What I am about to tell you is a true story. All the information has been documented on my end and is verifiable with my lawyer.
How it all started
It was a typical day in the office. I was digging through my usual clutter of information when a dropshipping website fell into my lap. Being an entrepreneur, I looked into it. I had tested the idea out before, but it didn’t pan out (some Nigerian scammer tried to buy it and pay nothing). I thought I could try it out again and see what became of it, perhaps the whole Nigerian scammer picture was out of the issue now that Ebay had “toughened” security.
I signed up, found a product to list on Ebay and put up the auction. Everything went on as normal.
Things are looking up
People started visiting the auction I had listed, and began bidding. The price started rising and I felt confident that it would go well. That’s when I should’ve cut off the auction. I didn’t listen to my gut.
The price eventually landed to within $50 of the retail price of the product I was selling, then the auction ended. The auction sold and soon after I noticed the payment in my paypal account. At this point, I was running around with joy because nothing was going wrong! It was a good day in my book, little did I know of the doom hanging on the horizon.
After The Sale
The payment was pending in my account until Paypal had notification of my shipping number. Ok, no problem I thought. I went through the checkout process with the dropshipping company and eagerly awaited the shipping number they would send me. The auction sold on a Friday, so I expected at least a couple days until they could supply me with the number. I contacted the buyer so that they were aware of this as well.
Paypal Saves The Day
Sunday. Two days after the auction. Doom struck, but not from who you may expect. I was going about my usual day when I noticed an email from Paypal. The email said,
A review of recent transactions indicates that you might have received a
payment that the PayPal account holder did not authorize.
We recommend that you not ship the item until our investigation is
complete. If you’ve already shipped the item, please log in and let us know
where you shipped it.
We have placed a temporary hold on the funds until we complete our
I contacted Paypal regarding this, but they gave me the run around. Within a day my account was closed via an “executive decision” by Paypal because I was too much of a “risk” for them. Too much of a risk?!?! HEY PAYPAL, I’VE BEEN A LOYAL CUSTOMER SINCE YOU FIRST CAME OUT!!! You wanna talk about betrayal, this was it. Great job Paypal, save me from absolutely nothing.
Oh, here’s the kicker, the dropshipping order was mixed in with my Paypal account too, so I was out of MY OWN MONEY, they were holding that money as well. I was able to refund the buyer of the item and notify them that I wasn’t able to send them the item as Paypal had closed my account for no reason. The buyer understood and agreed with me, so we were fine on that end. Paypal on the other end? Things were just about to get a whole lot hotter.
The Bubble Pops
Ok, so Paypal saw something they didn’t like, fine by me. Closing my account and refunding the buyer? I guess it was ok. Not being able to use Paypal ever again for any of my payments? That hurt. Not being able to run my online business and get money for work I’ve done? That burned. Almost literally. Paypal holding onto MY MONEY for no reason whatsoever??! That was the kicker that did them in.
I snapped. At that time, I was in Oklahoma City for some TESOL training for a trip I would be taking to Taiwan within the month. My life virtually came to a halt and this problem needed to be fixed immediately.
I called Paypal up and tried to fix it on my own. Paypal’s response to my plea? “You’re too much of a risk.” “We don’t know what is going on” (when I verbaitum explained my side of the story). “That money in your account is not your money, we have to hold on to it in case there are “any refunds” (whatever the heck that means).” “We can’t change anything, that’s our policy.”
Then I brought in the big guns. I brought my parents into this and we spent the next hour on the phone with a “manager” of Paypal customer service. It got heated pretty fast. Paypal did the classic balking maneuver and hid behind their “policies etched into marble”. This was gross what Paypal was doing to an honest person with an honest problem and we would not stand for it. The call ended as follows,
Us: This is the last straw, I have done nothing wrong. Since you seem to be incapable of anything remotely close to customer service and there is no one we can talk to directly to solve this problem, we are going to take legal action. I am going to call my lawyer as soon as this call ends. See you in court.
Us: [Hung up and dialed the lawyer]
I also brought my bank into this whole problem and reported the charge on my account as fraud. My bank went to work immediately. From talking to the bank, we heard of some other horror stories like ours with Paypal as well.
We searched online for some answers while awaiting a response from our lawyer, who was going to look into some cases for us, and found some websites (About Paypal). The stories we read made us realize we weren’t alone, Paypal had screwed thousands of normal, honest, hard-working people as well. This wasn’t the first time and most definitely wouldn’t be the last of Paypal’s stunts. Read some here. Here are some more stories.
Luckily our bank pulled through on us and we got the money back into our account within the week. How did Paypal respond to a big bank sitting on them? Here’s their email response:
You recently attempted to transfer funds from your bank account to your PayPal account.
Your bank declined the funds transfer on Jul. 23, 2010.
While this transaction had already been identified as unauthorized, the payment process was already underway and could not be stopped. If you have any questions about why this transfer was declined, please contact your bank.
Classic. Turn tail and run away like the wimps you are. Pretend there is nothing wrong and that the “bank” was the problem. Also notice how the “payment was underway and could not be stopped” when I had repeatedly hammered them about returning MY MONEY back to me until I pulled my bank into this situation.
What I’ve Learned
Don’t ever, EVER trust Paypal (or eBay for that matter). Everything that I had linked in my Paypal account has been deleted. They will never have access to any of my financial information or accounts. They have betrayed my trust for the last time. I am done with Paypal forever. If they want to see me ever again, it will be in the courtroom in front of a judge. Paypal has a stinking dung heap worth of sins to atone for, I’m just one of their many horror stories. I may just be the spear that pricks the armor and unleashes the flood, but so be it. Paypal needs to be held responsible for this until they have atoned for what they have done. Get this, according to Paypal policies,
We can close your account at any time and for any reason whatsoever.
Whatever money you have in your account when we close it is ours.
We can hold that money for up to six months and there is nothing you can do about it.
Any access to your financial accounts is permanent, and we can charge it at anytime.
Think I’m lying? Go check the policies for yourself. Wanna get scared out of your freaking mind about how much power they wield over you? Go ahead and read the policies and listen to the stories. After you return to your body, I can guarantee you will disconnect everything from Paypal and run to the hills. That is my hope after telling you my tale.
Want to know the even scarier part? Paypal is responsible for 70% if not 80% of all sales on the internet.
Paypal, if you are even listening and if you even CARE, know this. You have betrayed my trust and thousands of others as well. Your efforts to quell the “Nigerian scammers” isn’t working. It is hitting loyal customers and evangelists who have had accounts with you for years.
Because of that, I will NEVER. EVER. EVER. use, recommend, or listen to anything you have to say for the rest of your miserable existence as a company.
Your customer service is the worst I’ve ever had.
Communication between departments is a failure.
Hiding behind your “policies” is a failed excuse at showing that you care. Your policies are only for the good of your employees and board of directors, ensuring that you get “your” money.
If you truly CARED about your customers, you would move heaven and earth to make sure they have what they need and do everything in your power to rectify their problem, even if that means going outside of your bounds *ahem* policies *ahem*.
But because of that, I will not be satisfied until every single brick of your pathetic excuse of a company is torn down, examined, and BURNED.
I will see you in court.
What About You?
How should you respond to this relentless hammering of a company?
If I were you, and had half a brain to take action, I would close my account with Paypal immediately and look for someone else to use.
I’d also leave a comment thanking the author who wrote this article for enduring hellfire for no reason and for telling his story for the world to hear.
Finally, I’d share this article with my friends and encourage them to do the same.
I wouldn't believe it if I hadn't been involved in this whole situation. The problem is that Paypal doens't have to obey any banking regulations. There really are no laws to govern what they do. So Paypal does whatever they want to do. In the meantime they are freezing accounts and literally taking other people's money right from under their noses. And you wondered how they made any money . . .
…that's exactly how they do it. This isn't a one time problem either, its been happening to thousands of people for YEARS. They know the truth about Paypal as well.
well we just found out paypal took 500 dollars out of our account 22.50 for a transfer and we havent even used ebay or paypal in over a year they told us they thought the transfer looked fraudulent but did it anyway and now to get my money back ..we need to wait why should I wait you took the money we never asked for the transfer and they wont even tell us where the transfer went so I am out all this money and they sit back and do nothing.. beware of paypal they have your banks info they do what they want …
Exactly. Don't trust them for any reason. Still hurts to be out of your money though. Have you had any luck getting your money back?
I found an email of a VP level executive and email them directly. Within 24 hours, I got a call from the head of customer services and got my funds returned and account reinstated.
Do a google search for "Cryptome and my experiences with Paypal"
The email address I had sent to is email@example.com
Dear Mr Muller,
I am very disappointed on how Paypal is treating it's customers. I have read many horrors stories based on my research on funds being held. I too have recently experienced two instances where my funds are frozen. Right now, I am considering cancelling my account similar to a few vocal fans of Cryptome.
I hope Paypal will enhance it's seller protection in the near future. The current policy protects the buyer at the expense of the seller.
If you can please help with obtaining why my fund was frozen, I would greatly appreciated. I don't really care about the xxx dollars that is held, but I am more concerned about the lack of reason that was given.
I spoke with a supervisor on the phone today, and he wasn't able to explain to me why my account balances are frozen.
You could also file a case in a small claims court and get your money that way. Either way, Paypal broke my trust and I will never return to them.
A client of mine, who has a golf shop, was doing quite a bit of business on e-bay. He added cigars to his catalogue, because cigars and golf go well together. It wasn't a primary part of his business, just something to toss in with an order.
Someone bought ONE cigar from him, and Paypal notified him that his account was now closed, because they prohibited tobacco products. He told them he was unaware of that policy, and removed the cigars from his site. Too bad. They refused to give him his account back. His e-bay business became a bust – without paypay you might as well tell your customers you will only accept payments in krugerrands. It took him a year and a half to get his account back. He lost tens of thousands of dollars in business as a result.
I recently tried to buy some e-cigarette supplies on line, and found that paypal wouldn't allow me to use MY money to buy them with their "service." A month before I placed a large cigar order on line from a well known cigar site and they had a link to paypal. The sale went though with no trouble.
A couple of years ago I made a $35 purchase at DragonCon using my PayPal credit card. A few minutes later I received a notice of fraudulent activity on my account. I called them, and explained that it was a valid purchase. That wasn't enough for them. I had to immediately log on and jump through all kinds of hoops to get my account back. It took me over an hour. Here I was, at a convention, looking to have a blast at the zillions of things offered, and I had to sit in my hotel room and wrestle with their nonsense. I never used that card again.
I still have my account with them, because it's an easy way for people to give me money, but whenever the balance goes over $50 I make it a point to spend it immediately, or transfer it to a different account. They are too untrustworthy to keep any substantial sums in there.
Same thing happened to me, that's how I found this website, looking for others that might have experienced some issues with them…..But whose a good online merchant?
Paypal is is a scam
My recent post [WSO] – How To Find Real Wholesalers
This was really a shocking write-up and I think this incident happened to you on eBay and PayPal services are really unfortunate. The security for payment must be ensured before providing your banking details is the only method to defend these online forgeries. buy stretchy magic
Thats exactly how they do it.This isn't a one time problem either, You made some decent points there. I looked on the internet for the issue and found most individuals will go along with with your opinion. Thanks! http://www.africanewswire.net/
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I wouldn't believe it if I hadn't been engaged in this whole scenario. The issue is that Pay pal doens't have to follow any financial rules.
Thanks for letting know why Ebay and PayPal should be avoided at all cost. Although I was thinking these platforms are great for online business process and but from now on I'll look out for good alternatives of these scam dropshippings.
Hey Taylor, I'm sorry as I'm posting my comment too late. But your post is still effective. I tried contacting PayPal several times but never get a response. When they write back, the reply is just limited to a line or two and that never solves the issue. Your recommendation to avoid PayPal is great but it is a fact that PayPal is unbeatable and all alternatives fail to eliminate its need. I recently wrote an article on PayPal alternatives after reading your post, but the badness is, users aren't switching to other services in large numbers 🙁
My recent post Top 5 PayPal Alternatives in 2014 for Sending and Receiving Money
Thanks for the info Taylor! Yeah, I had to wait 180 days to get my $10,000 from PayPal from
my —>> ebay dropshipping business <<— last year. Not fun at all but at least I DID get it back!! Be Careful out there my friends…
My Paypal experience is preety bad,i am a approved Paypal merchant(merchant account) and i sell digital goods with my website.Recent years,Paypal favours the buyers to their refund claims so i got all my sales into vain,now i have stopped selling digital goods through Paypal.And their currency ratio is seems to be tricky i have frequently cheated by low margin conversions that made me sick.
My recent post How to Identify Fake Dropshipping Wholesalers
Your PayPal account was Permanently limited and closed?
Even if you open another account, it will be Permanently closed and limited again! Because PayPal knows it’s you! I CAN HELP! I have step by step information with full instructions on what to do in order to open a new PayPal account without having it to become limited or closed again!
If you want more info, email me
I’ve figured a way around it that works, but I don’t highly recommend them anymore. 🙂
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