14 
PayPal’s one of the truly ubiquitous names of the internet. It’s been around since e-commerce first became a Thing, and it’s even got its own Mafia. Like every Mafia, though, some of its practices are a bit shady, bordering on the downright nasty. It’s time for that to change.
PayPal was started way back in 2000, born out of a merger between a Palm Pilot payments system and the perilously-close-to-porn-named X.com. The founders are huge names in Silicon Valley — people like Peter Thiel, one of the first investors in Facebook, and Elon Musk of Tesla and SpaceX fame. PayPal’s star rose with eBay; on its debut to the auction site, it rapidly became the eBay transaction platform — 70 per cent of auctions in 2000 accepted PayPal. Consequently, eBay bought out PayPal in 2002, and the rest, to use a terrible cliché, is history.
PayPal has risen to a meteorically massive position in online payments. In 2012, PayPal processed around £91 billion of payments worldwide. Unsurprisingly, PayPal’s making a killing — it took £3.5 billion in cold, hard cash for eBay in 2012.
So, PayPal’s a successful business. Why? Simple: it’s incredibly useful to consumers and businesses alike. If you’ve bought pretty much anything off the internet recently, you will have noticed that PayPal is more omnipresent than most minor gods, with pretty much every online retailer, big and small, offering PayPal.
For the average Joe, PayPal checkout is pretty handy. Rather than having to plug your credit card details in to some dodgy website, you can just log into your PayPal account, mash “OK” a couple of times, and buy your dubious goods, safe in the knowledge that you haven’t just given your credit card details to some villainous Ukrainian identity thief. It’s an awesome, legitimately 21st century way of buying stuff that cossets us in a warm blanket of familiarity and security.
As well as all this, PayPal should also be a great tool for small businesses. Instead of having to set up a mind-boggling merchant banking service, businesses can just stick a PayPal checkout into their website (making things easy for web developers as well), and get money with minimum hassle.
Given all these advantages, it’s no surprise that PayPal is in a great business position in the UK. The fact that it’s so dominant, however, is a problem. PayPal isn’t always what it’s cracked up to be. Yes, if PayPal works, it works beautifully. But as soon as you crack the veneer of slick perfection, you run into problems.
Probably the classic problem with PayPal is that it freezes accounts for no good reason. Take an example from close to Gizmodo’s heart: Haje Jan Kamps is a former writer for Giz UK, and currently the owner of Triggertrap, a startup that sells a neat little device for cameras. Like many tech startups, Triggertrap chose to take pre-orders. But, PayPal didn’t like that Kamps was taking payment without delivering the product straight away (even though it was incredibly clearly marked as a ‘pre-order’), so it froze the entire Triggertrap PayPal account.
Arbitrary freezing of accounts is kind of a PayPal classic. Whenever it gets the merest whiff of fraud, it freezes accounts as fast as a Siberian blast freezes your balls. In fact, there are whole websites dedicated to accounts of PayPal doing just this. Even I’ve had it happen when I sold something for about £100 on the internet. PayPal’s justification is that by doing so, it protects buyers — freezing accounts gives them time to investigate any potential problems and correct any fraud. (This is regardless of the fact that if it registered properly in the UK and acted like a bank, PayPal’s buyers and sellers would have legal protection under the Consumer Credit Act.)
This wouldn’t be such a problem if getting an account un-frozen wasn’t such an intergalactic ball-ache. In Kamps’s case, PayPal wanted him to provide invoices, bank statements, proof of postage, ‘business documentation’, and fax PayPal information about his business. Remember, this isn’t some massive multi-national corporation we’re dealing with here, but a tiny team of two people, who, incidentally, were also slap-bang in the middle of going into production with a product. There are other hang-ups as well — check out Haje’s hilarious blog post for full details (Spoiler alert: he ends up invoicing PayPal for the wasted time. What a dude.).
And if you manage, against the odds, to provide the metric tonne of paperwork demanded? Well, PayPal says it aims to respond within 14 days. But that’s an internal target, one it has no obligation to meet. In fact, according to its terms and conditions, PayPal can freeze your account for a whopping 180 days — basically half a year. For a small business, having all your cash frozen, tantalisingly out of reach, will ruin you. It’s insane, and what’s more, the totally arbitrary nature of who gets their account frozen, and when, makes it very difficult for small businesses to rely on PayPal.
So, if you have a problem with PayPal, what are your options? Well, you can make a complaint to PayPal, but we’ve already seen how god-awful its customer service is. Trying to get a PayPal agent on the phone — one who can do more than blow smoke up your arse — is a voodoo art form that probably works best if you perform an ancient rain dance first.
Moreover, PayPal’s got a sneaky trick up its sleeve — according to the Financial Ombudsden (we’ll come onto them later), if you open a PayPal complaint, then close it, there’s no way to reopen it again.
The case study the Financial Ombudsmen gave to me was of a woman who ordered something which never arrived. She made a complaint to PayPal, who investigated it and sent the poor victim an email promising action, and telling her that she could withdraw her complaint. Nothing happened, so the woman tried to complain to PayPal again. No dice — in PayPal’s view, the matter was closed, and couldn’t be reopened again. The Financial Ombudsmen called this — and I’m quoting — “massively dubious”. I’d call it down-right evasive.
So, what if you’re rightly pissed off with PayPal holding your money, and want to tattle to someone? Well, PayPal UK isn’t actually registered in the UK — it’s registered in Luxembourg, so it doesn’t come under the jurisdiction of the Financial Services Authority in the UK. “Wait!”, I hear you cry — “isn’t it registered (voluntarily, no less), with the Financial Ombudsmen here in the UK?”. Well yes, it is, but there are a few caveats.
Firstly, as a result of its ever-so-generous voluntary registration, PayPal can choose which business areas can be investigated by the Ombudsmen. Although the Financial Ombudsmen can’t reveal exactly which areas PayPal is signed up to, I find it incredibly suspect that a corporation should be allowed to pick and choose how it’s regulated.
Secondly, the Financial Ombudsmen can only really investigate claims relative to PayPal’s own Terms and Conditions and a basic ‘fairness test’. Basically, this means that if the regulator has found that PayPal has acted fairly and reasonably within its T&Cs, there’s nothing it can really do. Given the draconian nature of PayPal’s Terms and Conditions, this gives PayPal a whole shitload of leniency. It means that PayPal is making the rules it has to play by — pretty shady if you ask me, especially when it’s others’ money it’s playing with.
The final problem with the Financial Ombudsmen is the speed it can work at. A ballpark figure for resolution of a complaint by the Ombudsmen is three to six months. That’s an absolute age when all you’re money’s parked in a PayPal account. Therefore, under current UK law, there’s not a lot you can do to quickly resolve issues with PayPal.
Yes, you can take PayPal to UK court. In fact, an enterprising law student did just that in 2011. With two grand frozen in a PayPal account (after selling unwanted crap on eBay, and having the whole thing marked as fradulent), Shelley Michaels took PayPal to county court and got a ruling in her favour. I reckon this shows that in many cases, PayPal is actually acting illegally, since Ms Michael’s case isn’t really different to many other PayPal cases. It’s just that not all of us are trainee lawyers, and therefore we don’t have the time, inclination or money to go nine rounds with PayPal.
There are, of course, a few arguments in PayPal’s defence — it’s a ‘free’ service, so it doesn’t really owe us anything. Free my arse. It takes a fairly hefty fee on transactions — either 2.3 or 1.9 per cent, depending on the transaction and the type of account.
Going back to the example of Triggertrap, Kamps reckons he’s paid PayPal around £1600 over the years. Contrast this with banks — most accounts are either free, or you pay a tiny amount of money per month in return for stuff like insurance and awesome customer service. Oh, and the bank actually gives you money in the form of interest.
Yeah, I know that banks invest your money to generate return, whereas PayPal just sticks it in a low-interest current account. So, on this basis, I can accept PayPal’s fees. But in return, I want to be treated like a goddamn customer. On the few occasions a bank froze my account because of suspected fraud, I got friendly customer service reps ringing my ears off telling me how to sort it out, and normally the whole thing’s solved in about 20 minutes.
And this is a bank that’s free! Compare that to being royally fucked around by PayPal at every turn, and you see why people become rapidly frustrated with PayPal.
Of course, we don’t live in a communist society, and PayPal isn’t operating in a vacuum. But it does hold an effective monopoly. The most shocking example of this is eBay, where PayPal is the soles means of payment. Fun fact: the UK is the only country in the whole sodding world where this is the case.
As well as eBay, PayPal is the only method of giving companies your dough on a whole plethora of other sites. To put it bluntly, if you want to engage in serious e-commerce, you’re going to need a PayPal account, there’s no two ways about it.
And that’s a problem.
It’s a problem because of PayPal’s whole “guilty until you’ve rammed your innocence down our throats” culture.
It’s a problem because this firm, which handles a shit-ton of UK money, is only really responsible to Luxembourg regulators.
It’s a problem because it’s basically a bank, but it’s not treated anything like one by the government.
I get why PayPal does it. I really do. It’s not like it does it for the sake of it — it deals in online payments, one of the most fraud-ridden, shady armpits of the internet, and as a result it’s incredibly cautious and risk-adverse. I admire that, I honestly do.
But its culture needs to change. Ultimately, it’s a twofold problem: money and attitude. Money, because the first thing it needs to do is invest some of its billions of profits in the biggest and best customer service network known to man. Freezing accounts wouldn’t be a problem if it could be un-frozen in a matter of minutes, and that should normally just be a matter of getting a rep with a +100 IQ on the phone.
The second problem, attitude, is something that needs to change from the top. Without trying to sound too much like a management consultant, it needs to start treating its customers more like valued paying customers, and less like the scum of the earth. When it does that, everything else will fall into place.
How is all this going to happen? Well, as much as I hate the government meddling, it needs to stand up and have the sheer balls to confront PayPal. Start aggressively regulating, and especially whacking PayPal with some punitive fines, and I think you’ll find that PayPal starts investing the time and money to avoid the government’s attention.
This won’t be an easy process; government intervention is always a fine line between stifling innovation and letting things run rampant. But in this case, the system is properly broke; people are suffering, and the people in power need to sort the bloody thing out.
Updated: PayPal responded to us with the following statement:
“PayPal recognises that we can do better, and as such we have started a huge programme of change to address the problems that frustrate some customers. We are investing heavily in customer service, and have recently opened another major service centre for our UK and European customers in Dundalk, Ireland. We are committed to change – and businesses and consumers will see a big difference by the end of 2013.
We know we need to get better at helping people – and when we do need to place restrictions on an account, for example to protect other customers, we will improve the way we explain what we’re doing and why. We take many factors into account when deciding whether to place a reserve or a hold on an account, such as our level of experience with the seller, a sudden spike in payments compared with previous experience and the financial strength of the merchant in relation to the financial exposure. We don’t place arbitrary restrictions on accounts.”
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I like PayPal because it lets me use Instant Bank Transfer that is not infact instant. It usually takes 2/3 days to take the money from my account that can be really useful if I do not want something debited right away.
It also lets me use my American Express card to make purchases on sites that do no accept American Express cards.
I have heard horror stories from people running small businesses though. Puts me off wanting to use it sometimes.
All valid points maybe BUT until there’s a viable option for people then Paypal can do what they like.
There are no real contenders, especially with regard to small payments (under £5) that people know and trust.
This is the problem! PayPal shouldn’t be at liberty to do what it likes — they have a monopoly, which is something that the government really should look into.
It’s not for the government to look into, it’s for some companies to come up with a superior product.
They have a monopoly because they have no real competition which isn’t really their fault.
Well, no one can contest them on eBay payments in the UK — they’ve got a guaranteed monopoly there.
They own eBay (or the other way around, I forget) so as site owners they are perfectly entitled to choose what method of payment is acceptable just as real life shops and businesses do.
Nochex had a go but aren’t (weren’t) upto the job and I do hope that a decent micro-payment company does come along but Paypal is better than nothing. IMHO
Well, no, they’re artificially creating a monopoly. In both the US and Australia, EBay’s been taken to court over this exact issue; in both cases, they lost, and were forced to at least offer other payment services. The UK is the only country in the entire world where they’re allowed to create a monopoly like this.
Now you’re talking exclusively about eBay and I agree that a choice of payment services would be ‘better’ but your article is generally talking about sellers having issues with their sellers accounts.
Part of the reason that eBay is successful is because people know if a seller sends them nothing, or rubbish, or any other issues then eBay/Paypal can refund the money if the seller won’t. For eBay/Paypal to stipulate a Paypal account for sellers is reasonable in my opinion; could their resolution service be faster and better, I’m sure but they have huge volume and I bet it’s only a fraction of a percent where there’s a problem.
But a fraction of a percent, over a vast volume, adds up to a serious number of people; not to mention, a frozen PayPal account can literally put a company out of business. I agree PayPal isn’t the evilest of evil companies — like I said, they’ve got a great product, it’s just that when it goes wrong, it goes wrong bad.
But not one single company has a 100% satisfaction rating from every single customer every single time so you’re calling for the government (who are so good at these things
) to regulate them because they’re successful and have lots of transactions, a tiny percentage of which go wrong?
I’ve had more issues with Interflora over deliveries or my local supermarket over shelf prices differing to till prices, than with Paypal but I’m not saying florists or supermarkets need government intervention.
But problems with Interflora or supermarkets don’t ruin businesses — PayPal does, and it’s barely regulated at all in the UK.
Can’t reply to Chris as ‘reply’ missing on his post (weird):
I still think it’s reasonable that they aren’t 100% although they could definitely speed up resolving cases where there are problems but government intervention would I suspect just slow everything down more plus probably increase sellers fees because Paypals costs would increase.
It’s not perfect but it’s the best there is.
I know your über rightwing JulianT but for once please make a decent argument.
You have some how turned an excellent argument about paypal needing to sort their shit out into paypal being a victim.
Paypal is not really a product. It’s essentially a huge finance company that is taking the piss. So yes, it needs regulation because it obviously is not capable of regulating itself.
And you are obviously a shade left of Labour if you think that a free market with competitors wouldn’t sort them out.
They are not an industry, they are a business that provides a service that people have the choice to use or not, it’s that simple and I don’t think they’re a victim, I think that of the millions of transactions they handle there are always going to be complaints, some of which will be valid.
I’ve used Paypal for years both buying and selling and never had one single issue although I’d welcome competition to give me a choice.
“And you are obviously a shade left of Labour if you think that a free market with competitors wouldn’t sort them out.”
Based on Labour’s current stance would that not put Pleasethink squarely in the centre?
I’ve had one huge issue with Paypal, but that was down to the dispute mechanism rather than an account freeze. Still always tread carefully though.
JulianT that problem is that in the case of PayPal there is no market, it has an effective monopoly. Most of the time the market is fine, in this instance it’s failed.
If I’m a business, and I pretty much have to use PayPal, and they are being paid to manage my money, then when something goes wrong they should sort it out quickly. I’m not going to care how small a statistic I am.
And if I can’t force this kind of change on PayPal because I’m too small a business, that’s EXACTLY where the government should get involved.
Hey, I agree that when it goes wrong it should be sorted quickly BUT my view is that getting the government involved would not help (and probably make things worse) and if there was decent competition around then Paypal would have to up its game; that’s all I’m saying.
Government regulation of financial services, of course that’s a stupid idea I mean we’re not still in a recession since the entire financial industry went tits up due to a lack of regulation or anything !
The point is you say no-one can challenge their tech but that’s nonsense plenty of other exist like Google Pay, yet they cannot get a foothold into retail because Paypal use Ebay to do that for them, there is nothing socialist about wanting a huge market like Ebay to except any payment method, in fact that is how you would ensure the market forces exist to balance your perfect capitalist system. Stay away from the rhetoric and use logic, it means you don’t end up getting caught in such a “20th century” political trap like left or right. *sighs*
What you don’t seem to understand is that the financial industry (the banks basically) already have regulation but it wasn’t tight enough with regard as to how they used the money in their control and the criteria they used to lend said money.
People here are complaining about very poor customer service and account handling with regard business accounts through Paypal.
I agree that in a perfect world Ebay should offer alternative payment methods BUT my personal opinion is that just as a shop can stipulate no personal cheques, credit or debit cards for transactions only above £15, etc, that Ebay as a business has the right to say their method of payment and people can either accept it or not.
What would solve it is decent alternatives to Ebay and or Paypal and whilst Google Wallet (Pay) comes close they fail to get most online retailers (excluding Ebay) onboard because their refund policy is hinky (as far as sellers are concerned) and they basically match Paypal rates rather than undercut them to gain market share.
Google could, if they wanted, take away 90% of Paypal (non-eBay) business within a year through better rates, ease of use and advertising.
Not actually a comparable situation if a big high street shop refused to take any payment method apart from a company they owned then the regulator would look into it. Ebay isn’t accepting payment either they are saying that people who use their site to sell stuff is only able to accept that payment or make a payment through a financial company they own. So again your grasp of the situation seems to be as sadly lacking as your metaphor and your grasp of how the financial meltdown happened.
It also needs to sort out it’s “exchange rate refund” scam.
A few years ago, I purchased a laptop via eBay, paid by PayPal and waited.
Granted the seller was completely useless and ended up cancelling the sale. I got a refund. But at a completely different exchange rate.
Result, I was out of pocket by around £50, which co-indecently went to PayPal, thanks to the “terms and conditions”.
That’s pretty horrific
I have only ever used my Paypal account once because I distrusted the pay direct through the website function. However, the payment was made quick and easily and had no complaints. This was a few years ago so my point is now invalid to current circumstances.
I think the best thing about Paypal, that this article negates (maybe not, I didn’t read it all, who would?), is the fact it covers everyone from online transactions. Sometimes we come across a website that doesn’t inspire us to give out card details, yet once you see the paypal payment logo it doesn’t matter if they rip us off as paypal will refund the money – and in all likelihood a site taking paypal can therefore be trusted.
Once we throw this level of cover and safe internet purchasing into the mix we can understand that paypal sometimes needs to be heavy handed in double checking and freezing accounts. It has happens to me a few times, it was a pain but understandable. And I take it that 90%+ times a account is frozen is just a computer flagging up a pattern.
When I started reading I thought you were going to expose how vounarable to fraud it is, but in your first few lines you said it “freezes accounts at even a whiff of fraud”.
& thats why I guess I use it. Because on the surface at least, I feel safe.
problem is the people that use it for real fraud are not blocked normaly (not right away any way, by the time they are blocked they have all ready taken the money out of paypal and all paypal do is just stick the account in negative funds)
When I saw the subheading “If PayPal’s Like a Bank, Shouldn’t It Be Helping Us Out?” I nearly spat tea at the monitor.
I know, like what planet’s he from?
I think this is one of about three pieces written in the past few years that makes banks out to be the good guys
Recruitment Specialist, can you get my missus a job
No, But I can recruit her into Google+.
I didn’t know we needed to be recruited, is my use of Google+ unwarranted? I didn’t know is was just there on the Google page, my phone and tablet.
You don’t NEED to be recruited, but you need to be approved if you want to enter the Giz UK (Unofficial) community. Mr Lowrey appears to be under the impression (possibly only for comic effect) that I’m some kind of Google recruiter.
Nah.
I really wish you were a Google recruiter.
Me too, since this would require me to work for them. As you don’t work for anyone on my “do not contact” list you could expect a call.
Thank you very much.
You’re my Bro, or Sis or whatever.
Bro, don’t let the hair, makeup and husband fool you
I completely agree with everything in this article. Paypal (like ebay) are a finance company with no moral compass whatsoever.
They purposely take as long as possible to deal with claims just so they can keep the money in their bank accounts as long as possible. It’s a discrace.
Monster of an article! I hate Paypal, two years ago I ordered a domino’s pizza through paypal.
3 days later I checked my bank and saw that paypal had tried taking money out of my bank account, even though I had enough funds in my paypal account for it.
Being unemployed at the time I had very little money, so the transaction was rejected…3 times. Paypal tried taking money out every day for the next 4 days, creating 7 unsuccessful transactions. And at £15 for each failed transaction, my bank took £105.
I managed to get this money back from my bank as they agreed it wasn’t my fault (although I agree I should pay more attention to my bank account)
Since then I rarely use paypal
Not sure whether to laugh or cry:
“I ordered a domino’s pizza through paypal” & “Being unemployed at the time I had very little money” so not the best financial decision then, buying pizza to be delivered when you’re unemployed with very little money.
Don’t see how any of that was really Paypals fault.
More of the Banks fault for charging £15 for a failed transaction lol.
Yeah, I hate bank charges. I’ve changed bank since
The stomach wants what the stomach wants.
PayPal annoyed me because I received 0 emails about failed transactions. And why did they feel the need to try every day?
Why did they need money out of my bank so bad when I already had the funds, and had my pay pal account setup to take money from my paypal funds before heading towards my bank?
Can’t comment any more because never had any problems, I set my Paypal account up years ago and it’s all been good.
Paypal are supposed to take funds from your account before they take them from an alternate funding source.
They didn’t.
Don’t get The Big Ginger Beast mad, you won’t like him when he’s mad!
He also makes a delicious sparkling soft drink!
My Mum still has about £600 lost in a paypal account from about 5 years ago, we sold aload of stuff on ebay and of course she forgot her paypal password, so we pressed the forgot password button and was asked for personal details like DOB and Mothers maiden name etc. filled all them in but still nothing, after giving up trying we tried to call PayPal for some help.
Computer voice, numbers, never got through to a human.
It’s still sat in a paypal account now. fuckers.
Try ringing again, my son speaks regularly to them as he’s always forgetting his password as he changes them monthly and then forgets them
What’s the username?
Haha, I don’t have a clue.
Do you still use the same address you would have for ebay. If so, you can go into your account and get your paypal email address used from that – it should be enough for PayPal to help you from then on.
It was my Mum’s so I’m not 100% sure, but as the article says “You have to do a rain dance to get through to a person” or some shit.
I’m amused, because you used the words “easy”, “PayPal” and “help” in the same sentence.
All my dealings with PayPal have been easy and pain free. Including getting my money back when an eBay seller didn’t send me my item. 5 stars!
“villainous Ukrainian identity thief” if this stereotype wasn’t so true, I’d be offended.
I’ve only used PayPal once to pay someone, otherwise I really don’t understand why direct bank transfer is not a mainstream option.
I have actually used Google Wallet more often than I have Paypal – first got into it when paying for the Humble Bundle packs and since then I have found loads of other online retailers that accept it. I’m happier with a big entity like Google having my bank details than I am with PayPal, who I have heard so many terrible stories about that it makes no sense to chance using their “service”.
Not to mention that PayPal charge you for using it and Google Wallet doesn’t.
Very rarely use my GWallet outside of Google Play but do need to ask about your last sentence…..buying something with Paypal doesn’t attract a charge that I’ve ever noticed so I assume you’re talking about selling and Google Wallet do charge for that.
Actually this was one of those rare occasions where I hit submit and instantly swore for an #editbutton.
But I won’t complain; I should have just edited myself better.
Good usage of a semi-colon, mind!
Wait, does that mean I used it properly? Or was it just the subject you were happy with?
Someone not complaining about an edit button? I must be really ill!
Both!
Thanks Kat
Google Wallet is a pain for traders though as you can cancel the transaction from your own Google account for 30 minutes. People were ordering online then cancelling the order, but the traders were still sending out the orders as Google wasn’t notifying them that the order had been cancelled.
That does not sound good for traders.
For purchasing, I mostly use Google Wallet too.
There’s an odd issue that can crop up with Paypal that I’ve suffered (not sure if others have)
I hadn’t used my account for about a year: The card linked to the account expired and I had long since destroyed the card. Months later I logged in and tried to add a new card, it wouldn’t let me do so until i removed the old card…this required the CVV number on the back of the old card. Being as the card expired months before had and had been destroyed I now have no way of adding a new card to my account and they haven’t replied to any number of emails I’ve sent.
To that end, I haven’t used paypal in about 3 years now and I haven’t once missed having it.
I’ve had both good and bad dealings with Paypal. They froze my account last year due to receiving large sums of money from multiple websites. Fair enough, I unfroze it within a matter of hours. Not bad. Used it countless times for websites when I can’t be bothered finding my card or don’t want to put my details in.
I did however have a nasty experience recently. I bought a piece of music equipment from an online retailer. (The biggest in Europe, based in Germany – so not a small, inexperienced seller). The item never arrived. I check the track details and it had been signed for 2 days previously and was marked as “successfully delivered.” – I phoned the company who said they had a signature and would not send another. So, I contacted paypal, explained the situation and it took them about 10 days to come to the conclusion that the courier’s ‘signature’ – which was more of a line and a dot at the end – totally unreadable – was in fact proof of delivery and I would not get a refund. This was after Paypal asked for my signature for a comparison.
They told me the case was closed and that there was no way I could recover the funds.
Made a cup of tea. Phoned Barclays, told them the situation. They got my money back within 24 hours.
Cheers paypal.
It’s a little-known fact that your often better protected from fradulent sellers by credit card companies than you are by PayPal
Too true. It was the way Paypal told me though as though my money was gone and I was in the wrong for even trying to get it back. The first few emails also said that they’d go through our banks and ‘deal with them’ – which some people may take as their bank has actually declined to get their money back and just give up.
This was only for £140, I dread to think what people go through when buying something like a car and the seller does a chargeback. Paypal like to leave you hanging for a few weeks just to get that blood pressure nice and high.
Which is why the Golden Rule is always pay with a Credit Card, even through PayPal, and not a Debit Card, as you get a better guarantee. A debit card they don’t have to refund, it’s at their discretion.
I use bank cards direct, no third party dodgy business. If anything goes wrong, bank will refund/rectify , simples.
Don’t have time to find the link at the moment but I remember a horrific story a while back where a lady sold a Stratovarius violin on eBay and the buyer claimed it was a fake and raised a claim with Paypal. Long story short Paypal told the buyer to destroy the violin, which they did, and issued them a refund; totally ignoring the certification the seller provided from Stratovarius and all other evidence.
Don’t get me wrong – their service is GREAT if you’re a buyer but the company I work for have been shafted so many, many, many times by Paypal
Yeah, they can be real grinches sometimes.
http://www.regretsy.com/2011/12/05/cats-1-kids-0/
Wow, just wow. At least the outcome was positive.
Another cracking piece from Chris Mills. I might just give up on the rest if the site and only read his pieces.
Maybe I’ll start writing under pseudonyms to confuse you
I’ve used PayPal long before they were affiliated with Ebay and still use them.
The one mistake people make is using their PayPal accounts like a bank account. We use it as a payment processing system ONLY. We leave a small insignificant amount in PayPal, but transfer the majority to the “Transfer Account” (linked to PayPal) at a local bank, then into a second account (NOT linked to PayPal). PayPal can’t touch the money in the second account without through local court to file a judgement against me.
Chris you have your opinions and not everyone will agree with you but this is a well written piece that got me thinking. Thanks.
I rarely use my PayPal account, only to pay for things via credit card when a vendor doesn’t offer a proper payment method. I work in IT in retail banking, card services, etc, so I just don’t trust unregulated financial service providers. I once got my password wrong twice in a row and the account was frozen due to “suspected fraud”. WTF??? The only way to get the account unlocked was to fax photographic ID and a copy of the card statement. Umm, no, I don’t think so!
Two things:
PayPal does not hold a monopoly in its market.
You shouldn’t claim that PayPal is “probably acting illegally” on the basis of a small civil claim. Civil claims have nothing to do with legality.
PayPal is terrible. I grimace every time I must the damn thing. Its a wonder why VISA and MASTERCARD or even the strangely-still-relevent American Express didn’t get in on the online-money exchange platform.