[sabslaurent]

I've processed successfully hundreds of thousands of dollars with my Paypal account over the pat 4-5 years. My account has been on review a few different times because of volume spikes (around the holiday season, I do ecommerce). When that happens, I usually reach out to Paypal and we discuss like humans, I explain where I'm coming from, they make suggestions and we get it settled. Around November 2016 Paypal reached out and told me due to the disputes coming in they need a $5000 set reserve + a 10% rolling reserve which will be released 90 days after a transaction. I accepted and since then Paypal has called me on 3 different occasions to check up on me and my efforts to reduce the dispute rate. We discussed and the calls seemed to go very well without them having any requests or EVER telling me my account is at risk of being limited and shut down due to disputes.

Towards the end of January I myself realized I tired of the disputes (seemed to be a quality issue with the product which got hundreds of 5 star reviews on my site but still disputes were coming in at around 2%) so I slowly stopped the business meaning I stopped advertising and the only sales coming in were trickling in organically. My volume went down from $200k a month to about $10k a month.

On Wednesday I log in to my Paypal account and it says it's limited they need more information.

They asked for Photo ID, bank statement, proof of address, supplier invoice, supplier contact info and proof of delivery for the last 5 transactions.

I provided everything but the proof of delivery for the last 5 transactions. From the resolution center whenever I clicked proof of delivery it brought me to a page with no transactions so of course I could not provide proof of delivery for transactions that don't exist.

I contacted Paypal letting them know I submitted everything but proof of delivery since there's a bug in their system, they said no worries i'll get an email requesting the transactions they need tracking for and I could just reply back.

I never got that email, but I did wake up Thursday morning with an Appeal Denied automated email saying my account is closed and the money will be frozen for 180 days. That's $20k CAD in my reserve + $15k USD in my available balance. Keep in mind in the past 30 days I processed less than $10k usd on Paypal in total.

I reached out to a supervisor at Paypal and told him what his happening simply doesn't make sense, i provided everything they needed except for what their system was unable to request/receive and that if they had any issue with what I provided they should tell me what it is and help me resolve instead of giving me the hammer for no reason. He said he couldn't help me but opened a ticket for both his supervisor and a supervisor from the limitation team to call me within 24 hours.

The limitation department supervisor never called me back but the business support manager called me back a few hours later. He called me from an unknown number in the evening, told me there's been a mistake, they added a second set of eyes to my account and they agree with me the limitation was unnecessary and wrongfully made. He said he just has a few questions and I will either get a restored access email in a couple hours or a call asking for more information in order to get it settled but he said there's a small chance of that happening, realistically the account will just be restored within a couple hours.

I never got an email or call again, so I called the following day. When I called the rep basically told me there's no evidence of a call and there are no notes on my account from that person/call and nothing was moved forward for a review.

I told him that is nonsense and to look harder. He eventually tells me there's evidence of a call but no notes, they tried to reach out to that supervisor and he wasn't available so there's nothing they could do for me, the decision is final.

I'm being treated like a fraud and a criminal when I'm a legitimate entrepreneur who's processed 10's of thousands of transactions successfully. I also paid them thousands of dollars in fees, never had a negative balance or anything of the sort that would put Paypal at risk.

Now whenever I call they are extremely rude telling me the account is closed they're holding the money and there's absolutely nothing I can do.

They have been rude, lying, inconsistent, unfair and have made 0 effort to resolve this amicably.

They have 0 logical reason to hold $40k of my money for 180 days, the only reason I can think of is they do this on 10's of thousands of accounts and gain big money off the interest.

When I log in to my account there's a notification saying they need more information from me. When I click on that notification it brings me to a page that says the account is limited because they need more information regarding my recent sales, they do not say what information or how to provide information. That is straight up illegal and a complete abuse of power.

I know there are thousands of Paypal horror stories but I genuinely feel abused. I have expenses, a family and so on and need that cash flow and no one at Paypal can be consistent for more than one phone call or help me resolve my issue, it's pathetic.

Just had to vent and hopefully this will give them some of the negative attention they deserve.

[jasode]

>My account has been on review a few different times because of volume spikes (around the holiday season, I do ecommerce)

What type of products do you sell? That also affects the triggers for reviews and freezes.

>but still disputes were coming in at around 2%

2% is really high. A lot of non-Paypal CC payment processors will flag your account when chargebacks exceed 1%.

[cpncrunch]

>2% is really high. A lot of non-Paypal CC payment processors will flag your account when chargebacks exceed 1%.

Yes, 2% is insanely high. I do about 2k/month through paypal and haven't had a chargeback in years. I think the last one was a few years ago, and that was just because a customer had their credit card stolen and just charged back all transactions they didn't recognise.

[kweks]

Depends on the product. I've seen businesses run at 10%, and others at 0%.

Until you have a massive, public facing product that sells internationally across many facets of customer - you've probably never experienced the hell of CB management.

Typically, you'll get: - Stolen cards (obvious ones) - Stolen cards (very insidious ones - all customer information, proxies that match the customer address, etc). Typically the only way to catch these guys is to have a hugely expensive 'express delivery' option, and manually filter each order that comes through on this option. - Dumb thieves (chargeback the day after delivery) - Smarter thieves (chargeback the day after posting) - Horrible people (chargeback months later) - Idiots (Unable to use a product, so chargeback) - Assholes (Weaponise chargebacks to blackmail you)

Words to anyone struggling to fight CBs / fraud: - Use machine learning, ie SiftScience (or similar) to screen all transactions. - If you use Stripe, use their Radar feature. - If an order gets one flag, place it into a review queue, and manually process it 24 - 72 hours later. Emailing a customer smokes out the majority of fraud. - If an order gets two flags - blackhole the order (refund the card, if charged)

The biggest thing is making your fraud processes opaque to scammers. If your site returns true/false responses, they'll just keep hammering until they find a combo of cards / proxies / etc that works. The only way around it is to shadow-ban: - Send blackholed orders to an approval page. - Send blackholed orders an approval email. Train your customer service to know which orders were banned, which weren't.

If scammers have to wait 1 - 4 weeks to know if their order worked or not.. they will move onto easier targets.

[Dylan16807]

> The only way around it is to shadow-ban: - Send blackholed orders to an approval page. - Send blackholed orders an approval email. Train your customer service to know which orders were banned, which weren't.

I wonder if this is why a friend of mine had to call in over and over about an order that kept disappearing.

That or the company really didn't want to fulfill their black friday sales.

[cpncrunch]

>Depends on the product. I've seen businesses run at 10%, and others at 0%.

Which products have 10%?

>Typically, you'll get: - Stolen cards (obvious ones) - Stolen cards

Is this with Paypal? Paypal does a hell of a lot of work to prevent stolen cards being used. I've never had a single case of this happening since I moved to Paypal. With Worldpay I did have the occasional one.

[devicenull]

> The only way around it is to shadow-ban: - Send blackholed orders to an approval page. - Send blackholed orders an approval email. Train your customer service to know which orders were banned, which weren't.

I don't use woot anymore because they did this to me... and apparently had no process for removing it.

[ikeboy]

Your chargeback rate is very high. Do those customers usually contact you first to resolve it? If you know there are quality issues, you should refund as soon as you have a complaint, not wait for a chargeback.

To the matter at hand: I think you'll eventually get the account back, probably within a week or two. (Just my personal opinion assuming the facts you have are true, I obviously can't guarantee anything.) Keep on calling, asking where to submit additional information.

If you're low on cash flow, figure out how much time you have. You will definitely eventually get the money, so if you can borrow to cover for some time at reasonable interest rates, do so.

Try not to argue with the people you speak to. Just keep on asking for what steps to take to get the account back.

[the-dude]

I could potentially see where they are coming from : they have processed quite some chargebacks and/or refunds for you.

The revenue seems to be winding down and they may want to keep enough in the account to process future chargebacks and or refunds.

And to repeat the question from jasode: what kind of products do you sell?

[the-dude]

Also, reading between the lines: he has not voluntary shut the business down. Who would do that?

This was already forced by PayPal. Lots of details missing here.

[Anderkent]

> Also, reading between the lines: he has not voluntary shut the business down. Who would do that?

?? People quit their businesses all the time.

[kweks]

I had a similar story. Launched a product - which ended up doing much more volume than anticipated. The account got flagged for information, and then went into the same non-sense spiral that you experienced: requests for the same documents, ignored emails, ignored calls, etc etc.

All in all, they had over 6 figures locked away. I managed to claw it all back no less than three months later.

Hints are: call every single day, and get familiar with someone on the supervisor level. One you have a name, you can start bugging them personally on a daily basis.

Most supervisors are slave to the risk department, but they can escalate claims.

PP really, really hates: - customer complaints. - backorders - slow deliveries

If you have any of these items, expect a world of pain. Once you can resolve them, expect a period of 2 - 3 months proving that you are consistant, and then living with a hold for the rest of your life.

[Buge]

Why did you post this as a comment and not in the body of the post? It makes it very hard to find.

[giis]

> I'm being treated like a fraud and a criminal > Now whenever I call they are extremely rude telling me the account is closed they're holding the money and there's absolutely nothing I can do. > They have been rude, lying, inconsistent, unfair and have made 0 effort to resolve this amicably.

Sorry to hear your story. This seems to be a pattern with Payment gateways. I had similar with experience Gumroad. Their Customer service is rude - i left a note here few months ago for their future customers. https://news.ycombinator.com/item?id=13139000

[throwaway_374]

You have my sympathies. A firmly drafted lawyer's letter should get their attention very quickly. This will cost you a small amount but it will bypass CS protocol and get you a senior.

[gpm]

I wonder if you could/should include the cost of the lawyer in the amount you demand from them... this seems like the sort of case that fee shifting was designed for after all.

[walshemj]

And bill then for a day of your time at say 2x your normal day rate

[Grexar]

Buggy resolution center page with no transactions. Calls from unknown number. No follow up emails. No notes on the account. No effort to resolve your issue. It sounds a little strange to me.

I apologize but I haven't seen anybody else ask these questions:

How did you find out that your account had been frozen?

Did you find out after logging in or were you reacting to an email?

Did you click a link in an email to get to the resolution center?

When you "contacted PayPal" to tell them about the buggy form, did you email or call?

If you called, what number did you call? Did you find it in an email or did you Google it?

When you called the following day and the rep said there were no notes, did you call the same number as before?

Did the rep on the second day confirm that your account had been suspended because of transaction disputes?

Have you logged into PayPal from your another machine (like your cell phone)?

Even intelligent, tech savy people fall victim to scams. I just want to make sure you weren't too trusting of emails and phone calls you received because they seemed consistent with the history of your PayPal account.

[sabslaurent]

I appreciate your concern but I've been online long enough not to get scammed, or at least I hope so. Paypal actually didn't have the decency to send me an email saying they need more info to lift a limitation. I was only made aware of the limitation when I logged in to my account and saw on a notification telling me they need more info. As much as I hope this was a simple phishing scam it's actually just the shady way Paypal does business. There are thousands of complaints on the BBB website against them!

[sabslaurent]

Also the number I called is through their contact us page using a 6-digit passcode which works only for 60 minutes and then expires so that's pretty secure.

[mark-r]

They probably have two algorithms, one for x amount of profit and one for y amount of trouble. As long as x > y, they'll find a way to work with you. Ironically your slowing down the business probably had everything to do with their decision; x dropped faster than y. They have basically told you we don't need your business anymore, so F.U.

I hope you at least get your money back after 180 days. Good luck.

[EGreg]

Do more than post it on HN.

Get a lawyer and get it resolved privately.

Otherwise, publish this on a website and promote it on twitter etc. to have them reach out to you.

Do you live in a state that allows one-party consent recording of conversations? You can sue them in your state. Too late now for the recordings, however.

* Look for other similar cases. Here is how one Redditor got $70k handled:*

Been a member with paypal for over 10 years now, done hundreds of thousands of dollars worth of transfers with them.

Recently launched a new product at a fantastic price point as a pre-order. Put it up on our website, did a big marketing campaign, sold around $65k in product (The remainder was money I kept in there because I used a Paypal debit card regularly).

They locked the funds mid last week, saying that i needed to provide invoices and the like. I did, then they requested more invoices and business information, which I sent them.

Now I got a email this morning stating that the money will be locked for 180 days. No way to appeal, nothing.

Our pre-order was quite short term, the customers will have all their products in their hands within two weeks or so, i have almost no product complaints and have delt with disputes typically within 24 hours of notification.

I'm at a loss. They just about ruined my company. We've done our best to offer what our buyers want at low prices, and doing pre-orders is usually the best for everyone because it allows us to buy in bulk from our wholesalers.

Will likely be calling a lawyer later today.

Edit : I ended up tweeting the president of paypal. He responded by escalating the issue w/ another paypal department. However one of the individuals who retweeted my status was subject today to a 'random account limitation and verification'. Odd, hunh?

Edit #2 - Thanks reddit and those out there. I got a call from a higher up at paypal just now and spent 12-13 minutes on the phone with them. We are working towards resolving this, and I feel there is at least some sufficient progress towards a quality resolution. Thanks for your help all :)

Edit #3 12/5/2013 - We just got in plenty of the pre-order products, ahead of schedule and should be getting out something like $25k-$30k of products in the mail to our buyers by the end of business today (Some went out yesterday). It will be very interesting to see how paypal responds to this.

Edit - #4 12/11/2013 - We had 72k, refunded the remainder, one guy had an order of around 7k and found our story on reddit, felt bad for us and ended up just wiring money to our business account so he could secure his place in line for pre-order. This took our account balance down to 65k or so.

[justinclift]

> When I called the rep basically told me there's no evidence of a call and there are no notes on my account from that person/call and nothing was moved forward for a review.

Every time you call a company with a dispute or complaint, record it. May not always be useful, but better safe than sorry.

[atmosx]

What happens if you lawyer up?

[exodust]

"...so of course I could not provide proof of delivery for transactions that don't exist."

Perhaps I'm missing something here, but isn't proof of delivery meant to be documentation from a shipping company? Why is the OP trying to get proof of delivery from Paypal?

Edit - I now understand the resolution center does have a problem where transactions are not listed, so the form cannot be submitted. Still, he could find the transactions himself and email paypal the required documents. I would do that before coming to HN about it!

Something doesn't sound right about this story. The whole mysterious phone call in the evening etc.

[mijoharas]

My understanding on that point is that he needed to see which transactions were the last 5 that he needed proof of delivery for and tried to find the details of the transactions (to then obtain proof of delivery from his shipping company). Upon trying to find these details he was unable as the paypal site wouldn't allow him to

[exodust]

Okay, so the resolution center failed to show the last 5 transactions. Seems like other people have this issue too...

https://www.paypal-community.com/t5/About-Payments-Archive/R...

That's sloppy of Paypal, but he could find the last 5 transactions himself from his normal history page, gather the required evidence and email paypal.

[sabslaurent]

They do not accept emails, they email from [e-mail] which is a no-reply address. The only way to provide them with tracking numbers is through the Resolution Center - yet in the resolution center they don't provide any transactions that they need tracking for. I emailed Paypal about this and they said they would send me an email with where to provide the info to, they did not send the email, they sent an Appeal Denied email yet I didn't even get the opportunity to appeal my case!

[exodust]

"they said they would send me an email with where to provide the info to"

If you have promises in writing, then quote those in future emails and remind them of the problem you faced in resolution center. Don't say "bug", but just that you need an alternative way to send proof of delivery.

I wouldn't mind seeing a screenshot of that email they sent to you promising to send you a future email. It's odd they would promise but not do it, considering they also made promises over the phone.

Perhaps throw together a blog page with screenshots and a timeline to illustrate more substantially their incompetence and your innocence! Let us know how you go!

[trstowell]

It shouldn't be a huge stretch to imagine a customer service department having lousy or non-existent documentation. They said there was no record of the call, they checked again, then magically there was a record. Do you think it's more likely he imagined it or even lied about?

[mootothemax]

It could also be an innocent miscommunication between the two parties. E.g.:

- "Some guy called and said you're ok with me."

- "We don't have any record of that."

Both are right but saying different things. (ie seller was -called-, PayPal don't have any record that -the OK- was given).

[exodust]

You said it. "Magically there was a record of the call".

I don't buy it. This story shows signs of factual adjustment to make things look better for the OP. I'm happy to be in the minority on that position.

[sabslaurent]

You are free to not buy it my friend, but one day Paypal will give you the hammer and you will see just how believeable this is. In fact, there are countless threads online with the same story. You've never had a rep from a big company say something and you call the next day and they have no record of that? It happens at least 3 times a year with my cellphone company, you must be very lucky!

[exodust]

All good. If you'd used your original HN handle rather than making a new one for this issue, and mentioning who you were and what your business is, that may have gone further in validating your story (for me at least).

Took me 2 minutes to find your post on Twitter, and from there your old handle and submissions on HN and details of your business. Your story now has more credibility. I'm all for anonymous opinions and discussion, but when it comes to seeking support in complaints against another company, it's best to disclose who you are (in my opinion).

[trstowell]

I did say it, but I didn't say that. "Magically there was a record" meaning they had it all along and that customer service departments of that size are routinely slow to update or make simple mistakes, not that it fell from the sky as a small sliver of corroboration for OP's story. You'd sooner believe a stranger is lying from a throwaway account on a random forum than a phone jockey making a mistake...but at least you're happy.

[poizan42]

Most likely those 5 transactions never actually existed. I'm saying this because it's a well-known problem that accounts sometimes gets flagged and you are requested to provide information about an transaction that never actually happened, I have encountered this myself (as a buyer). It lists a transaction number they want more information about, but you have never actually made any transactions at that time, and if you click on it you get a page that tells you that transaction doesn't exists.

Most likely there is a race condition somewhere in PayPal's backend that results in a transaction being partially logged to the wrong account, and then the inconsistent data makes the fraud detection system flag it.

[mrb]

I feel sorry for you. Truly. I have to say—and maybe you have heard it—but cryptocurrencies like Bitcoin precisely avoid this sort of horror story. When you receive a Bitcoin payment, no one can take the money from you (no chargeback fraud, no payment processor to freeze your account), thanks to the decentralized nature of the system because bitcoins are received directly into your local wallet.

Seek legal help to fight your case. And in parallel, look into accepting and promoting Bitcoin payments for your business.

Heck, Bitcoin is even becoming more and more popular among B2B business suppliers (according to BitPay CEO https://medium.com/@spair/the-bitcoin-fee-market-4df1857d12b...). So if you start receiving BTC payments from customers you may use them directly to pay your suppliers without even converting to USD.

[ufmace]

Yeah, no. Bitcoin eliminates chargeback fraud by completely eliminating the whole idea of chargebacks. You can tell your customers that if they don't get what they paid for and you don't feel like helping them, then they're basically screwed. Let's see how many people buy your product once they realize that. Talk about the cure being worse than the disease.

This in addition to it being virtually impossible for ordinary users to even get bitcoins. People here are talking about losing double-digit percentages of their purchases from Paypal forcing users to create a Paypal account, which takes like 30 seconds. What percent of your customers do you think you'll still have after you force them to do a wire transfer to a moderately sketchy exchange website, wait 2-3 days, set up a Bitcoin wallet somewhere, figure out how to do Bitcoin transfers, etc?

[mrb]

You are right there is friction for customers to acquire bitcoins. My post was meant to expose the advantages for merchants, for whom there exists practically zero downsides (as opposed to customers.) But again I am not suggesting "forcing" customers to pay with Bitcoin. I am suggesting to add it as an extra payment option.

That said, it is becoming easier than you think to purchase BTC. There is no need to wire money anymore. In the US bitcoins can be purchased instantly with a credit card via Coinbase, as easy as signing up for Paypal.

[vectorpush]

> There is no need to wire money anymore. In the US bitcoins can be purchased instantly with a credit card via Coinbase, as easy as signing up for Paypal.

The caveats being a 3.75% surcharge and the fact that many of the big banks will not authorize bank card transactions from Coinbase. You might have luck calling up your bank and getting them to release the hold on Coinbase transactions, but that's already more trouble and more expense than paypal.

[optimuspaul]

I literally laughed out loud at this. Bitcoin does not solve for any of this. Maybe it will stop some large corporation from putting a hold on your "cash" but bitcoin is by no means safe from theft. You can be your own payment processor, but you will still have angry customers. In fact you will probably have far less customers because most normal consumers want to protections that using a service like PayPal provides.

[mrb]

(Sorry I was in a hurry and miswrote! English is not my native language. I edited my post to clarify.)

What I meant to say is that Bitcoin eliminates chargeback fraud, because payments are irreversible. That plus Bitcoin eliminating the need for a payment processor who may freeze your money are 2 real problems that Bitcoin solves.

Theft is also solved by storing bitcoins in a hardware wallet (or 2 for a backup) like Trezor, Ledger, etc. To date no credible theft of coins stored in a hw wallet has ever been reported.

And I don't recommend to only accept Bitcoin payments. As you point out this would severely limit sales. At least sabslaurent could accept it as an additional payment option, which would provide an extra revenue stream not subject to Paypal's risks.