PDA

View Full Version : PayPal - A warning to everyone buying and selling!



Snoopdog
16-08-2008, 16:54
Mods, you may feel inclined to move this from the general discussion forum to elsewhere, but I consider that this deserves the widest possible circulation for anyone considering buying or selling and considering using PayPal as a means to move money from A to B.

I am compelled to post my recent experience with PayPal because I consider myself one of those people who is law-abiding, honest and who believes in playing by the rules. In a nutshell, I value my integrity and have always believed that if you play fair, others will treat you accordingly.

I have bought and sold items on Ebay since 2003 and have a 100% positive feedback rating of 152. I have also maintained a Verified Premier PayPal account for the same length of time and regularly use this service to pay for items I buy online and as a means of receiving payment from buyers for kit sold on Ebay or elsewhere (cheques are not always reliable and not everyone wishes to travel and collect and pay in cash.

At the beginning of July 2008 I advertised an IsoTek GII MiniSub on the Hififorsale classified ads website and was contacted by a buyer from Edinburgh (I live in Hampshire).

We agreed a sale price of £325 and the buyer sent me an e-cheque via my PayPal account which appeared to be a secure medium and would allow me to send the item as soon as the buyer's payment cleared.

When I tried to transfer the funds to my bank account, PayPal sent me a message informing me that because I had received more than $1300 USD my account (I have recently sold some hi fi on Ebay for £500) access was limited and I would have to complete additional security steps to comply with European anti-money laundering laws!

On 12/07/08 at PayPal's insistance I confirmed my bank account details, linked and confirmed a credit card, changed my password, provided business information (I do not operate a business!) and changed my security questions & answers. The final hurdle was to verify my address by PayPal phoning me and asking for a security code. Well, the phone rang and promptly disconnected. As a result, PayPal state that I failed that security step and on 22/07/08 they sent me a letter containing a six-digit security code that I will have to enter on my account to comply with their checklist of tasks.

I contacted (with much difficulty) one of their 'customer services' agents who told me that they could not telephone my home address because the computer could not be overridden and I would have to wait for the letter to arrive. Not very helpful at all!

By 10/08/08, the letter had still not arrived and I made a complaint to PayPal. The response was that the letter was being processed in the USA???????? and could take up to three weeks to arrive. They acknowledged that I had been inconvenienced and as an alternative option, I could fax copies of my utility bills to PayPal as a means of satisfying them that I lived where I do!

I duly faxed all the required documentation on 11/08/08 and received an acknowledgment stating that the documents could take up to five days to process (for f**** sake!).

As of today (16/08/08) my PayPal account is still locked and neither my buyer or myself can acces the £325 that Paypal are no doubt earning interest on (together with thousands of pounds worldwide as I have since learned that this is a popular strategy of PayPal).

My buyer is frustrated because he has parted with his money and is waiting for his item. I am frustrated because I cannot access the funds and I am obligated to hold the item for my buyer, therefore not able to sell it to someone else.

After a bit of internet research I was horrified to learn of others who had fallen foul of this thoroughly disreputable company. Some links are here:-

http://www.paypalsucks.com/
http://www.paypalwarning.com/
http://www.aboutpaypal.org/

Having in the past, used PayPal to send £800 to Canada and £2500 to Italy for purchases via Audiogon, I thank my lucky stars that my sellers accounts were not frozen in the same way as mine is now! Imagine having that much money tied up for months on end with no hope of an early resolution!

So there it is, my tale of woe and a warning to anyone using PayPal that it could easily happen to you too!

Once I get this cleared up I shall cancel my account with these crooks.

Steve

Marco
16-08-2008, 17:16
Steve, I'll make an exception and leave your post where it is even though it isn't hi-fi related, given the nightmare you have just described. In fact, I'll make it a sticky!

Sorry to hear of your difficulties; I hope the situation is resolved to your satisfaction as soon as possible.

Marco.

gary
16-08-2008, 17:47
Good for you Marco a friend of mine had a similar problem with ebay while buying Alloy wheels and they held on to his money for weeks while they sorted it out. I aggree people should be aware that this happens on a regular basis.

Ian Walker
16-08-2008, 17:55
I'd say copy and paste this on all the forums....Barstd's.

StanleyB
16-08-2008, 18:23
I had to go through all these steps, and I have no issue with my money being in a Paypal account. I have seen eBay seller notices stating that they can't ship till Paypal has transferred the money to their 'Bank'. But is Paypal not just another bank as well? So what's the difference exactly, or am I missing something?

Mike
16-08-2008, 18:26
But is Paypal not just another bank as well? So what's the difference exactly, or am I missing something?

I guess it is. BUT! most banks will at least allow you access to YOUR money in a reasonable time period.

StanleyB
16-08-2008, 18:42
But only if you pass the security checks. I got locked out of my high street bank account last year May. I could still put money in, but had to go down to my own branch to get my account access reset. Some of us shift eye watering sums of money through Paypal, and scammers are always out to get their hands on it. So a bit of extra security is well received. At least they don't ask for people to use a fob key like my high street bank demands for their on-line banking.

Mike
16-08-2008, 18:44
True.

Have you ever tried phoning paypal though?... Nightmare!

And this echeque thing is just a big scam IMO.

StanleyB
16-08-2008, 18:52
True.

Have you ever tried phoning paypal though?... Nightmare!

And this echeque thing is just a big scam IMO.
The echeque takes far too long. I tell people to pay by credit card via Paypal instead if they don't have cash in their Paypal account. Credit card payments get cleared by Paypal in the same hour for 99.9% of the time.

I must admit that I have no problem phoning Paypal. But then again I am a business user, so maybe I got a phone number that is manned all the time:).

gary
16-08-2008, 23:54
Hi Stan
Maybe things get sorted out faster for business users but for the average punter the service is not that great weeks can go by with ebay holding on to hundreds is not thousands of pounds with lame excuses why they will not complete transactions.

Snoopdog
17-08-2008, 00:18
I'd say copy and paste this on all the forums....Barstd's.

I have done :)

Steve Toy
18-08-2008, 02:05
A similar thing happened to me so I phoned the customer services number and my account restriction was lifted within the hour.

greenhomeelectronics
21-08-2008, 19:53
Thing you have to remember is that PayPal is NOT a bank, they are purely a money transfer service. They are not regulated by the FSA or any other regulatory body. They are not registered in the UK, their service center is in Dublin which is within the EU so they get round all sorts of rules, including being regulated by the office of fair trading or UK trading standards.. They are now banned from operating in several American states, in my opinion they should be banned from operating in the UK. We have to offer PayPal because that's what many customers are used to using and wish to continue to use. Ebay force sellers to use it and tell buyers it's the only safe payment method. Given that ebay own paypal maybe that's not too surprising but people have been told it for so long they now believe it, right up to the time they get ripped off.
Dave.

nat8808
26-08-2008, 12:37
I think PayPal is registered as a bank in the EU as of some time in 2007 so I don't know why they are able to get away with behaving as they do.

The general idea of it is good and can work very well, if a little expensive, but PayPal's ways of protecting themselves from losing money from fraud etc actually makes a mockery of the supposed 'buyer protection' they pretend to offer (under very strict terms)!


I had to go through all these steps, and I have no issue with my money being in a Paypal account. I have seen eBay seller notices stating that they can't ship till Paypal has transferred the money to their 'Bank'. But is Paypal not just another bank as well? So what's the difference exactly, or am I missing something?

What they are asking is a very sensible thing to do. If a buyer pays with a credit card, receives the item and then fraudulently claims that they haven't, the credit card provider normally refunds the buyer's money without much proof of the non-receipt (part of a credit card's own buyer protection). PayPal is forced to return the money to the credit card, is out of pocket and so then claims the money back from the seller. If you haven't FULLY withdrawn the money to your bank already then you've lost the money and the goods. If you have sensibly withdrawn it to your account then all you have is a frozen paypal account and probably their debt collector sending you letters but at least not out of pocket. I've had a big ebay seller tell me of people paying them with paypal, picking up in person and then still claiming the goods hadn't arrived. They just had to swallow the loss as they rely on PayPal so much.

Why can't the banks offer a good, rival system?? Why can't I even transfer to the EU online?

Most people though do seem to be ok with bank transfers as long as you communicate well. Where I can I pay money direct to their account instantly by going to their bank and try to spread the word of better methods by spreading feelings of trust and efficiency through direct experience. A good tip I got for selling to the EU is to let them make the SWIFT transfer in Euros, you set the exchange rate - this makes it easy and cheap for them I think and then actually cheaper for you too (receiving pounds from overseas can incur a fee from your bank for some reason).

Remember, PayPal mostly succeeded by preying on people's fears (much like insurance companies), fears of being ripped off. Unfortunately PayPal probably, for anyone with common sense and mild caution, has ended up being more statistically likely to cause you trouble! Oh dear....

Avondale Audio
30-08-2008, 22:01
My wife has a modest Paypal account through which she's mainly bought and sold some household and personal effects. Paypal now seem to take the view that as she's had a few hundred pound through her account (nowhere near even half of the £1700 limit cited by PP), she's deemed to be running a business and are demanding trading details.

Further, my wife does not have a credit card nor, from personal preference, does she want one. Paypal are harassing her for credit card details and no amount of emailing will get the facts through some very thick skulls.

My question is: What legislation exists that requires Paypal to register such miniscule amounts with the EU as business dealings.?

Thanks, Les W

Mike
31-08-2008, 15:05
My question is: What legislation exists that requires Paypal to register such miniscule amounts with the EU as business dealings.?

I think it's all in their own omnipotent (read 'deluded') heads Les! :mental:

StanleyB
31-08-2008, 15:34
My question is: What legislation exists that requires Paypal to register such miniscule amounts with the EU as business dealings.?


9/11
Paypal is a US company, and they data mine everything.

Togil
04-09-2008, 16:02
My question is: What legislation exists that requires Paypal to register such miniscule amounts with the EU as business dealings.?

Thanks, Les W

I don't think it's the EU, I suspect they have Revenue & Customs on their back who are getting much tougher with people selling regularly on Ebay