Paypal Horror Story 40k Frozen No Answers - sabslaurent
======
JumpCrisscross
Under U.S. federal law, PayPal is not a bank [1]. This is important. From the
government's perspective, you give PayPal money and then PayPal gives you
money. Between those events, it's not your money. PayPal has enormous
discretion around what they can do with those funds, how and under what
circumstances they get to decide to give it to you and if they get to keep it
forever.

What state do you live in? Do you do business through an entity, _e.g._ an
LLC? If so, where is it registered?

PayPal is, varyingly, registered as some form of a money transmitter in many
states [2]. While your federal protections are probably limited to antifraud,
protections you're probably outside of (PayPal has good lawyers--you agreed to
surrender lots of privileges when you opened an account), there may be state
regulations you can use to, if not force action, encourage it.

Going forward, I tend to consider any business using PayPal for mission
critical processes as being negligent with important risks. If you can't avoid
using PayPal for certain lines of business, set up a nightly sweep from PayPal
to a proper bank account.

[1] [http://www.zdnet.com/article/fdic-decides-paypals-no-
bank/](http://www.zdnet.com/article/fdic-decides-paypals-no-bank/)

[2]
[http://law.bepress.com/cgi/viewcontent.cgi?article=1153&cont...](http://law.bepress.com/cgi/viewcontent.cgi?article=1153&context=expresso)

 _Disclaimer: I am not a lawyer. Only a lawyer can give you good legal advice.
Don 't take legal advice from Internet comments._

~~~
oblib
"set up a nightly sweep from PayPal to a proper bank account"

That is by far the best advice one can get, and it's not hard to do.

~~~
kweks
This works, until they put 'temporary' holds on you. The holds seem reasonable
at first (ID check, business verification, etc) - but can / will drag on for
weeks / months.

All the while, the funds in your account add up - yet you can't touch them -
and you have to deliver product to customers.

It can get very uncomfortable, very quickly. I thought I was safe with your
advice, but still found myself recently with 6 figures held in a PP account.

~~~
plaguuuuuu
I'll put it another way, if you are moving 6 figures of product, you can
afford a less risky and... evil.. payment processor

~~~
hkmurakami
Aren't they still by far the cheapest if your business relies on micro
transactions?

I remember Marco Arment commenting on this.

~~~
dflock
Until they take all your money, at which point they become the most expensive.

~~~
cft
What are the other processors that reasonably price micropaymens? PayPal has
¢5+5% micropaymens regime.

------
sabslaurent
An update for anyone who cares...I tweeted this link and tagged Paypal, they
reached out saying they are sorry to hear and submitted my case for a review.
I replied via DM how can they review ny case without asking any new
information or telling me what the issue is, got no reply back. Just got an
email saying "Appeal Denied" Paypal account closed for security reasons.

Which security reasons I have absolutely no idea. There's no contact info on
the email, just says it's a do not reply address.

~~~
skeletonjelly
Wow. What next?

~~~
sabslaurent
No idea, clearly they aren't paying attention to anything I say and just send
automated replies. No one to talk to, nothing to do. I'm assuming complaints
with different organizations to see if they can help.

~~~
NamTaf
I'd say keep the battle public. The more bad press they seem to have as it
drags on, the more likely they'll do something about it.

------
ziszis
Traditional customer service channels are increasingly broken since they are
seen as a cost center to be reduced by many companies. In particular, if you
are trying to cancel service or withdraw money it is even "worse" because not
only do they have to pay the salary for the rep, they also lose money helping
you.

If after one or two calls you don't get what you want, it is not worth
retrying. I gave up after being placed in queue for an hour with Comcast.
After finally getting ready to speak to a rep, I was informed by an automated
message that they were closed for the day and to call back tomorrow.

Here is what I find works: 1) Least likely - Traditional customer support
channel. Try once or twice at most. 2) More likely - Contact publicly on
social media like Twitter (Comcast is actual great about this). 3) Most likely
- Getting upvoted and written about here and elsewhere.

I would wait to engage with a lawyer as there is a good chance that someone
from Paypal will popup in this thread. It is probably already surfacing in
some internal emails at Paypal now. Good luck.

~~~
sandworm101
It is more than jusy cost. Many decisions seem like customer service but in
fact are legal matters. Releasing funds isnt like reseting a password or
reconnecting a telephone service. For those decisions that legally bind a
company or that may violate various regs one often has to get management
approval. Something as small as releasing a few hundred dollars, if that money
is held due to a red flag, might even require board approval or at least be
reportable to shareholders. It is silly that our laws dont have perspective,
that a 100$ prize to the author of a story about syria is subject to the same
rules as a 400k payment to a shadowy syrian bank operating out of a russian
flat, but blame the people writing the laws.

Or, dont treat or trust paypal like they were a bank. The OP seems to be
canadian. Canadian banks have a stellar rep. Trust them, not some US money-
moving website.

------
oblib
I make invoicing software that I sell using PayPal and it lets my users add a
"Pay with PayPal" button to their invoices and over the years several of my
clients have called me and related stories similar to this and they all had
some common traits.

They all processed quite a bit of money via PayPal and they all had issues
with customer's requesting refunds which they disputed or didn't issue in a
timely manner, and they all sold something which had the potential to be a bit
shady. One of them sold aircraft parts to Iran, which may have had some legal
restrictions that applied. Another sold guns.

Since I sell access to web based software I don't have to ship anything and
the product is "delivered" instantly. I also process refunds immediately and
without any question.

PayPal most certainly doesn't like getting caught up in refund issues. In my
case most of the customers who've requested a refund contacted me first and I
issued it promptly with a "Thanks for trying my software" note attached.

The few that have contacted PayPal first resulted in PayPal sending me a
notice about the request for a refund and, again, I issued it immediately, but
their notice makes it clear that is what they expect and if I recall correctly
they put a time limit on that.

Take from this what you want but what I've taken from it is when a customer
requests a refund issue the refund as quickly as possible and try hard to make
that as easy as possible for your customers and to minimize the potential for
them asking for one.

~~~
DrScump

      Since I sell access to web based software I don't have to ship anything and the product is "delivered" instantly.
    

Since your "delivery" is not a discrete item and tracked by a common carrier
they recognize (e.g. USPS, UPS, DHL, etc.), you also have _zero_ protection
from chargebacks. They won't even investigate beyond just taking back your
money plus a fee.

~~~
CodeWriter23
PayPal won't accept a charge back from a user until the user has contacted the
merchant first. So user complaint? issue a refund.

~~~
DrScump
Not true at all. If a chargeback is filed with the card issuer first, Paypal
takes the money directly from your account immediately, pending
"investigation". I've personally experienced this several times (I have well
over 10,000 transactions with Paypal).

------
mhoad
I very recently (as in this was resolved about 72 hrs ago) was in a a similar
situation where I had $20k withheld by PayPal.

I would switch all of my business billing to stripe in a second if they had
the ability to pay out to accounts in different currencies like I can do with
PayPal.

Despite the fact that I run an Australian business I usually bill in USD but
because I travel so much sometimes I'd like to have it in EUR or GBP etc for
practical purposes. However with Stripe I am forced to convert it into AUD
before I can do anything at all with it meaning I usually have to eat currency
conversion fees twice before I can use it in a practical sense. Hence PayPal
sadly....

~~~
henrikschroder
We're pretty much in the same boat, except we picked Stripe anyway. We're
eating the conversion fees, can't wait for when they can start paying out in
different currencies, but at least we're not getting into any more PayPal
horror stories. :-)

~~~
snackai
So this can't happen with Stripe? You are delusional.

~~~
henrikschroder
Of course it can happen, but I've seen 0 Stripe horror stories, but many,
many, many PayPal horror stories over the years. So far their track record is
very good.

~~~
snackai
Compare the scale. Stripe horror stories will come.

------
fermigier
IIRC this is not the first time this kind of bad behaviour has been reported
about Paypal. I suppose you were aware of that. Did you consider Paypal's
reputation when you chose to do business with them? Were there alternatives
that you considered at the time and if so, why did you stick with Paypal?

~~~
sabslaurent
Paypal prides itself on being the safest payment solution online, they have
easy integrations with Shopify. I don't breach their terms or perform any
fraud so had no reason to suspect I'd be treated like a criminal and given
inconsistency and lies by a multi billion dollar corporation I've paid
thousands of dollars in fees too!

~~~
pgaddict
The fact that PayPal claims to be the safest payment solution is pretty
irrelevant, especially if it's meant to be safest for the buyers and you're
the seller. This is not the first story of PayPal freezing accounts with
substantial amounts of money and not talking to the account owner.

Also, their ToS are pretty clear that they can do whatever they want, based on
their beliefs, and there are no explicit limits how long they can keep your
funds, or even obligations to talk to you. It might work differently in the
EU, where they are registered as a bank (and so are regulated as a bank), but
in US that's not the case IIRC.

The behavior is not all that unexpected - it's easier and cheaper to loose a
customer receiving a lot of complaints than to inspect each of the complaints.
So while I understand this is pretty damaging and dislike what PayPal does,
I'm surprised that people are surprised.

~~~
99129371891
Corporations still manage to maintain the illusion of decency and customer
service. Their real behavior is surprising to a) people who were lucky and
have never encountered it and b) people who suffer from some corporate
equivalent of Gell-Mann amnesia.

I belong to the second category. Also, it becomes harder to avoid such
companies at all, for example cell phone operators in Europe universally view
their "customers" as billable addresses; some find it cheaper to settle
billing disputes in court (and lose a great percentage of the cases) than to
maintain a "customer" service.

With mobile the solution is to go prepaid.

~~~
jseliger
_Corporations still manage to maintain the illusion of decency and customer
service_

I'm baffled by this. Paypal does not. 28 days ago I wrote this comment on HN:
[https://news.ycombinator.com/item?id=13624393](https://news.ycombinator.com/item?id=13624393).
I'm sure that in the future I'll be reading another Paypal horror story from
someone like you, who somehow thought, "It won't happen to me!"

~~~
tajen
Same here. Most people tend to downplay risks "because they're big", but there
are alternatives and it's worth missing a few opportunities for a lower risk.

E.g., I don't go to USA conferences because of the TSA risk, people find it
funny, yet I keep hearing horror story after horror story. For Paypal, though,
people take the risk unknowingly because they aren't aware of Paypal's
reputation, which is more understandable.

------
rgbrenner
2% dispute rate?! That would get you shut down at every merchant account
provider I've ever dealt with. In fact, it's usually 0.5% or 1% max. One major
bank gave me 0.25% max. I've never seen an agreement that said 2% was ok.

That's a very serious fraud problem.

I've run an ecommerce store -- the chargeback rate was 0.1% (seriously, I
calculated this from actual #s).

Nothing in this story (except maybe the customer service issues) would be out
of the ordinary for any merchant account.

Edit: fixed chargeback rate

~~~
sabslaurent
Not sure what kind of volume you were doing to get that chargeback rate. I was
doing 500 sales a day, approximately $250k a month in volume when I was
running, my dispute rate was high but chargebacks lost were minimal. Despite
that, Paypal were aware of my dispute rate when they negotiated the terms of
our agreement ($5000 set reserve + 10% rolling reserve) - they then woke up
one day and closed my account without letting my appeal or negotiate or
provide any information. I just get the run around...

------
mastazi
I don't understand, this post has no link and no text body, just a recursive
link to this discussion page. Where is the "horror story" mentioned in the
title?

EDIT: Oh I see, the original post is buried down in the thread, because it has
been posted as a comment. Perhaps the mods could fix this?

------
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.

~~~
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.

~~~
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?

~~~
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).

------
mstaoru
If you're outside of the US, it gets even more interesting.

First, you need to be VERY careful about using VPN or letting remote team
members access Paypal. One misstep with, say, Hong Kong account being accessed
from Ukrainian IPs, and you're blocked for a security review which drags for
days and weeks.

Second, they completely neglect any special international shipping methods'
unique constraints. Sometimes when you ship from China, the tracking will only
appear when the package reaches destination country. This is considered an
outright fraud by Paypal, which promptly returns money to the client and
you're left with a loss.

On top of that, they will impose 3% commission for currency conversion. Did
you ever hear of a bank taking 3% to convert between your multi-currency
accounts? Well, "Paypal is not a bank".

Add to the mix their robotic support with that condescending tone.

No. I wouldn't touch Paypal with a ten-foot pole.

~~~
Markoff
they are luxembourgish bank in Europe actually

------
kelvin0
OK, so when I click this post, I go directly to HN's comments section. Where
is the original story? Missing URL?

~~~
sabslaurent
[https://news.ycombinator.com/item?id=13851124](https://news.ycombinator.com/item?id=13851124)

------
ahmetyas01
I worked with paypal almost 10 years. I can tell you this. Paypal is an evil
company.

------
dawhizkid
I had this happen to me. I filed a complaint with the CFPB and within a week
had my account unfrozen (i.e. still shut down but ability to transfer funds
out)

------
jccooper
We use PayPal for a few scattered customers who have problems paying with a
card and the occasional eBay sale, so I don't pay much attention to it.
Whenever I see a PayPal horror story, I transfer all funds out of there to my
bank. It's not the most effective sweep method, but it works depressingly
well. I wonder what PayPal's cash balance would be if it had a reputation as
being a safe place to keep a balance?

~~~
digler999
> but it works depressingly well

I dont think it "works" though. paypal can withdraw funds from your linked
bank accounts too. I think you would need to create an LLC , open a bank acct
under that LLC, then sweep funds out of that LLC account to be "safe".

~~~
damontal
Or just immediately pull your money out of the linked account to an unlinked
account.

------
teilo
If the OP were running an entirely legitimate business, they would have no
issue revealing what product they are selling. They clearly do not want us to
know what that product is. This is no doubt because we would have no sympathy
for them if we knew.

That being the case, I'm calling bullshit.

~~~
sabslaurent
LOL buddy where I come from you don't disclose an extremely profitable niche
on a public forum online where the majority of the community is familiar with
ecommerce and business online is general. I'm not saying what I sell because I
don't need 10 more competitors. What I sell is 100% legit, it's been approved
on Paypal, it sells by the thousands daily on both Amazon and Ebay.

~~~
teilo
This particular public forum also has a lot of people who know that a lot of
"100% legit" digital-only crap sold on Amazon and eBay is anything but. Does
that describe your product? Only grandma knows...

~~~
sabslaurent
It's a physicial product with proof of tracking shipped from the USA man. It's
an accessory that retails in countless physical stores. You're just trying to
find a way to delegitimize my story and that's fine but it would be nicer if
you asked questions instead of just calling bullshit with no back up.

~~~
cpncrunch
Can you give us an idea of what type of accessory it is? Or at least, what are
the concerns you had about quality? Is this something you have commissioned a
manufacturer to build? Is it a dodgy supplement with claims that aren't backed
up by science?

------
TimMeade
We quit using paypal 8 years ago for exactly this kind of treatment. Seems it
has not changed.

~~~
mee_too
Why would it? Obviously there are plenty of fools, who continue to do business
with PayPal.

~~~
ikeboy
I sell on eBay, and if you don't accept PayPal very few people will buy from
you.

~~~
Neliquat
I found as long as you could take a card, most people were good. Only some
ebay addicts were tied to paypal. Ymmv.

------
remx
I wouldn't move large volumes through Paypal. PP is useful for small donations
and shuttling small amounts around, but not for the amounts being discussed
here, because the larger the amount, the more it _hurts you_ when things go
awry.

------
coupdejarnac
I'm looking at using Paypal for my next business, and it scares me that there
is no recourse whenever an issue arises. I need to receive payments and send
payments to workers, mostly in Europe. I'm doing a marketplace for jobs kind
of like Upwork. I'm based in the USA, so Paypal makes it possible. Are there
any alternatives to Paypal? I've been talking with Payoneer, but they have not
inspired much confidence. I had my paypal account frozen about 10 years ago
for a bullshit reason, and I'd like to avoid using them again.

~~~
Markoff
i am using this market places and PayPal requirement would be very off
putting, why not just use wire transfer? wire fees sure are much lower than 5%
PayPal robbery they are committing when i am receiving money, I would much
rather take off wire fee from money i am suppose to receive than deal with
PayPal

~~~
coupdejarnac
Wire transfer is definitely the way to go if transactions are only Europe to
Europe or USA to USA. Unfortunately, I'm doing business in UAE, too, which
creates huge problems. :/

~~~
Markoff
I have zero problems to do wire even from US to Europe, heck I did even
transfers from China to EU, but with help of Chinese national to circumvent
their low forex limits (of course this is not solution for regular business,
but neither is Paypal in China, only reasonable solkution without help of
local is bitcoin, which I find risky for large sums)

------
funkyy
It might sound bad, but usually, when I was doing volume, and I would travel
to the different country, region, I would call PayPal central and let them
know. While I am all about privacy, this always made them put some comment on
my account that helped me pass all the bad things. "We need more documents"
issue? Solved in hours. $20K spike of revenue in few days? Not a problem!

------
Markoff
yeah, lifting my limits work further verification was online ordeal for like 2
or more weeks since apparently my ID card with address and full name issued
months ago is not good enough, my printed bank record from internet banking is
not enough, in the end had to send them two other bank records from different
bank to have my bank account back to regular

also don't get me started they steal 5% of my income and don't have live chat
service to resolve issues and their FAQ is referring to website layout from
years ago with most of the steps wrong

sadly still two of my vendors don't offer to me other payment solutions (well
one does wire transfer but only for large amounts i can collect in months) so
i still have to use this horrible service to not lose income

------
grahamburger
One of my top-ten rules for staying sane on the Internet is 'Never leave _any_
money in your PayPal account.' Served me well so far - I had my account frozen
but there was only $2 in the account. PayPal is horrible.

~~~
Kenji
You are wise. I had money on my PayPal accont once. It was payment for a
software feature I wrote for someone. Soon after I received the payment, they
wrote an E-mail that it was a fraudulent transaction and froze my account. Of
course I disputed it. Then my account dropped into negative balance: The
payment was taken away and a fee was taken from me for disputing the claim. Of
course, I refused to pay up my negative balance, despite their frequent
reminders. After half a year or so (I was in negative balance for all that
time), I got my money back, but they kept the fee for disputing the claim.
PayPal - never again. Do not leave a dime on that account.

~~~
buserror
If you get any money on your paypal account without a bank account linked, you
can't 'move' it.

So I just let Mrs BusError loose on a shopping spree immediately! that usually
clears the balance in no time at all.

------
uptown
Apparently no details either. Where's the story?

~~~
pas
[https://news.ycombinator.com/item?id=13851124](https://news.ycombinator.com/item?id=13851124)

------
kaffee
As someone paying for products, I detest PayPal. I'm forced to do it rarely
enough that I would pay 5-10% extra to avoid doing it. I realize I'm just one
data point but perhaps there's a market here?

One case where it's especially frustrating is Etsy. There are many vendors on
Etsy who refuse to accept any payment other than PayPal. (One can't use an
Etsy gift card.)

Edit: add etsy note

~~~
mirimir
I also avoid PayPal whenever possible.

------
joeclark77
Queen Victoria supposedly told her daughter on her wedding night, "Just lie
back and think of England." Whenever I have to deal with PayPal, I think to
myself "Just lie back and think of SpaceX." If Paypal helps Elon Musk take us
to Mars, maybe it's worth putting up with at least occasionally. (You can
think of Tesla if you prefer.)

------
eonw
this has been going on as long as paypal has been around. i never allow anyone
to send more then a $1k to my paypal, everything larger than that gets check
or wire. First time i got a $5k wire, they locked me out and held my monies
for 90 days.... doesnt really help a growing business to have money locked.
this was in 2002.

------
lquist
One of the most valuable lessons I've learned from HN was to autosweep my
PayPal account. I am thankful that I was fortunate enough to learn this lesson
before starting my company and running tens of millions through PayPal. I
can't say for sure that I would still be in business if I hadn't.

~~~
sabslaurent
I have a CAD Paypal account - but I charge customers in USD. To withdraw money
I have to pay Paypal's exchange rate, they won't let me attach a Canadian USD
bank account. That means I have to pay exchange rate to take money out, then
pay exchange rate again to convert the money to USD to pay my supplier and
Facebook Ads in USD. It makes much more sense keeping my money in Paypal, that
they are a fraud of a company is a different story.

~~~
allannienhuis
Have you thought of setting up a USD account with a US Bank? Canadians can do
that without a problem at most branches near a border, and I expect it could
be done remotely. Another alternative is to set up an account with RBC(USA)
[https://www.rbcbank.com/banking-in-the-us/checking-
accounts/...](https://www.rbcbank.com/banking-in-the-us/checking-
accounts/index.page).

~~~
kirykl
That would probably raise a flag to the IRS. I suspect the purpose for using
Paypal, and a contributing factor for the freeze, could be tax issues

~~~
allannienhuis
I think people use Paypal because it's easy to use in general, not because it
makes tax evasion easier (I suspect it's a pretty dumb choice for that :) ).
Taxes need to be paid regardless of how the money get brought into the
country, and Canada and the US have a pretty well understood tax treaty.

When I opened up my account at the BOA, it seemed to be a very well used and
smooth process - they mentioned that the number of Canadians holding accounts
at that branch (close to the border) was a significant percentage of their
total. I really doubt it raises any red flags on it's own - there are a lot of
legitimate legal reasons for the arrangement.

------
chygrynskiy
[https://www.paysap.co.ke/](https://www.paysap.co.ke/)

~~~
ryanlol
Does this really work as a marketing strategy?

------
Exuma
Yeah... pretty much the exact reason I don't leave any significant amount of
money in PayPal at one time.

------
Buge
Where is the story? This post doesn't link to any article or anything.

~~~
frankzinger
I was also wondering. The OP put it in a comment which is quite far down the
page currently:

[https://news.ycombinator.com/item?id=13851124](https://news.ycombinator.com/item?id=13851124)

------
adamio
You stopped advertising and still had passive income of 10k monthly ?

~~~
sabslaurent
Yes, when I was advertising I was doing close to $300k a month - I advertised
on FB, there are still thousands of people who have my shared ad on the top of
their newsfeed to this day. On top of that, I rank #1 on Google for my main
keyword..

~~~
bbcbasic
are you on IndieHackers?

~~~
sabslaurent
Nope, not sure what that is even.

~~~
bbcbasic
[https://www.indiehackers.com](https://www.indiehackers.com)

"Learn from profitable businesses and side projects."

People like you get interviewed to inspire those who want to do side project
or start a business.

------
ArtDev
I deleted my Paypal business account, never going back.

------
elastic_church
How surprising, I've never heard of this happening before

(this is sarcasm, for people who actually never heard of this happening
before)

------
wayn3
This is a case of KYC. Paypal wants to get to know you. Just talk to them.
This looks scary to people who dont deal with banks and entities that act like
banks, but paypal is doing this because they need to protect themselves from
aiding people in money laundering, which is a pretty big deal.

If you explain to them what youre doing and come up with some proof, they will
release your money. They do not want to steal it. Almost all these cases
revolve around someone not communicating with paypal and then acting surprised
when they freeze funds.

Any bank would do that. If my bank is hit wit ha 100k transfer and I don't say
a word about it and then appear at the local branch and demand to cash it all
out without an explanation of whats going on, they will refuse that, as well.
And probably call the cops just to cover their asses. Seriously. Talk to them.

