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PayPal Anti-Gay?

By Yoshi

I am writing this to share my experience with PayPal and in general the problems with running a business using them. I think this experience will make anyone think twice before using PayPal for financial income.

I am the author of a shareware program called “Chat Client”. This software allows people to chat on websites that offer Java based chat without having to use Java or the web browser. It’s downloaded approx 1000+ times daily. This software is generic and doesn’t use a specific website but will connect to multiple chat sites, including a site for def people. Most of the people downloading it use it to chat on the website.

The software doesn’t contain any spyware, adware or banners. I own my own chat site called This chat site  doesn’t contain any nudity or banners etc. It’s the cleanest gay site you may ever visit. I hosted the Chat Client download from as well as my company website .

To allow me to collect revenue from the software I opened a PayPal account and used the donate functionality to collect money that enabled me to pay for bandwidth and development tools used to maintain the chat client. I created the PayPal account in 2000 and it was working great. I was making enough money to support the site and pay the ISP bills. This carried on until Dec-2004.

On Dec-2004 I received a email from PayPal stating that my account has been limited (closed) and that I was to remove all PayPal logos etc from my site!!! The reason stated in the email was that my account was linked to “Mature audience content”, what are they the morality police?? My site is clean you can browse it safely from a workplace. I promptly contacted PayPal customer service and they couldn’t give me an explanation on the phone as to specifically what caused them to close my account. I emailed, phones, emailed and phoned. I must have spent more then 3 hours on the phone in total and in the end I received NO explanation as to what URL, content etc was the basis of the decision to limit my account.

On Jan-2005 I created a new account with Ikobo. Ikobo is not nearly as big as PayPal but they seemed like the best option. So I emailed Ikobo prior to making an account and had them look at and to make sure they didn’t violate the Ikobo AUP. They indicated that all was well (as I expected) and I proceeded to make a merchant account. The cash flow was about 20% of the PayPal figures I was previously seeing. After about 2 weeks on Ikobo my account was shut off and they refunded every payment I received to date. I promptly telephoned them and I found out that the phone number was incorrect on my account profile, they treated it like fraud account. It turned out that the form I filled out I switched 2 digits by accident, and it was clearly a typo. I also provided faxed visa and business account statements to prove I was legit.

After all that they re-instated my account but I never recovered the lost 2 weeks of money.

On Feb-2005 I was instructed my a CSR from PayPal that the only way to get back with PayPal again was to create a new account and they couldn’t see any reason why my account was limited. So I created a new PayPal account because Ikobo wasn’t doing so well and by this time I was getting used to the income from PayPal and required it to pay the bills. During this time frame I had to pay the ISP bills out of my pocket. So it was a relief to get PayPal working again. This time I moved all the PayPal stuff and the chat client download page to I didn’t want to give PayPal any excuse to close my account this time. If they thought the word was offensive then I will simply not use it where the PayPal donate buttons where located.

On Apr-29 this account was limited for the same reason! WTF!! I telephoned them and they told me I could try to appeal it but yet again no explanation as to why, they only state that I violated the AUP. This is the wording of the expination

“Apr. 29, 2005: In accordance with PayPal’s User Agreement and Acceptable Use Policy, we have closed your account. Your funds may be held for 180 days from the date of your last transaction. After 180 days, you will be able to access
your funds by requesting an online bank transfer or, if applicable, a check from PayPal. Please update your address or bank information as we cannot be held responsible for checks issued to an incorrect address. We do ask that you please
remove reference(s) to PayPal from your site.”

On one hand PayPal is popular and works very well, I had once emailed them complementing them on the good service they provide. If your account gets closed or limited then they suck big time. Firstly they can close or limit your account
and not give you any specific explanation. I looked at the PayPal AUP and if they enforced it to every account I am sure half of e-bay auctions would be deleted. The fact they can close an account and remove a source (in my case only source) of revenue is way too risky to run a business on.

Secondly they cannot put you in touch with a human to speak to regarding this. You have to email them and wait 24-72 hours for a appeal letter response. If my account is deleted I at least expect a reason! I indicated this to the CSR and he said that he would pass it to his superior. In both cases I never received a warning letter stating that I was in violation. Had I received an email stating the problem and giving me time to correct it then I would have gladly fixed it. They do not give any warning whatsoever. How can anyone run a business under those conditions?

My only explanation for all this is that PayPal is biased toward homosexual people. After all I can purchase a dildo on E-Bay and use my PayPal account to pay for it but I cannot receive money for a Chat Client program that is hosted on a clean site entitled I responded to all emails and chargebacks in a timely manner, I see myself as a good company. PayPal states on the mature theme section of the AUP “PayPal will not include sexual preferences or viewpoints as a factor in determining what goods or services are prohibited under the Mature Audiences Policy.” But I think they do unless they can prove to me otherwise.


I am no longer able to accept money and I gave up on payment processing companies in general. I think if you’re considering using PayPal that you make sure you have a backup revenue source or face the risk of the right-wing PayPal AUP department. PayPal states that they are good for business; I beg to differ on that point. In order to be even considered they should fix these problems below.

They can close your account without warning, no letter or communication is initiated prior to taking action (closing) on the account. You do not have a chance to comply even in the event of violation was accidental or un-intentional. No warning, and that is final.

They will not provide a specific reason as to why they closed/limited your account. Just a blanket generic response.

Allow for a telephone conversation with the person or department that closed your account. 24-72 hours response time via email only is unacceptable in a critical situation.

They appear to be biased to homosexual people. If you’re not gay (or your business) then you only need to worry about the other reasons.

Posted: May 7, 2012 at 10:46 am

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