Interesting that you are in the UK and still had trouble. Do you think that you got the money back because of the way they are regulated within Europe as a bank rather than the way that they are not regulated in the USA (which is where most of the horror stories I see seem to come from)?
Stripe. We moved most of our payment processing from Paypal to Stripe last year, they're unbelievably more competent (an extrapolation from the quality of the tooling and APIs) and actually respond with meaningful input when a problem arises.
And I'd bet their fraud detection machine learning bingo tool will learn "owner did not contact us after the ban" as a correct ban and continue to be more obnoxious to all the other customers.
Oh well, whoever are still using Paypal should know by now what they are risking.
PayPal manipulating, removing, or holding hostage the balance of your account?
Yes that’s normal for PayPal.
Getting a the runaround about how and why it happened?
Yep, that’s expected too.
Actually getting a non-form letter response of any type?
That’s just lucky. We couldn’t get an account rep on the phone for almost 4 days when ~35k was suddenly deducted from the account. Nor when they accidentally cancelled all of our customers subscriptions while working an an unrelated fraud incident. Of course in both of these instances the customers blamed us for not being able to process refunds and being unable to reactivate their subscriptions.
P.s. never ever link any account with shared funds to PayPal. Business or otherwise, open a completely separate account for PayPal if you must use it.
Imagine having PayPal place a hold on the funds in your account to make sure refunds/fraud can be handled. Then when a customer does request a refund you’re literally unable to process the refund because it won’t take it from the funds you just received that are held. So now you automatically lose all disputes and they just start raiding your linked bank account. So why did they hold the funds in the first place?
Actually that doesn't even work. When they don't have a payment method on file that they can abuse, they'll be happy to send your PayPal account into overdraft and start threatening legal action to bully you into settling the balance.
Really the only thing to do, as soon as you see a "pay with paypal" screen is to go away screaming.
Here's the anecdote: I had had a company with a bank account and PayPal account, then dissolved the company and closed the bank account. Months after that, a former supplier of the now nonexistent company who had PayPal authorization deducted funds fraudulently from the PayPal account, claiming they had rendered services that were never rendered to a company that obviously and provably no longer existed.
PayPal sent the account into overdraft. When they couldn't deduct payment from the bank account that no longer existed, they started sending threatening communications to get me to settle the balance. I took things up with their fraud unit to get the transaction cancelled. Their fraud unit dismissed my case without looking into any particulars regarding the services that the vendor didn't render or the company that should have received services that no longer existed. To them the only thing that mattered was that, years ago, I was, in actual fact, stupid enough to click on "Pay with PayPal", the ramifications being that vendors are entirely within their right to use PayPal as an instrument of fraud and legal intimidation against me. It's your own damn fault, sir, for being so stupid and using PayPal.
Knowing that taking the legal route would have been way more costly than the amount of the transaction, and wanting to sleep soundly again against the backdrop of PayPal sending threatening communications, I wired money from my personal account to settle the balance and jumped through a shitload more hoops to make sure the PayPal account was properly closed and couldn't come to haunt me again in the future.
I think that's how they get away with it: Since the transactions they handle tend to be small, no one will take legal action.
I'm starting to notice a trend in PayPal fraud cases: a user has an issue with fraud. User contacts PP. PP's fraud department won't discuss the matter. PP does something oafish to lose a customer.
The critical point seems to be that fraud won't talk to customers.
It makes sense that PP moves quickly when fraud is suspected. What doesn't make sense is that they're so secretive about the events that take place on a user's account. For all we know, user's could be facing legitimate fraud issues that can be addressed with cooperation between PP and user. However, a user cannot cooperate when they have no idea what's going on.
If you can't discuss cases of fraud with your customers out of fear of revealing information to the defrauding party, you may need to do more in vetting the identity of users. I don't mean the intricacies of fraud with customers like patterns and markers for fraud. I mean getting to the bottom of the disputed transaction. You're shooting yourself in the shoot in any other case. PayPal is concerned more with user count and transaction volume than individual account retention. You would think that you want your customers to be proactive in cases of potential fraud.
It seems like they never learned from their every-user-is-a-credit-card-holder days.
OP here. The fact that I am actively engaging in conversation with them, to resolve this, should bump me up a notch on their trust level (of course I could be playing an "iocane trick" [https://www.youtube.com/watch?v=U_eZmEiyTo0] but there is no way to honestly prove this).
Also the fact that they reply to my initial question about the refund, with an absolutist "After investigating, YOU have logged in and YOU have initiated the refund", when I know I have done not such thing, immediately makes me think that I've been hacked or somehow have fallen a victim of fraud.
Further inquiries to clarify the issue, only leads me to get my account blocked/locked. I have no idea how this can be considered fraud protection from their side! And all this means that all in all I agree with you about the lack of competence of the fraud protection team...
I had an ebay transaction where I sold a piece of equipment, and the buyer was shopping around and didn't want to keep my product despite listing it as "no refunds." The buyer claimed the product was defective and they allowed him to ship it back at my expense. I told ebay that I tried to help the buyer resolve any issues and they didn't even bother dealing with it and just closer the dispute. I called them and they claimed I agreed with and initiated the refund. I didn't. I called PayPal and they bluntly said that this is an ebay issue and that they're not involved. This is despite the fact that they froze the funds in my account. They straight up said they aren't involved. Both eBay and PayPal are complete shit and shouldn't be trusted. The fact that they cornered the market allows them to do this kind of crooked shit. It's absolutely ridiculous and I'm not paying the balance. They can close my accounts at this point. I don't give a shit.
No, because of the same consideration: The amount at stake was just too small to justify a court battle.
But I really think that the banking regulator should take note of user stories such as the ones that are regularly all over HN and get to the bottom of it. After all PayPal, at least in Europe, is subject to the same regulation as other banks and payment processors. And if that's not the job of a banking regulator to take note when a financial institution has such shitty processes that consumers regularly suffer damages, then I don't know what is.
Also, maybe a private lawfirm should put together a class action or something on the basis of all those user stories. I realize that cases tend to be rather different to each other, but I'm finding it hard to believe that there aren't some things that happen so frequently and so systematically that it should be easy to take a stab at in court on behalf of a larger group of users who have suffered damages.
How much was in dispute and how much would it have cost? Most attorneys offer free initial consultations. Did you get a quote? For a lot of these kinds of disputes, you can do the paperwork yourself and not even involve court. For example, (if you're in the USA) many common disputes involving companies claiming you owe them money fall under the Fair Credit Reporting Act, which I've found to be very consumer-friendly and incompetence-unfriendly. Remember, your opponent generally also does not want to spend more money than they believe is owed in order to resolve the dispute.
It was something like €100, so really not something to bring in lawyers about.
But, standing on principle, I would have really liked to lodge a complaint with the regulator. Only problem: Since I was acting as a company (that now no longer even existed), it was never a consumer transaction, so consumer complaint wasn't a viable route, and you obviously hurt your case, even if it's just a complaint with a regulator, if you then settle the balance since they'd read that as you admitting guilt in some way.
Not settling the balance and lodging a complaint with the regulator could have had the side-effect of raising the stakes for them. So in a situation where they'd not normally take you to court, they might now actually do that since there would now be real money at stake, if the regulator launches into a full-scale audit into their processes & business practices. In such a case, winning a court case against me would have helped them in calling off the dogs if the regulator were to take an interest.
If you ask me, it should be the other way round: The banking regulator should play the role of public prosecution. When you complain against them with the regulator, then the regulator should either (a) tell you to bugger off without charging you for the privilege and allow it to end right there (b) take on your case in the sense of taking it to court on their own dime and if it looks like it was processes & business practices that were at fault then they should come after the financial institution for that kind of a failure hard.
Do they use accounts linked for withdrawal to transfer money as well? I have an account linked so I can withdraw PayPal money to the bank, but I don't want them to get money from my bank account to PayPal.
The point I was trying to make that is actually more general than PayPal was: When you want to take back control over convoluted and untrustworthy systems that end up accessing your account in some way, you can't really do it at the level of the payment mechanism.
I've done this a fair amount in the past: When I would do business with a vendor that I don't trust all that much with the way they do their billing, I would give them a credit card number for a prepaid credit card with tightly controlled balances, instead of giving them anything that's linked to my main bank account.
But it doesn't really help. When the untrustworthy party wants to deduct a payment from the mechanism you've given them and it can't, then they will instead just turn to bullying and threatening legal action, and you end up paying them whatever is in dispute because you won't want to risk them taking legal action.
Another consideration that enters into this is the dark and murky territory of consumer credit rating. If there's an account that's in your name, regardless of whether it's PayPal, a prepaid credit card, a bank account or whatever, and there's a charge that hits the account and there's no balance, then this is an event that they'll collect data about, and that may be disseminated in ways that you may not realize, and it may come back to bite you in the ass when you want to apply for a mortgage or something. So it's best not to go that route.
At the end of the day, the only thing you can do is to not do business with certain kinds of entities at all. And PayPal is definitely on my list of entities not to do business with.
> Really the only thing to do, as soon as you see a "pay with paypal" screen is to go away screaming.
I recently bought some piece of clothes and paid with paypal (had some money in it and I wanted to spend it before Paypal decides to close the account for whatever reason).
There was a panel saying "you allow the clothing company to ask for whatever amount of money there is in the account and if there isn't enough we will take it from the credit card linked to the accound". That credit card is the one I used to put money in the account in the first place.
A few days ago I decided to give money to a charity a friend set up on facebook for his birthday. Had a choice between paypal and my credit card. Same kind of Paypal panel but I felt better giving facebook my credit card than linking Paypal and Facebook.
I am nervous and I am going to buy a pi or something and close the Paypal account forever.
My credit card is a "fill it to use it" kind. You need to put money on it from your bank account and then it acts as real Mastercard. So there's always 0 euros on it except when transfering money from bank account to buy something online. And I can put the money back from the cc to the bank account, no fees. With Paypal I can't, it's like I am forced to spend it now.
You say that but it's literally the only way to counter scamming sellers on the internet. PayPal needs to stay, at least until there are viable competitors.
How is it "literally the only way to counter scamming sellers"? There are so many competitors out there that offer better services... Stripe, Google Pay, Moneris, Braintree, Square, WePay, Authorize.net, the list goes on...
I'm talking about eBay and Craigslist sellers, not companies. Anything I buy from companies I can just put on a credit card and chargeback if scammed.
Edit: also googling around none of those seem to have the solid buyer protection that PayPal has. With PayPal I can just open a dispute with a picture of the error (color is off or whatever) and within a relatively short time period the seller is forced to reimburse me the full purchase cost, including shipping. That's very valuable as a customer.
Maybe in the US it's simpler, but recently I had to do a chargeback on my Polish credit card and first of all I couldn't even initiate one until the transaction was fully processed(while it was only showing as "pending" on my account), so that took 3 days, then I could file a chargeback by making a complaint about a transaction, which I was then told would be "reviewed in no more than 2 weeks" and that is genuinely what happened - the transaction was reversed and the money returned but it took the full 2 weeks from the day I requested a chargeback.
Do you have an alternative? most of Paypal's conduct around these cases is defined by the regulations. If you think Paypal is bad, try Skrill (which I guess is the EU Paypal). And no, I don't mean actually try it, i still have $700 locked in there which i believe they're taxing for inactivity, because all they have for ID verification is an automated 3rd party system.
What i would love is for these services to require ID for opening account, not after depositing over $250 (when you have skin in the game and have to verify your id or lose the $), they won't though because they would have a 95% churn rate on registration.
A _lot_ of banks allow you to generate 'virtual credit cards'. It's basically an auto generated valid credit card number.
You can use them for recurrent expenses or make them single use (the card is cancelled after first payment).
You can also max them to any arbitrary value. So if I need to buy 23.03 dollars of something online I can issue a card that maxes out at 24 dollars. So even if the details were stolen you could only take the remaing cents until it maxed.
None of this is new or innovative I never really understood the need for paypal in online shopping.
I got an eBay order and shipped it out, transferred the funds out of PayPal.
Buyer sends me an eBay message saying "OMG I'm so sorry but my eBay account was hacked." I believe them because when I googled the shipping address the package went to a foreign freight forwarder.
I don't worry because the address was "confirmed" in PayPal, so I'm protected from fraud. I always make sure to ship only to confirmed addresses.
eBay account owner initiates fraud investigation.
PayPal refunds buyer while the investigation is pending,
I have several linked bank accounts, they didn't touch them, my PayPal account just goes negative.
PayPal sends me an email telling me I can't have a negative balance and I need to fund my account to get my balance to zero, against their TOS to carry negative balance. No biggie, I fund it. I think I was even able to fund it with a credit card.
Fraud investigation proceeds. I have to provide a tracking number to verify I actually shipped the item.
A few days later PayPal decides it's fraudulent, but I'm covered under their seller protection.
PayPal refunds me the money, I transfer it back to my bank.
I'm perfectly happy with how it was handled.
I guess that doesn't make a good blog post though.
First, PayPal doesn't like it when your dispute ratio increases. The best way to handle disputes as a merchant is just to give the customer what they want. Most times this is a refund.
Second, when fraud occurs most PayPal users dispute any transactions as soon as they get their account back.
Third, You cannot refund a payment from a held or rolling hold balance. PayPal retroactively applied a rolling hold to our account of ~30% of our monthly gross transactions for a rolling 90 days. The way this works on PayPal, at least at that time, means that until your rolling hold balance is equal to 30% of your last 90 days transactions any funding of and payments into the account IMMEDIATELY get sucked into that rolling hold. We would auto flush the completed transaction account balance nightly. So now we're in a situation where trying to refund a customer wants you to add funds to your account, but as soon as the funds are added they are applied to the rolling hold. So, you click Refund on the dispute and you're unable to refund it. Eventually the dispute is automatically closed in their favor and the account balance goes negative. At that point you can fund the account and it'll apply to the negative balance first.
This was my experience at least, and trust me it was one of the most stressful events I ever encountered. Most of that stress was not knowing what was going on and why, and trying to get anything out of PayPal. Their processes are so opaque for merchants in many cases.
Money Transmitters are a heavily regulated industry. I bet this way of operating is just standard procedure to save their own neck from heavy regulatory fines.
What would be an alternative solution in your opinion?
I hope Libra (the new currency from FB) will set a higher bar.
I can confirm that PayPal is horrible to legitimate merchants. One would expect better fraud protection given the high fees they charge. I never expected they would simply “freeze” our funds without explanation.
Maybe. But Paypal and all the other fintech are still based on traditional banking with all its regulations and inefficiencies.
I doubt Libra, if it's ever actually launched, will escape those.
Similar to my experience, especially the ping-ponging between eBay and PayPal. In my case, I _did_ actually sell something, but then the buyer decided to return it. Somehow both my eBay and PayPal accounts got into a 'locked' state, with no way to resolve it instead of contacting customer service. The experience with their CS department was beyond frustrating - they're happy to send 'red' letters demanding refunds and transaction fees despite cutting off all my ability to do anything about it.
Reading this post has given me the final nudge I need to look into closing both those accounts.
No, most people would not be this agitated about a mistaken transaction being silently refunded. At best they'd probably assume the notification went to spam or something and went on with their day
My bank doesn't notify me about any transactions, I have to check my bank book manually. Once a mistaken transaction showed up and disappeared a few hours later, with no trace left behind at all. I just assumed it was a mistake and didn't bother getting angry.
Conversely, I'd be very annoyed if I didn't immediately get a notification from my bank about a decrease in my balance. However, I don't think either of us is qualified to speak for most people.
Receiving unintended funds can have all kinds of unintended consequences, including related to law enforcement.
In his case, he just got suspended and asked to provide documents he is physically unable to produce (contrary to presumption of innocence).
the next day, and after almost two weeks since the refund to place (but only one day after the long phone discussion) my account was blocked as "suspicious" activity and in order to unblock it I will have to provide original product receipts of the product I was "selling", something that I do not have as I do not even know what I was selling!
Yeah but it didn't here. Any negative consequence this man experienced was due to his anger and outrage. Calmly handling this situation would have resulted in a completely different outcome.
Yet again, emotion and anger are now somehow the company's fault.
If the customer’s emotions are affecting their account status, then it is entirely the company’s fault. If a customer is upset, a federally regulated financial institution should never be able to just shut down their account without recourse. That’s why we have regulations and laws, so some random customer service rep (possibly from a country with far different rules and regulations) can’t power trip over a customer.
This is incorrect and not how paypal handles refunds.
This is merchant 101: always refund suspicious payments before your payment processor has to do it, it'd be really bizarre if Paypal was somehow the only exception in the industry.
The only way I see this going wrong is if instead of doing a refund you create a new transfer to send the money back, but you obviously shouldn't do that.
FDSGSG is absolutely correct. He should have immediately processed a refund on the $600 as soon as he saw the transaction. By not doing so he risked getting a chargeback and loosing not only the $600 but an additional $10 PayPal chargeback fee.
There is no risk of OP loosing $1,200 to two refunds if he went through the proper refund procedure. A transfer can only ever be refunded once.
Id be pissed if a bank silently refunded money from my bank account without my say so, if money enters my account I want some input in it leaving.
I suppose the key is if Paypal put it in the wrong account then cleared up after themselves, I don't think that's a refund as such, you should be telling the account holder when they ask though. The other option is the payer paid money to the wrong account, in that situation this guy should be getting notified.
This isn't just an issue of 'not his money'. How are you supposed to know if your account is hacked, or some weird fraud is going on, or even just a straight forward, he sold something and thought he got paid for it.
I don't even have to have my say, but I sure as hell would want to be notified with an explanation (ie: refunded customer, money sent to incorrect account)
Once a mistaken transaction showed up and disappeared a few hours later, with no trace left behind at all. I just assumed it was a mistake and didn't bother getting angry.
I had an unexpected deposit show up in my bank account last year and then disappear a day later. The bank sent me a letter in the mail explaining what happened.
years ago, when Wells Fargo first introduced the ability to deposit a check via their mobile app, there was apparently a bug that caused it to sometimes deposit the same check twice.
so, i deposited a $1000 paycheck (was working for a local guy, fixing computers) once and did NOT notice that i actually ended up with $2000 in my account. This went on for at least three months, when all of a sudden I lose $1000 from my account. Apparently Wells Fargo had figured out about the bug and found all the accounts that had gotten double deposits and 'fixed it'.
You're not agitated by being called a liar, nor being implicitly accused of fraud?
It sounds like PayPal, or someone, made a mistake that PayPal then processed a fix on. When the guy called to say someone took money from his account with no notification, "what happened?", they said _he_ had actioned the refunding of the money. Which he hadn't.
They lied, purposefully and deliberately. But there's a good chance that the person on the phone wasn't lying IMO, instead someone altered his account in a way that didn't show [to their phone reps] in their system ... which is IMO much more messed up.
So PayPal lied to him.
Then they asked for details of the transaction that they said he had refunded and "blocked" his account for not providing them.
Government financial services should impose heavy fines on things like this, not informing a creditor when debits are made on their accounts. His PayPal account should have a user traceable error (with doubled entries in the other relevant account entries) -
money paid from $ACCNUM with $ACCID
money paid due to PayPal error and refunded to $ACCNUM
I mean come on, is basic accounting beyond them?
If they could do accounting properly then they wouldn't have to implictly accuse him of fraud (demanding the transaction details).
My experience of PayPal has in general been pretty good, but I did have a person pay for something from eBay, then when I was sending it - like just about to head to the post office I realised I'd not checked the payment. On checking the transaction link in eBay the transaction didn't appear on PayPal .. uh oh, so I checked PayPal and I couldn't find a transaction for the amount in my account list. So I checked eBay and the buyer had asked to cancel the completed transaction ... so I said yes, very begrudgingly. Then a few days later the buyer asked for the money back, but I never had it, and they (assuming they weren't lying) had a transaction for paying me ... which should be impossible with proper accounting because that transaction should include an entry in my account ledger too his payment and my receipt are one transaction.
My suspicion is that their database processing is lacking and their account ledgers as displayed to users don't properly demonstrate the status of accounts.
Lied perhaps ... or somebody made a mistake. Support rep might just not have understood the information they were seeing on their screen. Why immediately say THEY LIED rather than, they were mistaken. I find it more fruitful in life not to assume bad faith from the outset.
Fair point, PayPal were possibly mistaken because they've designed their system badly. They have it in their power to ensure they're not mistaken. Choosing to tell a falsehood as truth ... now, there's a name for that ...
I'm assuming good faith on behalf of the OP primarily because I've had a similar experience of missing transactions on PayPal.
PayPal exists, by design, in a legal gray area where they do almost everything that a bank does, but aren't legally a bank and thus avoid all the regulations and liabilities of the banking industry. Removing funds from your account sent in error (something normal banks do) and not telling you why is fully within the realm of a non regulated money transfer service. Use fed wire transfers next time. They're irreversible.
> I just assumed it was a mistake and didn't bother getting angry.
No need to get angry, but you might need to get careful. It's a bit like seeing a single cockroach in a restaurant; you can't just kill and remove it then declare that everything's fine.
Contacting them and confirming that it was a mistake is basic CYA, it establishes with them that it's not your transaction and hopefully gets something on file.
(I've just got off the phone with EE after a mysterious charge appeared on my account. They couldn't tell me where it had come from or even when it was applied, so after putting me on hold for a while they agreed to just take it off again. But I only spotted it because I'm checking my bills carefully after a previous dispute ...)
> Once a mistaken transaction showed up and disappeared a few hours later, with no trace left behind at all. I just assumed it was a mistake and didn't bother getting angry.
In many (all?) countries, your bank would've acted criminally. If money has been deposited to your account, only you or a court order can get it out again. If somebody "just does it", they are on a similar legal basis as somebody that forgot a jacket in your house and decides to break your lock and enter your house without your knowledge or authorization to get it back.
>A payor can attempt to reverse a payment made with an ACH credit only if the payor claims the beneficiary was already paid by a previous ACH credit entry, or the beneficiary was the wrong recipient of the funds, or the original ACH payment was in the wrong amount. Otherwise, the credit is considered final.
No clue how that works in different countries. Here it's pretty simple: once the money is in the account, you can't do anything. While the transaction isn't complete, you can cancel them obviously.
There's a good reason for that: nobody want's banks to take money out of accounts because they "feel that's the right thing to do".
There's one notable exception: SEPA direct debits getting reversed. Using DD requires a special agreement with your bank, however, and it won't happen that money ends up in your account without you requesting it - or if it does, you will get a phone call from your bank where somebody explains the situation, apologizes a dozen times and asks you to look into the matter and authorize a reversal. Acting on their own would be a criminal matter and likely be of interest to the regulators as well.
So if you decide not to reverse the mistake transaction you just get free money?
Unless it's a real lot of money going through the courts to get reimbursed would be impractical and if you transposed two numbers while typing an account number then you might not even know who the money went to.
> So if you decide not to reverse the mistake transaction you just get free money?
No, the law gets involved and at some point, a judge will decide whether you owe the sender the amount they mistakenly sent. It's basically the same for "I mistakenly sent you 100 that I meant to send to my friend" and "I mistakenly sent you 100 when I only meant to send you 50 that I owe".
And yeah, it's a hassle. At least you can generally find out which account the money went to, and with new IBANs, you need to mess up multiple digits, since they include a checksum. If the checksum doesn't match, the money bounces back into your account. Previously, some banks required that the account number and account holder match (within reasonable limits, misspelling the last name would work), but that changed with the IBAN system, only the account number matters now.
You're simplifying matters. If money was clearly sent in error, the bank can protect it from being spent (and subsequently refund it), unless the recipient disputes it:
> When you notify your bank or building society that you have made an electronic payment to the wrong account, your bank will commence action on your behalf within a maximum of two working days.
> Where your bank finds clear evidence of a genuine mistake, they will contact the receiving bank on your behalf with a request to prevent the money being mistakenly spent. As long as the recipient does not dispute your claim, you will subsequently receive a refund of the protected funds within 20 working days from when you notified your bank.
A friend of mine had declared bankruptcy, meaning he wasn't eligible for any kind of credit whatsoever, and his bank let a $10,000,000 withdrawal go through and put his account into overdraft. Naturally, this was on a Friday before a long weekend so he had to wait until Tuesday to get it corrected.
When the bank corrected it the transaction completely disappeared, apart from the screenshots he took there was no trace of it whatsoever.
A few years ago, I sent my youngest son to a well-known online retailer to buy some computer gear.
What he got was a counterfeit, a fake that was broken.
He started the refund process, but I was pretty miffed that my reputation with my kid got mixed up in these poor business practices. So I emailed management and asked that they apologize to the kid.
It took almost forever to get them to figure out that I was not asking for a refund. I was asking for somebody to explain what happened, apologize, and take steps for it not to happen again.
He finally got a refund, although whether it was from my actions or his nobody knows. He said it came in three chunks, as if various departments were each pitching in a bit.
I thought my point was pretty clear: as leadership, when you take your company and allow its reputation to suffer like that, this is something you are responsible for and need to take action to fix. The money has nothing to do with anything. But they only have certain predefined channels that they seem to be able to communicate through. Anything outside of those channels causes a weird org fault.
I've worked with call centers before, and it continues to amaze me the strange place we are putting humans. They're paid to answer the phone, but after that? They're basically little robots, paid to execute a predefined program, adding in a bit of human-sounding noises now and then to make things slightly more palatable to the person on the other end.
> Inappropriate automation and human/machine confusion bedevil call centres. If you could solve your problem by filling in a web form, you probably would have done. The fact you’re in the queue is evidence that your request is complicated, that something has gone wrong, or generally that human intervention is required.
> However, exactly this flexibility and devolution of authority is what call centres try to design out of their processes and impose on their employees. The product is not valued, therefore it is awful. The job is not valued by the employer, and therefore, it is awful. And, I would add, it is not valued by society at large and therefore, nobody cares.
Call centers, warehouses, and distribution centers; all places where people seem to be required yet their creativity and input isn't. For a large part, we treat them like they're just meat robots.
I remember the first time I saw the computer-controlled voice-directing picking. You wear the headset. The computer tells you what to do. I see this way of working eating up more and more workers.
One economist put it this way in a recent column I read: robots aren't taking your jobs. Robots are becoming your bosses.
> If you could solve your problem by filling in a web form, you probably would have done.
How true is this of the general population? I suspect that a significant fraction of call centre volume could be dealt with through a web form.
That said, the rest of the point is true: the lack of agency in call centre employees likely results in a huge amount of wasted time and frustration both for the customer and for the company.
>It took almost forever to get them to figure out that I was not asking for a refund. I was asking for somebody to explain what happened, apologize, and take steps for it not to happen again.
This is not the payment processors job, this is the merchants job. Instead of PayPal you could just as well have contacted Visa/MC/Whoever or your issuing bank, they wouldn't have been able to do much for you either.
Yes, my experience with PayPal has involved inconsistent UIs, bad UX, locked funds, and incompetent customer service. I only use paypal where absolutely necessary, such as for selling on ebay.
Do you work for merchantinc.com? They seem to own and operate paypalsucks.org and have a history of advertising themselves with forum spam similar to your comment.
The same happened to me. 10 years ago my personal account was frozen. They requested additional verification. Getting any information on why my account was suddenly frozen lead to nothing. Paypal was not able or willing to explain to me what caused this issue.
This was the moment I decided I did want to do any further business with them.
It’s difficult to understand why people are even using this service anymore. PayPal is not your ‘pal’ and to use them safely you need insurance and leverage all the way. The only reason I can imagine is that it works most of the time. But the times where it fails are invariably a disaster.
> PayPal survives because they keep end users happy, we (the people using PayPal to take payment or integrating it) aren't the end user.
I have no clue where you get that idea. PayPal was freezing end-users accounts, had a bad support and very inconsistent refund limits since forever. Almost everyone I know who heavily used it had issues with it at some point in time.
Yeah as long as you just use PayPal once a year to make some payment through your debit card it's okay, but any advanced user who use it more often will eventually get in trouble.
PayPal generally these days doesn't get hacked. As an alternative to supplying credit card number to a random online merchant, it is infinitely more secure.
I have no doubts about security and avoid giving my card credentials to random merchants it's exactly my use case for PayPal, but I still got account randomly locked several times over 10 years.
What exactly caused it I have no idea, but might be traveling or using VPN. Once I tried to make fairly big $2000 transaction to pay for my new laptop and spent a week re-verifying my identify with them.
There's really no good reason for anybody to be asking people for their credit card number any more. 3-D Secure exists and all the major schemes have implementations.
Given two merchants, I'll choose the one that uses a credit card over paypal every day. At least with a credit card I've my bank _and_ the scheme on my side. With paypal, it's me (and my bank) against the world ...
PayPal user since 2012, multiple monthly recurring transactions, about a dozen total transactions per month. Have cashed out bitcoin multiple times through Coinbase. Never had a problem.
Far less issues than I’ve had with my bank actually (random declines, locked out of my account due to technical issue) in the same number of years.
Lucky you. Other people have had very different experiences.
These new-monopolies all seem to have the same features: robo-traps that trigger problems for users, robo-support (or support-by-script) that doesn't solve the problems, and no apparent motivation to actually solve problems when they happen.
Stronger regulation might fix some of this, but generally there should be some obligation to act ethically and responsibly.
(I know I'm dreaming, but consider how we got to the point where this requirement might as well be science fiction instead of a realistic consumer expectation.)
It's a two-sided market with one-sided dispute resolution, like eBay. Customers love it because it almost always finds in their favour. Sellers hate it because it almost always finds in favour of the customer. Neither side really wants to pay higher transaction fees in the hope of better justice from the dispute resolution.
Ultimately if you get into a bit enough dispute with Paypal you have to consider using the real courts.
I'm a seller and I actually like the buyer protection, because it emboldens people to buy a product from a small and relatively unknown seller. Customers also don't have to give me any of their personal or financial information except for where to mail their package.
Now, an aspect of running even a small business is that I have some cash on hand, and a profit margin to cover the cost of eating one or two disputes if necessary. If a $100 sale goes down the toilet, I don't lose $100, but only my original cost of goods.
Where I read about horror stories is individual sellers who are selling things like a second hand electric guitar. In those cases, the buyer and seller are probably both not swimming in cash, so having their money tied up in a dispute is in fact painful. And that entire economy is rife with fraud and outright theft. Also, electric guitars are a case where there is extensive room for dispute about the provenance and condition of each piece. This gives the buyer an easy way to claim "item not as described."
In my view the hot business model for using the small payment services is selling an inexpensive physical good with a generous mark-up.
I don't pay for labor. Amusingly, an MBA student interviewed me about my tiny business, and could not wrap his head around the fact that I don't count labor in my cost of goods. I do have a rough estimate of profit, and of how many hours I work. The closest thing I could offer him was a ratio of these numbers, which is typically around $100 per hour. I make my widgets in my basement, and am usually able to take care of everything in one evening per week. It's the closest thing to passive income that I've been able to come up with so far.
I follow a rule that's common among micro-businesses, which is to waste zero time on disputes. I always offer a full refund right away, along with a boilerplate list of troubleshooting suggestions. In virtually every case, the customer comes back in a few days and agrees that my product works. But because of this, I consider a dispute to be an immediate loss, and not a dollar amount hanging in limbo.
Is there insurance for when banks/payment processors do odd things? If there isn't, that seems seems like an interesting business opportunity. (I personally don't think it would be much fun to sort out PayPal's misdealings and customers trying to defraud the insurance company and/or PayPal, so count me out.)
I've been using PP for several years without a single incident. I use it because I don't have to write Code or maintain a server to process payments. My business uses a passive web page. My online order form is written in plain HTML, in a text editor, and I was able to fully test it in a few minutes.
I keep my eye out for alternative services because like many others, I've heard horror stories, and would not mind having a backup. So far I haven't found anything.
A possible reason for my good luck is that I run an "analog" business. My product is a physical good that I make and ship, so the customer gets something tangible and that's the end of it.
I don't want to cast aspersions, but the horror stories I've read are either one-time incidents with eBay sellers, or complex digital services where the product is an intangible.
Because, as a business here in europe, and potentially other parts of the world, I need to offer an instant payment method that doesn‘t expect customers to have a credit card since that‘s not a given at all. Paypal‘s ability to add your banking account as a source of funds has allowed customers to instantly pay for goods long before credit cards became more common here.
Paypal is used in about 40% of our sales and we didn’t have any issues in about a decade. Even from personal experience as a buyer I can‘t report any major issues.
Once I ordered some expensive gear from UK and only option to pay was PayPal. I ordered and paid for the goods, order shipped and a few days later I get a mail from the selling company asking why I locked their account for fraud protection or some such. PayPal sent me the money back and I got the goods. Offcourse I didn't use PayPal again and sent them a normal bank transfer instead. Was also a better exchange rate than PayPal.
Paypal may, under good circumstances, fix problems they have themselves caused.
However, the concept of explaining to a customer why they did something is utterly alien to them. This just does not seem to be part of any process they have. It bewilders them to no end if you ask them for an explanation of anything.
PayPal is horrible, both as a merchant and a customer. In every single way possible. From APIs to service, to explanations to everything. It's time for someone else to take their place and everyone stop using PayPal.
Very weird case. The person got angry even though it was not his money to begin with. Absolutely no harm was caused to him. The person demanded explanation why an erroneous amount of money visited his account. Yet it's none of his business. There was a moment in this incident where any reasonable person would have just moved on.
> Notification of deducted money is something that is quite reasonable to expect.
You choose to say it like that. "Notification of deducted money". The money was first added, then removed. It would have been different if it was first removed, then added. But it wasn't.
It is his business, it's his account. What if he'd had an auto-transfer setup to clear his account and it sucked up the money before the magical refund? Then he'd have PayPal up his ass about "hiding funds".
Would you let some 3rd party use your PO box or parcel locker as long as "it was none of your business"?
It's not his account. It's a service paypal offers. They own the service, the bits, everything. He owns the money. Paypal added some money that was not his, and then they took it away. Nothing of his was touched.
OP here. If you do NOT get a notification that some money were removed from your account you will NEVER know of the fact (unless you are logging in everyday to check the balance and the account movements) My bone is NOT with the valid/legal refund, but for the fact that Paypal did NOT bother notifying me. If that refund was somehow invalid/illegal/callitwhatyouwill, I will have never found out for months. TOO late to do something about it by then
You just decide to care about the notification. The money that was added on your account and subsequently removed was just bits on hard disc. Those bits didn't affect your life until you decided to demand Paypal to notify about it.
Is it too much to ask for regulations for payment transactions to step in, at least in EU? I know we're not too regulation-friendly here, and I haven't made up my mind yet, but I tend to think it's only consequential that digital payment transactions are considered a field where governments should exercise authority, on similar grounds that give (or doesn't give) government authority over establishing a currency in the first place.
Note this isn't a snark at paypal specifically. I'm just interested if anyone with an economic background has an opinion to share.
The EU has a lot of law about digital payments. In September this year, a new provision will come into force in the entire EEA that requires digital payments to be made with two-factor authentication, for example. I don't know whether or how that affects PayPal though.
Ugh, I'm really going to need virtual phone numbers for all these "second factors" (i.e. linkable identifiers), I'm just not sure where to get them. Twilio requires a credit card, and most other businesses that offer this look super shady.
I won't install an app on my phone. It probably won't work without Evilcorp Play Framework, it probably won't work with root, and even if neither of those are an issue, I still don't trust my device enough (I won't install banking, password managing, or pgp apps on there, it's too much of a play thing for that). My trusted things are computer-based, not a mobile device that goes everywhere and that I want to be able to use without having to unlock the screen with a complicated password every time.
So it'll probably be SMS, and otherwise they can ship me a second factor -- as the Rabobank already does for as long as I know: they basically send you a payment terminal that creates 0 cent transactions on your card, if I understand it correctly. While a bit annoying, it is safe and not too inconvenient.
That's great news. I hope it will finally result in international support for more secure internet payment. I can do so domestically, but as soon as a transaction is international, credit cards is basically the only thing that's accepted.
Given the expansion of "Faster Payments" and "open banking" (banks must support APIs!), I wouldn't be surprised to see the EU try to mandate a bank-to-bank ""federated"" payment system. Norway already has Vipps everywhere, although that's more like Venmo than Paypal.
Those are fairly small pitfalls. You can send money back without a refund button. Authentication is done through your bank, if your bank has 2FA, then you have 2FA for Interact. Not sure what you are referring to about the payment address, but declaring the email the unique ID seems to be a decent solution for me.
I avoid PayPal, but in the rare case where there is no other payment method possible and i really need something, i simply create an account, do the transaction, and immediately delete the Paypal account again.
I once closed my account only for it to be re-opened 4-5 months later by them with a debt balance assigned.
Long story short is that someone I'd previously transacted with owed them money so they determined that they would take it from my account and recover it from me.
I complained the Financial Ombudsman in the UK. They agreed with my position that it was unreasonable for me to be held financially accountable for people I've transacted with indefinitely.
Paypal stuck to the line that "You cannot close your account in order to avoid a debt". Despite the fact that I had no debt, except the one they assigned me several months after account closure, out of nowhere.
I opened my paypal account in Sep 2003, and deleted it in November 2013. Even though I didn't have to concel their "support team" it started to feel like a scammy site I couldn't trust by 2010 or so.
I've found a few sites over the years which only supported Paypal as an option, in every case I've chosen to buy elsewhere or not at all. Paypal is not a company I could support.
As a buyer I would never want to use cryptocurrencies. There is absolutely zero customer protection without the cryptocurrencies going trough a middleman, at which point it's nothing else than another version of PayPal.
This is the primary reason I, and I assume a lot of others, use PayPal - not because of their amazing customer support, but because of their customer protection which works just fine in 99.9% cases - which is still a lot better than 0 customer protection.
I just got an invoice from Google Account. Basically, scammers send people invoices stating that they exceeded their 5GB and people have to pay $120 not to lose their Google account. I'm sure there are tons of rich idiots who will pay $120, but I wonder why:
- There was no merchant contact info. They managed to upload Google's logo and use Google Account as the merchant name. Isn't PayPal doing any basic blacklist check, etc. or check against stock logos (there are tons of companies now, which provide logo by provided company name).
- There's not way to report the invoice as scam attempt - I can only "cancel" or "archive", which sends the "merchant" an email and they can know that my email belong to a valid PayPal account after that as the email is sent by PayPal.
In general, after so many in business, PayPal is a lazy, slow, and stupid company. I am sorry to say that, but it's the truth. Their developers are a bunch of old timers, who have entrenched into the company and there's no innovation going on. There are many, many, many complains about PayPal, which I can list here. Most of the are very simple to spot and fix by PayPal, but, no, they are untouched for years.
I feel like their dev teams is maybe a dozen people who just do maintenance of critical issues and that's it. Their recent interface upgrade took years and it still sucks and feels like in the dawn of DotCom. Compare PayPal to Stripe, let's say - there's no room for comparison! Stripe innovates at a huge pace, they provide a much better DX (Developer Experience), and are so much nicer to work with!
PayPal recently acquired Xoom - a very expensive and shady money transfer company. Compared to TransferWise, they are a total joke. In general, I think PayPal is managed by technological morons!
P.S. PayPal Here is also a disaster compared to the rest. I bought the device (as PayPal gives nonprofit discounts like Stripe but unlike Square) and many of our transactions failed, so, we switched back to Square. Now we're integrating with Stripe's reader, so, we'll get the best of both.
My guess regarding why PayPal does so badly with edge cases: they probably use very low wage "contractors" to run customer service and support.
Google, Facebook, PayPal all rely on their automated systems working perfectly and handling as much as possible. But there's always edge cases where things don't go as planned, and they require human intervention. But big tech wants max profits, so they try not to hire anyone, and those that they do hire are as poorly paid as they can get away with.
So you get very uninterested and unmotivated people handling customer support.
Great analogy! Despite enjoying a long relationship, Paypal will very possibly stab you in the back and rob you blind in a blink of an eye then become incommunicado.
"Oh, yeah, don't worry, 3D secure can't be forced for all payments, but we got you, we'll enable it when we think it might be abuse. Also, our seller protection covers you."
All the time: "Here is a customer that made 12 purchases during the last 13 months. We took the money, but you have to prove that the card wasn't stolen and that the customer got what he paid for. We didn't enable 3D secure for this transaction, so please fix this for us and we'll give you your money back. Also, if you don't we'll take some more money from your account. Seller protection does not cover this as services are in a gray-zone."
240K frozen and taken since 2012 and still counting! At least I've started to win all the cases, but it takes a lot of time. Time to switch to stripe where I can force 3D secure...
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[ 4.8 ms ] story [ 259 ms ] threadPayPal charged me £400 which I was lucky I spotted. Eventually after a week got the money back.
I never got an explanation why it happened or how I or they would prevent it in future. I prevented it by leaving eBay and Paypal.
Oh well, whoever are still using Paypal should know by now what they are risking.
Yes that’s normal for PayPal.
Getting a the runaround about how and why it happened?
Yep, that’s expected too.
Actually getting a non-form letter response of any type?
That’s just lucky. We couldn’t get an account rep on the phone for almost 4 days when ~35k was suddenly deducted from the account. Nor when they accidentally cancelled all of our customers subscriptions while working an an unrelated fraud incident. Of course in both of these instances the customers blamed us for not being able to process refunds and being unable to reactivate their subscriptions.
PayPal, working as intended.
Imagine having PayPal place a hold on the funds in your account to make sure refunds/fraud can be handled. Then when a customer does request a refund you’re literally unable to process the refund because it won’t take it from the funds you just received that are held. So now you automatically lose all disputes and they just start raiding your linked bank account. So why did they hold the funds in the first place?
PayPal needs to end IMO.
Never had an issue with PayPal debiting funds though, in 10+ years using them.
Really the only thing to do, as soon as you see a "pay with paypal" screen is to go away screaming.
Here's the anecdote: I had had a company with a bank account and PayPal account, then dissolved the company and closed the bank account. Months after that, a former supplier of the now nonexistent company who had PayPal authorization deducted funds fraudulently from the PayPal account, claiming they had rendered services that were never rendered to a company that obviously and provably no longer existed.
PayPal sent the account into overdraft. When they couldn't deduct payment from the bank account that no longer existed, they started sending threatening communications to get me to settle the balance. I took things up with their fraud unit to get the transaction cancelled. Their fraud unit dismissed my case without looking into any particulars regarding the services that the vendor didn't render or the company that should have received services that no longer existed. To them the only thing that mattered was that, years ago, I was, in actual fact, stupid enough to click on "Pay with PayPal", the ramifications being that vendors are entirely within their right to use PayPal as an instrument of fraud and legal intimidation against me. It's your own damn fault, sir, for being so stupid and using PayPal.
Knowing that taking the legal route would have been way more costly than the amount of the transaction, and wanting to sleep soundly again against the backdrop of PayPal sending threatening communications, I wired money from my personal account to settle the balance and jumped through a shitload more hoops to make sure the PayPal account was properly closed and couldn't come to haunt me again in the future.
I think that's how they get away with it: Since the transactions they handle tend to be small, no one will take legal action.
The critical point seems to be that fraud won't talk to customers.
It makes sense that PP moves quickly when fraud is suspected. What doesn't make sense is that they're so secretive about the events that take place on a user's account. For all we know, user's could be facing legitimate fraud issues that can be addressed with cooperation between PP and user. However, a user cannot cooperate when they have no idea what's going on.
If you can't discuss cases of fraud with your customers out of fear of revealing information to the defrauding party, you may need to do more in vetting the identity of users. I don't mean the intricacies of fraud with customers like patterns and markers for fraud. I mean getting to the bottom of the disputed transaction. You're shooting yourself in the shoot in any other case. PayPal is concerned more with user count and transaction volume than individual account retention. You would think that you want your customers to be proactive in cases of potential fraud.
It seems like they never learned from their every-user-is-a-credit-card-holder days.
Also the fact that they reply to my initial question about the refund, with an absolutist "After investigating, YOU have logged in and YOU have initiated the refund", when I know I have done not such thing, immediately makes me think that I've been hacked or somehow have fallen a victim of fraud.
Further inquiries to clarify the issue, only leads me to get my account blocked/locked. I have no idea how this can be considered fraud protection from their side! And all this means that all in all I agree with you about the lack of competence of the fraud protection team...
That reads like a "no" to me.
But I really think that the banking regulator should take note of user stories such as the ones that are regularly all over HN and get to the bottom of it. After all PayPal, at least in Europe, is subject to the same regulation as other banks and payment processors. And if that's not the job of a banking regulator to take note when a financial institution has such shitty processes that consumers regularly suffer damages, then I don't know what is.
Also, maybe a private lawfirm should put together a class action or something on the basis of all those user stories. I realize that cases tend to be rather different to each other, but I'm finding it hard to believe that there aren't some things that happen so frequently and so systematically that it should be easy to take a stab at in court on behalf of a larger group of users who have suffered damages.
But, standing on principle, I would have really liked to lodge a complaint with the regulator. Only problem: Since I was acting as a company (that now no longer even existed), it was never a consumer transaction, so consumer complaint wasn't a viable route, and you obviously hurt your case, even if it's just a complaint with a regulator, if you then settle the balance since they'd read that as you admitting guilt in some way.
Not settling the balance and lodging a complaint with the regulator could have had the side-effect of raising the stakes for them. So in a situation where they'd not normally take you to court, they might now actually do that since there would now be real money at stake, if the regulator launches into a full-scale audit into their processes & business practices. In such a case, winning a court case against me would have helped them in calling off the dogs if the regulator were to take an interest.
If you ask me, it should be the other way round: The banking regulator should play the role of public prosecution. When you complain against them with the regulator, then the regulator should either (a) tell you to bugger off without charging you for the privilege and allow it to end right there (b) take on your case in the sense of taking it to court on their own dime and if it looks like it was processes & business practices that were at fault then they should come after the financial institution for that kind of a failure hard.
Does anyone know how I can avoid that happening?
I've done this a fair amount in the past: When I would do business with a vendor that I don't trust all that much with the way they do their billing, I would give them a credit card number for a prepaid credit card with tightly controlled balances, instead of giving them anything that's linked to my main bank account.
But it doesn't really help. When the untrustworthy party wants to deduct a payment from the mechanism you've given them and it can't, then they will instead just turn to bullying and threatening legal action, and you end up paying them whatever is in dispute because you won't want to risk them taking legal action.
Another consideration that enters into this is the dark and murky territory of consumer credit rating. If there's an account that's in your name, regardless of whether it's PayPal, a prepaid credit card, a bank account or whatever, and there's a charge that hits the account and there's no balance, then this is an event that they'll collect data about, and that may be disseminated in ways that you may not realize, and it may come back to bite you in the ass when you want to apply for a mortgage or something. So it's best not to go that route.
At the end of the day, the only thing you can do is to not do business with certain kinds of entities at all. And PayPal is definitely on my list of entities not to do business with.
I recently bought some piece of clothes and paid with paypal (had some money in it and I wanted to spend it before Paypal decides to close the account for whatever reason).
There was a panel saying "you allow the clothing company to ask for whatever amount of money there is in the account and if there isn't enough we will take it from the credit card linked to the accound". That credit card is the one I used to put money in the account in the first place.
A few days ago I decided to give money to a charity a friend set up on facebook for his birthday. Had a choice between paypal and my credit card. Same kind of Paypal panel but I felt better giving facebook my credit card than linking Paypal and Facebook.
I am nervous and I am going to buy a pi or something and close the Paypal account forever.
My credit card is a "fill it to use it" kind. You need to put money on it from your bank account and then it acts as real Mastercard. So there's always 0 euros on it except when transfering money from bank account to buy something online. And I can put the money back from the cc to the bank account, no fees. With Paypal I can't, it's like I am forced to spend it now.
You say that but it's literally the only way to counter scamming sellers on the internet. PayPal needs to stay, at least until there are viable competitors.
Edit: also googling around none of those seem to have the solid buyer protection that PayPal has. With PayPal I can just open a dispute with a picture of the error (color is off or whatever) and within a relatively short time period the seller is forced to reimburse me the full purchase cost, including shipping. That's very valuable as a customer.
What i would love is for these services to require ID for opening account, not after depositing over $250 (when you have skin in the game and have to verify your id or lose the $), they won't though because they would have a 95% churn rate on registration.
You can use them for recurrent expenses or make them single use (the card is cancelled after first payment).
You can also max them to any arbitrary value. So if I need to buy 23.03 dollars of something online I can issue a card that maxes out at 24 dollars. So even if the details were stolen you could only take the remaing cents until it maxed.
None of this is new or innovative I never really understood the need for paypal in online shopping.
This is what happened to me:
I got an eBay order and shipped it out, transferred the funds out of PayPal.
Buyer sends me an eBay message saying "OMG I'm so sorry but my eBay account was hacked." I believe them because when I googled the shipping address the package went to a foreign freight forwarder.
I don't worry because the address was "confirmed" in PayPal, so I'm protected from fraud. I always make sure to ship only to confirmed addresses.
eBay account owner initiates fraud investigation.
PayPal refunds buyer while the investigation is pending, I have several linked bank accounts, they didn't touch them, my PayPal account just goes negative.
PayPal sends me an email telling me I can't have a negative balance and I need to fund my account to get my balance to zero, against their TOS to carry negative balance. No biggie, I fund it. I think I was even able to fund it with a credit card.
Fraud investigation proceeds. I have to provide a tracking number to verify I actually shipped the item.
A few days later PayPal decides it's fraudulent, but I'm covered under their seller protection.
PayPal refunds me the money, I transfer it back to my bank.
I'm perfectly happy with how it was handled.
I guess that doesn't make a good blog post though.
First, PayPal doesn't like it when your dispute ratio increases. The best way to handle disputes as a merchant is just to give the customer what they want. Most times this is a refund.
Second, when fraud occurs most PayPal users dispute any transactions as soon as they get their account back.
Third, You cannot refund a payment from a held or rolling hold balance. PayPal retroactively applied a rolling hold to our account of ~30% of our monthly gross transactions for a rolling 90 days. The way this works on PayPal, at least at that time, means that until your rolling hold balance is equal to 30% of your last 90 days transactions any funding of and payments into the account IMMEDIATELY get sucked into that rolling hold. We would auto flush the completed transaction account balance nightly. So now we're in a situation where trying to refund a customer wants you to add funds to your account, but as soon as the funds are added they are applied to the rolling hold. So, you click Refund on the dispute and you're unable to refund it. Eventually the dispute is automatically closed in their favor and the account balance goes negative. At that point you can fund the account and it'll apply to the negative balance first.
This was my experience at least, and trust me it was one of the most stressful events I ever encountered. Most of that stress was not knowing what was going on and why, and trying to get anything out of PayPal. Their processes are so opaque for merchants in many cases.
What would be an alternative solution in your opinion?
I never got actual confirmation that paypal is really as bad as some people casually mentioned
I can confirm that PayPal is horrible to legitimate merchants. One would expect better fraud protection given the high fees they charge. I never expected they would simply “freeze” our funds without explanation.
No thanks.
Reading this post has given me the final nudge I need to look into closing both those accounts.
My bank doesn't notify me about any transactions, I have to check my bank book manually. Once a mistaken transaction showed up and disappeared a few hours later, with no trace left behind at all. I just assumed it was a mistake and didn't bother getting angry.
In his case, he just got suspended and asked to provide documents he is physically unable to produce (contrary to presumption of innocence).
the next day, and after almost two weeks since the refund to place (but only one day after the long phone discussion) my account was blocked as "suspicious" activity and in order to unblock it I will have to provide original product receipts of the product I was "selling", something that I do not have as I do not even know what I was selling!
Yet again, emotion and anger are now somehow the company's fault.
This is merchant 101: always refund suspicious payments before your payment processor has to do it, it'd be really bizarre if Paypal was somehow the only exception in the industry.
The only way I see this going wrong is if instead of doing a refund you create a new transfer to send the money back, but you obviously shouldn't do that.
There is no risk of OP loosing $1,200 to two refunds if he went through the proper refund procedure. A transfer can only ever be refunded once.
I suppose the key is if Paypal put it in the wrong account then cleared up after themselves, I don't think that's a refund as such, you should be telling the account holder when they ask though. The other option is the payer paid money to the wrong account, in that situation this guy should be getting notified.
This isn't just an issue of 'not his money'. How are you supposed to know if your account is hacked, or some weird fraud is going on, or even just a straight forward, he sold something and thought he got paid for it.
I had an unexpected deposit show up in my bank account last year and then disappear a day later. The bank sent me a letter in the mail explaining what happened.
Maybe you need a better bank.
so, i deposited a $1000 paycheck (was working for a local guy, fixing computers) once and did NOT notice that i actually ended up with $2000 in my account. This went on for at least three months, when all of a sudden I lose $1000 from my account. Apparently Wells Fargo had figured out about the bug and found all the accounts that had gotten double deposits and 'fixed it'.
All without notifying me.
...I don't bank with Wells Fargo any more.
It sounds like PayPal, or someone, made a mistake that PayPal then processed a fix on. When the guy called to say someone took money from his account with no notification, "what happened?", they said _he_ had actioned the refunding of the money. Which he hadn't.
They lied, purposefully and deliberately. But there's a good chance that the person on the phone wasn't lying IMO, instead someone altered his account in a way that didn't show [to their phone reps] in their system ... which is IMO much more messed up.
So PayPal lied to him.
Then they asked for details of the transaction that they said he had refunded and "blocked" his account for not providing them.
Government financial services should impose heavy fines on things like this, not informing a creditor when debits are made on their accounts. His PayPal account should have a user traceable error (with doubled entries in the other relevant account entries) -
I mean come on, is basic accounting beyond them?If they could do accounting properly then they wouldn't have to implictly accuse him of fraud (demanding the transaction details).
My experience of PayPal has in general been pretty good, but I did have a person pay for something from eBay, then when I was sending it - like just about to head to the post office I realised I'd not checked the payment. On checking the transaction link in eBay the transaction didn't appear on PayPal .. uh oh, so I checked PayPal and I couldn't find a transaction for the amount in my account list. So I checked eBay and the buyer had asked to cancel the completed transaction ... so I said yes, very begrudgingly. Then a few days later the buyer asked for the money back, but I never had it, and they (assuming they weren't lying) had a transaction for paying me ... which should be impossible with proper accounting because that transaction should include an entry in my account ledger too his payment and my receipt are one transaction.
My suspicion is that their database processing is lacking and their account ledgers as displayed to users don't properly demonstrate the status of accounts.
I'm assuming good faith on behalf of the OP primarily because I've had a similar experience of missing transactions on PayPal.
No need to get angry, but you might need to get careful. It's a bit like seeing a single cockroach in a restaurant; you can't just kill and remove it then declare that everything's fine.
Contacting them and confirming that it was a mistake is basic CYA, it establishes with them that it's not your transaction and hopefully gets something on file.
(I've just got off the phone with EE after a mysterious charge appeared on my account. They couldn't tell me where it had come from or even when it was applied, so after putting me on hold for a while they agreed to just take it off again. But I only spotted it because I'm checking my bills carefully after a previous dispute ...)
In many (all?) countries, your bank would've acted criminally. If money has been deposited to your account, only you or a court order can get it out again. If somebody "just does it", they are on a similar legal basis as somebody that forgot a jacket in your house and decides to break your lock and enter your house without your knowledge or authorization to get it back.
Requiring a court order to correct simple bank errors is entirely infeasible and, frankly, pretty silly.
https://digital.wf.com/treasuryinsights/portfolio-items/tm31...
>A payor can attempt to reverse a payment made with an ACH credit only if the payor claims the beneficiary was already paid by a previous ACH credit entry, or the beneficiary was the wrong recipient of the funds, or the original ACH payment was in the wrong amount. Otherwise, the credit is considered final.
There's a good reason for that: nobody want's banks to take money out of accounts because they "feel that's the right thing to do".
There's one notable exception: SEPA direct debits getting reversed. Using DD requires a special agreement with your bank, however, and it won't happen that money ends up in your account without you requesting it - or if it does, you will get a phone call from your bank where somebody explains the situation, apologizes a dozen times and asks you to look into the matter and authorize a reversal. Acting on their own would be a criminal matter and likely be of interest to the regulators as well.
Unless it's a real lot of money going through the courts to get reimbursed would be impractical and if you transposed two numbers while typing an account number then you might not even know who the money went to.
No, the law gets involved and at some point, a judge will decide whether you owe the sender the amount they mistakenly sent. It's basically the same for "I mistakenly sent you 100 that I meant to send to my friend" and "I mistakenly sent you 100 when I only meant to send you 50 that I owe".
And yeah, it's a hassle. At least you can generally find out which account the money went to, and with new IBANs, you need to mess up multiple digits, since they include a checksum. If the checksum doesn't match, the money bounces back into your account. Previously, some banks required that the account number and account holder match (within reasonable limits, misspelling the last name would work), but that changed with the IBAN system, only the account number matters now.
Well, you clearly aren’t a lawyer (anywhere).
> When you notify your bank or building society that you have made an electronic payment to the wrong account, your bank will commence action on your behalf within a maximum of two working days.
> Where your bank finds clear evidence of a genuine mistake, they will contact the receiving bank on your behalf with a request to prevent the money being mistakenly spent. As long as the recipient does not dispute your claim, you will subsequently receive a refund of the protected funds within 20 working days from when you notified your bank.
http://www.fasterpayments.org.uk/press-release/new-help-cust...
When the bank corrected it the transaction completely disappeared, apart from the screenshots he took there was no trace of it whatsoever.
What he got was a counterfeit, a fake that was broken.
He started the refund process, but I was pretty miffed that my reputation with my kid got mixed up in these poor business practices. So I emailed management and asked that they apologize to the kid.
It took almost forever to get them to figure out that I was not asking for a refund. I was asking for somebody to explain what happened, apologize, and take steps for it not to happen again.
He finally got a refund, although whether it was from my actions or his nobody knows. He said it came in three chunks, as if various departments were each pitching in a bit.
I thought my point was pretty clear: as leadership, when you take your company and allow its reputation to suffer like that, this is something you are responsible for and need to take action to fix. The money has nothing to do with anything. But they only have certain predefined channels that they seem to be able to communicate through. Anything outside of those channels causes a weird org fault.
I've worked with call centers before, and it continues to amaze me the strange place we are putting humans. They're paid to answer the phone, but after that? They're basically little robots, paid to execute a predefined program, adding in a bit of human-sounding noises now and then to make things slightly more palatable to the person on the other end.
> Inappropriate automation and human/machine confusion bedevil call centres. If you could solve your problem by filling in a web form, you probably would have done. The fact you’re in the queue is evidence that your request is complicated, that something has gone wrong, or generally that human intervention is required.
> However, exactly this flexibility and devolution of authority is what call centres try to design out of their processes and impose on their employees. The product is not valued, therefore it is awful. The job is not valued by the employer, and therefore, it is awful. And, I would add, it is not valued by society at large and therefore, nobody cares.
I remember the first time I saw the computer-controlled voice-directing picking. You wear the headset. The computer tells you what to do. I see this way of working eating up more and more workers.
One economist put it this way in a recent column I read: robots aren't taking your jobs. Robots are becoming your bosses.
How true is this of the general population? I suspect that a significant fraction of call centre volume could be dealt with through a web form.
That said, the rest of the point is true: the lack of agency in call centre employees likely results in a huge amount of wasted time and frustration both for the customer and for the company.
This is not the payment processors job, this is the merchants job. Instead of PayPal you could just as well have contacted Visa/MC/Whoever or your issuing bank, they wouldn't have been able to do much for you either.
E: Yeah, I guess I misinterpreted the parent.
This was about 15 years ago, and back then this was the first Google result when you searched for "Paypal complaint".
This was the moment I decided I did want to do any further business with them.
The funny thing is, Paypal just unfroze my old account after like 4 years...also for no reason!?
That is the story of the whole western world at the moment…
Proof a ruthless focus in the right place can overcome almost anything.
They've been shit forever.
Yeah as long as you just use PayPal once a year to make some payment through your debit card it's okay, but any advanced user who use it more often will eventually get in trouble.
What exactly caused it I have no idea, but might be traveling or using VPN. Once I tried to make fairly big $2000 transaction to pay for my new laptop and spent a week re-verifying my identify with them.
Given two merchants, I'll choose the one that uses a credit card over paypal every day. At least with a credit card I've my bank _and_ the scheme on my side. With paypal, it's me (and my bank) against the world ...
Far less issues than I’ve had with my bank actually (random declines, locked out of my account due to technical issue) in the same number of years.
These new-monopolies all seem to have the same features: robo-traps that trigger problems for users, robo-support (or support-by-script) that doesn't solve the problems, and no apparent motivation to actually solve problems when they happen.
Stronger regulation might fix some of this, but generally there should be some obligation to act ethically and responsibly.
(I know I'm dreaming, but consider how we got to the point where this requirement might as well be science fiction instead of a realistic consumer expectation.)
Ultimately if you get into a bit enough dispute with Paypal you have to consider using the real courts.
I think this is almost exclusively small, inexperienced merchants.
Now, an aspect of running even a small business is that I have some cash on hand, and a profit margin to cover the cost of eating one or two disputes if necessary. If a $100 sale goes down the toilet, I don't lose $100, but only my original cost of goods.
Where I read about horror stories is individual sellers who are selling things like a second hand electric guitar. In those cases, the buyer and seller are probably both not swimming in cash, so having their money tied up in a dispute is in fact painful. And that entire economy is rife with fraud and outright theft. Also, electric guitars are a case where there is extensive room for dispute about the provenance and condition of each piece. This gives the buyer an easy way to claim "item not as described."
In my view the hot business model for using the small payment services is selling an inexpensive physical good with a generous mark-up.
If you shipped the product, you most certainly lost $100, plus whatever additional labor costs were involved in attempting resolution.
There's also the opportunity cost of having that cash illiquid, even if you do win the dispute in the end. Money's time is worth money.
I follow a rule that's common among micro-businesses, which is to waste zero time on disputes. I always offer a full refund right away, along with a boilerplate list of troubleshooting suggestions. In virtually every case, the customer comes back in a few days and agrees that my product works. But because of this, I consider a dispute to be an immediate loss, and not a dollar amount hanging in limbo.
I keep my eye out for alternative services because like many others, I've heard horror stories, and would not mind having a backup. So far I haven't found anything.
A possible reason for my good luck is that I run an "analog" business. My product is a physical good that I make and ship, so the customer gets something tangible and that's the end of it.
I don't want to cast aspersions, but the horror stories I've read are either one-time incidents with eBay sellers, or complex digital services where the product is an intangible.
Paypal is used in about 40% of our sales and we didn’t have any issues in about a decade. Even from personal experience as a buyer I can‘t report any major issues.
How come most of these stories seem to involve obviously incompetent merchants?
However, the concept of explaining to a customer why they did something is utterly alien to them. This just does not seem to be part of any process they have. It bewilders them to no end if you ask them for an explanation of anything.
Notification of deducted money is something that is quite reasonable to expect.
In this case he was trying to figure out what to do, it was handled by others, and a notification would have let him know that it was handled.
You choose to say it like that. "Notification of deducted money". The money was first added, then removed. It would have been different if it was first removed, then added. But it wasn't.
Would you let some 3rd party use your PO box or parcel locker as long as "it was none of your business"?
It's not his account. It's a service paypal offers. They own the service, the bits, everything. He owns the money. Paypal added some money that was not his, and then they took it away. Nothing of his was touched.
And sellers on larger sites like eBay can't easily use a competitor. It's a classic anti-trust pattern and should be treated as such.
Note this isn't a snark at paypal specifically. I'm just interested if anyone with an economic background has an opinion to share.
So it'll probably be SMS, and otherwise they can ship me a second factor -- as the Rabobank already does for as long as I know: they basically send you a payment terminal that creates 0 cent transactions on your card, if I understand it correctly. While a bit annoying, it is safe and not too inconvenient.
[1]: https://en.wikipedia.org/wiki/Interac
- Inability to issue refunds
- Lack of 2 factor authentication
- Non-unique payment addresses (receiving emails are not bound to one account or even one person)
I find this the best way to deal with them :)
Long story short is that someone I'd previously transacted with owed them money so they determined that they would take it from my account and recover it from me.
I complained the Financial Ombudsman in the UK. They agreed with my position that it was unreasonable for me to be held financially accountable for people I've transacted with indefinitely.
Paypal stuck to the line that "You cannot close your account in order to avoid a debt". Despite the fact that I had no debt, except the one they assigned me several months after account closure, out of nowhere.
I've found a few sites over the years which only supported Paypal as an option, in every case I've chosen to buy elsewhere or not at all. Paypal is not a company I could support.
This is the primary reason I, and I assume a lot of others, use PayPal - not because of their amazing customer support, but because of their customer protection which works just fine in 99.9% cases - which is still a lot better than 0 customer protection.
No. At this point you have a trusted broker, who can choose to broker your transaction or not, but they cannot choose to decline it.
This is nothing like a "version of PayPal".
- There was no merchant contact info. They managed to upload Google's logo and use Google Account as the merchant name. Isn't PayPal doing any basic blacklist check, etc. or check against stock logos (there are tons of companies now, which provide logo by provided company name).
- There's not way to report the invoice as scam attempt - I can only "cancel" or "archive", which sends the "merchant" an email and they can know that my email belong to a valid PayPal account after that as the email is sent by PayPal.
In general, after so many in business, PayPal is a lazy, slow, and stupid company. I am sorry to say that, but it's the truth. Their developers are a bunch of old timers, who have entrenched into the company and there's no innovation going on. There are many, many, many complains about PayPal, which I can list here. Most of the are very simple to spot and fix by PayPal, but, no, they are untouched for years.
I feel like their dev teams is maybe a dozen people who just do maintenance of critical issues and that's it. Their recent interface upgrade took years and it still sucks and feels like in the dawn of DotCom. Compare PayPal to Stripe, let's say - there's no room for comparison! Stripe innovates at a huge pace, they provide a much better DX (Developer Experience), and are so much nicer to work with!
PayPal recently acquired Xoom - a very expensive and shady money transfer company. Compared to TransferWise, they are a total joke. In general, I think PayPal is managed by technological morons!
P.S. PayPal Here is also a disaster compared to the rest. I bought the device (as PayPal gives nonprofit discounts like Stripe but unlike Square) and many of our transactions failed, so, we switched back to Square. Now we're integrating with Stripe's reader, so, we'll get the best of both.
Nah it's still not done. There are nooks and crannies of the site where the early 2000s theme is still around.
Google, Facebook, PayPal all rely on their automated systems working perfectly and handling as much as possible. But there's always edge cases where things don't go as planned, and they require human intervention. But big tech wants max profits, so they try not to hire anyone, and those that they do hire are as poorly paid as they can get away with.
So you get very uninterested and unmotivated people handling customer support.
It's like living with a drug addict. They may be family but you sure as hell dont leave cash or valuables laying about...
Great analogy! Despite enjoying a long relationship, Paypal will very possibly stab you in the back and rob you blind in a blink of an eye then become incommunicado.
"Oh, yeah, don't worry, 3D secure can't be forced for all payments, but we got you, we'll enable it when we think it might be abuse. Also, our seller protection covers you."
All the time: "Here is a customer that made 12 purchases during the last 13 months. We took the money, but you have to prove that the card wasn't stolen and that the customer got what he paid for. We didn't enable 3D secure for this transaction, so please fix this for us and we'll give you your money back. Also, if you don't we'll take some more money from your account. Seller protection does not cover this as services are in a gray-zone."
240K frozen and taken since 2012 and still counting! At least I've started to win all the cases, but it takes a lot of time. Time to switch to stripe where I can force 3D secure...
PayPal is a joke. A bad joke.