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  1. #1
    Join Date
    Mar 2003
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    663

    Unhappy Urgent: PayPal Related Question

    Hi folks,

    i recently sold a site for US$8000. The buyer who had successfully won the bid on the site uses PayPal to pay for it. During the transaction, he said his credit card is limit to send not more than 2K per day. Hence he split up the 8K into a few transaction.

    Jan. 1, 2007 - $2,000.00 USD - Status: Completed
    Jan. 1, 2007 - $2,000.00 USD - Status: Completed
    Jan. 2, 2007 - $1,000.00 USD - Status: Completed
    Jan. 2, 2007 - $500.00 USD - Status: Held
    Jan. 3, 2007 - $900.00 USD - Status: Held
    Jan. 3, 2007 - $1,600.00 USD - Status: Completed

    As you can see, the transaction for $900 and $500 is held by PayPal. After a few days which is around Jan 5th, I login to my PayPal account and they said my account had been limited.

    Limited access means I can't receive, send nor withdraw any money from my account.

    I personally felt that PayPal is very unreasonable here. I am the reciever of the sum of money and in no way will I have any idea whether the money sent to my account is valid.

    Anyway in order to resolve this issue, PayPal demands me to fax in my ID card and any utilities bill. I did just that and waited for almost a week. Then I got an email from PayPal and they said the information submitted to them are not enough. I was like, WTF? These are the info you demanded and now you said its not enough.

    Ok great, so then they need me to show proof for the above transaction on what I have sold. I replied their email and show them the auction posted at sitepoint.com.

    Note that I have even tried to call PayPal and their staff over there said they need some time to verify the information. Ok, so I waited.

    During these weeks, the buyer is also working closely with me on this issue. His account is also being limited by PayPal! We both tried to call PayPal and the buyer even told PayPal via phone that he is the one making the payment and he is really wanting to pay me.

    So after which, yesterday I receive another email from PayPal stated:

    We have reviewed your PayPal Account, and due to the excessive risk
    involved, we would like to begin parting ways in a manner that is least
    disruptive to your business.

    Please reply to this email by logging in to your PayPal account and filling
    out the Limited Account Access web form to facilitate the disbursement of
    any funds remaining in your PayPal account. You can locate the web form by
    typing the following in your browser: https://www.paypal.com/emailus,
    choosing the topic "Limited Account Access," clicking "Continue," and
    writing your instructions in the message box.

    Disbursement can be handled in one of two ways:

    1. Your remaining account balance can be used to provide refunds to your
    buyers (if applicable).

    OR

    2. Your remaining account balance will be held in your PayPal account for
    180 days from the date your account was limited. After 180 days, you will
    be notified via email with information on how to receive your remaining
    funds.

    If you choose to provide refunds to your customers, please log in to your
    account and contact us with a list of transaction IDs for the buyers that
    you would like to refund.

    We thank you for your prompt attention to this matter and apologize for any
    inconvenience this may cause.

    Sincerely,
    PayPal Account Review Department
    PayPal, an eBay Company
    So what do they mean by parting ways? Closing my account??!?! If so, this is absolutely riduculous. Now my account has a balance of $6,629.46 USD from part the transaction of selling the site. I don't understand why part of these transaction is in my balance since PayPal is suspicious of the transaction???

    The only payment held is the $900 and $500 transaction.

    So was wondering, did anyone actually uses PayPal to sell their site for more than 8K and transaction went smoothly?

    Any advice greatly appreciated
    Member Since 2003.

  2. #2
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    Is your Paypal account Personal or Business ?

    If your Paypal account is a Personal account there is a limit of 5 credit card or debit card payments per year.

  3. #3
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    Mines is a verified business account. Anyway this is not related to this issue. Thanks anyway.

  4. #4
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    wow that sucks, I hate paypal with a passion they have screwed me so many times, and almost every time it was bull crap. I cant believe they done this without the money being reported unauthorized. thats crazy. i just wish there was such a widely used payment method without all the gayness.

    I dont think there is no help you can find here, sure some people might tell you to say this or say that but it doesnt matter, you will be lucky if you get out of this with your money at all.

  5. #5
    Join Date
    Jan 2007
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    356
    Sounds like PayPal is being fairly unreasonable on this. I don't have much advice to offer, but I say that you should keep in contact with PayPal as much as possible (preferably over phone). I know of many sites that have been sold in excess of $10,000 and had no problems paying via PayPal.

    I know it sounds silly, but is it possible that the $900 and $500 were funded from a dodgy source (eg. a stolen credit card)?
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  6. #6
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    Nov 2004
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    I had also the same problem. so i did not object to paypal, they held my payment and refunded the same to the original sender.

  7. #7
    Join Date
    May 2003
    Posts
    267

    Welcome to the club

    How many times you/we need to read and hear about paypal sucking business practices to realize NOT TO DEAL WITH THEM???
    I guess until it hits you.
    I'm very sorry for your situation though, anlene, but you should have known better that PayPal is a bunch of
    M O R O N S. you CAN NOT do business with them.
    I lost 3(!) business accounts with them. And most ridiculous reason was "suspicious transactions on credit card assigned to my PP account" WHERE there was NO F..KING CREDIT CARD nearby this account. I never assigned any CC and only used my business bank account.

    Anyway, "partying ways" (those morons love this expression) means they are going to hold whatever balance you have there for a six month, eventually releasing it back to you.
    NOW, make sure you DO NOT close bank account that is attached to your PP account. If you move it, chances of getting your money back in 6 month are zilch.
    Again, I'm sorry for your situation. Welcome to the club
    Amirocms.com

  8. #8
    Maybe you can try asking Paypal about it at the below mentioned email address.

    http://www.paypal.com/cgi-bin/webscr..._frame-outside

    Violations of the Acceptable Use Policy.

    Violating PayPal’s Acceptable Use Policy may result in temporary or permanent limitation of a customer’s account. This includes the inability to send and/or receive payments, to remove financial information from an account, and for users to close their accounts as a way of evading the policy. Additionally, users whose accounts are permanently limited for violating the Acceptable Use Policy are barred from future use of PayPal and its services, and such users are not permitted to open new or additional PayPal accounts.

    If you have a question about whether your proposed or existing business violates the Acceptable Use Policy, you can email PayPal’s AUP Compliance Department at: [email protected]

  9. #9
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    If the buyer is willing and you trust him enough...have him do a chargeback on the payments and then pay you via some other method.

    --Tina
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  10. #10
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    Thanks for all your replies! I just sent another email to PayPal:

    Sent to: [email protected],[email protected]..[email protected],
    [email protected],[email protected],[email protected]

    Dear PayPal,

    First of all, I would like to highlight to you that my account is a VERIFIED BUSINESS ACCOUNT. The reason of highlighting this is because I want you guys to know that I use this PayPal account to do many other business.

    The recent issue cost me my account to limited access. And now, I received another email stating that you are gonna close my account. This is totally ridiculous.

    I auction my website. The website I auction is $8000. The buyer pay me money. And you limit access to my account. I personally felt that PayPal is very unreasonable here. I am the receiver of the sum of money and in no way will I have any idea whether the money sent to my account is valid.

    You guys demand I fax in my ID card and utility bill. I faxed. After i faxed, you guys said that the information was not enough. You want proof to the item I sold. I show you proof that the auction I posted is at [http://censored]. What more do you want? After all these information I've sent, you guys sent me another email and wanted to close my account without a satisfying reason???

    The buyer and I have been calling PayPal physically, sacrificing our phone bills, to try to resolve this issue. We have given our contact number, physically home addresses and what more do you want? If there is anything suspicious or wrong with the payment the buyer had made, you guys should check with the buyer instead of we, as the merchant!!!!

    Please kindly advise on this ridiculous decision PayPal had made. I am not going to let this off easily and I promise I will make this issue really big. I had posted a forum thread as well at http://www.webhostingtalk.com/showthread.php?t=578407. You guys really want to drive us merchant to other service provider like Google Checkout aren't you?
    Yes, I know and have heard a lot of PayPal nightmare issues. But so what? I need to use a provider like PayPal to receive money and be able to transmit the payment to my local bank account on the fly. Can you recommend any?

    Anyway their office hour is close during weekend. I will have to wait till their office hour before I can make another call to them.

  11. #11
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    Quote Originally Posted by AH-Tina
    If the buyer is willing and you trust him enough...have him do a chargeback on the payments and then pay you via some other method.

    --Tina
    Yes Tina, I told the buyer to do a chargeback. He is gonna do it on monday after we try to call PayPal again and see if there's any resolution to this. He is from Spain and I'm from Singapore.

  12. #12
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    Wouldn't repeated large transactions from the same source within a short period of time raise eyebrows with a merchant account as well? Depending upon one's risk parameters it could be seen as an attempt to circumvent them.

    I'm not surprised at PayPal's response. (Not that they don't suck )

  13. #13
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    Quote Originally Posted by transops
    Sounds like PayPal is being fairly unreasonable on this. I don't have much advice to offer, but I say that you should keep in contact with PayPal as much as possible (preferably over phone). I know of many sites that have been sold in excess of $10,000 and had no problems paying via PayPal.

    I know it sounds silly, but is it possible that the $900 and $500 were funded from a dodgy source (eg. a stolen credit card)?
    Yes, this is what I initially thought so at first. Although I still suspect so till now. I tried to verified with the buyer and our conversation on this almost got heated up. I tried to highlight to him that PayPal is only holding the transaction for $900 and $500. He said he really have the money and he is not sure why PayPal is doing this to us.

    I still try to trust him though.

  14. #14
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    Just curious...why would you do such a large transaction with a stranger via Paypal? That just raises all sorts of red flags. Personally, I can totally understand why Paypal is a bit nervous to take on that kind of risk.

    --Tina
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  15. #15
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    Quote Originally Posted by Shawna888
    Wouldn't repeated large transactions from the same source within a short period of time raise eyebrows with a merchant account as well? Depending upon one's risk parameters it could be seen as an attempt to circumvent them.

    I'm not surprised at PayPal's response. (Not that they don't suck )
    By all means, they can raise as many eyebrows as they like. I can understand "repeated large transactions" and I seriously dont mind they have such practice. But at least if we have already provided all the proof, they should already be lowering their farking eyebrows isn't it???

  16. #16
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    Quote Originally Posted by AH-Tina
    Just curious...why would you do such a large transaction with a stranger via Paypal? That just raises all sorts of red flags. Personally, I can totally understand why Paypal is a bit nervous to take on that kind of risk.

    --Tina
    I've already mentioned, I put my website on auction. Its impossible for me to know everyone in this world to be able for me to accept the bid isn't it? Everyone who bid on my auction is a total stranger to me.

  17. #17
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    PayPal provides a service for easy payment. People sell their items on the internet and uses PayPal to do the transaction. Seller gets money, PayPal receives their commission. Done. That's it.

    Now 2007
    PayPal provides a service for easy payment. People sell their items on the internet and uses PayPal to do the transaction. Seller gets money, PayPal limits both accounts and close them. So whats the point of this service for?

  18. #18
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    Quote Originally Posted by anlene
    ... I am the receiver of the sum of money and in no way will I have any idea whether the money sent to my account is valid... If there is anything suspicious or wrong with the payment the buyer had made, you guys should check with the buyer instead of we, as the merchant!!!! ...
    It is the merchant's responsibility to assess the risk of taking any payment. The payment processor takes a risk by trusting you with this responsibility. The larger the payment the greater the risk.

    When someone submits a large payment to me I tend to think more in terms of the risk than the money since even for many months after the payment has made its way into my account I cannot rest assured that it's going to stay there!

    Quote Originally Posted by anlene
    PayPal provides a service for easy payment. ...
    They do make it easy, but that doesn't mean it's always a good idea to use their service.

  19. #19
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    Quote Originally Posted by Shawna888
    When someone submits a large payment to me I tend to think more in terms of the risk than the money since even for many months after the payment has made its way into my account I cannot rest assured that it's going to stay there!
    Amen on that!. Anything over $100 I just do western union, I have lost $100s just doing hosting business and my mother has lost about as much just selling things on ebay. Its simply not viable to accept paypal for payment anymore. Ive had payments from $3 to $250 get charged back MONTHS after they cleared. I just dont get these people. there is very little protection for sellers and if you sell digital goods you really have no protection

  20. #20
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    seems like a scam..
    Martyn

  21. #21
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    Is western union better?

  22. #22
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    I am feeling really insecure about my account balance (over 2k usd) in my paypal account. time to withdraw asap///
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  23. #23
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    Quote Originally Posted by Leadix Web
    I am feeling really insecure about my account balance (over 2k usd) in my paypal account. time to withdraw asap///
    I would never trust paypal with that much . I think we have slightly more protection on our balances in the UK, since they are regulated by the FSA (financial services authority), but i still get it into my bank asap.
    Andrew Thomas

  24. #24
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  25. #25
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    What are the other options if we have to do with something other than PayPal ??
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  26. #26
    Other options would be Moneybookers or 2CO.
    if you've a large payment like 8000$, it worth to pay 50$ to open 2CO account. (However you pay it for the first transaction only)
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  27. #27
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    Firstly, do NOT have someone do a chargeback. This will only limit your funds further.
    After coming to an agreement, refund their money entirely. Go into the interface and refund this. Do this ONLY if it's necessary to do so.

    Secondly, Don't E-mail paypal, pick up the phone and call them. Explain the situation, see just what is going on, and just what you have to do to resolve the situation amicably. Do NOT email them, again. Simply pick up the phone, call them, and don't give up until this situation is resolved in EVERYONE'S best interest!

    Now, saying that:
    Paypal has a responsibility to it's users. You have 5 transactions , probably from the same user for rather large amounts of money. What, paypal should just ignore this? No, this should draw a very serious red flag to your account, and it's done!

    Paypal has to cover it's own tail end here. They are a professional business, and must refund these in the event that ANY of these transactioins are fraudulent, so yes, they're going to be VERY picky here and say "you are limited". This isn't PAYPAL'S fault, this is your own fault, for accepting multiple transactions from the same user for large amounts of money.

    Like any bank, paypal has to protect it's funds. Since you've raised a red flag, you've of course had your account limited, and it SHOULD be this way. Again, paypal must protect their own interests here.

    Had you done this through a merchant account,they would have done the same thing. Most likely they would have limited your withdrawals until this got taken care of, which is essentially what paypal's done here.

    Like I said, pick up the phone and call paypal. Explain the situation to them. In my experience they are FAR from unreasonable, you just need to be clear on what happened and find the resolution that works fro everyone. Even IF they limit your withdrawalls for a bit, that's not them closing your account
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  28. #28
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    Quote Originally Posted by linux-tech
    Firstly, do NOT have someone do a chargeback. This will only limit your funds further.

    Paypal already said they were closing his account.

    --Tina
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  29. #29
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    Quote Originally Posted by linux-tech
    This isn't PAYPAL'S fault, this is your own fault, for accepting multiple transactions from the same user for large amounts of money.
    erm...eRM...ERM? Let me put it to you this way. So an innocent guy wanted to sell something online. He went to PayPal website. PayPal advertise "Expand your business with PayPal", "Receive secure, instant payments for auctions", "blah blah blah" included with a nice beautiful lady photo at the PayPal overview page.

    This guy open an account, and when he is accepting multiple transactions from the same user for large amounts of money, his account got closed. And fault goes to the guy.



    Does this make sense?

    Let me put it to you in another way.

    I wanted to buy a sweet in a shop but I've no money. I rob an old lady and use the money to buy the sweet. The shop got close down by the authorities. Does this make sense to you?

    (Disclaimer: I'm not trying to say the buyer robs anyone here)


  30. #30
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    I do feel for the guy, but damn. If I ever saw multiple, sequential high value payments (off a credit card, no less) to the same account, I'd shut it down too. You don't understand that they have a business to run - what if someone actually had compromised the sending account and emptied their credit cards, then PayPal is left holding the bag.

    That transaction, even as you explained it, sounds very shady to me. eBay gives you the option to refund the buyer even thought they're closing the account, why don't you just do that and have him pay through a different method?

    The most suspicious part is that one of the payments got held. That does NOT happen with legitimate payments. I'm thinking that this is a little less legitimate then you're making it out to be.

  31. #31
    8000 in several tractions in a short time from the same account sounds like fraid to me had I been paypal. then you had two held payments. I notice those were 900 5nd 500 right? (I cant scroll back that far now)
    So now we have 8000 in and 1400 in charge backs so paypal limits. PAypal gets nervoious when the charge back rate is more then 1% the total incoming finds in anyone month. So here you just blew that away plus being coupled with the multuiple transactions that makes you look even more supicious I woudl have closed your account as well.

    Now I am also guessing that both your account and the seller may be relatively new or possible not normaly acustom to seeing transactions of this size. If the buyer didnt even have a paypal but used a CC on the paypal payment form then this is even higher risk. In either case paypal could be stuck with a charge back from the bank which paypal cannot fight or prevent. Charge backs can occur up to 180 days after a charge is made. Then add in the fact that your in a foreign country to paypal which means paypal has even less ability to confirm or fight a charge back.

    So paypal is looking at it like this. Multiple red flags making yoru account very high risk. There is a better then average chance that even if the transation was authorized by the buyer and the goods were transfered that the buyer still could run to their bank a few months later and yell unauthoized and iniste a charge back just for fun and they would probably get their money back fomr papal. Now this would leave paypal footing thebill ince they would probably have already transfered the $8000 to your checking weeks or months before with no way to get it back from you. This is why they put the 180 day limit on here since they want to be 100% sure they dont end up losing 8000 on this transaction.

    Thnk of this senario. You process $8000 from my CC whic is a from a foreign bank and pay it out to some merchant who is also in another country. Then I issue a charge back with my bank...but you already paid your merchant. and cant get your money back. Guess who is out $8000.

    Paypal sees you and this series of transactions to be of higher then average susicion and they want nothing to do with it and frankly neither would I

    I have been a paypal business account member for over 4 years now and I process $4000 per month and have a rating ov 389. The longer your with paypal the more they will trust you and let certain red flags pass by without much concern. And its always best to be proactive and take every possibel verification step you can.

  32. #32
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    This guy open an account, and when he is accepting multiple transactions from the same user for large amounts of money, his account got closed. And fault goes to the guy.
    Exactly. NEVER handle multiple LARGE transactions from the SAME individuals in a short period of time like this. That's only asking for problems.

    The shop got close down by the authorities.
    Here, you're comparing apples to oranges
    The shop owner is not responsible, or required by law to give the money back.
    Paypal, however is.
    You may see nothing wrong with multiple large transactions, and as the seller, of course you wouldn't. As the BANK, however, yes, Paypal WILL.

    As a side note:
    This should have been done all at once, not through multiple cards, multiple transactions, and this SHOULD have been done through a wire transfer, not risking paypal accounts.
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  33. #33
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    yeah paypal is not an official financial institution in the is therefore they do not have to abide by banking laws which prevents stuff like this, accounts being frozen for months, etc; I think the average consensus among sellers, especially digital goods is that no one likes using it but its so widely accepted there isnt much choice. Maybe in time more merchants will stop accepting paypal and they will either change their policies or a new better service will pop up.

    On teh frozen account deal I know a guy who had 600 bucks in his paypal, got froze for some crazy reason, not quite clear on it but i had something to do with an ebay transfer. Anyway, his account stayed frozen an entire year before they finally issued him a check for his balance.

    I just dont see how anyone who has dealt with paypal transactions for a while can say 100% positive things about them

  34. #34
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    I think Paypal is in the wrong here. While they do have a business to run, apparently these transactions were all legitimate, so they have no reason to especially close down an account. It's ridiculous that you have to "plan" payments so your account does not get closed. They should have red-flagged the account and monitored it closely. Alternatively, they could have contacted the owner of the account the funds were sent from or even just put a hold on the funds for 30 days.

    But to just close down the account is just a bit short of retarded.
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  35. #35
    Multiple transactions should have raised the red flag. Most credit cards have a fixed credit limit rather than a daily limit. So if the buyer says he has a limit of 2k per day that would make me suspicious. Also anyone that had such a limit (730k per year?) should not have a problem in getting the limit raised for a single transaction.

    I don't think PayPal or any other 3rd party processor is particularly good in terms of supporting the merchant but in this case I can see why PayPal would place a control on the account.

    Telling the customer to do a chargeback was not a smart move. What did the customer tell the bank I wonder. If he lied to the bank then this could be considered as fraud by the card holder.

    If you had not shipped the goods you should have refunded the payment and asked the customer to do a bank transfer of 8k less the PayPal commission. This would have given you the same net amount and the customer an incentive to walk to the bank.

    If you had already shipped the goods you should have given PayPal proof of receipt.

  36. #36
    Quote Originally Posted by ayksolutions
    I think Paypal is in the wrong here. While they do have a business to run, apparently these transactions were all legitimate, so they have no reason to especially close down an account. It's ridiculous that you have to "plan" payments so your account does not get closed. They should have red-flagged the account and monitored it closely. Alternatively, they could have contacted the owner of the account the funds were sent from or even just put a hold on the funds for 30 days.

    But to just close down the account is just a bit short of retarded.
    How can paypal be sure they are legitmate? And how can paypal be sure that the legitmate transaction wont still be chrged back because the legitmate buyer has illegitmate intentions of charging back for the hell of it.

    Sometimes is safer not to do business with high risk customers even if they are getting paid very well to do so. There was too many red flags and there was $1400 charged back out of $8000 before the account was frozen and was probably the primary factor in paypal limiting the account in the first place. This far in excess of what paypal considers to be alow risk seller. Paypal requires you keep charge backs to less then 1% and in this case that would be less then $800.

    On the subject of paypal being a bank they are FDIC Insured as a PAss through financial IStitution. So this may not be a standard bank like you use for checking and savings but they are a bank and none the less and covered under the regulation that govern investment companies and money market accounts. They are regulated like like any other bank and they do abide by the law like any other similar bank.

    If you had a merchant account with any other financial institution and acharge back came through they would still be at risk of loss if they paid out this money and were not able to recover it since your account no longer have the funds to cover the charge back. If you used a standard merchant account and suddenly had several transactions of this size from the same source and then two charge backs for $500 and $800 in a short period they too woudl freeze your account and possible even close if they felt your level of risk was more then the processor wished to bear. There is no law that requires any bank to maintain any account for any person and there is no law that requires any bank to release any funds before the period of charge back has passed.
    Last edited by softtech; 01-24-2007 at 11:10 AM.

  37. #37
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    181
    www.paypalsucks.com
    they have 1,800$ of mine im still waiting for. keep in mind paypal is not a financial company, bank and does not have to abide by any laws or regulations.

    Paypal is one of the most bs companies. in large part because of megg whitman (sp?) who runs paypal/ebay. over the past 3 years she has slowly but surly been driving the ebay company into the ground. the best thing that could happen to ebay/paypal users is if a company that knows what they are doing like say google opens an auction website. (which is in development thank god!) once this site is open ebay will be screwed in large part because there sellers will probably not want anything to do with them.

    ps. it will be fun to watch ebays stock fall when googles auctions go live!

  38. #38
    Join Date
    Sep 2002
    Location
    Top Secret
    Posts
    11,686
    Quote Originally Posted by Arcadie
    Is full of individuals who have violated the TERMS , yet wonder why Paypal has blocked them. Imagine that
    Quote Originally Posted by Arcadie
    they have 1,800$ of mine im still waiting for. keep in mind paypal is not a financial company, bank and does not have to abide by any laws or regulations.
    There, you are wrong
    While they are NOT a bank, they DO have to abide by the law in MULTIPLE jurisdictions. Not just US, but UK, CA and more. Every country they are in, they have to abide by THEIR law.

    As for your funds, they ARE obligated to wait up to 6 months before releasing them, due to chargeback protection. This is something that anyone in their business who is smart would do. I mean, think about it. Where would YOU propose the money came from? Paypal doesn't make jack per transaction, and if they had to cover these all out of their OWN pocket, well, you'd better believe they'd be charging a LOT more.

    IN the end, it's up to the seller to provide reasonable protection to their buyers and to those they do business with. This can be anything from verifying location of individual (compared to order) to actually verifying the street address to NOT accepting massive multiple transactions from the same user. I mean, this just screams fraud here.
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  39. #39
    I've never encountered this problem. However, I do know that some Paypal accounts are limited to the amount of transactions and the balance that can be kept.

    If you have a business account then you shouldn't be having the problem. Good luck.
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  40. #40
    Join Date
    Sep 2004
    Location
    Seoul, Korea (London, UK)
    Posts
    1,672
    Had a recent dispute where a dodgy looking email address paid 12.99 USD for a month. Cancelled and refunded it immediately - but a dispute was submitted later: How is this possible when the transaction is cancelled and refunded? My live paypal processing form was online for 2 days. Took it offline again.

    I, since some time ago stopped using automated systems for processing billing and paypal. You see I was worried about the amount of unknown & fraud transactions. I do not get signups every minute of the day.

    When there were no automated billing processors, I never had any fraud orders or chargebacks. Clients have to email me, request quote, discuss their requirements before being signed up.

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