jepoirrier

Would you trust your money with an entity that is not considered to be a bank? For millions of people around the world, the answer is yes. PayPal has had more than its fair share of horror stories and lawsuits, yet people still flock to its services as a resource to send and receive money. For the three people below, it seems that PayPal isn’t all it is cracked up to be.

#1 – Alabama Woman Succumbs to Fraud- PayPal Refuses to Help

PayPal is renowned for giving the cold shoulder to foreign countries, but for this Alabama woman, the problems hit closer to home. Sheila Stawicki went through almost two months of long phone calls and myriads of emails in order to contact PayPal. The problem? Sheila had lost just under $3,000 due to fraudulent activity, and PayPal was proving to be no help even after 45 days of constant emails and phone calls.

Perhaps you have heard of PayPal’s support service- famous for hanging up on customers, being rude, and not to mention the long wait times to actually talk to a human. But it seems this horror story ends with a happy ending, believe it or not. 47 days later, PayPal finally makes a move to refund Sheila’s money- but only because the subject went public. Their response: they were just in a transitional phase in their customer support. And as a side note, they claim that PayPal is impervious to hacks of all types.

The best way to avoid PayPal’s customer service is to keep your account fraud-free. Make your password mean, long, and strong. Don’t fall for phishing scams, and certainly don’t use your PayPal login details on any other website. Lastly, only access PayPal on your own computer if possible- and run a current antispyware program to keep your computer clean.

#2 – Stoney Brody Loses His Business

Stoney Brody ran an online business with PayPal, particularly dealing with gold. Out of the blue, PayPal suspended his accounts for possible “fraudulent funds.” Outraged, Stoney demanded his funds to be withdrawn, as he claimed he had done nothing wrong.

Things took a turn for the worst when PayPal refused to release over $20,000 of Brody’s money. This is even after Brody consented to go through the verification process PayPal enforces for frozen accounts. With no luck demanding his funds back, Brody decided to sue PayPal- but tacked on another $400,000 in damages due to lost business.Sadly, Brody was forced into arbitration and ended up paying not only PayPal, but heavy fees for arbitration. This wasn’t such a good outcome for Brody, obviously.

PayPal has the right to freeze your account at any time for no reason whatsoever. This has led many people to follow one simple rule: never leave more money in your PayPal account than you can do without. This type of problem with PayPal also proves that the legal system might not be the best alternative.

#3 – Something Awful This Way Come

A rather famous incident involves the Something Awful website run by Rich Kyanka. This particular incident occurred two years ago, but still remains to be one of the biggest disputes in PayPal history.

After the events of hurricane Katrina, Something Awful decided to allow visitors donate to a PayPal account that was linked to giving charity aid to hurricane victims. So what was this sum of money? Try almost $30,000! PayPal froze the account as Rich Kyanka was about to donate it to the Red Cross. Kyanka kept calling, submitting to their verification process, and contacting them whenever possible.After many frustrating phone calls and investigations, Kyanka finally had to refund all of the donations-since PayPal was no help. Imagine paying PayPal fees on every single refund!

The account was frozen for two reasons: first, a major amount of money was donated at once. This flagged the account for PayPal review. Second, the account was linked to the hurricane relief effort- and as we all know, there are a lot of crooks out there that setup fake charities to steal money. PayPal claims it was looking out for the best interest of its users. Basically, be sure you don’t take in too many donations at once- and make sure you aren’t linked to any possible popular scams.

Closing Comments

PayPal is not a real bank, and thus, can generally screw anyone over without so much as a notice. The best practice to forego is to withdraw money as you receive it- don’t use PayPal as a warehouse for your money.With the advent of features such as the Money Market, you may feel compelled to leave a few hundred dollars in your account. Since these funds are not insured, keep in mind you are still running a rather large risk here.If worse does come to worse, make sure you have a good lawyer and a lot of money. You will have need of both if you hope to ever get a shot against PayPal in the legal system..

richardmasoner

We had a dispute with a contractor we hired: we paid them via pay pal and they never delivered the service. So, we opened a claim with Pay Pal. After not hearing anything for a month, we got this notice from Pay Pal via email:

After careful review, we have concluded our investigation of the Buyer Complaint described below.

We have decided in your favor, however, we were unable to recover any funds from the seller’s account. As stated in the PayPal User Agreement, recovery of funds associated with a Buyer Complaint cannot be guaranteed.

Please know that we will make our best effort to recover the funds in question if they become available in the seller’s account in the future and will take appropriate action against the seller. Such action may include issuing a warning, a temporary restriction, or terminating the account.

Keep in mind that PayPal uses a number of factors to determine when to take action, including member complaints.

Due to privacy laws, we cannot discuss the details of any action taken.

We hope you understand our policy and that it assures you that you are safe using PayPal.

So, they found in our favor, but could not give us our money back. Another Pay Pal horror story.
[tags] paypal [/tags]