I blame the Warrior Forum for this...

14 years ago

Sums up PayPal. There'd be outrage if mainstream banks started closing accounts and freezing money in them for 180 days with no warning..

Very sorry to hear about this, OP. All I can say is best of luck in the future and I'm very glad to hear that you had 3 other merchant accounts lined up and waiting

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TinkBD

14 years ago

Originally Posted by TristanPerry

There'd be outrage if mainstream banks started closing accounts and freezing money in them for 180 days with no warning..

PayPal isn't a bank.

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TristanPerry

14 years ago

Originally Posted by TinkBD

PayPal isn't a bank.

It functions in a similar manner to one. All I was pointing out, anywhoo, is that the way PayPal acts sometimes is downright scandalous and if similar 'offline' companies acted the way PayPal does, there'd be outrage.

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TinkBD

14 years ago

Originally Posted by TristanPerry

It functions in a similar manner to one. All I was pointing out, anywhoo, is that the way PayPal acts sometimes is downright scandalous and if similar 'offline' companies acted the way PayPal does, there'd be outrage.

I agree with you completely, but the fact remains that PayPal is not REGULATED the way a bank would be... which is where the problems come in...

It looks like a duck, and it quacks like a duck, but it is NOT a duck. ;-(

Expecting it to then ACT like a duck -- and be governed by duckly regulations -- ain't gonna happen.

My original post was more in the nature of a warning for those who may not realize the PayPal isn't a duck, er, I mean, bank....

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dbarnum

13 years ago

Originally Posted by TristanPerry

It functions in a similar manner to one. All I was pointing out, anywhoo, is that the way PayPal acts sometimes is downright scandalous and if similar 'offline' companies acted the way PayPal does, there'd be outrage.

I agree. I wish there were regulations in place for financial entities as this for better protection and fair treatment. Maybe some day...

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theemperor 14 years ago

Originally Posted by TinkBD

PayPal isn't a bank.

Agreed ... and all financial services companies - banks, payment processors, stock brokers, etc. have a legal duty to minimise risk of fraud, money laundering and other forms of financial crime. So from a devils-advocate point of view, I can see why PayPal does this.

I am sure PayPal don't do this stuff lightly, and I can only guess that the payment processors who accept bigger volumes of sales ask more questions about you and your business than PayPal does.
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tpw

14 years ago

Originally Posted by TristanPerry

Sums up PayPal. There'd be outrage if mainstream banks started closing accounts and freezing money in them for 180 days with no warning..

Very sorry to hear about this, OP. All I can say is best of luck in the future and I'm very glad to hear that you had 3 other merchant accounts lined up and waiting

Of course, that is the real issue... Paypal is not a bank, and they do not have the protections that banks have...

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dbarnum 14 years ago

Cheers, to your success (rootbeer held high)!

Originally Posted by mattlaclear

I need to take a midol and lay down for a bit I guess.

Midol is for women, just an FYI - -although you're hopefully joking or a female Matt.

And place a couple calls to Paypal, jotting down times and names, You can often call back and get someone much more helpful, friendlier, in-the-know and even higher up. So keep trying, hang in there!
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Will Edwards

14 years ago

Wow - congrats ... er ... I guess.

But - bummer - on the Paypal thing.

I also read the thread you referred to; seems like I will need to get myself an alternative payment gateway setup too.

Thanks for posting and hope it all gets sorted out.

Will

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Biggy Fat

14 years ago

Next week on The PayPal Sucks Show:

"I was making One Million Dollars a Day and PayPal decided to freeze my account even though I did absolutely nothing wrong! PayPal sucks but they're the only payment processor online that is worth doing business with!"

Same PayPal Sucks Time, Same PayPal Sucks Forum.

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simtex 14 years ago

This is really unfair but there is nothing you can do other to respect their opinion.
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Caleb Spilchen

14 years ago

I decided to call PayPal and ask how my account would be banned:

He said I have nothing to worry about unless I don't respond to disputes in a timely manner, sell duplicate products, sell fraudelent products, and high chargebacks.

Caleb

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mattlaclear

14 years ago

Originally Posted by Caleb Spilchen

I decided to call PayPal and ask how my account would be banned:

He said I have nothing to worry about unless I don't respond to disputes in a timely manner, sell duplicate products, sell fraudelent products, and high chargebacks.

Caleb

That certainly is the party line Caleb. But in our case it just wasn't so. But still it's a very good practice to run your business that way. My advice is to pick up a couple alternate ways to receive funds. It's never smart to put all your eggs into one basket.

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Caleb Spilchen

14 years ago

Originally Posted by mattlaclear

That certainly is the party line Caleb. But in our case it just wasn't so. But still it's a very good practice to run your business that way. My advice is to pick up a couple alternate ways to receive funds. It's never smart to put all your eggs into one basket.

Yeah,

I know. I just wanted to call and see exactly what they would say. Ironically, I'm still on hold with PayPal. I asked them to check-up on a dispute I made. I think Imma fall asleep.

Caleb

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Ron Douglas

14 years ago

That does suck. I just transferred $15k out of PayPal to my bank account. It doesn't make sense to hold a balance with this PayPal slap happening so frequently.

I don't think I'm at risk too much though because I sell a lot of physical products with shipping confirmations as proof. Occasionally they do an internal audit on one or two of my transactions but the shipping confirmation code helps.

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mattlaclear

14 years ago

Originally Posted by Ron Douglas

That does suck. I just transferred $15k out of PayPal to my bank account. It doesn't make sense to hold a balance with this PayPal slap happening so frequently.

I don't think I'm at risk too much though because I sell a lot of physical products with shipping confirmations as proof. Occasionally they do an internal audit on one or two of my transactions but the shipping confirmation code helps.

Luckily I only had $5k in the account. I was always very diligent to empty the account every night before I went to bed. But had forgotten to do so these last few days. Luckily the payments were from a few great customers of mine so all i did was refund it back to them and they paid me through another merchant account.

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tpw

14 years ago

Originally Posted by mattlaclear

Luckily I only had $5k in the account. I was always very diligent to empty the account every night before I went to bed. But had forgotten to do so these last few days. Luckily the payments were from a few great customers of mine so all i did was refund it back to them and they paid me through another merchant account.

Beautiful idea... Thanks for the idea...

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Etak

14 years ago

I know they are not a bank, but they are licensed by the banking commissions in many states. Here's the link to which, right from the horse's mouth:

https://www.paypal-media.com/state_licenses.cfm

I would immediately file a complaint with your banking commission. Once the complaint is filed, it will go to someone higher up in paypal who (hopefully) will see the seriousness of the complaint and who (again...hopefully) will want to take care of this and not endanger their state license.

I've heard of quite a few state level banking commissions who are very interested in going after paypal. Good luck!

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Crew Chief

14 years ago

Originally Posted by mattlaclear

Paypal saw the extra cash coming in and even though there were no disputes or chargebacks on the account decided to close the account down anyways.

Now I have to find alternative ways to pay 17 different vendors that I was paying every month via PP.

Plus they are freezing the $5k I had in my account at the time. Grrrrrrrrrrr

Matt, alls I can say is that I'm peeved about this...

Originally Posted by Will Edwards

I also read the thread you referred to; seems like I will need to get myself an alternative payment gateway setup too. Will

A sage once said, "A word to the wise should be sufficient."

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I'm being preemptive on this and setting up an alternative payment gateway! PayPal is not going to catch us with our pants down and then leave us out to dry.

Originally Posted by Etak

I know they are not a bank, but they are licensed by the banking commissions in many states. Here's the link to which, right from the horse's mouth:

https://www.paypal-media.com/state_licenses.cfm

I would immediately file a complaint with your banking commission. Once the complaint is filed, it will go to someone higher up in paypal who (hopefully) will see the seriousness of the complaint and who (again...hopefully) will want to take care of this and not endanger their state license.

I've heard of quite a few state level banking commissions who are very interested in going after paypal. Good luck!

Emma, that's a great suggestion!

When a company feels it can conduct itself in this manner with impunity, it will continue to so do until the people stand up and drop the legalese hammer on them.

I've had to file three Class Action lawsuits over the past four years and had I not done so, the companies named in the suits would have never changed.

I think PP may be need the Class Action lobotomy and a Class Action enema to help them develop more user friendly policies.

Giles, the Crew Chief

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secrets2010

14 years ago

Originally Posted by mattlaclear

Luckily I only had $5k in the account. I was always very diligent to empty the account every night before I went to bed. But had forgotten to do so these last few days. Luckily the payments were from a few great customers of mine so all i did was refund it back to them and they paid me through another merchant account.

I've heard that paypal doesen't like that we empty the account every night...they would prefer that we leave the money that we have earned more time on the account...just in case...

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mattlaclear

14 years ago

Originally Posted by secrets2010

I've heard that paypal doesen't like that we empty the account every night...they would prefer that we leave the money that we have earned more time on the account...just in case...

Ha...yeah right!

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Dan C. Rinnert

14 years ago

Originally Posted by mattlaclear

I was always very diligent to empty the account every night before I went to bed.

There's a good chance that that is what threw up a red flag. That might have put you into the "potentially high risk" category. If someone were to request a refund, there'd be no money in the account for PayPal to issue the refund. And, for all they know, you're emptying out your bank account every day too. (There was a thread not too long ago on here on how PayPal would get stuck on situations like these.)

Originally Posted by DogScout

Two bank accounts. One linked to PP. Withdraw from PP and transfer on-line to 2nd non-attached account. They can not get that money.

And, there you go. You withdraw the money from PayPal, stick it somewhere PayPal can't access it and, if someone requests a refund or files a chargeback, PayPal is stuck with the bill.

Ergo, if you make a regular habit of emptying your PayPal account, there's a good chance you're putting yourself in a "high risk" category.

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mattlaclear

14 years ago

Originally Posted by Dan C. Rinnert

There's a good chance that that is what threw up a red flag. That might have put you into the "potentially high risk" category. If someone were to request a refund, there'd be no money in the account for PayPal to issue the refund. And, for all they know, you're emptying out your bank account every day too. (There was a thread not too long ago on here on how PayPal would get stuck on situations like these.)

And, there you go. You withdraw the money from PayPal, stick it somewhere PayPal can't access it and, if someone requests a refund or files a chargeback, PayPal is stuck with the bill.

Ergo, if you make a regular habit of emptying your PayPal account, there's a good chance you're putting yourself in a "high risk" category.

So you're suggesting the solution to all this would be to let an entity who at a whim can snatch your funds and refuse to give them back for six months hold all your money?

Once in a while when a refund did come through it was covered by the new revenue that had come in that day or I simply transferred money from my main bank account into the one connected to my PP account.

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Dan C. Rinnert

14 years ago

Originally Posted by mattlaclear

So you're suggesting the solution to all this would be to let an entity who at a whim can snatch your funds and refuse to give them back for six months hold all your money?

Once in a while when a refund did come through it was covered by the new revenue that had come in that day or I simply transferred money from my main bank account into the one connected to my PP account.

You're concerned about PayPal, but they're concerned about you. There is no guarantee that new revenues will come in. They don't know if there is any money available for refunds or chargebacks in accounts outside of PayPal.

They see someone that empties out his account every night. So, at any time, you could skip town and leave them stuck with a bunch of potential refunds or chargebacks. If you were them, wouldn't you see that as risky?

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mattlaclear

14 years ago

Originally Posted by Dan C. Rinnert

You're concerned about PayPal, but they're concerned about you. There is no guarantee that new revenues will come in. They don't know if there is any money available for refunds or chargebacks in accounts outside of PayPal.

They see someone that empties out his account every night. So, at any time, you could skip town and leave them stuck with a bunch of potential refunds or chargebacks. If you were them, wouldn't you see that as risky?

Given the fact I ran this account this way for 40 months I doubt I would view it as risky behavior.

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Crew Chief

14 years ago

Originally Posted by Dan C. Rinnert

You're concerned about PayPal, but they're concerned about you. There is no guarantee that new revenues will come in. They don't know if there is any money available for refunds or chargebacks in accounts outside of PayPal.

They see someone that empties out his account every night. So, at any time, you could skip town and leave them stuck with a bunch of potential refunds or chargebacks. If you were them, wouldn't you see that as risky?

Dan, PayPal could easily resolve issues such as this but IMHO, why would they when they are collecting interest off the back end? Surely, you realize that they ARE INVESTING those frozen funds and making a killing?

I guarantee those monies are not sitting in a non interest bearing account.

The simple solution would be to set up reserves or a require each account to maintain a retainage. But if they did that, the income stream from the frozen funds would freeze up!

Giles, the Crew Chief

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John Henderson

14 years ago

Originally Posted by Dan C. Rinnert

They see someone that empties out his account every night. So, at any time, you could skip town and leave them stuck with a bunch of potential refunds or chargebacks. If you were them, wouldn't you see that as risky?

In the thread that Matt linked to in his OP, "ActiveTrader" says something about this very subject:

Also, I see many people on here recommend to withdraw all the money immediately when it's received... I disargee. Leave 10 to 20 % in your account at all times in case you need to issue a refund, someone files a dispute or a chargeback.

If your account does not have funds and someone files a chargeback your account will go negative and it will immediately flag it and make it limied until you restore the positive balance plus jump through their hoops to provide all kinds of documents they will ask you for.

Going negative is just one big reason your account will get in trouble.

http://www.warriorforum.com/main-int...ml#post2431839

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mattlaclear

14 years ago

Originally Posted by John Henderson

In the thread that Matt linked to in his OP, "ActiveTrader" says something about this very subject:

http://www.warriorforum.com/main-int...ml#post2431839

Using hindsight I can see how PP would feel this way. Maybe it would of been wise to keep 20% of our revenue in the account. But they're the ones missing out for shutting down my account. Last I checked they were receiving a god chunk of change from my account.

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Dennis Gaskill

14 years ago

Originally Posted by TinkBD

I agree with you completely, but the fact remains that PayPal is not REGULATED the way a bank would be... which is where the problems come in...

If enough people with legitimate complaints started reporting Paypal to their state's attorney general, senators, congressional representatives, and other regulatory agencies, sooner or later someone would look into them and perhaps propose regulations. Of course, that would likely raise the fees we're all charged, so it might be a case of being careful of what you wish for.

Originally Posted by mattlaclear

There's a good chance that that is what threw up a red flag. That might have put you into the "potentially high risk" category. If someone were to request a refund, there'd be no money in the account for PayPal to issue the refund. And, for all they know, you're emptying out your bank account every day too. (There was a thread not too long ago on here on how PayPal would get stuck on situations like these.)

So you're suggesting the solution to all this would be to let an entity who at a whim can snatch your funds and refuse to give them back for six months hold all your money?

I didn't read that into it. I thought he simply suggested why your account was flagged for the edification of everyone. I've read the same thing many times. If you have thousands going into the account everyday, or even just hundreds, it surely can't hurt to leave $500 to $1,000 there to cover refunds and give them some assurance there is a cushion to cover refunds. That's what I do, and it's nice to have money there for my own purchases as well.

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Crew Chief

14 years ago

Originally Posted by Zeus66

Dan's right... Paypal isn't "out to get" anyone who has this happen but didn't do anything they perceive to be wrong. PP is just covering its ass.

John, I'm not disagreeing with your statement by any stretch of the imagination. But to be clear, PP can choose a much better option than altogether blindsiding legitimate businesses.

I think everyone can agree with that.

As a business they have a fiduciary responsibility to protect all parties in every transaction. I got that! They also have a right to cancel a relationship they deem is detrimental to their bottom line; I got that!

But I'm questioning their methodology in doing so.

Essentially, what they are saying is, "You are guilty until and unless you can prove your innocence."

AND, in other cases that I've seen such as Matt's, you don't get a chance to prove anything?

Until today, I was still on the fence about this issue because there seemed to be a lot of gray areas... interestingly, according to PP, ALL on the seller's side.

But upon further review, this is more of a major company taking unjust actions it feels there won't be any legal or financial repercussions.

I used to own a IT contracting firm before going full time in Internet Marketing and one major IT company I did business with had a propensity for slamming contractors on the same level of what PP does.

When I saw what was going on and could confirm it with incontrovertible evidence, I sequestered some of the top contractors together and sat them down with my attorneys.

In short, my attorneys nailed their arses to wall. We're still in litigation but they've changed that whole system of freezing a contractor's earned funds at their whim for no reason.

Here's my take - I am fully persuaded beyond a shadow of a doubt that those FROZEN FUNDS are a bonafide income stream that PP counts as part of its bottom line the same way a grocery store counts milk and bread towards it's bottom line.

AND, here's the sobering reality; PP won't halt this arbitrary conduct until victims start holding them accountable in a courtroom of law!

Giles, the Crew Chief

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halfpoint

14 years ago

Matt,

Can I ask how frequently you were in contact with them?

Did you contact them whenever you were expecting increases in your incoming funds or just contact them occasionally to stay in touch?

I'm extremely paranoid about getting my PayPal account frozen so I only leave enough in there to cover refunds and monthly payments but I try to contact them every few weeks just to make sure there is nothing that could potentially cause me problems.

They're probably sick of hearing from me but I figure it's the best way to limit the risk of getting frozen.

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mattlaclear

14 years ago

Originally Posted by Pat Jackson

Matt,

Can I ask how frequently you were in contact with them?

Did you contact them whenever you were expecting increases in your incoming funds or just contact them occasionally to stay in touch?

I'm extremely paranoid about getting my PayPal account frozen so I only leave enough in there to cover refunds and monthly payments but I try to contact them every few weeks just to make sure there is nothing that could potentially cause me problems.

They're probably sick of hearing from me but I figure it's the best way to limit the risk of getting frozen.

To be honest Pat I never called them even once. Was too busy taking care of clients that I forgot too. Which is something we all have to concern ourselves with when we start bringing in extra clients.

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Black Hat Cat

Banned 14 years ago

Originally Posted by mattlaclear

First the good news...

Our monthly sales totals have reached the $17k - $20k mark mostly from extra revenue we have earned through the relationships we have built with other Warriors these last few months through wso's and such.

So things are going well in the LaClear household to say the least. Daddy loves putting bread on the table.

It seems Paypal did not like all the extra business I have been EARNING though...

Here's what I just received late last night:

So after 40 months without a single dispute on that account (I'm very quick to refund unruly, impatient and otherwise unhappy customers) my Paypal account has gone the way of the do do bird and Wooly Mammoth.

Any chance this was a free paypal account? Could be worse. At least it wasn't $50,000.00.
Paymentech Merchant Account Sucks

Originally Posted by DogScout

Two bank accounts. One linked to PP. Withdraw from PP and transfer on-line to 2nd non-attached account. They can not get that money.

Keep telling yourself that, lol.

I think PP may be need the Class Action lobotomy and a Class Action enema to help them develop more user friendly policies.

Giles, the Crew Chief

Ahh yes, let's give the money to lawyers instead. Just curious, but, do you really think Paypal hasn't checked out the legalities of what they're doing here? What are you going to sue them for, following the law?

Originally Posted by mattlaclear

So you're suggesting the solution to all this would be to let an entity who at a whim can snatch your funds and refuse to give them back for six months hold all your money?

What else are you going to do....pretty much every merchant account has this option.
Merchant Account Hold: No money in, no money out
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Originally Posted by TinkBD View Post
I agree with you completely, but the fact remains that PayPal is not REGULATED the way a bank would be... which is where the problems come in...

You're right...they're regulated the way a merchant account/money transfer business would be. Let's not pretend they aren't regulated simply because they aren't a bank.

I am fully persuaded beyond a shadow of a doubt that those FROZEN FUNDS are a bonafide income stream that PP counts as part of its bottom line the same way a grocery store counts milk and bread towards it's bottom line.

Giles, the Crew Chief

It doesn't matter if you are persuaded. That and 50 cents will buy you a can of Coke down the road from me. Can you prove it? If it is, it's a poor strategy. They would make more by letting him continue to process sales.

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sal64

14 years ago

Originally Posted by Dennis Gaskill

If enough people with legitimate complaints started reporting Paypal to their state's attorney general, senators, congressional representatives, and other regulatory agencies, sooner or later someone would look into them and perhaps propose regulations. Of course, that would likely raise the fees we're all charged, so it might be a case of being careful of what you wish for.

I didn't read that into it. I thought he simply suggested why your account was flagged for the edification of everyone. I've read the same thing many times. If you have thousands going into the account everyday, or even just hundreds, it surely can't hurt to leave $500 to $1,000 there to cover refunds and give them some assurance there is a cushion to cover refunds. That's what I do, and it's nice to have money there for my own purchases as well.

Nicely put, Dennis.

I guess that one advantage of Clickbank is they hold back for refunds.

But it takes me 2 weeks after the check is issued for it to arrive in Australia.

A colleague had the same problem... so make sure that none of your sales copy mentions anything remotely like MLM.

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mrdomains 14 years ago

Sorry to hear of your troubles Matt.

All this freezing going on is probably a long-term scheme by PP to soften up those with high-volume accounts for the upcoming Paypal VIP Unstoppable Accounts with a "DeLuxe Dedicated Personal PP Manager!" - a servicethat will obviously come at a premium cost.

Seriously though, they may not be a bank but I´m surprised they don´t have a better policy/system of account managers with whom we can build relationships. At least then you would know who hit the button and be able to supply whatever info they need.

Seems a bit counterproductive on their part. As OP points out, he´s been putting bread on their table too.

Matt, were you using PP manager / payflo?
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joshril

14 years ago

Originally Posted by Dan C. Rinnert

You're concerned about PayPal, but they're concerned about you. There is no guarantee that new revenues will come in. They don't know if there is any money available for refunds or chargebacks in accounts outside of PayPal.

They see someone that empties out his account every night. So, at any time, you could skip town and leave them stuck with a bunch of potential refunds or chargebacks. If you were them, wouldn't you see that as risky?

Dan's hit the nail on the head here... Like any business, PayPal is going to look at a ratio of profit vs. risk. Sure, you're making PayPal some money in the form of fees, but if you had substantial refunds/chargebacks, etc. and there's no funds in your account every night after you empty it, PayPal has no recourse.

I don't know what your average transaction size is, but it wouldn't take too many chargebacks in many cases to put PayPal on the losing end of the relationship.

Am I suggesting you would skip town or not honor a refund? No. But PayPal doesn't know you. I'm sure they have algorithms that set off red flags similar to what the IRS uses to initiate an audit.

Something you did triggered a red flag, and I suspect it was a combination of sweeping the funds out of your account daily as well as an increase in sales/business.

Although you hear horror stories about PayPal, this same thing can happen with other merchant accounts as well. There are a few threads relating to this here on the Warrior Forum.

Sorry to hear about your issue though. I have quite a bit of money that goes in and out of PayPal, so stories like these certainly make me nervous. That's one of the reasons that I have 2 other merchant accounts setup besides PayPal, so I can quickly resort to a Plan B or even Plan C if necessary.

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All Night Cafe

14 years ago

Originally Posted by mattlaclear

Luckily I only had $5k in the account. I was always very diligent to empty the account every night before I went to bed. But had forgotten to do so these last few days. Luckily the payments were from a few great customers of mine so all i did was refund it back to them and they paid me through another merchant account.

Thanks for let us know. I had not thought to empty
my account each night. that is powerful info for us.

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George Wright

14 years ago

Hi Ron,

As you said, you probably don't have anything to worry about, however, uploading funds to your bank is not a protection, PayPal can grab that back. The best way is to withdraw with a paypal debit card at an ATM. Then again, $15k, wow, you'd hold up the line a bit.

George Wright

Originally Posted by Ron Douglas

That does suck. I just transferred $15k out of PayPal to my bank account. It doesn't make sense to hold a balance with this PayPal slap happening so frequently.

I don't think I'm at risk too much though because I sell a lot of physical products with shipping confirmations as proof. Occasionally they do an internal audit on one or two of my transactions but the shipping confirmation code helps.

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Marhelper

14 years ago

Congrats on your success but sorry to hear another sad paypal story ... makes no sense.

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missmystery

14 years ago

I'm so sorry

That's really stink. I hope this gets sorted, it can't be nice for your family to hear either after doing so well.

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Devon Brown

14 years ago

So did they cut you off primarily because you made more that month than any other month and it was unusual and high risk? I wonder if they cut off ebayers.

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mattjay

14 years ago

that sucks matt, i know you are honest and provide outstanding services. there are other payment proccesors though. sucks you have to wait 180 days for 5gs i'd lose my mind on that one. best of luck to you.

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Rob Maggs

14 years ago

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theory expert Banned 14 years ago

Originally Posted by moonfish

I read the other thread you mentioned too, and a few merchant accounts were mentioned,

Rob

Isn't all merchant account providers the devil when your bringing in large amounts of money? At least that's what I have heard
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- mattlaclear 14 years ago
  
  Originally Posted by janok
  
  Isn't all merchant account providers the devil when your bringing in large amounts of money? At least that's what I have heard
  
  After today I will spread out the payments we receive between 3 different merchant account providers. If any of them get close to $10k a month I will set up additional accounts if need be.
  
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- DogScout 14 years ago
  
  Originally Posted by janok
  
  Isn't all merchant account providers the devil when your bringing in large amounts of money? At least that's what I have heard
  
  They have to fill out extra paper work for anything over 5K a month (used to be 10K) as a 'suspicious transaction' to the Treasury department in charge of money laundering. (That was part of my job at the dealership I worked at. For car dealerships were included in the definition of 'financial institutions' in the body of the money laundering law.)
  
  In most cases, the Treasury dept never looks at it twice if it fits in with normal cash flows, but when a substantial increase in any account is flagged by the system, a human then looks at it.
  
  Processors face large fines if they do business with anyone that 'acts' in anyway that a money launderer might act, even if there is no laundering going on. (I know of 14 people that did prison time AFTER doing the paperwork on customers that were NOT laundering based on the premise that because of the 'unusual activity' of the accounts in question, they SHOULD have guessed that illegal activity was going on... even though no illegal activity was going on. Crazy, but true.
  
  The new regulations (old now, i guess) state that you are only allowed to do business in excess of 5K a month with parties that are 'known' to you. Federal ID's go only so far in verifying an identity as they are easily forged well enough for a scanned copy.
  
  A processor you can deal with in person will be much less likely to freeze or otherwise mess with your accounts.
  
  Most local banks also have on-line processing systems. They are not well known for that service, but work as well as any and because you can bring an ID to them physically, you remove most of the threat that they will close or freeze you due to worrying you are either laundering money or skimming.
  
  (A business owner that does not report cash income is 'skimming' and is considered to be both defrauding the IRS AND laundering money, more crazy stuff.)
  
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Neil Morgan

14 years ago

Apparently in Europe, PayPal was granted a banking license and therefore is regulated as a bank by the relevant authorities. Google it. There's lots on it from around 2007.

What difference that makes in reality, who knows?

Cheers,

Neil

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tpw

14 years ago

Originally Posted by Neil Morgan

Apparently in Europe, PayPal was granted a banking license and therefore is regulated as a bank by the relevant authorities. Google it. There's lots on it from around 2007.

What difference that makes in reality, who knows?

I bet it might make a difference if you lived in Europe...

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DogScout

14 years ago

Two bank accounts. One linked to PP. Withdraw from PP and transfer on-line to 2nd non-attached account. They can not get that money.

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TinkBD 14 years ago

Originally Posted by DogScout

Two bank accounts. One linked to PP. Withdraw from PP and transfer on-line to 2nd non-attached account. They can not get that money.

Yep... that's what I do (and recommend to my coaching clinets) .

When I went in to set it up my bank manager complimented me on doing this. ;-)
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- Hanz 14 years ago
  
  Matt, did or do you have an alternate paypal account to continue your business while your other one is frozen?
  
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  mattlaclear 14 years ago
  
  Originally Posted by Hanz
  
  Matt, did or do you have an alternate paypal account to continue your business while your other one is frozen?
  
  Hi Hanz...yes we are using my partners Paypal we had set up just in case something like this happened. You can never be too over cautious!
  
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- Tina Golden 14 years ago
  
  The only problem with setting up the second bank account not connected to your PayPal account, is that PayPal can still try to get money. What happens is you start racking up insufficient funds fees and then you owe the bank. So don't count on this system to totally protect you.
  
  Tina
  
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Neil Morgan

14 years ago

I bet it might make a difference if you lived in Europe...

True.

Not wishing to hijack the OP's thread but thought it might give a little comfort to those in Europe.

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Crew Chief

14 years ago

Originally Posted by secrets2010

I've heard that paypal doesen't like that we empty the account every night...they would prefer that we leave the money that we have earned more time on the account...just in case...

IMHO, this has to do more with PP earning interest as opposed to protecting the buyer, seller or Paypal.

Originally Posted by DogScout

Two bank accounts. One linked to PP. Withdraw from PP and transfer on-line to 2nd non-attached account. They can not get that money.

True, but that's a tense way of doing business isn't it?

Giles, the Crew Chief

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DogScout 14 years ago

Originally Posted by Crew Chief

True, but that's a tense way of doing business isn't it?

Giles, the Crew Chief

5K held for 6 months is pretty tense, as well!
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addykho

14 years ago

I have been selling online for many years and I know paypal has always been favouring buyers and their bank.Not to mention I always lose out in the dispute even though I can provide tracking no etc. I guess I should also look into alternative payment gateway.

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GSX

14 years ago

PP is pretty ridiculous and I'm waiting for the day a large enough class action suit is filed against them to finally put them in their grave. While this will never happen I've had numerous run ins with them in running Twitter1k and it's driving me (and the other 2 in the company) nuts.

-Collins P

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harro1

14 years ago

That's why i dont keep more than $500 in my paypal account.

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Hanz

14 years ago

Originally Posted by harro1

That's why i dont keep more than $500 in my paypal account.

Reminds me of a thread I saw one time where somebody had a screenshot showing over $500,000 in their Paypal account.

Raised a ton of suspicion! The forum was on to him. Not sure why anybody would keep so much in their Paypal account.

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harro1

14 years ago

Originally Posted by Hanz

Reminds me of a thread I saw one time where somebody had a screenshot showing over $500,000 in their Paypal account.

Raised a ton of suspicion! The forum was on to him. Not sure why anybody would keep so much in their Paypal account.

I had $45,000 in my paypal last year and they blocked it for 2 month or so, after that i never kept more then $500 in paypal and i would suggest everyone to withdraw funds within 1-2 weeks.

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R Hagel

14 years ago

Did you use PP for the WSO listed in your sig?

I ask because there's a potential red flag sitting right at the top of your sales letter. You say:

You're looking for a way to recruit others into your downline.

And PP's acceptable use policy says:

You may not use the PayPal service for activities that... 3.relate to transactions that ... support pyramid or ponzi schemes, matrix programs, other “get rich quick” schemes or certain multi-level marketing programs

(from https://cms.paypal.com/us/cgi-bin/?&...locale.x=en_US)

Your use of the word downline probably raises the red flag for "supporting" certain MLM programs.

Of course, I'm just speculating (along with everyone else in the thread).

cheers,
Becky

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x3xsolxdierx3x

14 years ago

...has anyone had any luck with communicating with Paypal?

...and, say you were expected a huge influx of cash into the account, as a result of a product launch or some other promotion, do you all think it would be wise to proactively call/email Paypal and let them know that you expect some 'unusual' things to occur with the account because of promotion you had arranged? (Having a large marketer promote a product as an affiliate, etc?)

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halfpoint

14 years ago

Originally Posted by x3xsolxdierx3x

...has anyone had any luck with communicating with Paypal?

...and, say you were expected a huge influx of cash into the account, as a result of a product launch or some other promotion, do you all think it would be wise to proactively call/email Paypal and let them know that you expect some 'unusual' things to occur with the account because of promotion you had arranged? (Having a large marketer promote a product as an affiliate, etc?)

Yes, it's very important.

Call them and give them a rough estimate of figures and also the time period so they can put a note on your account in case it gets flagged.

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Istvan Horvath

14 years ago

Originally Posted by x3xsolxdierx3x

...has anyone had any luck with communicating with Paypal?

...and, say you were expected a huge influx of cash into the account, as a result of a product launch or some other promotion, do you all think it would be wise to proactively call/email Paypal and let them know that you expect some 'unusual' things to occur with the account because of promotion you had arranged? (Having a large marketer promote a product as an affiliate, etc?)

Yes. I called them even before my first WSO here because I was hoping for a higher "influx"... :p

And that's exactly what I told them: I expect a sudden increase in payments during a day or two when the launch will happen, so please make a note about it on my account.

I asked them if there was anything I could do to make sure everything would be fine; they thanked me for letting them know and asked if there was anything they could do for me. Really!

Regardless, I also think that their terms and policies are as they are because they have an almost monopoly and can dictate... Nor do I say they are always right and nice.

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sal64 14 years ago

They make a tidy profit on the exchange rate spread also.

My question is: Are you receiving funds directly or via a payment processor such as ejunkie, clickbank or similar?

If anyone can enlighten me, I'd be appreciative.
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- Istvan Horvath 14 years ago
  
  Originally Posted by sal64
  
  They make a tidy profit on the exchange rate spread also..
  
  Don't even go there :rolleyes:
  It drives me nuts every time I have to withdraw funds...
  
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  sal64 14 years ago
  
  Originally Posted by Istvan Horvath
  
  Don't even go there :rolleyes:
  It drives me nuts every time I have to withdraw funds...
  
  Well, I now leave some funds in there to pay vendors and use direct debit.
  
  Try this one on...
  
  The AU$ trades at 0.90 USD... they give me 0.87 when I'm paying and 0.93 when I withdraw.
  
  Not to mention their processing fees.
  
  Plus, if it goes via my CC, then I get a foreign currency transaction fee of about $3 from my bank!
  
  Oh for the good old days when the Aussie dollar was trading at $0.70 USD!
  
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warrior4life 14 years ago

From now on, please do not leave large sums of money into your paypal account. withdraw most of it and leave a small portion of it in your account.
Yes, I agree, paypal sucks! But on the other hand, can we do much more without them? Just a thought.
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Dave d

14 years ago

There are so many threads on here praising Pay Pal saying you only get the ban hammer if you do something wrong and thats simply not true.

When I was an ebayer it happened to me twice. The first time they froze my funds for 180 days and then released it after they concluded their investigations although while it was frozen I had to restructure my whole ebay business. As somebody else says I bet it was not sitting in a non interest account

The second time it happened it was because my partner and I had the same address after she moved in with me and since then I have been banned forever. They thought I was obviously dodgy with 2 Pay Pal accounts at the same address.

Now I share my partners Pay Pal and we never leave more that $1000 in there because I know what they are capable off.

Bottom line Pay Pal can turn the tables on you at any time and screw you and they make all the rules so be careful because it may happen without warning.

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John Romaine

14 years ago

Sorry to hear dude - Ive had a love hate relationship with PP for a long time. Hearing this though, does make me a little nervous, even though my account is clean.

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kitkat73

14 years ago

That really stinks! Good that you have other merchant accounts ready ~ that is just crazy... I think it's time for PayPal reform... or someone to come up with a bigger better version... idk

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Anonymous Affiliate

14 years ago

I don't know guys, I've never had a bad experience with PayPal. During my first year in IM, before I discovered Clickbank and the such, I conducted all my business through PayPal. At one point I had over $40k sitting there and I never had a problem with them to be honest.

PS: now a days I only use PayPal for minor stuff like paying my outsourced labor.

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Zeus66

14 years ago

Dan's right... Paypal isn't "out to get" anyone who has this happen but didn't do anything they perceive to be wrong. PP is just covering its ass. I know because a PP rep told me several years ago that you absolutely red flag your account if you routinely clean it out by withdrawing to your bank acct. They review those accounts - and they should! It costs them time and money to have to pursue you if you do that and then a bunch of refund requests and chargebacks roll in. PP has to protect itself. That's the way to view this. It sux for the OP, who was obviously doing nothing wrong in terms of his business practices. But from PP's point-of-view, he's risky simply because he was clearing out the account regularly and had large amounts flowing through it. They should not have shut him down, since he'd been clean for 3½ years, but to put his acct. under scrutiny was absolutely the right call from PP's perspective.

John

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Brad Gosse

14 years ago

Been there done that. Got the account back after making a stink.

This is part of growing pains online. Happens with merchant accounts in a different way. They don't freeze you they hold you hostage for deposits to cover your potential frauds later.

Lot's of people will quit their business at this point. It's extremely frustrating.

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Alfred Shelver

14 years ago

Wow damed if you do damed if you don't I dont have enough money in PP yet to ever cause a fuss then if I get all successfull I might make them angry and lose the account.

Matt did you phone and speak to anyone personally I was very impressed with their customer call center

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goindeep

14 years ago

You guys should consider your own ecommerce gateway especially those rolling the big bucks. It makes no sense to let a third party handle that much money with their own terms and conditions. Some ecommerce gateways are very flexible affordable now days

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mattlaclear

14 years ago

Originally Posted by Andrei Rotariu

You guys should consider your own ecommerce gateway especially those rolling the big bucks. It makes no sense to let a third party handle that much money with their own terms and conditions. Some ecommerce gateways are very flexible affordable now days

That actually is a really good idea worth further considering for sure. Have any suggestions who to speak to regarding getting one set up?

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Orator

14 years ago

Sorry to hear about your troubles Matt. I really don't know enough to cast judgment on PP in regards to this situation. All I can do is wish you better luck, and hope things get back to normal for you as soon as possible.

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mikemac1

14 years ago

You think you have it bad with PayPal...

"What It's Like To Suddenly See Your Bank Account at Negative $900,000 Thanks to PayPal"

This morning, 24-year-old web developer Derek Lanphier started seeing fraudulent charges on his PayPal account, adding up to about $3,000. Then, moments later, his bank account balance was at -$888,871.91.

In all seriousness, this really sucks that this happened to you Matt but thanks for starting this thread and I will be following it and the advice that is being given here.

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CACruiser

14 years ago

Matt: Sorry to hear about the PayPal debacle. At least you did withdraw from the account regularly. Many of us who have smaller cash flows may be devastated by a freeze by PayPal. Thanks for raising awareness. Also how about some input on what other providers are out there? All input from Warriors would be appreciated.

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karmah

Banned 14 years ago

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Crew Chief

14 years ago

Originally Posted by Black Hat Cat

Ahh yes, let's give the money to lawyers instead. Just curious, but, do you really think Paypal hasn't checked out the legalities of what they're doing here? What are you going to sue them for, following the law?

Yeah, I'm positive PP checked out the legalities!

When companies and individuals are taking advantage of others, they normally set things up so that they look too legit to quit.

Just like Enron did...

Just like the investor Laurence Isaacson did...

Just like William Pierre Crotts did...

Just like Madoff did...

Say what you want, but it doesn't take a rocket scientist to understand that the funds from those frozen accounts are an income stream for PP.

In terms of legalities, they are not following by the LAW as you put it. Their TOS is written in what is called in legalese, "A contract by adhesion" Go look it up my friend! It's a one sided agreement crafted to benefit PP and provide no one else with any real rights.

The good news is; any sharp bulldog attorney with pure litigation backbone can shred PPs TOS to pieces.

As far as your comment about paying lawyers, that's why all smart business people [including all smart IMers] keep attorneys on retainer; to protect their rights and interests.

Giles, the Crew Chief

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Anonymous Affiliate

14 years ago

Even though I've used PayPal extensively in the past, now a days I believe that PayPal is not meant to be used as your main payment gateway: clickbank, plimus or even your own merchant account are way better for that. I think PayPal is best used for minor transaction, quick online money transfers, etc.

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CheapTrafficDude

12 years ago

Wow, so that's why I wasn't able to purchase more of your AMAZING service, Matt.

You know, I used to always defend PP in here, now, I have enough hatred for them that I've closed both my personal and corporate accounts with PayPal, screw'em. I even called in and told them why and they pretty much didn't seem to care to say the least, even tho they make a decent amount of cash (to me it is) from my purchases and sales. Just blows that I have to change all my aff network preferred payment method to check but I think its for a good cause.

I sincerely hope you get your money back Matt and I'll be waiting with cc in hand once you find a new service provider. I'm personally upset that PP refused payment just a day or two ago when I tried to get some more of your services.

Just, please, don't go with Plimus, their service is awful (sorry if anyone likes them), thy're another one of them services that doesn't seem to like money.

Thanks Matt, for your amazing service and opening my eyes about PayPal. Which ever decision you make, you will get my support!

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