PAYPAL CAUGHT ON TAPE!
It isn't a PR nightmare for PayPal just yet, but I'm hoping it will be. Marc Perkel recorded a conversation he had with PayPal. The link is below. He had his account frozen by PayPal, with $300 still in it, so he called PayPal to wonder what the hell happened. First of all, for those of you unfamiliar with PayPal, it is not a credit card, it is more like a debit card attached to either a bank account or a credit card for funds. Any money you have on your PayPal card is your actual money.
Marc apparently withdrew about $300 from his PayPal account one day, and the next day, PayPal reversed the transaction and closed his account, leaving him unable to access the $300. PayPal states that they closed his account because he was selling mature material, which violates their user agreement. Marc disagrees.
He said that he has over 30 websites with the PayPal logo, and none of them are pornographic. One is an adult dating site, and specifically, the website that PP states was objectionable, had nothing adult on it, according to Mark, but that's neither here nor there. The issue is that their list of what is a violation of their agreement is so long, it's laughable. Some of the items are "items deemed fraudulent", which PP decides, even though they do not have every single, or probably even one, collectibles/jewelry/antique expert on staff, lists, signed items (autographs), alcohol and adult material, and PP decides what is "adult" material.
Sites have had their accounts closed because they have pictures of women in nurses uniforms posing provocatively but with absolutely no nudity. Marc has PayPal on tape stating that they can close anyone's account for any reason, whatsoever.
As a company, I can see that they reserve the right not to be associated with certain products or services, even if they don't give customers clear guidelines to follow, but Mark's real issue is not that PP closed his account. His beef is that PP is now holding his money for 180 days, or 6 months.
This is NOT an isolated incident.
And if you think that it's not so bad because PP is linked to your credit card, keep in mind that you're paying interest on that credit card charge, PP DOES NOT pay you interest for the 6 months they hold your money and you are limited to $1000 for the life of your PayPal account when linked to a credit card and not a bank account.
Friend #1 - Had their PP account closed, with an undisclosed amount of money still in the account, because a relative of theirs owed PayPal money. PayPal will not release the funds, even after 180 days, until said relative or Friend #1 pays PP. When friend complained that no bank would ever hold someone's money because of another peron's debt, PP stated that they are not a bank and therefore not regulated by or subject to banking laws.
Friend #2 - Had their PP account closed with $800 in the account because someone else was "linked" to their PP account. When trying to discover who this mysterious other person was, PP would not release their name, but stated that Friend #2's funds would not be released until either Friend #2 or mysterious other person cleared up $X with PP.
Sounds like extortion to me.
Here are some tidbits from the conversation.
You have to listen to the entire recording. PP states that they hold the money for 180 days to protect themselves from any chargebacks, but he corners them on that issue, too.
In short, I will never ever do business with PP, and I strongly suggest you follow suit, until they are regulated, either like credit card companies or like a bank. They can't have their cake and eat it too. Furthermore, if you have had an experience with PP that smells illegal, I would urge you to talk to an attorney to see if anyting can be done to right the wrong.
LINKS
More PayPal horror stories
Marc Perkel's Taped Phone Conversation with PayPal - You can save this file on your hard drive or your web server for posterity by right-clicking it and doing a "Save Target As".
Original Discussion Thread
Marc apparently withdrew about $300 from his PayPal account one day, and the next day, PayPal reversed the transaction and closed his account, leaving him unable to access the $300. PayPal states that they closed his account because he was selling mature material, which violates their user agreement. Marc disagrees.
He said that he has over 30 websites with the PayPal logo, and none of them are pornographic. One is an adult dating site, and specifically, the website that PP states was objectionable, had nothing adult on it, according to Mark, but that's neither here nor there. The issue is that their list of what is a violation of their agreement is so long, it's laughable. Some of the items are "items deemed fraudulent", which PP decides, even though they do not have every single, or probably even one, collectibles/jewelry/antique expert on staff, lists, signed items (autographs), alcohol and adult material, and PP decides what is "adult" material.
Sites have had their accounts closed because they have pictures of women in nurses uniforms posing provocatively but with absolutely no nudity. Marc has PayPal on tape stating that they can close anyone's account for any reason, whatsoever.
As a company, I can see that they reserve the right not to be associated with certain products or services, even if they don't give customers clear guidelines to follow, but Mark's real issue is not that PP closed his account. His beef is that PP is now holding his money for 180 days, or 6 months.
This is NOT an isolated incident.
And if you think that it's not so bad because PP is linked to your credit card, keep in mind that you're paying interest on that credit card charge, PP DOES NOT pay you interest for the 6 months they hold your money and you are limited to $1000 for the life of your PayPal account when linked to a credit card and not a bank account.
Friend #1 - Had their PP account closed, with an undisclosed amount of money still in the account, because a relative of theirs owed PayPal money. PayPal will not release the funds, even after 180 days, until said relative or Friend #1 pays PP. When friend complained that no bank would ever hold someone's money because of another peron's debt, PP stated that they are not a bank and therefore not regulated by or subject to banking laws.
Friend #2 - Had their PP account closed with $800 in the account because someone else was "linked" to their PP account. When trying to discover who this mysterious other person was, PP would not release their name, but stated that Friend #2's funds would not be released until either Friend #2 or mysterious other person cleared up $X with PP.
Sounds like extortion to me.
Here are some tidbits from the conversation.
PP: You can request a refund of those transactions. you'd have to do that through a secure webform...
MP: The people who sent me the money, can get the money back, is that right?
PP: Yes, they'd have to submit a buyer complaint... Or you can submit a secure webform through your PayPal account and request that we refund the buyers that paid you...
MP: Oh, so I can refund the money to them in my limited status, is that what you're saying?
PP: You'd actually have to submit an email to us in order to have that done.... Which is it? The buyer has to submit a complaint or the seller has to submit an email or both?
MP: Ok, so well, why don't you initiate that for the last 2 transactions.
PP: You'd have to submit that through a secure webform.
MP: Ok, and you're telling me that if I submit that, or if the customer who sent me the money, asked for a refund, that you will refund the money?
PP: They would actually have to submit a buyer complaint because we don't actually refund anything, unless you request that through our secure website. Hmm... circular logic.
MP: I see. I don't. But if I submit that, you will give them their money back?
PP: Yes. Uh huh... Bullshit. Talk to anyone that has submitted one of these buyer complaints when the seller's account has been closed, and they'll tell you that they've tried over 10 and 20 times via numerous vehicles and gotten nowhere, for 6 months or longer.
MP: I don't understand this 180 day thing. You can arbitrarily close an account because you don't like what I have to say in my website and keep my money for 180 days. Is that what you're saying you can do?
PP: Yes sir.
MP: What gives you the right to do that?
PP: The user agreement that you agreed to.
MP: So you're saying that, according to your user agreement, the people who sign up with PayPal agree to, that they agree to, that for any reason at all, that you want to close somebody's account, that without any type of due process or anything, you can just grab their money and keep it for 180 days. Is that what you're saying that PP (crosstalk)
PP: PayPal can hold your funds for 180 days, if your account becomes limited. And for any reason, your account becomes limited to a state where there are no appeals, they can hold your funds for 180 days. That is correct sir. She tries to imply that there is some sort of appeals process, but there isn't.
You have to listen to the entire recording. PP states that they hold the money for 180 days to protect themselves from any chargebacks, but he corners them on that issue, too.
In short, I will never ever do business with PP, and I strongly suggest you follow suit, until they are regulated, either like credit card companies or like a bank. They can't have their cake and eat it too. Furthermore, if you have had an experience with PP that smells illegal, I would urge you to talk to an attorney to see if anyting can be done to right the wrong.
LINKS
More PayPal horror stories
Marc Perkel's Taped Phone Conversation with PayPal - You can save this file on your hard drive or your web server for posterity by right-clicking it and doing a "Save Target As".
Original Discussion Thread
posted by Rene at
1:03 AM
