Paypal BS... this might be affecting you too

27 replies
I received the following from Paypal today and would normally not call this BS... but it clearly is.

My paypal account activity has remained the same for the past 2 years... no refunds or claims in over 3 years... My IM sales stuff doesn't go through PP. My wife received this as well and nothing has changed with her account either. I don't even think she has EVER had a refund or claim on her account in the 7 years she has had it. She uses it mostly for personal stuff.

Anyway, here is the email we got...

----------
We're writing to let you know about a change to your PayPal account.

Starting 7/17/2011, money from payments you receive will be placed in a pending balance for up to 21 days. By doing this, we're making sure that there's enough money in your account to cover potential refunds or claims.

Even though you can't access the money right away, please ship orders quickly and communicate with your customers. After 21 days, you can withdraw money from each payment as long as the customer hasn't filed a dispute, chargeback, claim, return, or reversal.

The money may be available sooner if:
We can confirm that the item was delivered.
Your buyer leaves positive feedback. (Applies only to eBay items)
This change isn't necessarily permanent. We'll review your account every 35 days and re-evaluate if we should continue to hold your payments. If we decide to stop holding payments, we'll email you to let you know.

Why are my payments being held?
We reviewed your account and determined that there's a relatively higher than average risk of future transaction issues (such as claims, or chargebacks, or payment reversals). We understand that it may be inconvenient to have your payments temporarily held but please know that we didn't make this decision lightly.

Before deciding to hold payments, we consider many factors. These factors include account and transaction activity, the rate of customer disputes, the type of business a seller runs, average delivery timeframes, customer satisfaction, performance and history.

Questions? Let us know
We understand you'd like to have immediate access to the money you receive and we're here to answer your questions about this change to your account.

For more information and tips on what you can do to avoid having your future payments held, please see our Frequently Asked Questions. To speak to a Customer Service representative, log in to your PayPal account and click "Contact Us" at the bottom of any page.

Thanks,
PayPal

----------

Not sure how they are choosing the accounts or if they just shot this out to everyone (the letter seems to indicate it is NOT everyone).

So here is the heads up that you may not have immediate access to your funds in Paypal. Might want to go check your email account hooked to Paypal to find out.
#affecting #paypal
  • Profile picture of the author ErnieB
    I got a statement email today but not one of those. That would suck if that happened to me.
    {{ DiscussionBoard.errors[4283347].message }}
  • Profile picture of the author WillR
    I haven't had that email... yet (fingers crossed). If I did though it wouldn't concern me too much. You may have to wait the first 21 days but once you have done that then you will be in the exact same position you are now.

    Just be thankful you still have access to your funds.
    {{ DiscussionBoard.errors[4283357].message }}
    • Profile picture of the author gefflong
      Originally Posted by WillR View Post

      I haven't had that email... yet (fingers crossed). If I did though it wouldn't concern me too much. You may have to wait the first 21 days but once you have done that then you will be in the exact same position you are now.

      Just be thankful you still have access to your funds.
      I'm not concerned about not having access to my funds... just thought this was a crappy move when my account hasn't changed as far as funds coming in and going out go... and I haven't had any kind of refund or anything in over 3 years. Not sure why they all the sudden decided to do that.

      Not killer blow, but certainly very much a pain in the butt.
      {{ DiscussionBoard.errors[4283375].message }}
      • Profile picture of the author E. Brian Rose
        Originally Posted by gefflong View Post

        I'm not concerned about not having access to my funds... just thought this was a crappy move when my account hasn't changed as far as funds coming in and going out go... and I haven't had any kind of refund or anything in over 3 years. Not sure why they all the sudden decided to do that.

        Not killer blow, but certainly very much a pain in the butt.
        If that is the case, I suggest that you contact PayPal's risk management department and ask them why they have placed this limitation on you.
        Signature

        Founder of JVZoo. All around good guy :)

        {{ DiscussionBoard.errors[4283384].message }}
  • Profile picture of the author entrepreneurjay
    Hopefully Paypal is not singling out internet marketers in general one by one slowly one's that sell information or digital products like a lot of us.

    That does suck I am glad there are alternatives just in case ..... I am sorry to hear that it does not sound fair at all!

    But like Will said on the brighter side it could be worse. Maybe you will save a little more and spend less because of the longer waiting times to actually get your funds.
    {{ DiscussionBoard.errors[4283366].message }}
  • Profile picture of the author E. Brian Rose
    Just curius, do you have a lot of complaints, refunds, or chargebacks?

    While this is certainly not a good thing, I have seen and experienced much worse. The bright side is that you still have a working PayPal account.

    I suggest looking into an alternative payment method for products and dealings that do not require you to have a PayPal account. Those that do require such, will still go into your quasi-restricted account.

    This will at least keep your money flowing in.
    Signature

    Founder of JVZoo. All around good guy :)

    {{ DiscussionBoard.errors[4283367].message }}
    • Profile picture of the author gefflong
      Originally Posted by E. Brian Rose View Post

      Just curius, do you have a lot of complaints, refunds, or chargebacks?

      While this is certainly not a good thing, I have seen and experienced much worse. The bright side is that you still have a working PayPal account.

      I suggest looking into an alternative payment method for products and dealings that do not require you to have a PayPal account. Those that do require such, will still go into your quasi-restricted account.

      This will at least keep your money flowing in.
      Maybe I need to clarify this a bit more.

      No, I don't have complaints or refunds on this account... I actually don't use it all that much, so it doesn't affect me that much. None of my IM stuff goes through this account at the moment and hasn't for a couple years. I mean, I've paid people with the account and received some fund for jobs I've done, but no actual IM sales pages or anything go through paypal.

      Not sure what's up with that.
      {{ DiscussionBoard.errors[4283397].message }}
      • Profile picture of the author richgrad
        Originally Posted by gefflong View Post

        Maybe I need to clarify this a bit more.

        No, I don't have complaints or refunds on this account... I actually don't use it all that much, so it doesn't affect me that much. None of my IM stuff goes through this account at the moment and hasn't for a couple years. I mean, I've paid people with the account and received some fund for jobs I've done, but no actual IM sales pages or anything go through paypal.

        Not sure what's up with that.
        Maybe you were picked at random then?
        {{ DiscussionBoard.errors[4283441].message }}
      • Profile picture of the author WillR
        Originally Posted by gefflong View Post

        Maybe I need to clarify this a bit more.

        No, I don't have complaints or refunds on this account... I actually don't use it all that much, so it doesn't affect me that much. None of my IM stuff goes through this account at the moment and hasn't for a couple years. I mean, I've paid people with the account and received some fund for jobs I've done, but no actual IM sales pages or anything go through paypal.

        Not sure what's up with that.
        Ok, another question. WHEN you do use your Paypal account, do you have a habit of taking out any money you are paid as soon as you receive it or very close to the time you receive it?

        You need to think about it from their side too. They may be singling out those who have a history of taking out all their money and not leaving a running balance to cover things such as refunds and/or chargebacks IF they happen. Yes, you may not have had any refunds or chargebacks in the past but that is not to say you won't have them in the future... and if there is no money in your account to cover such things then you become a risk to Paypal.

        Considering customers have 45 days or whatever it is to dispute a transaction with Paypal, you should always be keeping at least 20 - 30% of any funds you have received in your Paypal account for that length of time to show Paypal you are not a high risk customer.
        {{ DiscussionBoard.errors[4283470].message }}
        • Profile picture of the author gefflong
          Originally Posted by WillR View Post

          Ok, another question. WHEN you do use your Paypal account, do you have a habit of taking out any money you are paid as soon as you receive it or very close to the time you receive it?

          You need to think about it from their side too. They may be singling out those who have a history of taking out all their money and not leaving a running balance to cover things such as refunds and/or chargebacks IF they happen. Yes, you may not have had any refunds or chargebacks in the past but that is not to say you won't have them in the future... and if there is no money in your account to cover such things then you become a risk to Paypal.

          Considering customers have 45 days or whatever it is to dispute a transaction with Paypal, you should always be keeping at least 20 - 30% of any funds you have received in your Paypal account for that length of time to show Paypal you are not a high risk customer.
          Very good point! Thank you for bringing that up.

          We did have a habit of transferring most of the money to a bank about once a month in the past.

          However, we have not done that in 2011. I suppose you could be on to something with that thought. Just seems odd they would do it right now... since we've had a balance in there for over 7 months and have not transferred anything out. Just paid for some stuff out of it and used the debit card to pay for a few things.

          If Paypal didn't make me so gun shy, we probably would have left balances in there the past few years. However, with their policy of being able to freeze any account, any amount of money at any time... I've always been leery of leaving any kind of a large balance in there.

          It's the proverbial catch 22 situation.

          Length of time having the account without trouble should count for something. I've had this account since October 2000.
          {{ DiscussionBoard.errors[4283529].message }}
          • Profile picture of the author E. Brian Rose
            Originally Posted by gefflong View Post


            If Paypal didn't make me so gun shy, we probably would have left balances in there the past few years. However, with their policy of being able to freeze any account, any amount of money at any time... I've always been leery of leaving any kind of a large balance in there.

            It's the proverbial catch 22 situation.
            That's a great point. PayPal enticed people to leave their money in their accounts by hooking you up to a money market account. They paid you interest on the money that you left in there, but at the same time, had the ability to freeze that money at will... and they did many times over.

            This is a huge breach of trust that they have put on themselves.

            In case you are wondering how much money they keep in their frozen account coffers... I don't know for a fact, but I have heard it is over a billion dollars at any given time. Who gets the interest on that frozen money? They do, of course.
            Signature

            Founder of JVZoo. All around good guy :)

            {{ DiscussionBoard.errors[4283561].message }}
        • Profile picture of the author Jeremy Kelsall
          Originally Posted by WillR View Post

          Ok, another question. WHEN you do use your Paypal account, do you have a habit of taking out any money you are paid as soon as you receive it or very close to the time you receive it?

          You need to think about it from their side too. They may be singling out those who have a history of taking out all their money and not leaving a running balance to cover things such as refunds and/or chargebacks IF they happen. Yes, you may not have had any refunds or chargebacks in the past but that is not to say you won't have them in the future... and if there is no money in your account to cover such things then you become a risk to Paypal.

          Considering customers have 45 days or whatever it is to dispute a transaction with Paypal, you should always be keeping at least 20 - 30% of any funds you have received in your Paypal account for that length of time to show Paypal you are not a high risk customer.
          Are you gunning for a job at PayPal? lol

          This is just an observation, but...

          Every single thread that I've seen where someone has had an issue, you've consistently sided with paypal and "favored" their interests over those getting their accounts closed, limited, and altered.

          I think that you're under the impression that everything that they do...they do for a reason, or because somehow the person on the other end of getting bent over has somehow violated their TOS, which isn't even close to the case.

          Let me share MY story with you...

          A little more than a year ago, my partner and I both had our accounts limited with a combined SUBSTANTIAL amount of money in our accounts. Collectively, our refund rate was/is under 1/2 of a percent, during out 3 years almost of business, we've had 2 chargebacks, and very rarely every had anything less than 5 figures in our account(s).

          One day, out of the blue, we got the dreaded email. First him, then me, within a half hour of each other. So, we call them, thinking that we are going to get the usual deal..."send us this or that" and everything would be OK...Nope, not even close.

          We were told that both of our accounts were PERMANENTLY closed, and that they were going to keep our money for a period of 6 months. Above and beyond that, recent transfers that we had made to our bank accounts were REVERSED, and the money was returned to the PP account to be held for the 6 month period.

          The "story" we got was that we were considered "high risk" for pretty much the same reasons that the OP has outlined above, which baffled the hell out of both of us, because neither one of our accounts singularly, or collectively had any sort of "issues".

          After about a month, and repeated calls, we finally found out why our accounts had been limited...

          About 10 years ago, my partner had worked for a guy who at some point found his way on the bad side of paypal. I have no clue what the back story there is - They wouldn't tell us. However, because at some point, my partner about 5 years ago, had paid him for a service, his account was limited, and because of the close relationship that I have with my partner and the frequent payments we make to each other etc...my account was axed.

          Luckily, we were able to finally talk to someone with a little bit of common sense, who agreed to give our accounts back with the stipulation that we allow them to hold a 20% rolling reserve on each of our accounts.

          Most folks that are using PP have families to support, in our case, we also have hardware, software, office space, employees, business utilities, insurance, and other expenses to pay, which was difficult to do because a SUBSTANTIAL amount of money was "locked" up, and because recent transfers had been reversed.

          When you enter into an agreement with a company of this type (financial), especially with a business account, I think that most people have a sense of security that their money is "safe", and that if there ever is an issue, that there will at least be a conversation, or some sort of interaction to either verify or clear up any sort of issue that might be present. Sadly, that doesn't happen.

          I'm not saying that PP is out to cheat, rob, or steal from anyone, but I am saying that there are plenty of people who don't violate any sort of TOS that find themselves in a situation that they shouldn't be in. Obviously, PP carries a significant amount of risk with what they do, and they have to protect their interests, but I personally think that in many cases, the situation could and should be handled much differently than blind siding someone and freezing their funds for six months or longer.

          I'll wrap this up with this one last thought...

          Over the years since I've been on this forum, it's getting hard to count the number of people who were quick to jump in these threads and say things like....

          "you're not telling the whole story"
          "you must have done something wrong"
          "PP must have had a reason"

          Who one day were here on this very forum posting their own thread about how they didn't do anything, yet woke up one morning with their business, and their families financial security hanging in limbo because money that they thought they had was suddenly taken for half a year.
          {{ DiscussionBoard.errors[4290925].message }}
          • Profile picture of the author WillR
            Originally Posted by Jeremy Kelsall View Post

            Are you gunning for a job at PayPal? lol

            This is just an observation, but...

            Every single thread that I've seen where someone has had an issue, you've consistently sided with paypal and "favored" their interests over those getting their accounts closed, limited, and altered.
            No. Why, do you think I'd get one?!

            I am just a little sick of all these Paypal threads everyday now. The only threads I have commented in have been those where I know at least one of the products the person was selling at the time and I know the outrageous claims that were being made in their sales copy.

            Whether it was the sales copy that got their account suspended this time is totally irrelevant. The point I have been making and will continue to make is if they are doing ANYTHING that is against Paypal's terms... anything at all... they cannot then turn around and complain when their account is limited.

            It doesn't matter if that is the reason their account gets suspended or not... if you are making big bogus claims in your sales copy and using Paypal to process your payments then you have no leg to stand on.

            Your story may be a little different and I don't know what products your were selling at the time. However I find it very hard to believe the influx of WSO sellers having their Paypal accounts frozen has anything more to do than just the type of products they are selling (Get Rich Quick) and the outrageous claims being made in their sales copy.
            {{ DiscussionBoard.errors[4292508].message }}
            • Profile picture of the author gefflong
              Originally Posted by WillR View Post

              No. Why, do you think I'd get one?!

              I am just a little sick of all these Paypal threads everyday now. The only threads I have commented in have been those where I know at least one of the products the person was selling at the time and I know the outrageous claims that were being made in their sales copy.

              Whether it was the sales copy that got their account suspended this time is totally irrelevant. The point I have been making and will continue to make is if they are doing ANYTHING that is against Paypal's terms... anything at all... they cannot then turn around and complain when their account is limited.

              It doesn't matter if that is the reason their account gets suspended or not... if you are making big bogus claims in your sales copy and using Paypal to process your payments then you have no leg to stand on.

              Your story may be a little different and I don't know what products your were selling at the time. However I find it very hard to believe the influx of WSO sellers having their Paypal accounts frozen has anything more to do than just the type of products they are selling (Get Rich Quick) and the outrageous claims being made in their sales copy.
              Not sure how to take that comment.

              I certainly don't have any products hooked to my paypal account and haven't for over 5 years. I didn't do anything wrong with my PP account and I didn't break anything in their TOS.

              So I guess not "everyone" who has started a paypal thread here about having problems with pp has an errant sales page to explain the problem.

              In my case, it would appear that it was indeed a mistake by the software PP uses to flag accounts.

              At least PP was willing to admit the mistake, unlike Google... Who sticks to their guns no matter how wrong they are.
              {{ DiscussionBoard.errors[4301903].message }}
  • Profile picture of the author Michael Lewis
    I have had that exact email sent to me several times over the last year or so. They usually never hold anything on me that long. If I sell something on Ebay all I do is have to confirm shipment and/or get positive feedback from buyer and they release the funds. Though paypal still does hold like 20% of what I get for a month or so before releasing it. Thats not to much of a problem for me, I have learned to deal with it.

    I hope you don't have any more problems with your account. Maybe consider creating a backup for payments if your paypal account ever stays that way to long.
    {{ DiscussionBoard.errors[4283388].message }}
  • Profile picture of the author onegoodman
    That seriously s... I haven't received anything like that.

    If they do for any reason I would immediately move to my backup plan. I know not everyone will be happy with that but if something wrong with PayPal account, I can't shut my business waiting to resolve the issue.

    I implemented AlertPay as a pack up plan. so, if for any reason such a thing happen, I can immediately move to AlertPay.

    I suggest to keep having a back up plan. PayPal with no doubt is the biggest out there, but there are many other options like moneybooker, alertpay, hoobla, .. etc
    {{ DiscussionBoard.errors[4283485].message }}
  • Profile picture of the author Darrell Hagan
    Not sure why PayPal would target you for this but as someone suggested, you might call them and ask - if you can manage to talk to a live person that is.

    I abandoned PayPal long ago after they burned me on a transaction and then tried to charge me double the original item amount when my buyer (who paid via credit card thru PayPal) filed a chargeback on his credit card. I refused to pay anything because I had positive proof that the item was shipped via USPS.

    You are smart and quite correct to be leery of using PayPal for any substantial amount of money because they can and often do freeze and/or restrict accounts for vague reasons.

    If you manage to contact them and ask about this then please do let us know what they say.
    {{ DiscussionBoard.errors[4284009].message }}
    • Profile picture of the author Marketing Merit
      Originally Posted by Darrell Hagan View Post

      I abandoned PayPal long ago after they burned me on a transaction and then tried to charge me double the original item amount when my buyer (who paid via credit card thru PayPal) filed a chargeback on his credit card. I refused to pay anything because I had positive proof that the item was shipped via USPS.
      I'm in the process of dealing with my first ever chargeback for a digital download (that I can prove was downloaded!) and the bit that sticks in my throat is the additional charge. No seller protection for non-tangible goods of course. :rolleyes:

      Apparently, this charge originates from the card issuer and PayPal simply passes it on to the Merchant. My gripe is that we are already paying for a payment processor service and hence, should not be lumbered with these additional charges. It's not as if we have any of the credit card details so why are we penalised??

      In respect of the OP, I'm wondering if it's because you have a relatively low activity level and your account is semi-dormant so to speak.
      {{ DiscussionBoard.errors[4284181].message }}
      • Profile picture of the author azmanar
        Originally Posted by Marketing Merit View Post

        I'm in the process of dealing with my first ever chargeback for a digital download (that I can prove was downloaded!) and the bit that sticks in my throat is the additional charge. No seller protection for non-tangible goods of course. :rolleyes:

        Apparently, this charge originates from the card issuer and PayPal simply passes it on to the Merchant. My gripe is that we are already paying for a payment processor service and hence, should not be lumbered with these additional charges. It's not as if we have any of the credit card details so why are we penalised??

        In respect of the OP, I'm wondering if it's because you have a relatively low activity level and your account is semi-dormant so to speak.
        Hi,

        Dr. Brian said the amount withheld by PayPal is $1billion or so at any one time. Detrimental to PayPal users but definitely beneficial to PayPal.

        Then we are facing with penalties for charge-backs which were not of our fault. The number of cases seem to increase greatly by the day.

        And then we have bad currency exchange rates for international transactions.

        To the 3 issues above, I have 4 questions :

        1) Are there remedies for such issues?

        2) Can BBB and FTC help or any other places to complain to?

        3) Can we actively raise and publicize this issue all over the net?

        4) Are there already groupings pooling resources legally against PayPal?
        Signature
        === >>> Tomorrow Should Be Better Than Today

        {{ DiscussionBoard.errors[4284402].message }}
  • Profile picture of the author gefflong
    Here is what I found out... and let me just say that these huge companies (google and paypal in particular) need to get real and let actual people fix problems.

    I called Paypal today and the customer service rep. said there were lots of accounts hit with this problem and the system generated these by some sort of accident. They were working to try and correct it and I should see another email within 24 to 48 hours with the payment holds removed.

    The kicker, however, was the same complete BS that google gives... She told me there was no way for her to remove this "system generated" hold.

    I don't know why Google and Paypal trust their automated systems more than actual people, but it is ridiculous. Their "system" flags accounts and there seems to be no way for customer service to remove them. Does that even remotely sound like a good idea?

    Man I am getting so tired of Google and Paypal.

    Sure, they are great when they are working correctly... but once their "system" gets their panties in a bunch about something (whether it's a real problem or a mistake), things turn hellish.

    It seriously can't be a good idea for the machines to make irrevocable decisions when real people are involved.
    {{ DiscussionBoard.errors[4286465].message }}
    • Profile picture of the author Piper Anderson
      I've had this message sent to me on my personal (not business) PayPal account at least twice, maybe three times (I can't remember exactly). Each time, it was totally random, and sent at a time when I hadn't had any transactions through that account in a while. The first time it happened, I called PayPal, and they told me it was JUST for items I may sell on eBay (which I hadn't been doing recently). They said any other money would be available immediately.

      When I did get a non-eBay payment through that account a little while later, it WAS available right away, and within a month, they took the restriction off of my account totally of their own volition. The same thing happened the other one or two times I've gotten this message. They restricted the account for about a month (but apparently only for items sold through eBay), did it at random, and then within about a month, took the withdrawal restriction off the account without me asking or doing anything else.

      Strange, I know. But I don't worry about it anymore whenever it happens. And it hasn't happened in a while now, thank goodness.
      {{ DiscussionBoard.errors[4287159].message }}
  • Profile picture of the author gefflong
    Just wanted to update the thread and say that my account is back to normal now. For once, what I was told by customer service at a big company actually happened.
    {{ DiscussionBoard.errors[4290291].message }}
    • Profile picture of the author Goldenboy
      Paypal seems to be giving its clients some hard time with their earnings. My friend just received the same email from Paypal and he tried to contact anyone from Paypal to give him an explanation regarding the said action they made. i mean, why do they ever had to do that to their client that it's them who made their business grow? I do hope I will not be reading that same email from Paypal in my yahoo account.
      And to add to your observation gefflong, people nowadays are relying too much on their system that every time they encountered some problem, only a few people are capable of repairing and troubleshoot these kinds of system failure. They just let machines do their job, so what are these people doing? Are they just paid by their client to do nothing? Just my reaction, since I don't want to receive that kind of message to my email.
      {{ DiscussionBoard.errors[4290722].message }}
  • Profile picture of the author Targeted Traffic
    Their site says they may even hold funds until 180 days...so I guess we can look on the situation at a brighter side...

    They also stated:
    Holds are typically placed on:

    New sellers or sellers who have limited selling activity - until they build up a history of successful transactions
    Merchants selling in higher-risk categories like electronics or tickets, where we see higher levels of chargebacks and disputes
    Sellers who have performance issues, or a high rate of buyer dissatisfaction or disputes

    {{ DiscussionBoard.errors[4290755].message }}
  • Profile picture of the author AverageGuy
    I got the exact same email in one paypal account. But, at the second day, received the email which says it backs to normal. so, no worries. seems a bug in the sytem somewhere.
    {{ DiscussionBoard.errors[4290874].message }}
  • Profile picture of the author Matt Poc
    Yeah, mine account has some problems too.

    You can go to derrick vandyke's blog and read more about it.

    There's a lof of horrible stories about that!
    Signature
    {{ DiscussionBoard.errors[4291625].message }}
  • Profile picture of the author LB
    Your story may be a little different and I don't know what products your were selling at the time. However I find it very hard to believe the influx of WSO sellers having their Paypal accounts frozen has anything more to do than just the type of products they are selling (Get Rich Quick) and the outrageous claims being made in their sales copy.
    Keep in mind that Paypal freezes accounts with an automated program. This program can't go out and make decisions about sales copy.

    It's true that income claims, etc. may come into play after the fact, but I think the issue is that Paypal is poorly equipped to handle "launch" type events which may include things like a large affiliate mailing, getting WSO of the day, etc. When the influx comes, the algorithm says, "this is abnormal" and locks it down. You are then at the mercy of whoever is tasked with reviewing the account.
    Signature
    Tired of Article Marketing, Backlink Spamming and Other Crusty Old Traffic Methods?

    Click Here.
    {{ DiscussionBoard.errors[4293206].message }}

Trending Topics