PayPal Sees The Err Of Their Ways
Exactly 2-months ago, to the day, my PayPal account was banned. Paypal decided that they were going to hold my $5,000 balance for six-months to cover any possible credit-card chargebacks, and they denied my request(s) to appeal. I finally convinced them to return my $5k balance, I switched to Google-Checkout and things have been going just fine ever since. I proved to myself and to the thousands of people that have read about my ugly PayPal saga here in my blog, that life does go on without PayPal….
…Then today I got a call on the iPhone… and a voicemail at home… and a voicemail on the business number… and an email.. It was a very nice lady from the PayPal Office of Executive Escalations (whaa?!) - She told me that she was contacting me in response to some concerns that I had raised in my blog (hey, PayPal reads my blog! *waves to PayPal*). She explained the “limiting account” process (aka BANNING) a bit, and told me that after further review, Paypal was reversing their decision to “limit” (aka BAN) my account - and all that was necessary to UN-ban and restore my account was to agree-to, and sign the PayPal Acceptable Use Affidavit - basically swearing to abide-by and uphold the PayPal TOS and user-agreement. I signed-in to my PayPal account, clicked on a new link that appeared for me to sign the affidavit, read the rules and user agreement, and digitally signed it - and just like that, I was no longer banned from PayPal. My unappealable, un-reverasable ban had been appealed and reversed.
So I guess this proves a few things: Paypal is not a totally-blind, totally unresponsive organization - they apparently have some processes in place to catch at least some of the mistakes or borderline/salvageable customers. It took a few months, but hey, it worked in my case. Although based on my research and even from what my Executive Escalations lady told me, 99% of banned Pay Pal accounts are NOT reversible - there is still that 1% chance at getting reinstated and it looks like PayPal does try to save that 1% if possible. So if your PayPal account becomes “limited” (banned), AND you didn’t break the rules, don’t give up. Make some noise, call them, email them, and hope and pray that you’re part of that 1%.. If you did break the rules - forget it.. But if you didn’t, or if as in my case, it was ‘borderline’/arguable, don’t give up.
So the question is, will I keep using PayPal now that I’m not banned?
YES… and NO….Maybe…I dunno.. Depends…. For sending money, absolutely - Like it or not, PayPal is the king when it comes to sending money. During the time I was banned, my biggest problem was not being able to send money. I created an ePassporte account to pay for our new logo, and it sucked. So for SENDING money, PayPal will get all of my business.. There really is no other choice. For receiving money? I’m still undecided… Google-Checkout has been working flawlessly for us. GoogleCheckout deposits my funds almost immediately into my bank-account so I don’t have to worry about my funds being “seized” as PayPal did with my $5k, and the GoogleCheckout fraud detection system (so far) seems superior PayPal’s - so for now at least I think we’ll stick with GoogleCheckout - We may use PayPal for members/customers that have issues with GoogleCheckout (we’ve had a few complaints), and if we have enough demand for it, maybe we’ll resume a modified PayPal Premium Membership subscription service like we had before.
For a Tuesday, it wasn’t such a bad day…
How I Convinced PayPal To Release My Funds
This is a follow up to my post “Banned by PayPal“
When I was informed that my PayPal account was “permanently limited” (aka: banned) and that PayPal would be holding my balance of $5,149 for six-months, I thought there was not much I could do. I appealed the decision to limit (ban) my account and PayPal denied it. Since I did not need the balance of $5,149 that PayPal was going to hold for 6 months I figured I would just wait it out (note that I say did not NEED it.. I want it, but I did not NEED it).
But after seeing some of the comments that readers posted on my original “my PayPal account was limited” post I started to feel a bit victimized and angry, and a bit like PayPal was pushing me around and doing whatever they wanted with my balance. I decided that instead of feeling like I was going to just lay down and let PayPal rape me that I would fight back one last time.
So based on a comment posted by Lucas explaining how he got his funds released after PayPal limited his account, I sat down and wrote this little email:
RE: Case PP-xxx-yyy-zzz
I am respectfully requesting that the hold on my funds/account be lifted. I
am not necessarily requesting that my account be re-opened or allowed to
continue to use the PayPal service, as I have already taken my business to
your largest competitor and am no longer in need of PayPal’s services.I have previously requested a review/appeal of my case which was denied.
Although I still disagree with the decision to deny my appeal I will abide by it - however because I feel that holding my funds for 180 days for a non-fraudulent violation of PayPal’s Acceptable Use Policy is excessive, and perhaps a punitive abuse of power, I will be filing complaints with the following agencies on Wednesday morning, April 23, 2008 if I am not satisfied with PayPal’s response to this request to release my funds:(agencies in the states that I reside or have a business presence in)
The California Office of the Attorney General
http://ag.ca.gov/contact/complaint_form.php?cmplt=CLThe Washington State Office of the Attorney General
https://fortress.wa.gov/atg/formhandler/ago/ComplaintForm.aspxThe Florida Office of the Attorney General
http://myfloridalegal.com/contact.nsf/contactThe Arizona Office of the Attorney General
http://myfloridalegal.com/contact.nsf/contactAdditionally:
The United States Federal Reserve
http://www.federalreserveconsumerhelp.gov/complaintinfo.cfm?info=1
(I understand that PayPal does not operate as a “bank” which is precisely
why they may be interested in such complaints)The Better Business Bureau:
https://odr.bbb.org/odrweb/public/complaintlink.aspxAll complaints will be filed “online” Wednesday morning April 23, 2008 and
written copies will also be sent via certified postal mail.I understand PayPal’s need for holding funds for credit card chargeback purposes, however a review of my account history for the last year will reveal a very low chargeback rate as well as a very high customer-satisfaction rate. I feel that any reasonable person would conclude that holding my entire balance for 180 days is excessive and my be viewed by some as punitive or as already stated, an unnecessary abuse of power and perhaps even contrary to the laws of some states. That being said I have no problem with, and agree to leaving a balance of $500 for credit card chargeback purposes for the duration of the 180 days. I feel that this is a fair resolution while still leaving PayPal with the means to charge back any future credit card disputes to my account.
Please be aware that replying with the standard “this is part of the terms of service that you agreed to” will not satisfy my request, or deter me from filing my complaints with the agencies listed above on the morning of Wednesday April 23. It will be up to those agencies to determine if PayPal is operating within the law, abusing power, etc. I am simply seeking a
resolution that is fair and in the best interest of both parties.Thank you for your time again in looking into this matter.
Randy Brown
Case PP-xxx-yyy-zzz
I addressed the email to the following addresses: account-review@paypal.com; aup@paypal.com; complaint-response@paypal.com; resolutions@paypal.com; escalations@paypal.com; complaints@paypal.com; RDutta@paypal.com; sthompson@paypal.com; crme@paypal.com; press@paypal.com; exec.relations@ebay.com
Rdutta@paypal.com and Sthompson@paypal.com were as best as I could tell the guys in charge at PayPal, press@paypal.com and exec.relations@paypal.com appear to be their press people, and the others are all of the “escalation” email address that I could find - most of which I got from PayPalSucks.com.
I did my best to word the email as politely as I could and basically told them that they had 48 hours to respond or I would start complaining to whoever would listen. I spell-checked it and hit the SEND button at 1:48PM California time on Sunday afternoon.
Approx 5 hours later, at just a little after 7PM California time on Sunday night my phone rang. CallerID said it was from the 402 area code and listed it simply as “Nebraska”.. Hmm.. Who could be calling me from Nebraska this late on a Sunday evening? Could it be Shoemoney calling or might it be someone from PayPal headquarters working late??
Sure enough, when I picked up the phone a very nice lady at the other end explained that she was calling from PayPal regarding the email I had sent earlier in the day. She had reviewed my account, agreed that my chargebacks had been virtually zero over the previous year, and that although PayPal would not be re-opening (or un-banning) my account, they would be transferring $5,000 of my $5,149 balance into my bank account. They would hold the remaining $149 for the balance of the 180 days at which time it would automatically be transferred into my bank account. Heck, that’s better than I had asked for in my email!
So - although having my PayPal account banned has been a huge inconvenience, being forced to switch to Google Checkout is still working to my advantage (making me more money), and now that PayPal will be releasing all but $149 of my funds, I can say that I’m pretty happy.
Now, if you’ve been banned by Paypal, before you go copying and pasting my email to try and get your funds released remember that I have had my PayPal account for a few years with virtually zero complaints and very few disputes or chargebacks. If you have been involved in fraudulent activity, been ripping people off, selling body parts, etc, you probably wont make out as well as I have (nor should you). However if your account has been in good standing and you have a low rate of disputes you may be able to get your funds released before the 180 day period that PayPal imposes by letting them know that you just wont stand for it and that you will complain to anyone that will listen.
W00t!
Banned From PayPal! (Permanently “Limited”)
Last week while busy at my ‘day job’ I got the following email on the iPhone:
(slightly edited for brevity)
Dear Randy Brown,
The PayPal User Agreement states that PayPal, at its sole discretion, reserves the right to limit an account for any violation of the User Agreement, including the Acceptable Use Policy. ….
We are hereby notifying you that, after a recent review of your accountactivity, it has been determined that you are in violation of PayPal’s Acceptable Use Policy regarding your sales of Subscription Services … Therefore, your account has been permanently limited.
You will need to remove all references to PayPal from your website(s)
and/or auction(s). This includes not only removing PayPal as a payment
option, but also the PayPal logo and/or shopping cart. We thank you in
advance for your cooperation. If you have any questions, please contact
the PayPal Acceptable Use Policy Department at aup@paypal.com.Sincerely,
PayPal Acceptable Use Policy Department
PayPal, an eBay Company
My first gut reaction that this was just another phishing attempt, so I quickly logged into my PayPal account only to find the following:
We recently reviewed your account, and we need more information about your business to allow us to provide uninterrupted service. Until we can collect this information, your access to sensitive account features will be limited. We would like to restore your access as soon as possible. We apologize for the inconvenience.
Why is my account access limited?
Your account access has been limited for the following reason(s):
Mar. 27, 2008: In accordance with PayPal’s User Agreement and Acceptable Use Policy,we have closed your account. Your funds may be held for 180 days from the date of your last transaction. After 180 days, you will be able to access your funds by requesting an online bank transfer or, if applicable, a check from PayPal. Please update your address or bank information as we cannot be held responsible for checks issued to an incorrect address. We do ask that you please remove reference(s) to PayPal from your site
It took me only a minute to realized something I never even thought was possible:
I was banned from PayPal!
All the work I had done in the last year building my Premium Membership income to over $5,000/mo. was gone! That’s it, game over, no reason to go on! I literally became ill, and I assumed that my online career was over for good.
After calming down and putting away my rope and wobbly stool, I figured that this must be a mistake. I had used the term “Adult access” in describing an area of our premium membership forums and surely this must have tripped an automatic red-flag or something. I contacted PayPal customer-support by telephone and was told that I could send an appeal to “appeal@paypal.com”. I promptly wrote a lengthy explanation and fired it off to the ‘appeal@paypal.com’ address.
Now here is where I began to realize that PayPal is not the most professional outfit out there. 24 hours after I sent my appeal to appeal@paypal.com, it was returned as undeliverable - those fucks on the phone gave me a fake email address to send my appeal to! How’s that for professional customer service?! Now I went from being depressed to angry. I resent my email, this time to AUP@Paypal.com which was the address for questions that was on the first email I received.
*Update: I have since learned from a PayPal employee that the correct email for a PayPal appeal is appeals@paypal.com . I have not tested it, but I was assured that appeals@paypal.com (with an S at the end) is the correct email address.
Within hours of re-sending my appeal to AUP@paypal.com I received what appeared to be an automated response that basically echoed what the first email said: “you’re banned from PayPal and we are going to hold your balance ($5,100) for up to six months“. I then sat down and wrote yet another email, explaining that after being a long-time PayPal customer, paying thousands of dollars in fees over the years and being blown-off by the customer support people who gave me a fake email address that I at least deserved the professional courtesy of being given the assurance that my issue had been reviewed by a human being. I was confident that if someone actually reviewed the website, that there was no way they could come to the conclusion that we were selling subscription services to “certain sexually explicit material“.
Less than 12 hours after my “demand” for review I got my reply, from a human, assuring me that my case had been reviewed - and they would not be reversing their decision, and my $5,100 balance would be returned to me within 180 days.
Ok - so it’s PayPal’s game and they have decided to take their ball and go home. Time for me to move on and find someone else to give my transaction fees to.
Google Checkout can have my transaction fees from now on:
I had thought about using Google Checkout in the past because their transaction fees are much lower than PayPal (about 1/3 less) - but because GC does not support ongoing subscription payments I stuck with PayPal. Well now that PayPal has decided they no longer want my transaction fees I figured it was time to switch to Google Checkout. This would mean that I would have to change from a “subscription” based model to a one-time “lifetime” membership model. We’ve been offering lifetime memberships for $25 at the site for over a year, and we get a few each day, so the move to lifetime only memberships is not that big of a deal. And even though there are other providers that can do ongoing subscriptions, because there are no Drupal modules to support them, they aren’t a good choice for me.
The average lifespan of our premium subscriptions was 3-months. So earnings for the average subscription were $9.97 ($5.99 first month, $1.99 for each of the remaining months). We are now offering lifetime Premium Membership for $25, which is approx. 2.5x that value of an average premium subscriber. So even though I expect fewer lifetime signups because of the higher fee, that should be offset by the increased fee. To my surprise though, so far we have been getting the same number of higher-priced lifetime signups as we had been getting with the lower priced subscriptions, so earnings for the month so far are way above average. We are also offering a $10 discount to current subscribers who would otherwise loose access to our Premium Forums and so far there has been a very high purchase rate as their PayPal subscriptions run-out. So - even though PayPal has banned our account, being forced to move to one-time fees with Google Checkout may have been the best thing that has ever happened.
How to tell if PayPal is reviewing your account
A few days before PayPal banned my account, I received two emails that I had successfully confirmed my bank accounts - one email for each bank account I have setup in my PayPal profile. When I sent the email asking for PayPal to appeal my case (the one that did not get returned) I received two-more of those automated “your bank account has been confirmed emails”, and then, less than one-hour before I got my final response from PayPal, I got two more of the “your bank account has been confirmed” email messages. So it appears that each time PayPal looks at your account they also verify/validate your bank accounts, which triggers those emails.
And lastly: If you rely on PayPal make sure you read and understand PayPal’s user agreement and acceptable use policy. Even though they gouge you on fees, it can really ruin your day if they ban you. Although it has actually ended up increasing my earnings by being forced to move away from Paypal, waiting 180 days for my account balance is just no fun. I recommend not getting yourself banned in the first place.
Update: after posting my story i found this website, PayPalWarning.com
Where I learned a lot about how PayPal does business. If I had seen this website sooner I would have thought twice about letting them hold so much of my money. If you use or rely on PayPal I recommend that you check it out. Another very informative site is www.screw-Paypal.com
**Update#2: Paypal has released my balance to me!
***Update #3: Paypal has UNBanned my account!
How I Manage My PayPal Income
Earlier this month I wrote about how much income I generate from Paypal subscriptions and donations - so far this month over $2,600. What I did not mention in that post is that each month these subscriptions and donations come in the form of hundreds of individual Paypal transactions each month - and because I like to keep track of every penny of my income (so I can report it to Uncle Sam, of course), keeping track of all of these transactions is a real nightmare. At the beginning of 2007, when my monthly earnings began to regularly exceed $5,000/month I started using QuickBooksPro (for Mac). Quickbooks allowed me to track every donation, ebook sale, subscription and donation, as well as my expenses such as server hosting and paying my writer that works on an up-and-coming website of mine. Using QuickBooks is easy, but manually entering all of the PayPal transactions, even without recording individual details now consumes several hours per week and results in so many errors, I can never get my numbers to balance.
There Had To Be A Better Way!
I finally got tired of wasting so much time doing data-entry and started searching for an automated method of getting my Paypal data into QuickBooks. After reading up on a few products I stumbled across SimplePort from SimpleBizsystems.com. They have a web-based system that promised to fully (and mostly automatically) import all of my PayPal data directly into QuickBooks (even the Mac version). They offered a 15-day free trial, so I decided to try it out.
In short, this product is great. It’s not “fully automatic”, and requires me to download my PayPal history to a text file, run it through their web-based system, then import the resulting file into QuickBooks. This has reduced my “PayPal time” from 20-30 minutes per day down to about 1 minute, and I have don’t have to worry about data-entry errors anymore.
You can try SimplePort at simpleBizsystems.com.
Disclaimer: Unlike most other bloggers, I have nothing to disclose. There are no affiliate links in this post.
