Paypal Policy - A License To Steal Your Money

Paypal

If you use Paypal or if you are thinking of using Paypal to process online payments for your eBay items or your website, there are some things you need to know. We will explain some of the common concerns that Paypal users are faced with, and the things that most Paypal users do not even realize. These are issues that you will not want to learn the hard way, and these are the things that eBay and Paypal are not going to tell you. You don't want to wake up one morning and find that your Paypal account is limited and you are out thousands of dollars. We will explain to you the risks of using Paypal for buying or selling. We will also try to help you avoid unnecessary problems with your eBay and Paypal accounts.

PAYPAL 21 DAY HOLD POLICY - A few years ago Paypal introduced the 21 day hold policy for eBay items. At first glance this seems like it might be an excellent method to reduce fraud and make eBay a safer place. Paypal will hold your money until you can provide proof of delivery, or the buyer leaves positive feedback indicating they received the item, or 21 days passes without any complaints from the buyer. Now with this policy it would make it almost impossible for anything to go wrong.As a seller you have to be very careful, if you begin selling your products, shipping them out and waiting for the 21 day hold to clear, you will surely become dependant on that money. You never want to depend on any money from Paypal because at any point they can seize your funds and limit your account.

Some sellers overextend themselves by spending money out of their pocket to send eBay items before they have received payment, because they are confident they will get the money in 21 days.

Unfortunately in some cases, after the 21 day period is up, the customers have received the items and left positive feedback for their eBay items, when the seller tries to withdraw the available funds, they are shocked when their account is limited. What does this mean? For some sellers this means that the money they have desperately been waiting for is held for 180 days.

PAYPAL 180 DAY HOLD POLICY - Now I am guessing that most people that use Paypal have no Idea that Paypal can seize all their funds and hold them for 180 days. Well the sad truth is that this happens all the time, and it could happen to you! Paypal can limit your account for any reason at any time, and most of the time they don't even tell you what the reason for this is. In some cases they will ask for a mountain of paperwork in order for you to clear up the holds on your funds.The best case scenario is that after several weeks or even months of exhcanging emails, sending faxes and long distance telephone converstations that finally they might release your money. In other cases they will leave you with no opportunity to provide any evidence or information, and you will simply have to wait 6 months for your money.

HOW TO AVOID LIMITATION - One of the most common reasons for an account to be limited is that somehow the account is linked to another suspended account. This can happen if you log into your Paypal account using a computer that was previously used by another Paypal user, or using the same IP address at a wireless Internet location. You should never sign into your Paypal account using any computer other than your own personal computer. Another reason that your account might be limited is high sales volume or a sudden spike in sales. In order to minimize the risk you can avoid using public computers and keep your sales volume low and gradually increase it slowly. Of course you will always be at risk of limitation and there is no sure way to avoid this.

PAYPAL BUYER PROTECTION - Paypal has convinced many people that they are always safe when they use Paypal to purchase item from eBay or other online marketplaces. They have advertisements that say "Paypal has got you covered". What people don't know, is that Paypal doesn't really pay you out of their own pocket if you have been ripped off on eBay or another website. Paypal will do their best to recover the funds from the seller, but if the seller has no money in their Paypal account, they will just tell you that they are sorry! Ironically Paypal holds funds from users for 180 days, however they only allow claims for 45 days after the purchase. So the question is, what do the do with this money for 180 days? Well the answer is .. they profit from it.

CONFLICT OF INTEREST - Nobody knows for certain how much money Paypal actually makes from funds held as part of their 180 day hold policy, but I think we can all agree that they will profit from it. Now if they make money by limiting accounts, it would seem like there is a conflict of interest. Do they really have an interest in creating a safe trading environment, or do they just seize as much money as they can because it is profitable for them? It should not be legal for Paypal to hold funds from transactions where the items have been delivered and proof of delivery is provided.

*UPDATE*: JAN, 2011- In the past it was assumed that after 180 days Paypal would release the money in any limited account. Recently we have had an account with a balance of several thousand dollars limited for more than 200 days. We received an email from Paypal after 180 days that notified us our funds were eligible for withdrawal, when we attempted to withdraw our funds the account was locked, and the withdrawal was reversed. These funds remain with Paypal, and it is unclear if they will ever be recovered. It seems that Paypal really is stealing our money!

So after several emails to Paypal, we finally got this response:

Dear ######,

As part of our commitment to offering a safe transaction network for all of
our valued members, we regularly screen account activity. During one of
these screenings, we reviewed your account and determined that the activity
associated to your eBay or PayPal accounts poses an inherent risk to the
overall security of our network. Unfortunately, due to this risk, we have
determined that we are no longer able to offer the use of our services to
you.

Although you are no longer able to utilize PayPal services, you may still
log into your PayPal account to review the information associated to your
use of our services for a limited time.

In accordance with PayPal s User Agreement, the balance of your PayPal
account will be held for 180 days to protect PayPal against the risk of
reversal stemming from buyer claims, chargebacks, or other reversal rights
that may have been assigned to a consumer outside of PayPal and eBay s
policies. After the180-day period has passed, any remaining funds will be
available to you for withdrawal, less any additional amounts owed to PayPal
or eBay.

Additionally, eBay will charge any amounts you have not previously disputed
to the billing method currently on file and you will be credited for any
listings that were ended.

While we regret having to make this decision, please understand that the
decision was based on criteria set forth in the User Agreements for both
PayPal and eBay. You can view our User Agreements in their entirety by
using links located at the footer of each of our websites.

Please do not reply to this email, as this mailbox is not monitored and you
will not receive a response. If you seek further clarification regarding
your account access, please contact PayPal by visiting the Help Center and
clicking "Contact Us.

We thank you for your prompt attention and cooperation with this matter.

Sincerely,

Account Review Department
Forward Message

What does this mean? Well our account has already been limited for over 180 days, we already received notification that our funds were eligible for withdrawal, and then our withdrawal was reversed. Now we simply do not understand what paypal is telling us? Are they asking us to wait another 180 days? Or more than likely they did not even read our emails and this reply means absolutely nothing. Meanwhile.. our money is with paypal ..

UPDATE, FEB 24, 2011

After sending more than 50 emails to Paypal and getting only an automated reply, I finally got a human response. The customer service rep told me that the situation would be taken care of within 48 hrs. Today I finally got the email saying that my funds are available for withdrawal. So after more than 8 months, I finally got my money back.