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

PayPal Is In Shambles

By Rod

  Having decided that we were going to use an online credit card processing company to handle all payments through our business website. We contacted PayPal and others to discuss the matter. We told everyone the same facts – that we were an established supplier of mail order spare parts, and that based upon our current turnover they could expect between GBP£250,000 to GBP£350,000 per annum to pass through the account. We received PayPal’s assurances that they were used to dealing with large volumes of money without problem, and that based upon our turnover we would expect to be charged as little as 2.4% plus 20 pence per transaction. Based upon their assuranced we proceeded to integrate our website with the PayPal system.

In early March this year we went live with the system, and all appeared to be ok. After a couple of weeks trading we noticed that occasionally their IPN system would drop a customer’s details, so unless we checked every individual record with the PayPal receipts we could find that PayPal were accepting money on our behalf, but we would not know what they had ordered, or their address details, or in fact that that customer ever existed. When we contacted PayPal about this they stated that the IPN service was free and so they had no responsibility to ensure whether it was working correctly or not. In short they were unhelpful.

One weekend in late March the entire PayPal IPN system ceased to operate at all. When we discovered this we contacted PayPal who stated that they were unable to assist us until after the weekend as they had no technical staff available until the Monday. That weekend I had to process every transaction individually by hand, first locating the customers entry in our PayPal account, and then patching that information into our website administration pages. This caused mayhem, but still no help from PayPal. Out of the blue in late March a notice appeared on our PayPal login screen to say that we had now got limited use of our account as they needed an expanded use number for the company credit card that was lodged with them. We immediately asked for the number to be sent through which involved PayPal charging our credit card with GBP£1.26.

We phoned PayPal and asked for assurances that this would not interrupt our business while this process was being carried out. We were told that we had 45 days to resolve the matter and that nothing adverse would happen during that period. On the 3rd of April this year suddenly a further notice appeared on our PayPal login page to say that our account had now been frozen because they had noticed an increase in the amount of money that we were handling, and that they required more particulars from us before they would release the account for normal use. The amount of money passing through the account had not increased pro-rata, as it was in line with our original estimates when we first opened the account. The Resoltion page contained a list of 7 items that they required further particulars about.

Amongst these was a demand for details of the expanded use number referred to above, and the other questions involved proof that we were buying-in parts to send out to customers and proof of postage relating to a list of orders that had come in that weekend THAT HAD NOT EVEN BEEN PROCESSED YET. I made eight phone calls, spending over 3 hours on the phone to PayPal trying to find a way through, but to very little avail. During this time PayPal put a notice of our webite shopping basket stating that we could not accept payments – effectively stopping our entire business in its tracks. Trying to find answers for some of their questions I phoned them yet again explaining that we could not supply purchase invoices for individual items as we bought parts en masse. They accepted this and asked me to fax through a handfull of sample invoices which I did. I was told that it could take up to 48 hours before these would be looked at.

I phoned them yet again stating that it was impossible for me to give them the expanded use number for the company credit card, as this did not appear on our credit card statement. They admitted that sometimes these numbers do not appear on company credit card statements. When asked waht I could do to resolve this problem I was told that they could resend the number. I pointed out that if the credit card company had missed it off the statement the first time, and if this was a common occurrence then there was little point in carrying out the excercise again, because it would happen AGAIN. When I explained to them that we could not provide postal details on orders that we had not even even processed yet, they asked WHY not.

So there we are then. What have PayPal done for me since March 2005? (1) Well they have cost me over GBP£1000 in charges for transactions that have successfully gone through the system. (2) They have cause me to employ more staff to double-check every transaction that passes through their coffers, due to their faulty IPN system. (3) They have cost me at least one day’s lost turnover, and possibly 5 more days in lost revenue until this matter is resolved. (4) They have discredited my company by stopping our ability to process any transactions at all, making it impossible for customers to place new orders.

Which ever way I go now is going to be extremely time-consuming and expensive. To replace PayPal with Worldpay, or any other online card processing company is going to take time, effort and money to integrate with them. So, to sum-up what do I think of PayPal? For me they have turned out to be a complete shambles, incapable of ensuring that my business continues uninterrupted, and worse still, they have cost me, and continue to cost me thousands in lost revenue. Add this to the fact that they have discredited my company, and there you have it – a recipe for disaster.

Posted: May 8, 2012 at 11:25 am


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