
Venmo and Paypal Are Stalling Urgent Efforts to Bail People Out of Jail - aspenmayer
https://www.vice.com/en_us/article/k7qbnz/venmo-paypal-freeze-transfer-limits-bail-funds
======
thelittleone
Having worked in fraud protection for several very large banks I totally
understand the need for automation and case reviews.

However PayPal stands out for me as THE worst company in finance.

One colleague has over $25k that has been held pending company verification
for AML reasons. This has been ongoing for over 1.5 years every time he
completes the requirement PayPal issues additional requirements. And the
according to email replies he received, the department responsible for such
case reviews has been on leave for 3 months due to COVID.

What does PayPal do with money that is frozen? Are they allowed to gain from
it?

I now always advocate strongly against using Paypal.

~~~
notyourwork
A much smaller scale but same problem. I for a holiday years ago received an
iPod from two different relatives. My parents bought me one earlier that year
so although appreciated I didn't want to offend family and try to ask for a
receipt or return them. Therefore I opted for selling them via eBay. As an
eBay small volume seller with 100% positive rating, I posted 2 iPods, sold and
shipped to payer.

My account funds were frozen and paypal requested proof of purchase. At this
point as a poor high school student I was flabbergasted they could withhold my
money for no reason.

I reached out to both relatives, explained what happened and told them about
the receipt paypal requested. Both send me a copy of the receipt which I
supplied. Paypal rejected the receipts (I forget the reason) and told me they
were not going to release the funds.

I determined they could only hold it for 6 months (I don't remember the legal
reasons here). Therefore, I parked my account paypal account, 6 months later
took my money and never looked back.

~~~
csomar
It's easy to bash PayPal but they probably implemented that after too many
people used the platform to sell stolen goods. The receipt was probably in
your relatives name's; which means you did not buy it. This is actually a good
use case for Gift cards.

~~~
TheSpiceIsLife
Absurd.

PayPal should just ask the seller to have the original purchaser make a
statutory declaration stating the item was a gift to a relative / friend,
maybe provide some sort of supporting documentation to prove the relationship.

~~~
sansnomme
Notarizations and medallions are not cheap.

~~~
TheSpiceIsLife
Here in Australia the list of people who can notarise a stat dec is as long as
your arm.

[https://www.ag.gov.au/legal-system/statutory-
declarations/wh...](https://www.ag.gov.au/legal-system/statutory-
declarations/who-can-witness-your-statutory-declaration)

Your point still stands, you may not know any of those people who are willing
to witness a stat dec below the value of the funds in question.

------
kevinsundar
So "Covid Bail Out NYC" used Paypal and Venmo (presumably only their
respective p2p transfer options, not their organization/business options) to
collect funds.

And they're complaining that Paypal or Venmo isn't willing to disable
automated fraud protections for a payment method thats only meant to be for
individual to individual transfers?

------
ValentineC
PayPal's customer service is atrocious, especially if one falls between the
gaps and gets asked to do some weird KYC.

Some months ago, they asked me to provide charity information for my personal
account, and subsequently limited my receiving/sending privileges.

Phone calls to them trying to sort this out have always ended up at some call
centre in the Philippines, where the agents can only tell their users that the
account limitation is "for their safety".

That account of mine is still limited.

They've also limited the personal account of a friend of mine (who was
interestingly enough ex-PayPal) before, also asking for charity information.

------
heavyset_go
Never use PayPal to raise funds or donations for charity, they are notorious
for freezing funds and never giving them to their intended recipients. This
was the case 15 years ago and it's still the case today.

------
MrRadar
This is far from new. I still avoid Paypal as much as possible from how they
screwed over the Something Awful Hurricane Katrina fundraiser back in 2005.

------
aaron425
I'm not entirely sure I agree with the "stalling" portion of the title for
this article. Vice could argue that they're slow to react, but transfer limits
have been a thing for these kinds of apps forever, including CashApp which
doesn't seem to be mentioned here.

~~~
bdcravens
It's only "stalling" if they are uniquely doing this for this organization,
which doesn't seem to be the case.

~~~
close04
Being able to do something about this, especially in these extraordinary
circumstances, and still not doing it is a sign of acting in bad faith. More
so when the issue lies with your intentionally crippled (as in "not just an
oversight") implementation. Stalling is perhaps too soft a word. On the other
hand PayPal is more than willing to blame COVID19 for delays in issues that
should officially be resolved faster and that are causing losses to others. So
they're willing to use the "extraordinary circumstances" excuse when and only
when it suits them. Another sign that they are acting in bad faith.

------
strbean
For all their anti-fraud measures, they still couldn't figure out that those 3
simultaneous $500 transactions with a _West African gold mining company_
weren't actually initiated by me, and need 3 weeks to resolve it.

Anyone using PayPal today just hasn't learned their lesson yet.

~~~
Wingman4l7
Or has no other choice. :/ They're the major _(and possibly sole)_ payment
provider for eBay sellers.

~~~
strbean
True. Many online swapping communities also standardize around PayPal.

It seems like eBay is dominated nowadays by people drop-shipping products from
Amazon etc. with a markup, though.

~~~
Wingman4l7
It really depends; eBay is a huge marketplace. There are several professional
electronics recyclers / refurbishers on there, I'm sure there's a healthy
contingent of collectibles sellers, games, etc. I'd love to see the numbers
though; maybe it's like Amazon -- AWS : retail :: drop-shippers : unique
sellers.

------
at_a_remove
It's funny, I typically get downvotes wherever I go for suggesting that I want
companies like this to be a dumb pipe for my transactions. Everything is
political, I was told.

Ah, now the downsides of everything being political become apparent -- when it
goes against them.

~~~
bitwize
It's almost as if... politics has right and wrong answers!

------
vikramkr
You could look at this as these organizations making a mistake by using Venmo
and expecting them to try and re-engineertheir platform to help them, or as
venmo making a mistake by failing to capitalize on this moment and ending any
chance of them becoming the payments backbone of small dollar donations, while
also creating the PR disaster of PayPal's notorious tendency to freeze
accounts/mess things up with broken systems and poor customer service blowing
up into a high profile failure. PayPal has started getting a pretty bad
reputation, and while I think this site is likely to lean into the "they
shouldn't have chosen venmo" angle, do remember that PayPal has a reputation
for fraud systems screwing up.

~~~
PaulDavisThe1st
I have never seen any statistical data on PayPal's screw ups. All I ever see
are anecdotes about a terrible thing that happened to someone or someone they
know.

PayPal is __huge __. It 's not suprising that there would be some horror
stories. What matters is how frequent they are given the number of accounts
and/or transactions, and I've never come across any actual data on this. I
suspect it doesn't exist.

~~~
jjnoakes
What matters to me is how the screw ups are handled.

If I can make a few phone calls, verify some ai-flagged transaction is legit,
and clear things up in a few days max, then the occasional screw up is just a
fact of life.

If I have to talk to a brick wall for months or years and have my money frozen
for paper thin reasons and the side who made the mistake takes no
responsibility, then it doesn't really matter how rare it is. I'm not touching
that business.

~~~
PaulDavisThe1st
Sure. But this is another thing that is not properly known.

I've been using PayPal for almost all of my income for more than 12 years.
I've never had a notable financial screw up on their part, and these days
whenever I need to call them I get a real human on the phone in a few minutes
(even during covid-19). Most issues get solved in minutes to days (the latter
if there's a problem on their end, such as instant payment notifications
getting stalled).

But this information is useless - just another anecdote.

Nobody except PayPal really knows how things look statistically speaking.

~~~
jjnoakes
It doesn't have to be properly known; to me it doesn't matter how rare it is.
A single instance of the latter case is enough for me to find an alternative
if one is available.

~~~
PaulDavisThe1st
Good luck finding any payment processor that doesn't have a single instance of
what would be enough to make you find an alternative.

For myself, until someone else has a micropayments fee schedule like PayPal,
I'm stuck with them.

------
pjc50
Bail security is yet another part of the US system that needs to be removed
for all but the most serious crimes.

~~~
bdcravens
In Houston there was an outcry when the county was going to let a large number
out of jail to alleviate COVID concerns. The narrative about "dangerous
criminals on the streets!" was ridiculous, since they were only letting out
those who were there because they couldn't bail out; they were no more
dangerous than those who had bailed out for the same crimes, the only
difference was if they could afford the bail.

~~~
the-dude
So they were actually releasing dangerous criminals on to the streets.

I fail to see how the claim is ridiculous.

~~~
jschwartzi
In the United States our justice system applies the principal of "Innocent
until proven guilty." In other words, when you are merely accused of a crime
you are presumed to not be a criminal. The state has to actually prove beyond
a shadow of a doubt that you, the accused, committed the crime. People in Jail
are not criminals until they are put on trial, convicted, and sentenced at
which point they are convicts and go to prison.

~~~
the-dude
Right, they are suspect. But this was not the point the parent was making. He
was comparing the paying group to the non-paying group.

If you release more, you have more suspect dangerous criminals on the streets.

~~~
close04
Wait, "dangerous" or "suspected dangerous"? Because most of the people in jail
(not to be confused with prison/penitentiary) are not there for anything
dangerous to begin with. A policeman decided they they should be locked up and
that policeman doesn't need any particularly good reason for it.

------
lucb1e
I hadn't heard of Venmo before so perhaps I'm missing something, but Wikipedia
says it's a subsidiary of PayPal, so this is really "paypal and paypal are
stalling"? The post seems to talk about them as if they're independent.

~~~
cosmie
You're not missing anything.

Paypal slurped up Venmo as part of their Braintree acquisition several years
ago.

Braintree still exists as it's own distinct offering, but the branding was
updated to clearly show it as part of Paypal[1].

Venmo is also operated under its own brand as an independent/distinct product
offering, and unlike Braintree it never had its branding updated to tie it to
the Paypal portfolio. The only place you'll find a reference to Paypal are
places like their legalese such as the website footer[2], where they note
they're a service of Paypal and Paypal is the actual provider of all money
transmission activities within Venmo.

So they're spoken about independently because from the consumer standpoint
they are (independent apps, independent accounts, different
capabilities/limitations, etc). But they're having the same issues because the
root cause is part of the same shared money transmission systems/policies.

[1] See the header logo
[https://www.braintreepayments.com/](https://www.braintreepayments.com/)

[2] [https://venmo.com/](https://venmo.com/)

------
thoraway1010
Couple of quick things.

Can you even use venmo to send money to people to write checks on behalf of
third parties? I thought there was lots of restrictions on that type of
activity in general and limits in these person to person platforms in
particular.

Are these folks setup as approved businesses with venmo / paypal / stripe etc?
I've had good luck moving large volumes if you are a legit large business not
violating TOS. Note that accepting money to write checks for third parties is
almost always a violation.

------
bdcravens
The article's title is clickbait (no fault to the submitter).

These are withdrawal limit and/or fraud detection issues that would apply
equally to other organizations using Venmo or Paypal. I suspect this isn't
just a matter of these companies clicking a checkbox; many of these limits are
likely required by their banking partners or regulations.

~~~
tyingq
Sometimes they use "partners" or "regulations" as scapegoats.

For example, PayPal's implementation of OFAC blacklisting is a braindead loose
string match on ANY field that therefore has a huge false positive rate.

Compliance with OFAC is mandatory. Doing it in a stupid way is not.

~~~
ashtonkem
PayPal has been shady long enough to lose the benefit of the doubt.

------
corobo
Alternate title: Urgent Efforts to Bail People Out of Jail Used Paypal, Again.

Can we stop using PayPal for this sort of thing? Every time there’s a news
story about PP locking accounts for fraud checks. Every time. At a certain
point it’s just PayPal’s policy to lock charitable accounts, it’s on you if
you use them anyway.

------
CPLX
The accounts in question are essentially acting as money transmitters,
intermediaries between the people with money and the court/jail they are
trying to get the money to.

I don't think there's a financial institution the country that is going to
allow that without restrictions, for reasons that should be obvious.

~~~
thejynxed
Well yes, besides it running afoul of laws governing anti-mafia/cartel
dealings, the risk of fraud is very high.

------
vmception
Thats just dumb because the people directing energy to these efforts are not
organized and are reactionary.

There literally exist people in this world that believe "doing something" is
more important than planning, and that is the kind of person involved with
these efforts here.

Is it even worth writing a solution here? Whats the best way to reach that
group? I can imagine they just told their supporters to venmo them, instead of
actually ACH or wire transfer to their organization's bank account - assuming
they even have one set up under an entity or foundation.

Imagine being so unprepared that you don't even know the regulations creating
the problem and misdirect that angst to Venmopal.

~~~
egypturnash
Dude, these protests are barely two weeks old. You want people to go set up an
LLC or something before they get together to bail out the folks the cops
arrested after doing tricks like “closing all the exits to the city twenty
minutes before announcing a curfew”? Yes, a lot of this sort of thing is being
done on an ad hoc basis.

Never mind that there may be hidden class issues, you need a certain amount of
money and privilege to set up DBAs (as well as time, which, again, people may
not necessarily _have_ because who the hell anticipated any of this past
month), and part of the reason these protests are happening is decades of
systemic economic suppression of Black people.

But go ahead, keep blaming the victims because they’re reacting to a problem
that popped up as quickly as possible, and running into problems with rigid
systems that have a long history of dealing badly with accounts that suddenly
explode in popularity.

~~~
UncleMeat
> You want people to go set up an LLC or something before they get together to
> bail out the folks the cops arrested after doing tricks like “closing all
> the exits to the city twenty minutes before announcing a curfew”?

He doesn't. This mode of argumentation is not actually intended to produce new
ideas or methods that enable better protest. Instead it is intended to produce
an infinite regression of complaints about improper protest to delay change
forever.

~~~
vmception
Thats unnecessary polarization when it describes unrestricted flow of capital
to actually enable change, while removing tax and accounting consequences at
the same time.

------
MintelIE
I think a big issue is that Paypal and Venmo don't want to come under scrutiny
for aiding domestic terrorists.

~~~
kstrauser
Which ones were convicted? I hadn't seen that story yet.

------
metrokoi
>But because of constant security freezes and transfer limits imposed by
PayPal and its mobile payment service Venmo, the group is only able to bail
out around five people— $20,000 worth of cash bail—per week.

Quite the incendiary headline for an issue of bandwidth. These payment
processing companies were never designed for so many and so large transfer
amounts. Vice and others expect these companies to snap their fingers and
change something that otherwise would take months or years of development.
Quite puzzling, especially since Venmo and PayPal are supporting these groups
bailing people out, the only complaint is Venmo and PayPal are not doing it
fast enough.

