[waveformpc]

Has anyone else had their account limited and then closed by PayPal?

I started up my computer business awhile back, selling desktop computers (I built them), and just when things started going good, PayPal limited my account. I have had no complaints, I have a 100% feedback rating on eBay, and I had a verified Business Account and Debit Card through PayPal. My account has been active for over one year. I figured they just wanted some additional information (they requested a photocopy of my social security card, utility bills, invoices, and other very private information) before lifting the limitation, but it only got worse from there.

They claimed I had complaints from buyers (this threw me into panic mode). After contacting all of my buyers, and numerous calls to PayPal, one of the security department managers confirmed that I didn't have any complaints at all, and the message stating I had complaints was just a "default" message (she chuckled when she told me, which angred me). The final reason for limiting my account? They won't tell me, but one lady indirectly stated that I may be stealing the items I was selling (don't wory, I recorded the message). After several days of trying to find out why my account was REALLY limited, they closed my account. Why did they close it? -- I didn't have a credit rating... Now $3,000 of my money sits in an un-insured PayPal account, lowering PayPals bank fees, for possibly more than 180 days (6 months). The "manager" also told me that in order to even be eligible for the PayPal service, you must not have an "unacceptable level of credit risk"... I asked what constitues "unacceptable", and she told me that they would need a subpoena to give out that information (?). From that information though, I am guessing that having no credit, poor credit, or even a low-mid credit rating would be grounds for account termination.

Since all of my money was in PayPal, I had no funds to cover my $331.00 in eBay fees. I contacted eBay via phone, and they were VERY rude -- They demanded to know where I found the number, and why exactly the situation needed to be settled over the phone vs. their e-mail system. I then decided to use the e-mail system, after that nasty phone call, and told them that they were no longer authorized to bill me until further notice. I also told them that this may end up going to the collection agency until I can afford to pay. They contacted me back and stated that they understand my situation and that I won't be billed. Two days later, I sent a reminder, telling them not to bill me, and they re-assured me. Well, a few days later, they billed me, and caused me to have a negative balance in my checking account of over $100, with an overdraft fee of $50 (how they took out more than what was actually in the bank is beyond me). My bank notified me and told me that eBay had violated the Electronic Funds Transfer Act by doing this.

These are all things that PayPal was sued for a while back, which ended in a $9.5 million settlement (which is now being appealed for a higher value). I never did sign up for that class action, as things were going fine as far as PayPal was concerned, but the thought to file a seperate lawsuit has crossed my mind.

This is horrible though, I really liked PayPal, and I was starting to make decent money via their service. And to think, I thought all those horror stories were bogus
I just want to remind everyone to be careful when transfering funds via PayPal, particularly withdrawing them into your bank account. And never do like me, and keep thousands of dollars in there! Anyway, I do not want to discourage anyone from using the service, especially if it works for them, I may have just been unlucky...

[mxer210]

I havn't had this problem, I'm new to using Paypal though.

http://www.paypalsucks.com/ is a good site for sharing your problems with other paypal haters.

I would just go with a merchant account to avoid any more problems. Maybe have a website that just has a place where customer can pay you? It'd cost around $25-40/month and the transaction fees are about the same as paypal, 2.5%, 30 cents/transaction.

I've read some recent articles are paypal being charged for fraud and taking money from accounts.

[sskinner]

If they are holding your money, you need to call your local police department and their local police department NOW! Also, contact the Internet Fraud Complaint Center http://www1.ifccfbi.gov/index.asp . If they are going to try to make your life hell, do the same. I would also think about taking them to court.

[ericesquire]

Record everything, get a lawyer and sue the shit out of 'em - I HATE PAYPAL - they are such a scam!

[bigpund]

wow this really sucks that this has happened to you. i have been using paypal for the past couple years and havent had any such problems. but i dont keep more than 20 bucks at a time in my account, so i guess i am not seen as a huge user. however, i have done thousands of dollars worth of transactions through them and never had a problem.

best of luck to you in your persuit to get some justice with this problem.

[waveformpc]

Originally posted by ericesquire
Record everything, get a lawyer and sue the shit out of 'em - I HATE PAYPAL - they are such a scam!

I have thought about it, and this is the route I think I am going to take. The more I think about what they did (and how they lied to me), the more upset I get. eBay pushed the last button by telling me that they would wait until I could afford to pay, and then billing the hell out of my bank account, leaving overdraft fees and a negative balance. (if that's not a lie, then I don't know what is)

I have written a 6 page inquiry, complete with time-line, conversations with employees, and damages. I have submitted this to a lawfirm in California, and they said that they will review the case. Hopefully, I can get somewhere with this...

[Outta Hand]

I would say sue... you have done nothing wrong and are completely in your legal right as a client of PAYPAL's to do so... its sad to hear but the fact of them freezing funds i've heard of this before.

Next step is talk to a lawyer.... it's $3000 you need! Good luck

[cheng]

waveformpc, that really disturbed me. i have also very worried when using paypal after hearing alot about paypal here and there. btw lets say if you win the lawsuit and get your 3k back. Will paypal have to pay you your lawyer's fee? Cos if the lawyer were to cost you say 1k, then kinda get back 2k only. *for example*

[bps092]

Originally posted by ericesquire
Record everything, get a lawyer and sue the shit out of 'em - I HATE PAYPAL - they are such a scam!

I don't understand why people have problems with them. I've been with them since they practically started and I have only had 3 problems, all of which weren't their fault and they were all resolved. 2 times people tried to screw me out of money and they got it back for me. I don't encounter problems with PayPal because I act sensably, and if you follow their guidelines, you won't run into any problems. Good luck sueing PayPal, lol ebay and paypal pay a lot more to their lawyers then you could front for one for a civil suit.

[waveformpc]

Originally posted by cheng
waveformpc, that really disturbed me. i have also very worried when using paypal after hearing alot about paypal here and there. btw lets say if you win the lawsuit and get your 3k back. Will paypal have to pay you your lawyer's fee? Cos if the lawyer were to cost you say 1k, then kinda get back 2k only. *for example*

The lawyer I contacted works on a contingency fee, so I only pay if I win (a certain percentage)...

There are several possible "torts" which PayPal has commited, which would actually qulify me for further compensation damages, such as mental anguish, lost income that the PayPal account would have produced (the PayPal account was bringing in close to $500/week on average), and potentially punitive damages. Below are a list of identified torts, applicable to my situation:

Negligent Misrepresentation (possibly fraud)
Slander of Title
Conspiracy to Induce Breach of Contract (by using ambiguous terms within the contract, as well as using false reasons to limit the account)

As well as:
Unfair and Deceptive Business Practices

And:
Violation of the Electronic Fund Transfer Act, Section 907, Part A, as stated by the Federal Trade Commision.

I have contacted the Attorney General of Nebraska (PayPals location), and the Attorney General of California. The Attorney General of Nebraska has already responded, and they stated that they are sending a letter to PayPal, demanding some reasoning as to what is going on. The Attorney General did say that PayPal need not respond (but that would only help me).

[waveformpc]

Originally posted by bps092
I don't understand why people have problems with them. I've been with them since they practically started and I have only had 3 problems, all of which weren't their fault and they were all resolved. 2 times people tried to screw me out of money and they got it back for me. I don't encounter problems with PayPal because I act sensably, and if you follow their guidelines, you won't run into any problems. Good luck sueing PayPal, lol ebay and paypal pay a lot more to their lawyers then you could front for one for a civil suit.

I don't understand why people like you don't understand how people have problems with them,

PayPal has lost a lawsuit in the past, for the same thing they did to me, why shouldn't I sue? The lawfirm I have been talking to has won several large cases... And if they are working on the incentive of a contingency fee, why are you basically telling me that they won't try as hard as PayPals lawyer? PayPal/eBay have violated civil codes, and the Attorney General knows this.

What you fail to understand, is that if you are in the right, then you stand a good chance of winning. What makes PayPals lawyer (who is human, just the same as my lawyer), and better than anyone else?!

Finally, what exactly did I do to violate their policy, PLEASE tell me? They LIED to me several times, and shut me down! I was selling desktop computers, they were shipped within the right timeframe, I had no complaints, I did all transactions to verified buyers, I stayed within my transaction limits, didn't withdraw more than the UA specifies, so please, let me know (as it sounds to me like you are just "trolling" the thread to make your point sound better by using erroneous statements).


EDIT:

I also wanted to add, that you are 17 -- And you talk about ME not following PayPal guidelines/rules!? YOU are not even eligible for the service, your not technically allowed to make any transaction of any sort through their system... Please do not try and be hypocritical and blame others, when you, yourself, do not even follow the rules.