This website is a collection of horror stories, news reports and other information addressing problems with Paypal, Inc..

I Curse the Day I Started With PayPal

By Kay

We had experienced a minor problem with Paypal as sellers on eBay two or three years ago and stopped using them. After reading that most buyers like Paypal and often mistrust sellers who will not use it, we decided to start offering Paypal again.

We had a large sale. One buyer bought multiple items, so the total was quite large. This person has bought from us before, and has about 1900 positive feedbacks on eBay. Paypal processed the transaction and we transferred the payment to our bank account. A day or two later we discovered an account message stating the payment was on “temporary hold” and they deducted the payment from our account leaving us with a huge negative balance! After two or three days I wrote to the buyer, thinking he had put the payment on hold for some reason. He had not. I called Paypal and they said “Didn’t you get an email from us?” I told them we had not. At that point they sent an email saying that the buyer was being investigated for possible fraudulent funds.

It seemed to both the buyer and us that Paypal simply froze the payment since it was a large sum of money and they get the use of the money while they “investigate.” We know of other people who have had similar things happen.

The buyer was upset and tried calling his bank and credit card company to resolve the matter. In the meantime I sent in to Paypal all the required documentation to show that we had followed their rules: had a verified buyer, mailed to a confirmed address, he signed for the package, it was insured and traceable to his confirmed address. The buyer provided me with a phone number and Case number to the credit card fraud division of his bank and allowed me to talk to the rep there. She assured me that he did indeed have an account, the funds had been withdrawn legally, and they had verified that he was the cardholder, etc.

Last night we got an email from Paypal that they had finished their investigation and had decided it was appropriate to reverse the payment to the sender (the buyer). WHAT!?? This was an outcome we had never for a moment considered. Why on earth would they send the money to the buyer? If the payment was fraudulent, they should return it to whoever the money belonged to, and Paypal should stand behind their Seller Protection Plan and give us the payment out of whatever funds they use for such cases (insurance?) as their policy states. If it was not fraudulent, the payment was ours for the merchandise. In no scenario can I think of would they return the money to the buyer. Now the buyer has our merchadise, and his money, and we have nothing! This is an absolute nightmare!! The person I spoke to last night seemed perplexed, too, but all she could do was send a message off to some other Paypal dept. to look into it.

All I can say at this point is that I hope this is ultimately resolved and we get our money. This is extremely stressful and I curse the day we ever started using Paypal again.

Editor’s Note: (This story is a very common one. We receive stories like this one almost every day. It is very difficult to ignore the fact that PayPal freezes accounts in this manner as a routine part of their business model. Please remember that only the smallest fraction of PayPal victims ever find this website and take the time to tell their story. There are tens of thousands of stories posted online just like this one. This is NOT an isolated incident.)


Posted: May 7, 2012 at 5:37 am


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