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PayPal keeps a shitload of my cash for 90 days + gives it away. Beware of these bastards!!

Discussion in 'BlackHat Lounge' started by milans, Dec 17, 2011.

  1. milans

    milans Regular Member

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    Hi Guys,

    I run several e-commerce drop shipping websites selling different types of products. I mainly use PayPal in the UK to accept credit card payments and PayPal payments.

    About one week ago PayPal decided to limit my account for no reason at all. Sure there were some open disputes due to late delivery but this is not unusual in the Christmas season. My account has been limited due to the 'financial risks' that are related to my account according to them. Now PayPal has decided to close my account entirely and keep the funds (around EUR 5000.-) on this account locked for at least 90 days!! Now I'm unable to pay my supplier the invoices that are due and my company is going to shit.

    I contacted PayPal to ask them what transactions would impose this risk so I can give them proof no financial risk is involved (proof of shipping etc) and they told me that they only give this information if I subpoena them for a court case. I have called PayPal for about a week and they won't give me a specific reason why our account is limited and will be closed. No reason at all except for ' financial risk'. This way it's impossible for me to proof them wrong as I don't have any information on what would impose this risk.

    They also refunded two scammers that already got their orders delivered even though I supplied PayPal with the trackingcodes and proof of shipping!! This costs me another EUR 400.-

    Going to court seems not really the thing to do, their lawyer will probably always be better than mine.

    Any help or tips regarding this problem would be greatly appreciated..
    How do you guys handle fake PayPal disputes that are started by scamming customers? Apparently offering PayPal proof of shipping is not enough even though they ask for it.
    And did you guys ever have the problem of getting your account limited for no clear reason at all? What should I do?

    Seriously fuck this company they keep my money for no reason and just give it away to scammers.. How is this even possible!!!
     
    Last edited: Dec 17, 2011
  2. krzysiekz

    krzysiekz Senior Member

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    Take them to small claims court. If you have tracking that the buyers received item and signed for it, then they should not have refunded.

    Also, take them to court for keeping your money - you should be able to withdraw it immediately and not need to wait 90 days (despite whatever BS might be in their ToS).

    I would go to court with it. I would additionally file for damages because they've obviously fucked up your business.

    You can expect to:

    1) Go to court. Win your money back for the two items received by the scammers and wrongly refunded. Also good chance that you will get your money back before 90 days. Good chance you will be able to get them for some type of damages to your business as they've locked your account without giving you any opportunity (besides going to court) to fix the issue.

    2) Them trying to 'settle' outside of court (once they get the information that you're taking them, they'll become 'srs'). Personally, I would deny it and take them to court anyway - because they need to be taught a lesson.

    I nearly took them to court last week because of a scammer who did the same thing as in your case - got the item but said he didn't and they gave him the money. Chatting to the supervisor several times eventually got the funds back in the account. If that wasn't going to work, I was going to go to court without a doubt.
     
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  3. mastermind110

    mastermind110 Junior Member

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    You're not first whom pp sued, alot of people got their accounts frozen for no reason.
    Paypal isn't available in my country so i use alertpay, ofcourse i face difficulties due to that because many people don't use ap but to be honest ap is far better than pp (atleast i didn't have any problem so far with it).

    P.S My friend lost his 500$ because of pp, same shit like you happend to him.
     
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  4. oOULTiMATE KhANOo

    oOULTiMATE KhANOo Regular Member

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    Wow milans... dude I feel really sorry for you man.. that sounds extremely fucked up.. I WOULD GO APE SHIT if I even lost $500 to scammers but ebay closing your account with "your $5000" inside of it.. FUCK THAT.. no way phone them and threaten to take them to court.. DO NOT STAND FOR THIS!.. get on that phone a.s.a.p, that is your hard earned money, GET IT BACK!.
     
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  5. Realign02

    Realign02 Regular Member

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    I'm fairly certain that a mass amount of people absolutely hate paypal and their shady ethics.

    I am one of them.
     
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  6. sixalarm

    sixalarm Regular Member

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    Yeah, there seem to be endless paypal horror stories. I hate that I have to rely on them for so many things. Sadly, they have such a stranglehold on the internet transaction market that there is almost no other option...*sigh*
     
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  7. anthonio

    anthonio Registered Member

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    If the account only got 500$, then i probably stay quiet, if it's 5000$ i surely phone them asap, no matter what the cost. I'll fly into their front office door if i need to.
     
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  8. Marcink99

    Marcink99 Power Member

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    If I were you I would write a letter to them with a copy of prefilled court papers threatening to sue. Fax it to them and give it 48 hours If no answer proceed with the sue.
     
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  9. Sacrilege

    Sacrilege Regular Member

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    PayPal relies on the fact that it's really easy to integrate them. But they are a really bad choice for a credit card processor because the funds are paid to them rather than straight to you. They also have taken it upon themselves to police e-commerce and they often freeze accounts and hold the money indefinitely. Consumers know that PayPal will take their side and seize your funds and they take advantage of this to steal from you.

    Bottom line, you need to open a merchant account with a real credit card processor. This way if a customer wants to dispute, they have to argue it out with their credit card company, which is much much harder and much more involved. If they do actually go through the process (rare) - and they happen to succeed (even more rare) - then your processor will still charge the money back (assuming the credit card company charges it back from them) - just make sure it doesn't happen very often (it won't) and they'll keep you on board.

    I haven't had experience with PayPal as far as frozen funds, so I don't know if there's anyway to accelerate the process of getting your funds back. But the most important thing right now is to get your business up and running again because you are losing money every second, especially during this shopping season.

    I recommend authorize.net for payment processing. They have tons of options that PayPal doesn't, the fee schedule is reasonable, and most importantly, they are professionals and don't fuck with your business. There are a lot of resellers and affiliates of this company that have different packages and pay schedules that are powered by authorize, so some of them may have lower startup costs, or a lower percentage, or zero monthly fee etc.. basically there are a ton of different options. You should research which package is right for your business.

    Good luck.
     
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  10. spsfinest

    spsfinest Junior Member

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    If you have delivery conformation slips for each order this should be a very easy win for you in court.
     
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  11. small_town_boy

    small_town_boy Power Member

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    What you mean "the lawyer will be always better than mine"?

    Umm...if you have the FACTS (evidence/proof) that you are RIGHT it does not matter what kind of lawyer they have. A lawyer can't change FACTS and court is NOT DUMB.

    If your account was locked without a reason, without basis, then you win by default and should go to the court asap.

    If it is a sketchy slope, then yes, you might lose, but from what I read you have all the facts on your side, so supply them to the court.
     
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  12. Crewchief007

    Crewchief007 Power Member

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    I think it is high time Internet Marketers embrace the fact that having their own merchant account and not using PayPal as a primary credit card processor is the optimum way to go. There are just way too many horror stories of PP doing this and not being challenged. It is going to take some major lawsuits with PP being thrust into the glaring media spotlight before they even thing about changing.

    OP, your only option in this case appears to be to sue PP. Before you start that process/jpurney, you need to g00gle "Paypal limited my account" and be prepared to be saturated with individuals who are going through the exact same thing as you.
     
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  13. Sacrilege

    Sacrilege Regular Member

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    I just have to chime in again because people here are retarded and giving you really, really, epic bad advice.

    DO NOT SUE

    PayPal froze your funds for 90 days. It's going to take a hell of a lot more than 90 days to sue them and you bet your ass they will hold your money until it's over with, then appealed, then appealed some more. You'll also be paying a lawyer, and while the judge may eventually order them to reimburse you, you'll be on the hook in the meantime through the litigation and appeals process and this is expensive as all shit.

    You need to focus on your business and making more money. That's the most important thing. It doesn't matter what happens with the PayPal funds. They closed your account so you need a new payment processor whether you ever see that money again or not. You need to do this now rather than later because you are losing more money every second. Get yourself on solid footing, start making money again and if you don't get all of your money back in 90 days, fight them once you're on solid ground and you can afford it.

    You can't let this setback get in the way of your core mission which is making more money. I've said it many times, revenge is sweet but it is rarely profitable. One of the things that makes a true professional is not letting adversity affect your ability to do what you do. Again, any legal process will take longer than 90 days AND it will require you to spend more money. It's a non-option.
     
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  14. Crewchief007

    Crewchief007 Power Member

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    @ Sacrilege,

    So what do you tell a person who just invested $27k in a product launch, used PayPal as their primary and sole credit card processor, took in over $90k on the launch and immediately got their account limited?

    An account they had for over seven years? An account that was tied to a business checking account, with all of the proper verifications in place? Yet and still PP, froze their funds after they transferred funds into the same bank account.

    PP only offered this devastating explanation, "Suspicious activity." :Eyecrazy:

    PP held a little over $90k.

    So you are saying that he should have forgotten that hard earned $90k cash? And just continue to focus on the launch?

    The point being, your admonishment is not wrong but neither are the ones to sue. It all depends on the circumstances. Given certain circumstances, the advice not to sue would be apropos. Conversely, given a whole different set of circumstances as in the aforementioned $90k case, suing may be the best option because of the irreparable financial damage PP caused. :cool:


     
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  15. Sacrilege

    Sacrilege Regular Member

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    I tailored my response to this particular circumstance. Suing is a non-option.

    With the circumstance that you described: If it's a 90 day hold, you still don't sue. Suing takes a monetary investment and requires more than 90 days. Waiting 90 days to see how it shakes out, requires no investment, and takes no more than 90 days. It's pretty much a no-brainer.

    Stuff like this happens all the time in business - you can't let it get in the way of your mission. When big companies get sued, they don't close up shop while they go chasing down adversaries. When running a business, your number 1 priority needs to be.... running the business. If the funds aren't released in 90 days then HELL YES you need to go after them, but still, the number one priority is getting the train back on the track - otherwise you won't have the resources to sue anybody.

    How can anyone possibly argue that you should sue, which could take a year or more with appeals, and require you to pay a lawyer - for just a 90 day hold? What could you possibly hope to accomplish? How would it make the situation any better?
     
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  16. keeponrocking

    keeponrocking Regular Member

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    What are cons of using Google Checkout insted for example?
     
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  17. FuryFit

    FuryFit Regular Member

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  18. Ardit

    Ardit Junior Member

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    You guys make this harder for yourselves!

    Use paypal for sending payments! Use 2checkout for receiving them!
    You'll be fine ;)
     
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  19. Lucy1984

    Lucy1984 Junior Member

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    I have a personal paypal account, that I rarely use. A month ago, I sold a few things on Ebay. One in particular, was a kitty costume. Well, some broad bought it, paid it and then opened a dispute because her fat ass couldn't fit in it (Even though I listed all the measurements etc). Anyhow, so since I rarely use ebay or paypal, I didn't notice her dispute until 2 weeks after. I ended up giving her refund and told her to keep the costume (maybe she will go on a diet). So fast forward to last week, I listed about 100 items, more then I ever have before on Ebay. Everyone pays up, I go to the post office, with boxes and boxes of envelopes. My total is up to like $200 in shipping, go to swipe my paypal card, deennniieeedd. Obviously I call them all furious and shit, they tell me since that dispute, they are now going to hold on to all my money for a month. Are you kidding me? Thank god I make $2k a week posting on craigslist, and I was able to cover it.

    But long story short, fuck paypal and sorry to hear about your troubles.
     
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  20. milans

    milans Regular Member

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    Hi Guys,

    Thanks a lot for your responses! :)


    I think I'll do the above, send them court papers threatening to sue and see if they will finally open up a dialogue with me regarding the limitation.

    Sacrilege is right when it comes to really sueing them.. I don't have legal insurance so I'd have to pay the lawyer myself until I'd get reimbursed but this might take months if not years. If the amount or the limitation period was larger/longer sueing would be the right thing to do. I currently simply don't have the funds to do this and sueing would take much longer than waiting 90 days. I don't want to punish PayPal (well I want to but it won't help me), I just want my money back as soon as possible.

    I've now applied for a merchant account with a legitimate credit card processor and I'll get a legal insurance this week. The insurance costs around 40 EUR a month but I guess it's worth it as I'm surely only gonna get more problems like this in the future if my business grows.

    I've just received some cash for a webdesign job I did and I'll see if I can work something out with my supplier or pay my VAT taxes later once I get my money back.

    Again thanks for al the input I appreciate it!