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The Almighty Buck News

PayPal Preparing To Address Frozen Funds Policy 175

First time accepted submitter skywire writes "After years of forcing innocent customers to navigate a Kafkaesque process to unfreeze their funds, PayPal has announced that they are preparing major changes to alleviate the pain. From the article: 'The company routinely freezes funds for 21 days if it thinks there's a fraud risk, and its terms give it the right to extend the freeze for up to 180 days. To get access to their money, users are often asked to provide the kind of documentation that a product seller would have, like several months' worth of sales records. But if you're running a fundraiser or selling tickets to an upcoming conference, you don't have that paperwork. Even for those with extensive paper trails, the appeals process can take months to resolve. The Web is filled with enraged blog posts, websites like, and a Tumblr called "Conferences Burned by PayPal."'"
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PayPal Preparing To Address Frozen Funds Policy

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  • Too Late (Score:5, Insightful)

    by QuantumBeep ( 748940 ) on Monday January 21, 2013 @06:25PM (#42651587)

    After over ten years of destroying businesses and hurting people while hiding behind a blank gray wall of "policy", Paypal are kidding themselves if they think that they can ever recover the goodwill that they've burned.

  • Re:Too Late (Score:2, Insightful)

    by Tanuki64 ( 989726 ) on Monday January 21, 2013 @06:30PM (#42651637)

    You are kidding if you disregard the stupidity of the average sheeple.

  • Re:Too Late (Score:5, Insightful)

    by alexo ( 9335 ) on Monday January 21, 2013 @06:33PM (#42651663) Journal

    You don't need much "goodwill" when you are the biggest player in the game and have a captive user base.

  • TL;DR (Score:2, Insightful)

    by CanHasDIY ( 1672858 ) on Monday January 21, 2013 @06:45PM (#42651753) Homepage Journal
    You already burned us once, PayPal.

    You will not be given another opportunity.
  • by Gorshkov ( 932507 ) <[moc.liamg] [ta] [vokhsroGlarimdA]> on Monday January 21, 2013 @06:45PM (#42651757)
    Until recently, I was on the board of directors for a local homeless shelter here in town. RIght now, we're in the middle of planning a major fundraiser. When it was suggested that we get a paypal account so that people could purchase tickets on-line, I went ballistic - I've heard way too many horror stories over the years. I'm not sure others on the fundraising committee quite believed everything I said, but my reaction was so strong it spooked them, and they backed off the idea completly. Paypal's changes will have to be effective, and in place for a very long, long time before they even have a *chance* of having people like me deal with them. That's a very large part of the market they've never had, and quite possibly never will.
  • Re:Too Late (Score:1, Insightful)

    by broohaha ( 5295 ) on Monday January 21, 2013 @06:46PM (#42651775) Homepage

    > sheeple

    I'm so tired of this word....

  • Re:Too Late (Score:5, Insightful)

    by Hognoxious ( 631665 ) on Monday January 21, 2013 @06:55PM (#42651829) Homepage Journal

    we're just dumb

    Speak for yourself, but don't count me in.

  • In Germany (Score:4, Insightful)

    by Anonymous Coward on Monday January 21, 2013 @06:56PM (#42651841)
    Paypal does not get much news coverage in Germany, it is just not as useful since the bank transfer system is pretty fine. But a while ago they managed to get onto the news when they tried to force a company to stop selling Cuban cigars. The company decided to stop offering paypal transfers instead of stopping to sell the cigars.
    But really, how is that their bussiness? And why is that stupid Cuba embargo still in place? Some people said that this embargo has always been about turning Cuba into a colony.
  • Re:Too Late (Score:5, Insightful)

    by tlhIngan ( 30335 ) <> on Monday January 21, 2013 @06:57PM (#42651851)

    Credit card policies are not very different

    Most of the sellers I read about we're just dumb

    That's the problem, really.

    Merchant accounts aren't too different from what Paypal does in the end - except retailers are often forbidden by contracts to speak about it.

    The other thing is, the average Joe cannot get a merchant account, so accepting credit cards is impossible (they often have minimum transactions per month of minimum amount to qualify, else you get the high rate account). Paypal does, however, let the average Joe do that, so if you're running a small shop and can't qualify, Paypal is pretty much your only option.

    Especially if you want to sell online (imagine how online auctions go if you can't pay via credit card).

    The problem is, most sellers just assume that it's like a cash account and Paypal will hide al lthe fees and crap from them. But given a chargeback can occur easily 6 months from the transaction date, and by default the credit cards refund the money unless the seller can prove the transaction (at which point it's paid back), well, most people are in for a surprise.

    I suppose one could take cash or cheques sent through the mail. I'm sure that's viable in this day and age of buying stuff and getting it the next day.

  • by TankSpanker04 ( 1266400 ) on Monday January 21, 2013 @07:00PM (#42651879)

    Indeed; PayPal is not a bank yet I'm betting most of its customers think they are. They don't have to follow the same set of rules and so they get to make their own. Customers only learn of this after they've been burned, unfortunately. That's why I don't use PayPal.

  • by Spad ( 470073 ) <> on Monday January 21, 2013 @07:02PM (#42651889) Homepage

    They are in Europe and have been since 2007. Not that it stops them acting like dicks, of course, they are just (in principle) well-regulated dicks over here.

  • Re:Too Late (Score:5, Insightful)

    by afidel ( 530433 ) on Monday January 21, 2013 @07:13PM (#42651981)

    For commercial seller Amazon seems to be the vastly superior service. I know I only look at ebay if there's none listed on Amazon or none at what I consider a reasonable price. As far as payment processors for things like donations there's Google Wallet, Isis, and Amazon payments.

  • Re:Too late for us (Score:4, Insightful)

    by DanielRavenNest ( 107550 ) on Monday January 21, 2013 @07:44PM (#42652247)

    Just tack on a PayPal "processing fee" for anyone that wants to use that method. This is an extra charge to cover the chance that PayPal will jerk you around. For example: Check, Visa, or Mastercard = $20 entry fee, Paypal = $20 + $5 Paypal processing fee = $25. This will make most people use another method, but still leave the option open for people who have no other way to pay. The extra fee covers your risk and hassle in using PayPal.

    You can even adjust the processing fee in real time to keep your risk manageable: Assume you have reserves from last year's event equal to 20% of this year's expenses. Then adjust the fee so that no more than 20% of your registrations are through PayPal. In the worst case, you can still cover your bills, and argue unfreezing your account afterwards.

  • by Anonymous Coward on Monday January 21, 2013 @08:26PM (#42652539)

    Well, apparently PayPal thought I was actually paying for sex with PayPal and froze the funds. After I called them and explained the situation though, they quickly released the funds.

    The story is not funny at all, but it is indicative of problem with PayPal

    The fact that you had to explain yourself before your account is un-frozen is the very reason PayPal should cease to exist. I should be able to write whatever the hell I want on the payment -- unless they have some proof of illegal activity, I should not explain myself to PayPal to recover my account/my money.

  • by mister_playboy ( 1474163 ) on Monday January 21, 2013 @09:06PM (#42652793)

    You sound like you've never worked with the PayPal "dispute resolution" process.

  • by retroworks ( 652802 ) on Monday January 21, 2013 @09:22PM (#42652879) Homepage Journal
    I transferred a good bit of money to my wife in Paris in 2007. It had worked twice previously. On the third time, Paypal "froze" the funds, IE took them out of our joint account in the USA, but not putting them into our account in France. Several weeks went by, I was calling constantly. One particular guy taking my calls will live in my memory forever. I learned to just say "escalate" "escalate" "escalate", as we reached a point when my wife in France's internet account would be cut off for non-payment. We had to keep faxing documents all showing both our names on both the accounts. It was an absolute horror show. I don't understand why there is not a class action suit against them for the interest Paypal earned from all of the people like me who had all of their money in Paypal limbo. I'm way too busy to worry about this now, but if I had time to, I'd hate their guts.
  • Re:Too Late (Score:4, Insightful)

    by houstonbofh ( 602064 ) on Monday January 21, 2013 @11:54PM (#42653737)

    > sheeple

    I'm so tired of this word....

    I am more tired of the people who inspire it...

Solutions are obvious if one only has the optical power to observe them over the horizon. -- K.A. Arsdall