer rep hang up on me. (Too bad I didn't write down his name) Wow, what a response time considered the fact that you have MY money. Now three and a half weeks later I loose my PayPal debit card, follow their instructions, report it lost, request a replacement, result: Account restricted - debit card request denied! (????????) I get the feeling this restriction thing is going to become a monthly event. Further I can't see in their terms of use that I have to reveal my other financial matters on a monthly basis since of course I had to refax the whole stuff. PayPal comes with a lot of amenities and convenience, but hold times on the phone of 1 hour and 45 minutes (!!!!!) to get the appeals department. No thanks I think after my current auctions close it's going to be Citibank's C2It from now on.
And on and on and on... Jeeez!

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