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PayPal Preparing To Address Frozen Funds Policy

Posted by samzenpus on from the papers-please dept.

First time accepted submitter skywire writes "After years of forcing innocent customers to navigate a Kafkaesque process to unfreeze their funds, PayPal has announced that they are preparing major changes to alleviate the pain. From the article: 'The company routinely freezes funds for 21 days if it thinks there's a fraud risk, and its terms give it the right to extend the freeze for up to 180 days. To get access to their money, users are often asked to provide the kind of documentation that a product seller would have, like several months' worth of sales records. But if you're running a fundraiser or selling tickets to an upcoming conference, you don't have that paperwork. Even for those with extensive paper trails, the appeals process can take months to resolve. The Web is filled with enraged blog posts, websites like paypalsucks.com, and a Tumblr called "Conferences Burned by PayPal."'"

8 of 175 comments (clear)

  1. Too Late by QuantumBeep · · Score: 5, Insightful

    After over ten years of destroying businesses and hurting people while hiding behind a blank gray wall of "policy", Paypal are kidding themselves if they think that they can ever recover the goodwill that they've burned.

    1. Re:Too Late by alexo · · Score: 5, Insightful

      You don't need much "goodwill" when you are the biggest player in the game and have a captive user base.

    2. Re:Too Late by tlhIngan · · Score: 5, Insightful

      Credit card policies are not very different

      Most of the sellers I read about we're just dumb

      That's the problem, really.

      Merchant accounts aren't too different from what Paypal does in the end - except retailers are often forbidden by contracts to speak about it.

      The other thing is, the average Joe cannot get a merchant account, so accepting credit cards is impossible (they often have minimum transactions per month of minimum amount to qualify, else you get the high rate account). Paypal does, however, let the average Joe do that, so if you're running a small shop and can't qualify, Paypal is pretty much your only option.

      Especially if you want to sell online (imagine how online auctions go if you can't pay via credit card).

      The problem is, most sellers just assume that it's like a cash account and Paypal will hide al lthe fees and crap from them. But given a chargeback can occur easily 6 months from the transaction date, and by default the credit cards refund the money unless the seller can prove the transaction (at which point it's paid back), well, most people are in for a surprise.

      I suppose one could take cash or cheques sent through the mail. I'm sure that's viable in this day and age of buying stuff and getting it the next day.

  2. Square by TechyImmigrant · · Score: 5, Informative

    Maybe they're feeling the heat of competition from square and feel the need to do something to stop the exodus.

    Our little business finds square a lot easier to deal with.

    --
    I should use this sig to advertise my book ISBN-13 : 978-1501515132.
  3. Reminds me of a funny story by cualexander · · Score: 5, Interesting

    PayPal once froze my account. I didn't realize how much they take those comments seriously and several years ago I sent some money to my wife with PayPal and put "For Sexual Favors" in the memo box, just kidding around, the way people would do on checks back in the day. Well, apparently PayPal thought I was actually paying for sex with PayPal and froze the funds. After I called them and explained the situation though, they quickly released the funds.

    1. Re:Reminds me of a funny story by Anonymous Coward · · Score: 5, Insightful

      Well, apparently PayPal thought I was actually paying for sex with PayPal and froze the funds. After I called them and explained the situation though, they quickly released the funds.

      The story is not funny at all, but it is indicative of problem with PayPal

      The fact that you had to explain yourself before your account is un-frozen is the very reason PayPal should cease to exist. I should be able to write whatever the hell I want on the payment -- unless they have some proof of illegal activity, I should not explain myself to PayPal to recover my account/my money.

  4. Re:Too little too late by Anonymous Coward · · Score: 5, Funny

    >> They lost me 2 years ago and short of their entire executive team kissing my bare ass on national TV,

    Hi! I'm with customer relations at PayPal and we're working hard to restore our name and good will to our prior customers. Our new policy is to do everything within our power to help you view the new open PayPal in a better light. As such, your request for a public ass kissing has been reviewed internally and accepted.

    Please write back with your name, number and the nearest TV or film station so that it can be broadcast.

    Disclaimer: Note: All fees and expenses related to the round-trip ticket to your home town, purchase of air time, film crew and all misc and incidental fees will be applied to your paypal account.

    Thanks!

    Joe
    Paypal Customer Service.

  5. Too late for us by tipo159 · · Score: 5, Informative

    I am involved with organizing a sporting event. This last year was our seventh running of the event. In previous years, the sanctioning body would collect the entry fee and send the events their portion. Because of some issues with the sanctioning body (not really set-up for credit card payment and slow payment to events), the system was switched to where events collected the entry fee.

    We decided to go with PayPal for most of the normal reasons folks go with PayPal. I had the PayPal-based payment system up on the event web site in a couple of hours. The first month of getting entry fee payments went fine and we could transfer the funds into the event's bank accounts (to cover pre-event costs like venue deposits and insurance).

    The trouble started at the end of the early entry period for the event (when entry fees increased). To avoid the increase in entry fees, almost everyone entered in the event who had not already done so, paid their entry fee on the same day. This triggered PayPal's fraud system and the event's PayPal account was locked. Although we had successfully run the event for the six prior years (with outside media coverage to prove it) and our paperwork was in order, PayPal decided that they would not give us access to the funds until after the event had run, "just in case the event was cancelled and the entry fees needed to be refunded".

    PayPal's actions were almost a self-fulfilling prophesy. Without access to the funds to cover pre-event costs, the event was almost cancelled. Luckily, between the entry fees collected before the PayPal account was locked, the entry fees that we collected directly after the account was locked and understanding vendors, we were able to cover the pre-event costs and the event was held.

    After successfully running the event, we contacted PayPal to get the account unlocked. At first, they wanted to make us wait six weeks. However, we pressed the point that we had bills that had to be paid and needed access to the funds ASAP. After an hour on the phone, they unlocked the funds and gave us access to the funds.

    Compared to some people that I have spoken with, we got off easy.

    I don't care what PayPal's new policy is. We are not putting our event at risk again by accepting payment via PayPal.