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Paypal Won't Release Funds To Slain Soldier's Family
robustyoungsoul writes "Popular sports blog Deadspin established the Adam Knox Fund for the purpose of raising money in honor of the fallen soldier who was killed in Iraq. They took the donations through a PayPal account.
Turns out now, however, PayPal will not release the money due to the way the account was set up on their end."
"Paypal Won't Release Funds To Slain Soldier's Family"
That isn't quite true, they are holding the funds until mid April, probably due to somebody screwing up. I'm not convinced that it was Paypal's mistake to begin with.
"Paypal Doesn't Want Slain Soldiers' Families To Receive Aid"
Come on now, yea, there may have been a mistake made, but it has nothing to do with the money going to a Slain Soldiers' Family.
Why the need for so much drama?
It could be worse, it could be Monday.
A more accurate summary should have indicated the money is frozen by policy for 180 days. So, paypal is not saying they won't release the money, they won't release it until April 13.
It probably sucks for the people who raised this money, but it also sucks for paypal that too many people set up these kinds of things with intent to defraud.
Hopefully with the noise raised and ruckus caused by sites such as slashdot, the resolution will become before April 13.
FTA:
Hopefully Adam's family and platoon isn't so depleted to not be able to function until April 13. Hopefully if this is so, paypal will figure out a way to disburse earlier.
Meantime, deepest regrets and best wishes to Adam's family for their loss.
They took the donations through a PayPal account. Turns out now, however, PayPal will not release the money due to the way the account was set up on their end.
"Paypal: We don't care. We don't have to."
The theory of relativity doesn't work right in Arkansas.
I suspect that PayPal will release the funds within 24 hours of the /. report.
No one wants that kind of bad PR.
While I hate large corporations ripping people off as much as the next guy, I don't think this says anything that bad about PayPal. This is my guess at what happened:
So it doesn't seem the company is trying to rip anybody off or laugh over the graves of the dead. In this case.
SomethingAwful.com ran into a similar problem when they set up a paypal donation fund, to collect money for the Hurricane Katrina relief efforts. They intended to give the money to the Red Cross.
After more than $20,000 had been donated in a day, PayPal froze the account. PayPal insisted that they would be unable to donate the money that had accumulted before the freeze to the Red Cross, tho bizarely said they could donate it to the United Way. After finding that the United Way had a reputation for inefficiency, SA finally just threw their hands up in disgust and told PayPall to refund the money to the donaters.
Wikipedia has a brief writeup of the issue in their SA article, at http://en.wikipedia.org/wiki/Somethingawful
The reason why Paypal does this is because creating a charity account without being able to provide documents proving your charity status is suspect. It's a red flag. Another red flag is having a new account suddenly receive a massive amount of funds from many individuals.
To make things clear, the types of accounts that is:
A) New accounts
B) Unable to provide documents
C) Receiving many funds from many separate individuals
If you can't guess already.... accounts created by phishing scams!
The fact that this person is not a phishing scam is a travesty on the part that they were suspended, but the FACT REMAINS that they have no possible means to prove their innocence.
Yes I said prove their innocence. This is a company, not a trial. Likewise, they haven't been found guilty either. The reason for the 180 suspension is obvious:
If the people who sent them money start to increasingly cancel their money payments, then, bingo, the account is a scam. If they don't after a given time, say... 180 days, then hey the account is legitimate.
Paypal sucks, but not in this particular case.
Lesson learned to all: if you're going to claim you're a nonprofit organization, BE A NONPROFIT ORGANIZATION.
This site was not nonprofit, and was having the funds sent to their own, private account.
Yes it's sad, but ask yourself the following: could you trust a nonprofit paypal donation if you knew that they only had to casually mention that they were nonprofit? That they didn't have to prove it?
There's nothing stopping the people who run that website, other than personal honor, from pocketing the cash and giving the finger to everyone who donated. And THAT is why PayPal has those policies. I'm surprised that they'd even hand over the cash after 180 days in fact.
It's sad, yes: but in the future, they should know to make an actual nonprofit organization with its own account. Doing such a thing isn't that hard: you just have to apply, and make a seperate checking account. My club at High School did it, and the people in that club were a bunch of idiots, especially in High School (myself included).
-Vendal Thornheart
Unfortunately, THIEVES!!!!!11! are exactly the reason why PayPal has to maintain policies like this if they want to remain in business. There is an entire cottage industry, stretching from Bucharest to Lagos, that's devoted to figuring out new, innovative ways to rip off PayPal and its users.
If you are going to start a legitimate charity drive, you need to follow the prescribed procedures, or you WILL encounter hassles like this one. If not from PayPal, then from the IRS.
PayPal did the same thing when Dan Savage of the Savage Love sex column took up a collection for charity. PayPal refused to release the funds to him and would only donate them directly to United Way, a charity with a very questionable reputation. Don't take charity through PayPal, people. They're sketchy enough when you're buying and selling like they want you to.
Did you actually read the article? Oh wait, this is slashdot. Of course you didn't. Even the guy's personal blog admits that they will, indeed, get the money, and that they didn't set up their account correctly for this sort of online dontation gathering. I'm really not seeing how this is Paypal's fault. They have to have some safeguards in place to prevent fraud. And this has nothing to do with Paypal not 'wanting soldiers to get their money'; that implies someone actively made a decision to withhold the money on the basis of where the money was going. Sure, maybe they're being a bit inflexible, but that might get worked out in the coming weeks. That has nothing to do with Paypal actively withholding money from soldiers.
the CEO of Paypal must be a Michigan grad...
Help me take back Slashdot. When did 'News for Nerds' become 'FUD and Conspiracy Theories for Extremist Nutjobs'?
The deadspin folks claim that paypal wrongly flagged the account as a charity account, and that they (deadspin) did not ask for the acount to be flagged as a charity account. If that is true, paypal has no right to be witholding the money, and they are also obliged to correct their classification error.
No matter what the "factual" details are, if you're on the same side of a dispute as a dead soldier's family, there's no possible way you can be wrong.
& I wish I knew the password to your heart . . . &
Read the article, and it will be obvious that the person who set everything up is not only and idiot, but they are rude and foul-mouthed as well.
PayPal is doing what they have to, giving themselves time to investigate to make sure it isn't a scam. Scams like this are rampant, both with soldier funds and hurricane relief funds.
Considering the guy did NOT set this up as a non-profit, he is going to be in for a rude shock come tax time. Once PayPal releases $20,000 to his PERSONAL BANK ACCOUNT the bank will file a "suspicious transaction report" with the gov't. I wouldn't be surprised it HIS BANK didn't then freeze the funds for 30-90 days.
Assuming it is then released, the IRS is going to count that $20K as INCOME and will want 20-33% tax from this person. All his protestations of "but I gave it to the widow's family as a gift!" won't amount for shit.
Sure, he meant well, but he is going to be a living example of "The Road to Hell is Paved With Good Intentions" because PayPal is only the beginning of his descent.
Learning HOW to think is more important than learning WHAT to think.
Over the past few years, eBay has been slowly tightening the screws to get people to switch to "Business" accounts (i.e., the ones they get a percentage of every transaction on) as opposed to "Personal" accounts. First they made it so that you couldn't accept credit card payments on your personal account. (OK, fine, credit cards charge fees.) If you received a credit card payment on a personal account, you had the choice of upgrading the account or denying that charge. Then they made it so that you couldn't sell on eBay accepting paypal and NOT take credit cards, which meant you had to get a business account. (Not so fine.)
But what really pissed me off was the fact that, sometime in October 2006, they changed the rules again without bothering to tell anyone. They disabled the Deny button for PayPal payments for eBay auction if you had a personal account designated for that auction, and also made it impossible for the Payee to cancel the transaction! Before I just denied the charge, then sent a bill from the my business Paypal account. But now neither I nor my winning bidders could cancel the transaction! And both eBay and Paypal customer service (the phone support of which has been is a pay call to a call center that's re-routed to India) refused to do anything about it. I finally had to wait until it aged out of the system after 30 days, because I refuse to upgrade with a metaphorical gun to my head.
There was no e-mail or account notice of this on Paypal or eBay, just an update to the Terms of Service buried somewhere on their respective websites.
Thanks a lot, eBay. Way to ensure that GCash has an audience ready and willing to switch from Paypal at the first opportunity thanks to your heavy-handed tactics. Ditto for a GAuction, when it comes...
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
Notice the use of the word "Had." I'm sorry, but responding to a problem like that with that sort of language is somewhat ridiculous. Paypal is supposedly following their own policy. You can respond to it by acting professionally, writing it up for the public, and then returning to PayPal and trying to get access to someone higher up the command chain, or you can do what they've done, and mouth off about it. Considering the way they reacted in text, I have a hard time believing that they acted professionally enough on the phone to make the PayPal representitive honestly feel they were there in good faith. As well, their request that people assault PayPal with phonecalls and other contacts is somewhat petty. Honestly, I'm not a fan of PayPal in the slightest, but this isn't the way to react to such things.
If I read correctly, the money is not for the family but is for care packages for the people in the unit he was in.
Engineering is the art of compromise.
LOL, they think the United Way is less efficient than the friggin Red Cross?
Yes, it is. The level of payment to executives and executive benefits is higher at the United Way. The percentage of payment that directly helps people is greater with the Red Cross, even if the people helping are rude.
Learn to love Alaska
They have every right to withhold the money until they prove it is an error. Just someone claiming there was an error in how the account was flagged isn't enough. It's very likely that on creation, the deadspin inadvertently said they were non-profit, since they are, just not documented.
Paypal has to put these sorts of safeguards in place since, as has been pointed out elsewhere, the way this account was set up looks *exactly* like a phishing scam account.
Someone made a mistake. Possibly Paypal, possibly the organizers of the fund.
My guess is that they had never set one of these up before and when setting up the Paypal account was asked many questions and they ticked of the wrong box.
This is not unreasonable due to those who tend to set these accounts up as scams. But putting the hold it forces the legit people to justify themselves and the bogus people to jump through hoops.
Now if you really want to be upset at someone it's the bankers who try to pull scams that caused these types of rules in the first place. The banking regulations that were tightened in the 90's. The Sarbanes/Oxley regulations that have caused increased accountability and paperwork.
Expect it to get bombed again... now that they've pissed off the military.
Recently, my dog and my girlfriend were attacked by a Staffordshire terrier ("pitbull") that was allowed to run off of his lead. Due to the extremely high vet bills for my dog, a friend of mine set up a donation fund and created a new paypal account. I didn't know about it, and then was surprised with a nice gift from my friends to help me through a rough time; it was all very touching.
However, Paypal would not let me associate my bank account with the account he created, since it was already associated with my account. So, we just forwarded the money in my friend's account to my account, where I then moved it to my bank account.
Apparently this set off some red flags for Paypal. They called my friend not once, not twice, but five times, each time asking him to reiterate why he created the account, what the money was for, and why I was putting it in my account. Each time he told them what it was for, why it was set up, linked them to the donation web page, etc., and the next day, they would call him back. Apparently they never made notes of the fact that they called him the previous day.
I'm very glad that I removed the money from my account as soon as possible, Paypal has been known to freeze accounts for various reasons, and it seemed like they were looking for a reason to do so in this case. The thing that I found most odd is that they put you through hoops to speak to a real person over there, but try to do something nice for someone, and they grill you like a criminal in an interrogation room.
If Paypal weren't so ubiquitous, especially among eBayers, I would never touch it again.
Let's take a look at it from the PayPal perspective.
1. An account is opened.
2. A LOT of people pay towards this account, within rather little time, accumulating also a LOT of money.
3. The amount should be withdrawn, all at once and also rather shortly after it's been set up.
Where do I know that from... Ah heck, pick your favorite fraud scheme, I'm not teaching scamming 101 here.
It certainly isn't in PPs intention to keep a soldier's family from receiving their money. But I can well understand that they want to make sure that it does INDEED go to the family and not to some con artist.
Or we'll soon see headlines akin to "PayPal helps con artist to pull off scam", and people will get their undies in a knot because PP doesn't do jack against them and doesn't even try to stop these things from happening.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Buddy, if your definition of evil is PayPal then you need some serious help.
I have read the Paypal horror stories. I still have and use it though but with caution. I set up a bottom of the line free checking account at a local bank and use if for nothing but Paypal. I even have a Visa attached to my Paypal account but that Visa is a debit card from the same checking account. When I want to buy something, I transfer money to that bank from my real bank or make a local deposit with just enough to cover the cost and then use Paypal. I guess my thinking is if I'm going to be buying stuff from FleaBay, I might as well use a Paypal account instead of sending money orders like I used to do in the past. I only buy a few things a year so maybe that is why I have not experienced an issue yet.
On that note, I may be back here next week with my own horror story about Paypal and saying the same thing as you are now.
Bad boys rape our young girls but Violet gives willingly.
Indeed. We all know that Ray Romano is the true definition of evil.
... and then they built the supercollider.
They do that where I work and I fucking hate that. Our supervisors go around with this line about how they "expect us to top last years numbers" and my boss in particular gives you that long, thoughtful exhale followed by the head shake when you tell him you're not participating.
Fuck the United Way. It's inefficient to the point of being a scam. The only thing worse is the people who call my house every three months wanting me to donate to some kind of police officer charity fund. It's for the families of officers killed in the line of duty and obviously that's a good cause. I donate to another organization here in Houston that does the same thing so I don't deal with the people on the phone. It doesn't slow them down in the slightest however. I've actually explained to them why I wasn't going to donate, told them I wasn't interested, hung up on them, and then been called back by the same person who got rude about my hanging up on them. I wouldn't piss in those peoples mouths if their throats were on fire much less give them any money.
Appended to the end of comments you post. 120 chars.
I just spent some time reading the articles on deadspin, along with a myriad of comments that really don't paint the complainers in a very good light either. Sure PayPal's policy might be annoying in a case like this, but name calling, mud slinging, foot stamping and whining is not the way to make your case. They're not keeping the money... they're following the policies they've put in place, and publicly posted, to protect their own interests as well as those of the vast number of customers they serve every day. In case you haven't noticed, there's a shitload of bad people out there who spend every waking hour of the day trying to take hard-earned money out of our pockets with a never-ending parade of scams, rip-offs, lies, etc... and many times try to do so using PayPal. Making it inconvenient for a few might just possibly be saving tons of money for many would-be targets. It's not a desire to piss you off, it's a by-product of doing large scale business in a hostile environment. If you think ganging up on PayPal is going to force them into changing their policies, you're most likely in for yet more disappointment in your life. Maybe it would be more beneficial to take some of the energy being put into slamming PayPal and redirecting it towards public education.... and no, I don't mean letting the world know that PayPal sucks.. I mean let your readers benefit from your situation by describing what went wrong and how they might avoid the same trap if they choose to use PayPal for such an activity. It's called constructive journalism.... it wins awards and shit... really.
chown -R us
The longer they can tie up your money, the more interest they'll make. They've locked countless accounts permanently, keeping the money for themselves. Blah blah blah. Rabble rabble rabble. This is nothing new. Hardly newsworthy. Beware the terms of service.
This story smells.
The site author neglects to disclose a few things:
1. Are they paying taxes on the money?
2. How did they disclose their tax status to *both* donors and PayPal?
From the article, they are at fault, not paypal. It sounds like they tried to make some tax-free cash without setting up a non-profit.
So if PayPal just gave them the money, and the IRS stepped in, then PayPal would be blasted for allowing this to happen.
I'm not a fan of PayPal, but this story smells either: bogus, or skewed. Either way it's somewhat inaccurate and shouldn't be taken at face value.
In a situation like this the money probably doesn't belong to the account holder yet. It probably belongs to the one who sent the funds. But in either case, the money most definately does not belong to Paypal. Paypal releases the initial funds after 6 months in these cases (a rather extraordinary length of time) but Paypal is not entitled to the interest garnered on frozen funds no matter what the circumstances. Whether the charity is legit or not, I want the interest on my donation for the time period in which paypal held the frozen funds returned.
Whether you group those whose funds have been frozen by paypal, or you group those who donated the funds there is definately a class action to be made here. Paypal freezes accounts when they have accumlated large sums and then pockets the interest; they need to be stopped.
Umm, are there stories that show Paypal in a good light? I haven't heard / read any...
It must have been something you assimilated. . . .
I actually came here to post exactly this. And the problem with United Way vs the Red Cross is that the United Way pays their management hundreds of thousands of dollars a year to do jack shit. They waste huge amounts of donations on unnecessary expenses, and they use strong-arm tactics to 'encourage' these donations at large companies. United Way is a morally corrupt vehicle to enrich the company's directors, and SA did not want to contribute to that.
PAYING with PayPal is rarely the problem. It's GETTING YOUR MONEY BACK from PayPal where all the issues come up. All their policies are designed to do one thing: keep the cash in their accounts, earning interest for them, for as long as possible. As a payer, I've never had any issues.
Dude, I think I can see my house from here.
The constitutions of big business (anything with widely held shares) pretty much says that they're out to make money. They are their balance sheet, and anything that the CEO says will help the balance sheet is what gets done. If you've seen the corporation, you'll understand this.
Small businesses, on the other hand, are often there because the owner likes what (s)he is doing and they get to make a living doing it.
I, for example, love solving people's problems. Many of the jobs I've had, I'd do for free, if I had the money from an independent source. Other friends of mine are completely mercenary about their jobs.
I guess that what I'm saying is that small businesses are an expression of their owners .... larger businesses too, but shareholders tend to be only interested in the profits.
Free Software: Like love, it grows best when given away.
The fund in question was set up (possibly improperly) with an explicit, legitimate purpose that all donors can be expected to know about. That means that it is not phishing.
No it doesn't. All it means is that the person who created the account CLAIMS it's not a phishing scam. Someone who was running a phishing scam would say EXACTLY THE SAME THING that these people are saying. They would CLAIM that they were running a charity donation drive for a soldier's family, they would CLAIM that they were going to send the money to them, and then when Paypal put the money in their bank account, they would wire it to Russia.
The way you do this RIGHT is you set up a separate, legal, non-profit entity, and in the ARTICLES OF INCORPORATION state that the purpose of the organization is to benefit John Smith's family, and that funds may only be distributed for that purpose, and then you open an account in that organization's name, not in your personal name. Then when you advertise that you're a charity, sign up for a charity paypal account, and people pay you through paypal and paypal says you're a charity, you can actually get your money right away.
Paypal is doing the right thing here. There is simply no other way that paypal can offer a donate to charity function without this policy. Does it suck for this partciular 'charity'? Yes. Is it ENTIRELY their fault? Absolutely.
paintball
There's absolutely NOTHING new in Paypal doing this. They aren't regulated, so they can do what the hell they want to in effect. and you can notice this.
On top of that, atleast in one point, even fscking janitors could get to see your account info there!
It does get better tho... Rather than working honestly, in one case i had, i got a fraudulent order, found out about that myself
a day later, e-mailed them about the transaction needs to be reversed. This got to happen due to the fact, that they do not require any authentication at all to deposit more into paypal, as long as you have username & password.
I explained what has happened in detail etc. meanwhile, calming the victim down (who's account was stolen, victim of a phishing attack). I wasn't going to just send the funds to her, then the insane transfer fees would be lost etc. Total amount was approximately 150.
Almost 2 months later, i finally got a word from there... Nope, they hadn't read my e-mails, it seems it was automated message, saying the funds had been refunded etc. but the thing is, who's money it was, never got it. She noticed my Myspace profile 6months later, and she hadn't got STILL got it, while paypal had taken the funds from me.
In effect: Paypal decided to take the funds, without refunding them.
Nevermind the insanely high fraud amounts with them! I dropped them, after using them years and years, guess they calculated the
one time cash was worth to them more than continuing transfer fees.
People, don't use paypal, there is honest companies out there to replace them... That being moneybookers!
Pulsed Media Seedboxes
I sugest that you read the post again. He is saying "PayPal is evil" not "Evil is PayPal". There is a difference you know.
Those "Firefighter Union Charities" and "Police Brotherhood Funds" that call you are basically a scam. They give the police/firefighters a lump sum and then call in their name and keep everything they collect. The overhead can be on the order of 95% when all is said and done. If you are suckered into contributing to one of those you'd better be ready to listen to your phone ring, a lot. They will promptly use your name in the other similar charity-scams that they've set up. I used to have a picture of two pledge kits from two "different" organizations (I even asked them when they called back and they denied all knowledge of each other. The two organizations were: The Brotherhood of the Police Chiefs and the Police Chiefs Brotherhood. Their logos were similar, but not quite identical, and the information packets on the inside were nearly identical. Interestingly enough, the former had pledges in the $35-$55 range, while the latter had them in the $45-$75 range.
From what I can tell, if you "pledge" but then never send in the money, eventually they'll put your name on a deadbeats list and stop bothering you. At least the volume of calls I get from "unrelated" organizations diminished a fair bit after I sat on 5 different pledge kits for a few months.
I read the internet for the articles.
Not to Yoda.
Actually, Yoda would say ...
Evil, Palpal is.
The verb is either at the front of the sentance, or at the end (or both), depending on whether it includes the "to be" verb.
"away put your weapon"
"Begun, the clone wars have"
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.