Paypal shenanigans, must reading if you use PP

DesertLizard

Last month my friend's PP account was frozen when he was slammed by a disgruntled buyer over a $22 item. That was only the beginning of a long journey which apparantly is all to common. I have since drained my PP account and only fund as needed and no longer accept as payment. See the link for more on the darkside of PP.



Paypal Warning

NBSQLGeek

I miss the paypal when it first got up and running. I knew it was a great idea and ahead of its time, but now the big machine has gotten its claws in it.

Now time to look for other alternative.

nwcs

I look at it this way: the odds are always in your favor. But when your number comes up, it'll usually be bad.

Russ

1. Open a dedicated checking account used only for Paypal.
2. Keep little or no money in your Paypal account, sweeping incoming payments in to said checking account.
3. Keep little or no money in dedicated checking account, withdrawing it upon completed transfer.
4. Link to a very low limit credit card.

For the longest time I flatly refused to use Paypal because of their frequent tendency to freeze and grab money first and ask questions later. Finally, I decided to go ahead and use them, but I have it set up in such a way that even if they go completely insane, they'll get just about enough to stop at Starbucks on their coffee break.

Russ, NCNE

baccaruda

russ,

i follow your set of rules, moving money immediately from paypal to my own bank account as soon as it comes in. are you telling me that paypal can access your bank account and pull out money? certainly that can't be true.

NBSQLGeek

I have mine set up with little or no money in the paypal account. I just purchase items with paypal and the money is drafted from my bank account. Works great, and if I do receive cash I send that money on its way to the bank account fo use the ATM card.

tjkillian

Baccaruda,

Yes, I heard of the actually draining your checking account. Somewhere in their license agreement, you authorized them to do that. Russ is absolutely right on how to do it. You still have a little risk to your credit record, but they would have limited ability to seize all of your money.

tom

NBSQLGeek

If this is true, I wonder how hard this will hurt their number of existing users if this would become wide spread and out to the public.

Russ

baccaruda,

Yes, if there is no money in your Paypal account they can, and will, reach in to your checking account and freeze or remove funds. But, it depends on when you signed up. Their ability to do that was not part of the initial agreement. That agreement was changed at some point so, if one signed up prior to that change, they can't do it. If one signed up after that change, they can.

I can't remember for certain when the change was made, though. I "think" it was October 2000.

Russ, NCNE

1956Quarter

I read a ton of the messages and whiny cry baby storys. It seems that the bottom line is that in almost every case the person was dealing in something questionable, or they were dealing with someone who was questionable. They got stung and now they want to place blame everywhere except where it belongs, on themselves. Thats not to say every complaint is without merit, as I am sure there are a few. As one person said, people tend to scream faster and louder when money is involved. I keep very little money in my account, and try to use PayPal for relatively small transactions under $100. I am only liable to PayPal for amounts paid to me that are reversed, but it would be nice if that ever happened, that PayPal would inquire first so as not to give someone a credit that was unauthorized or unwarranted. Anyway, to say PayPal has unlimited access to charge your account is not correct. They can only charge back an amount equal to the transaction in question. I say know what your dealing with, know who your dealing with, and you'll avoid troubles.

KlectorKid

<< <i>know who your dealing with >>

How do u figure that out on E-Bay?

Iampoorman2

I've got a nice credit union that allows the direct trasfers into the account, but Paypal cannot extract funds from it for anything. The bank send me a security warning about someone trying to access my account whenever I mess up and don't assign my credit card for payment when using Paypal.

1956Quarter

<How do u figure that out on E-Bay? >

Only deal with people/dealers you know. I never use PayPal for anything where I am not familiar with the seller or buyer. I typically do transactions with Money Orders first, see the quality of the item, see how things were handled. After I am satisfied then I use/offer PayPal.

KlectorKid

O I C

baccaruda

i don't think i'm out of bounds feeling that it's utterly ridiculous that anyone in the world who cares to file a fraudulent complaint against my account has full access to my checking account.

yeah, paypal is a fun little way to buy stuff on ebay - but not at the expense of my mortgage and food.

Russ

<< <i>I never use PayPal for anything where I am not familiar with the seller or buyer. I typically do transactions with Money Orders first, see the quality of the item, see how things were handled. >>



If one's concern is protecting themselves as a buyer, that scenario makes no sense. It's a lot easier to get screwed paying by money order than it is paying by Paypal.

If one is a seller, you either take Paypal or you don't. You can't look at one buyer and say "no Paypal" and with the next say "okay, Paypal."

Russ, NCNE

1956Quarter

Russ, not sure how its more dangerous using a Money Order. If I pay with a Money Order I can file a fraud claim with the Postal Inspector and I have the same chances of getting my funds taken as I would with a paypal. In my experience, the seller gets intimidated by the inspectors inquirys and sends the item or a refund. It sounds like PayPal is not able to help much in that capacity, which makes them more of a weaker route to me

As for screening buyers, sure you can Russ. I just don't list PayPal as an option when I'm selling. If the winning bidder is someone I am familiar with, I'll offer it in my confirmation e-mail.

Twowood

I'm a buyer and I've been using PayPal for about 6 mo. and I've been very happy with their service primarily because it gives me leverage with sellers.
I got tired of running down to the PO to shell out a few bucks for a MO which I mailed within 24 hrs., only to wait 3-4 or 5 weeks for the coin to arrive by snail mail w/ .37c postage! This among other complaints.
I haven't filed a grievence yet, altho I've come damn close to it, but I feel comfortable with the leverage. Twowood

petertdavis

<< <i>1. Open a dedicated checking account used only for Paypal.
2. Keep little or no money in your Paypal account, sweeping incoming payments in to said checking account.
3. Keep little or no money in dedicated checking account, withdrawing it upon completed transfer.
4. Link to a very low limit credit card.

For the longest time I flatly refused to use Paypal because of their frequent tendency to freeze and grab money first and ask questions later. Finally, I decided to go ahead and use them, but I have it set up in such a way that even if they go completely insane, they'll get just about enough to stop at Starbucks on their coffee break.

Russ, NCNE >>



Russ, I used to follow this exact philosophy with Paypal. Then, they decided to fiddle with my checking account, even though there was no money in it. Result was several months of fighting with my bank over the overdraft charges, getting my name cleared with credit reporting agencies and such. So, don't feel safe just because there's no money in that account, it could be worse if they try to withdraw and there's nothing there to take (it's like you're writing a bad check). When you register an account with them, you're giving them permission to take your money (it's in their terms). And, when they decide they want to take your money, they don't care if you've got money or not, they just grab.

Russ

<< <i>Result was several months of fighting with my bank over the overdraft charges >>



Peter,

One can only have an overdraft charge on a written check, not on electronic charges. If they attempt to electronically transfer money that doesn't exist or exceeds the available balance, the attempt is simply declined by the bank - just like a credit card would be if the balance is exceeded. Thus, the reason I set up an account that is ONLY used for Paypal.



<< <i>it could be worse if they try to withdraw and there's nothing there to take (it's like you're writing a bad check). >>



It is not like writing a bad check at all. In order for it to be so, the account owner would have to initiate the transaction. Since I don't initiate transactions from my checking account thru Paypal unless the funds are actually available, the analogy is not applicable. If Paypal initiates the transaction against a no balance or low balance account, again, it is simply declined.

Russ, NCNE

petertdavis

Russ, I used to have that misinterpretation also. Since this actually did happen to my account, I have stopped giving people a false sense of security by saying that.

dbldie55

For those of you who think this cannot happen to you, think again. I saw it happen. PayPal froze an account with thousands of dollars because one buyer wanted to be sure he was happy getting his item worth a few hundred. They would not clear it until the buyer told them it was okay. This is a scam in the highest degree. Believe it or not, it does happen to the totally innocent. (for what it is worth, the buyer had no idea this was happening behind his back)

They are good for what they do, and they are slime in most other ways (just like any other unregulated financial organization.)

Conder101

<< <i>One can only have an overdraft charge on a written check, not on electronic charges. If they attempt to electronically transfer money that doesn't exist or exceeds the available balance, the attempt is simply declined by the bank - just like a credit card would be if the balance is exceeded. >>



Tell my bank that. I have been hit with overdraft charges incurred by electronic charges before.

my3cents

Russ,

My bank DID charge me overdraft charges and sat there and looked me in the eye and said "an electronic transfer is exactly the same as a check - it still results in an NSF charge".

I had already moved the funds in that account to a new bank and had stopped by to close it out and found that Paypal, for some reason, had attempted to draft the account for a refund - although my understanding was that my CREDIT CARD was a "backup funding" mechanism....well guess what? The bank went ahead and paid the draft, charged me NSF fees (which I HAD TO PAY), and the charge never went to my "backup funding" method.

In short - if your bank pays the charge - you will pay the NSF fees.

CLASSICS

lets say that a seller will take paypal for items he sells on ebay, now you no longer want to use paypal for any items you sell........is there a way to....cancel your ebay paypal account? if you already have one set-up with them?

RotatedRainbows

Yes, just go to the profile feature and it will let you select Payment Receiving Preferences and just check the box which says Block Payments from users who:Initiate payments from the Send Money tab and then leave the Alternate Payment URL: blank then no one can send you a payment. Also if you registered an auction account go in and delete it.

Russ

<< <i>Russ, I used to have that misinterpretation also. Since this actually did happen to my account, I have stopped giving people a false sense of security by saying that. >>



Peter,

If your bank is allowing you to go in to overdraft on electronic transfers with an account from which you do not write checks, I'd suggest you switch banks immediately. Mine simply declines the attempt the same as they would if I tried to use the Visa check card associated with the account for an amount that exceeded the available balance.



Russ, NCNE

ANACONDA

Huh! Another PayPal problem.

doops

reaypal. here's what's up. the other day,one day last week a couple of experts on ftc violations,securities fraud of gigantic corps,etc were talking about ebay's aqcuistion of paypal on FOX TV NEIL CAVUTO saying the ftc is about to snag them in the federal courts. ok, good. no, BAD because everyone's money can be seized and frozen from the joe blow weekend warrior on ebay to the million doller a month club users of paypal. this is BAD BAD news.
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remedy.....STEP #1 : use up all monies you have in your open funds paypal account, STEP #2 : use up or transfer all of the money in the checking account tied to paypal to another account not linked to paypal or a different bank entirely.
STEP #3 CLOSE that checking account that USED TO BE tied to paypal
STEP #4 get with the credit card co or co's you had linked to paypal as back up funding sources and report missing,lost or stolen credit cards owed by you or shared by you,spouse,children,etc and have all
limits,amounts due,etc re-assigned to another completely DIFFERENT account # of that credit card co
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THIS IS THE ONLY SURE FIRE WAY TO AVOID A PAYPAL PROBLEM AS WE KNOW AND SEE THAT HUNDREDS OF THOUSANDS ARE CURRENTLY EXPERIENCING AND EXACTLY WHAT WE ARE GOING TO DO DOING NOW. BECAUSE THEY ARE FIXING TO DO IT TO ANOTHER ROUND OF A COUPLE HUNDRED THOUSAND PAYPAL USERS
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PAYPAL IS OUT......read O-U-T !!!!!!!!!!!!!!!!!!!!!!!!!
**********
not safe AT ALL,especially to the private individuals who may rely on doing some ebay biz here and there
thinking things are NORMAL then find out their money is SEIZED. then all of the aforemetioned problems WILL BEYOND A SHADOW OF A DOUBT DIRECTLY AFFECT YOU OR WHOEVER THEY PUT IN THE NEXT BATCH OF THOUSANDS TO DO THIS TO.
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WHAT DOES IT MEAN FOR PAYPAL ??
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it means ALL the monies they have in your open paypal funds accounts collectively WHICH ARE
SEIZED ie "LIMITED ACCESS" are a daily fluctuating amount they can legitimately use in open markets to invest as they so desire to make their stockholders even MORE schemingly RICHER and RICHER.
***********
and YES, you gave them PERMISSION to do just this not knowing it,all under the guise of "RANDOM ACCOUNT RE-VERIFICATION uhhhhhh. "SECURITIES PROCEDURES"
***********
ITS CRYSTAL CLEAR FOLKS. the FTC & SEC is about to BUST THE HELL OUT OF PAYPAL AND YOUR MONEY,BE IT $100 or $150,000 in that checking,open paypal funds account and/or credit limits tied to your paypal account can all be halted in MID-ACTION for YEARS and you wont be able to do a DAMN thing about it.
************
the preceeding aforemention STEPS #! through #4 is what our attorney said is the ONLY way to AVOID a PAYPAL styled ENRON/WORLDCOM DOWNFALL where EVERYONE GOT STUCK. I PRINTED THE ENTIRE PAYPAL USER AGREEMENT AND TERMS AND THIS IS THE ONLY WAY OUT. P-E-R-I-O-D !!!!!!
**********

leothelyon

I saw it happen. PayPal froze an account with thousands of dollars because one buyer wanted to be sure he was happy getting his item worth a few hundred. They would not clear it until the buyer told them it was okay.

Hey, I've done this and it was a great way to resolve a possible bad deal. This seller begged me to lift the freeze on his account. I had already returned his coin and it ended up in another state. The seller had changed a number on his zip code. I also had a delivery confirmation tracking number and the false zip code. The PO tracked it alright and I ended up telling the guy where his coin ended up and had the delivery address corrected.
The guy kept telling me a MO was in the mail, take the freeze off his account, but 3-4 days would pass and no MO. He finally had a change of heart and returned my money.
What this guy was trying to do was to raise money to payoff someone else on a couple of other transactions. He was losing money fast, paying off his debts with other people's money. He was playing with 0 dollars! There are sellers who will do this, selling bogus coins to generate money for their debts.

As for Paypal, I've had no problems with them and I don't keep tons of money in the account. It's not a bank! How is their stock doing? Has it been steady, gone up or has it drastically fallen these pass few days? I guess I should go check.
The FDIC does insure your money up to $100,000 at their banks, if we don't have a nuclear war or a meteor is on it's way. Why anyone would want to leave thousands in a Paypal account is beyond me when you can draw a higher percent interest rate elsewhere and by other means.
You can easily read up on Paypal and read futher into their user agreement.
All big companies get their attention and have their watchdogs and scavengers. Look at Microsoft, Enron, the airlilines. Look at the unemployment rate and shortfalls of money. Bush is passing a 92 billion bill to fund it. There are problems with the 401K plan and SS. Mismanagement can occur anywhere. The last thing you want to do is panic, withdraw monies and head for the hills, lol
After the 9/11 catastrophe, do you remember what Bush said to keep the economy going? "Get out and spend your money!"
I believe if a seller who doesn't do business through Paypal, etc, this may be a signal for caution about doing business with that seller. Buyers don't have that much protection against fraudulent sellers as it is.
All buyers need to learn and use the leverage that eschow, squaretrade, negative feedback, PO insurance, credit cards, Paypal, banks offer to make your transactions safer and help generate profits.
Sure their are bad apples out there who will abuse the system, but who doesn't read about that in their local newspaper?
But if you believe your money, a substantial amount is at risk, then move it where you believe it's in better hands. But don't believe for a second that there's nothing in the world that can affect your money. Even gold can become worthless. The only two things are certain in life and that is death and taxes.

Leo

leothelyon

I used to follow this exact philosophy with Paypal. Then, they decided to fiddle with my checking account, even though there was no money in it. Result was several months of fighting with my bank over the overdraft charges, getting my name cleared with credit reporting agencies and such. So, don't feel safe just because there's no money in that account, it could be worse if they try to withdraw and there's nothing there to take (it's like you're writing a bad check). When you register an account with them, you're giving them permission to take your money (it's in their terms). And, when they decide they want to take your money, they don't care if you've got money or not, they just grab.

Please share with us why you believe Paypal did this to you.

Leo