PayPal Warning – oops...they´ve done it again!
Ian Brockwell
April 29, 2008
This article is a follow up to the one I wrote on April 12 2008, entitled "PayPal – Another bad) example of the way things are in the United States"
In the previous story I told you about a customers attempt to transfer his funds from one PayPal account (in the US), to a new one in the UK. After many emails, PayPal agreed to release the funds to the new account. Unfortunately, before having time to get the champagne out of the refrigerator to celebrate this incredible piece of luck, the following happened.
Within about 5 minutes of the funds arriving in the new account, PayPal froze it again! Although the money belonged to the customer, and he was merely transferring it from one account to another (no other party/sale involved), he was told "We have observed activity in this account that is unusual or potentially high risk."
Naturally, the customer wrote more letters to object to this decision and was told that an "investigation" was being conducted. On April 25 he received the following response:
Dear XXXXXXXXX,
Thank you for contacting PayPal in relation to an email we received from
you on the 22nd April 2008.
Please be advised Mr XXXXXXXX that limitations are put in place as a
security measure and will not under not circumstances be lifted until all
steps listed are completed.
If you do not complete these steps the funds in your account will be held
for 180 days. I will list the steps you need to complete below Mr
XXXXXXXX.
Add and Confirm a Bank Account
Fax Photo ID
Fax Proof of Address for Any Address
Confirm Location
I realise that this is not the outcome you would have wished for and I know
it may not meet with your approval but I do hope you will understand that
this decision was made in accordance with our company policy. While I
cannot change this I will make sure you objection is duly recorded.
Please let me know if you need further assistance.
Sincerely,
Sam
Resolution Services Department
PayPal, an eBay Company
The customer responded with the following letter:
This is not acceptable and you are right that it does not meet with my approval.
Before taking this matter to much higher levels (government levels), I require the following information:
1) A full and detailed explanation as to why your company reached the following conclusion: "We have observed activity in this account that is unusual or potentially high risk." and would remind you that the funds (MY MONEY) was being transferred from my old account to the new one. There were no "other" parties involved and you seem to be suggesting that I have performed some action that is potentially illegal. Is this what you are saying? I require your confirmation on this and an exact reason for this decision.
2) Why did you wait until my money was deposited into the account before blocking it? There were no special limits or restrictions prior to this, and nothing has happened to warrant any change.
3) I wish to know the full name of all those involved in this decision (including yours!), I'm afraid "first names" are unacceptable. I'm sure if you feel what you are doing is legally and morally correct, you won't object to this request.
4) Please provide details of the "investigation" you claim to have carried out. What exactly did you do/investigate?
I expect to receive this information as a matter of urgency, so that I can proceed with alternative action without any further delay. I do not intend waiting 180 days or providing a company like yours with my personal finance details. If you do things like this without good reason, how can you be trusted with my bank or credit card details?
Two days later, the customer received another letter from "Samantha", the author of the first:
Dear XXXXXXXXX,
On 04/25/2008 I replied to the email message you sent regarding your PayPal account. As part of PayPal's commitment to excellence, I want to make sure I met your needs in my response. Would you please take a minute to answer a few questions to let me know how I did?
CAN YOU BELIEVE THAT? These people are just unbelievable! But there´s more....
When the funds were transferred (before being frozen), PayPal deducted their usual fee and an amount was charged for the currency exchange. However, they have frozen the original amount, not the figure after deductions, and now claim the customers owes them money! (See screenshot below that appears on his account)
How governments allow these people to operate their business like this is truly amazing, can you imagine what would happen to you and your business if you tried the same thing?
Needless to say, I shall continue to write articles on this situation until the matter is resolved (in the customers favor), and hope that anyone thinking of opening an account with PayPal will seriously consider the alternatives that are available. If you already have an account with them, I would strongly advise taking the money out before they do the same to you. There are hundreds of thousands of PayPal customers who have suffered in this way, don´t give them a chance to increase that number.
In the previous story I told you about a customers attempt to transfer his funds from one PayPal account (in the US), to a new one in the UK. After many emails, PayPal agreed to release the funds to the new account. Unfortunately, before having time to get the champagne out of the refrigerator to celebrate this incredible piece of luck, the following happened.
Within about 5 minutes of the funds arriving in the new account, PayPal froze it again! Although the money belonged to the customer, and he was merely transferring it from one account to another (no other party/sale involved), he was told "We have observed activity in this account that is unusual or potentially high risk."
Naturally, the customer wrote more letters to object to this decision and was told that an "investigation" was being conducted. On April 25 he received the following response:
Dear XXXXXXXXX,
Thank you for contacting PayPal in relation to an email we received from
you on the 22nd April 2008.
Please be advised Mr XXXXXXXX that limitations are put in place as a
security measure and will not under not circumstances be lifted until all
steps listed are completed.
If you do not complete these steps the funds in your account will be held
for 180 days. I will list the steps you need to complete below Mr
XXXXXXXX.
Add and Confirm a Bank Account
Fax Photo ID
Fax Proof of Address for Any Address
Confirm Location
I realise that this is not the outcome you would have wished for and I know
it may not meet with your approval but I do hope you will understand that
this decision was made in accordance with our company policy. While I
cannot change this I will make sure you objection is duly recorded.
Please let me know if you need further assistance.
Sincerely,
Sam
Resolution Services Department
PayPal, an eBay Company
The customer responded with the following letter:This is not acceptable and you are right that it does not meet with my approval.
Before taking this matter to much higher levels (government levels), I require the following information:
1) A full and detailed explanation as to why your company reached the following conclusion: "We have observed activity in this account that is unusual or potentially high risk." and would remind you that the funds (MY MONEY) was being transferred from my old account to the new one. There were no "other" parties involved and you seem to be suggesting that I have performed some action that is potentially illegal. Is this what you are saying? I require your confirmation on this and an exact reason for this decision.
2) Why did you wait until my money was deposited into the account before blocking it? There were no special limits or restrictions prior to this, and nothing has happened to warrant any change.
3) I wish to know the full name of all those involved in this decision (including yours!), I'm afraid "first names" are unacceptable. I'm sure if you feel what you are doing is legally and morally correct, you won't object to this request.
4) Please provide details of the "investigation" you claim to have carried out. What exactly did you do/investigate?
I expect to receive this information as a matter of urgency, so that I can proceed with alternative action without any further delay. I do not intend waiting 180 days or providing a company like yours with my personal finance details. If you do things like this without good reason, how can you be trusted with my bank or credit card details?
Two days later, the customer received another letter from "Samantha", the author of the first:
Dear XXXXXXXXX,
On 04/25/2008 I replied to the email message you sent regarding your PayPal account. As part of PayPal's commitment to excellence, I want to make sure I met your needs in my response. Would you please take a minute to answer a few questions to let me know how I did?
CAN YOU BELIEVE THAT? These people are just unbelievable! But there´s more....
When the funds were transferred (before being frozen), PayPal deducted their usual fee and an amount was charged for the currency exchange. However, they have frozen the original amount, not the figure after deductions, and now claim the customers owes them money! (See screenshot below that appears on his account)
How governments allow these people to operate their business like this is truly amazing, can you imagine what would happen to you and your business if you tried the same thing?
Needless to say, I shall continue to write articles on this situation until the matter is resolved (in the customers favor), and hope that anyone thinking of opening an account with PayPal will seriously consider the alternatives that are available. If you already have an account with them, I would strongly advise taking the money out before they do the same to you. There are hundreds of thousands of PayPal customers who have suffered in this way, don´t give them a chance to increase that number.