PayPal - Beware of PayPal, 6000 USD seized by Paypal

[FranGian]

I wanted to inform the forum of recent developments regarding acceptance of credit card payments related to PayPal.

 

PayPal has recently begun freezing assets in user accounts. My business is effected. PayPal has seized more than 6,000.00 USD. The 6000 USD has been frozen for more than 3 weeks and doesn’t look like it is going to be released anytime soon. PayPal has informed me of the LOCK on all my sale proceeds and the freeze will last 180 days.

 

Since this has happened I’ve further researched the matter. A class action lawsuit has been filed in Chicago, IL, USA that has more than 500 effected class members as part of the suit, effected parties are growing daily.

 

http://www.lawyersandsettlements.com/articles/14403/consumer-financial-fraud-small-business-scams-class.html

 

I WARN all of you. Switch to a traditional merchant based credit card system before this happens to your shop.

 

My business is unable to fulfill orders, it looks like we may have to close shop after 2 years. Frankly, we are devastated here.

[Guest]

Hi Francsica,

 

That is a terrible mess you are going through with PayPal, more so because PayPal is not answering any questions about the seizures. Please keep us informed if anything changes.

 

 

 

Chris

[lagodilecco]

This is terrible. Can you tell us more about this story? What information did they give you? How did you discover that it had happened? Can you think of any reason why they could have made such an awful mistake?

 

Maybe you can keep trading in the meantime using other methods?

 

Good luck.

 

Diana

[NodsDorf]

This is why I stopped using PayPal 3 years ago. They held 3000 dollars of our funds and then put us on a rolling reserve which held another 5% of incoming and outgoing funds for 90 days. It took us about 6 months to get them to give us our 3000 back.

 

The excuse was that we were a high risk company because we sold digital products and we had a high number of chargebacks. The truth was we had a less then 0.02% chargeback rating. They counted all the denied orders we identified as fraud, even though we denied and refunded the payments.

 

PayPal is the number 1 payment system that scammers use. I recently found a forum which was linking to our site asking scammers and hackers to buy our gift certificates. People were offering to buy them for pennies on the dollars and the scammers all accepted only paypal or moneybookers.

 

Whats worse is PayPal will give you a black mark for every person who trys to scam you. I know of other companies who were frozen or locked up just like we were due to what scammers were doing to them. It makes no sense to punish the companies who are already victimized by scammers whom run rampant in PayPal's system.

 

IMO PayPal has went to hell every since eBay bought them out.

[FranGian]

Honestly, what more is there to tell, we are a legitimate licensed business entity. We use PayPal outside of the "ebay" venue to process our online credit card transactions. Not one customer has complained. Not a single one (1) We run a legitimate business, in all aspects of the law.

 

I would think. All online sellers wish to improve their monthly sales goals. Doing so "FLAGS" your PayPal account. They seize your funds. We are prusuing all means of legal recourse at this juncture against PayPal.

 

As to how I discovered this, PayPal informs you quite kindy that a "Limitation" has been placed upon your account, they then give you 15 monkey hoops to jump through, once you've done all of that. It doesn't matter. Your funds have been seized for 180 days.....

 

 

Have a nice day.

 

 

...mistake? is there a mistake in me seizing your funds, doing so as I wish with them, and then repaying you after 180 days?

 

 

 

 

 

 

 

 

This is terrible. Can you tell us more about this story? What information did they give you? How did you discover that it had happened? Can you think of any reason why they could have made such an awful mistake?

 

Maybe you can keep trading in the meantime using other methods?

 

Good luck.

 

Diana

[expresshost]

This is nothing new. This has been going on for years, even before ebay purchased them. I refuse to purchase anything with paypal and will not ever give my customers that option. Besides, if everyone looked to their local bank, you would save so much on transaction fees. Merchant accounts are cheaper these days to set up. Go local...hell with them.

[♥mdtaylorlrim]

The answer does not lie solely with not using Paypal, or using a traditional merchant account. As previously stated, ALL merchant account are subject to the same thing. Excessive chargebacks result in deposits required. End of story.

 

However, there is still a workaround. Do not complete the charge until a fraud analysis is complete and you accept the purchase. This is easily done by using the AUTHORIZE only feature of your payment processor. Once you review the purchase and determine that it is legitimate then change the transaction from AUTH only to SALE. Or CAPTURE the sale, or whatever the specific terminology used by your merchant company.

 

You can try to keep only a minimal amount in your credit card merchant bank account, but any accounts tied together with tax numbers are going to be subject to the same seizures.

[arnoldblack]

it's not just paypal who pull this crap, moneybookers did it to me years back, I still have 500 euros stuck in my account that I cannot take out. They also locked the accounts of everyone who I had sent funds to. They claimed I had been using moneybookers on my website funny thing is I never even had a website and was only using it for p2p transactions.

[MarketUS]

If anyone would like the REAL truth about accepting credit cards and especially paypal, feel free to contact me.

 

Here is the short story:

Paypal does not protect a merchant they does not provide a tangible product, period.

If a customer files a charge back against you, you can win. If they re-dispute, you automatically lose. How do I know this? After paypal froze over $180,000 for 180 days, I opened a traditional merchant account and rebilled some of my clients. The same customer filed a charge back with American Express. When Amex called me they asked me why I ACCEPTED the charge back last time. My response was 'I never accept', their response was 'PAYPAL RESPONDED TO US THAT THEY ACCEPT THE CHARGE BACK'. Are you serious? Paypal will always respond with 'accept' on ANY re-dispute from any credit card company and then send you the infamous email '...Despite our BEST efforts...'.

 

I am currently preparing a lawsuit against them, and guess who is my star witness, American Express, et. al.

 

Hope this helps.

[NielsVanDelt]

I recently found a forum which was linking to our site asking scammers and hackers to buy our gift certificates. People were offering to buy them for pennies on the dollars and the scammers all accepted only paypal or moneybookers. :blink:

[Guest]

http://www.paypalsucks.com/ Check this site, for hours and hours of interesting stories of what Paypal has been doing to 1000's of businesses, for years..

[web-project]

give a call to PayPal and move to 2CO, better payment provider than PayPal.

 

I used the WHB3WPFA promotional code to get a free 2CO account, but it also available byetn2co11

[Jack_mcs]

give a call to PayPal and move to 2CO, better payment provider than PayPal.

 

I used the WHB3WPFA promotional code to get a free 2CO account, but it also available byetn2co11

I haven't looked at 2CO in years but, as I recall, their rates were at least double what paypal charges. Is that not the case anymore?

[p2409]

The whole non-bank payment system industry is scammy. I don't know why people persist with outfits like Paypal - if you've got a proper business, you can get yourself set up as a merchant with your local bank.

You can limit the damage PayPal causes though. Set up osc to only take sales from countries you do business with, don't allow any sales from 3rd world countries and always do a credit card check before finalising payment.

[DavEvans]

What kind of things do you sell? Is it high risk? That may be why your money is being held. Better off getting your own merchant account if possible.

[Guest]

for every 1 real paypal user there are 100 scammers and fraudulent users.

 

Paypal is forced to crack down on everyone to try and get the scammers out, otherwise they would be shut down by the Govt for allowing a fraud operation.

 

If it werent for all of the script kiddies we wouldnt have these issues.

Paypal is a legitamte company who is in a terrible position right now..

[Aqua121]

Paypal is a legitamte company who is in a terrible position right now..

 

ROFL...i feel sooo bad for them ;)

 

but seriously, I agree with some above, all merchant acct subject to same. they will freeze your funds for any reason to protect their own...

[adawnstyle]

i was just limited to for the 180 days, i have been in online business for over 10 years and now i can not sell a thing as there is no way to pay me. In australia i read that merchant accounts are huge and I just am not making those sort of dollars to cover it right now.

Another unfortunate thing is I cant buy anything either because most use paypal.

Does anyone know of any online company that offers merchant services and anything else that might be needed to set up....

some recommendations would be great.

Cheers

[Guest]

paypal sucks big time they still owe for 1,200.00 because a hacker got into my account