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

Unauthorized Payment

By Simone Harris

I am a UK buyer  with ebay (I do not sell), and for each payment using paypal I insist upon using a credit card rather than going directly through my bank account. The moment I make a payment using a credit card I then pay the credit company directly from my own bank account. This way I am not subject to interest charges. Also, if anything goes wrong, I am protected by the credit company. For me, this is a safe system which works well…….in spite of the delays between money coming out of my bank account and into my credit card account. Yes, big banks are on the make and on the take and have been doing so for many years. From what I have read so far it appears paypal are trying to do the same thing, but they are not a bank and have no legal right as far as I am aware to do any more than deduct charges for services rendered.

My own horror story with paypal seems to pale in comparison with others, yet, it is an ongoing saga and I have no idea as to when it will end.

For the first time in a while I bought an item through the Buy it Now scheme. Imagine my surprise when the money was automatically taken from my bank account before my very eyes, this, instead of giving me the choice of funding source.  I thought little of it at the time, but a few days later felt I should report this oddity to paypal as there may well have been a technical hiccough.

Going through the usual hoops on the Help section of paypal I eventually decided to call by telephone. Of course, as is the norm these days, I was put through to a call centre. The poor lad had no idea what I was talking about. As I was beginning to feel like a farmer talking to a lawyer about soil erosion,  I asked him if he actually had a paypal account. He did not so I insisted on speaking to someone who DID.

There followed a fairly fruitful discussion with a lady in customer service who did use paypal herself. It appeard that to protect buyers from non-payers money was automatically deducted through the Buy it Now system. I pointed out that although I can understand this new policy and for small amounts it was fair enough there are many sellers such as furniture suppliers, and even individuals who sell cars via tthis method. If vast sums of money were suddenly taken directly from buyers bank accounts there would be an awful lot of red faces around, not to mention a lot of innocent creditwothy people suddenly becoming blacklisted. Such an important change of policy was not highlighted on the paypal site and I did not receive it in an update email. All things being equal, the lady assured me that this matter would be brought up at the next meeting, and there was nothing in her voice which indicated I was being fobbed off. In recent days I have noticed that when making paypal payments I am no longer faced with that additional page trying to sell me the idea of paying via my bank account. I have not, however, bought via Buy It Now, so cannot report if all has settled down in that direction.

So now, just when I thought it was all sunny days ahead I was faced with another little oddity with the compliments of paypal.

A few days ago I logged on to my bank account in order to cancel a Direct Debit payment. Lo and behold, in the listing there appeared a Direct Debit  in favour of (big fanfare) paypal. Tracking back, it appeared that this one-off payment to the seller of the Buy It Now item had become a a payment to paypal to be paid once per fortnight. As the original payment had already been made, needless to say I cancelled the Direct Debit.

As most readers are American, I will make a break here to explain a point or two as the British banking sytem may be a little different.

Here, there are three ways of making payments electronically. First, there is the Banking Automated Credit  System whereby I may set this up myself to make payments directly from my bank account to another. Then there is the Standing Order, which is a regular payment set up by myself, but this will always be exactly the same amount of money. Should the amount change, a new Standing Order must be set up. Finally, there is the Direct Debit. The DD is different whereby it is set up by the recipient of any funds leaving my account, and, as opposed to being a fixed amount it is variable. Because it is set up by a third party it can only be actioned by the bank upon receipt of a Direct Debit Mandate which is physically signed by me on a piece of PAPER, and then posted back to the eventual recipient of my funds who are then authorized to take certain amounts
from my account.

I SIGNED NO SUCH AUTHORIZATION.

I contacted the bank, but, once more, I was faced with an operator from a call centre who has no idea about banking principles. Somewhere along the line some daft individual called this progress. Having said that, I was given the address of the department of paypal which set up the mandate. I have as yet to write. I am waiting to see what happens first.

Things progressed. A couple of days ago I received an email from paypal informing me that I had cancelled my Direct Debit payment. Clever fellows aren’t they? Well, gentle readers, I did not reply as I owe no money to anyone, I do not hold funds with paypal and treated the email with the quiet contempt it deserved.

This is the story so far which began on the 3rd May 2005. I will keep you posted should things progress further.
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I have not as yet read everybody’s story, but as I have only seen the horrors of what has happened to sellers I felt that my experience (albeit it little in comparison), as a buyer should be shared to add another slant.

I will say this, though, if I may.

From what I can see, paypal is little different from many companies today in that we have a small group of young people who have made a successful company overnight. Sadly, they have not grown in maturity with the company and cannot cope with how to deal with things when they go wrong. It could well be, that all the problems incurred are because initiative and common sense when handling customer problems has been wiped from the face of the earth along with I.T. technicians who REALLY know to sort out computer errors. More and more we are being faced with ‘that does not compute” and “send letter A”. Automated systems are everybody’s nightmare.

Be well, and take care.

Posted: May 7, 2012 at 1:13 pm


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