

Ask HN: How the PayPal Verification process works? - csomar

Hi,
I heard lot of horror stories about PayPal verification process. I have a fake account since I'm in a country where you can't receive funds with PayPal. I verified my account with a Virtual Credit Card that made me match its information with my entered ones.<p>I made this, well, 3 years ago and just forgot about it. I'm logging from my local IP (always), but  the other country is a neighboring one. Last days, I read a discussion on how someone account was blocked because he reached a $3.3K limit and how it took him two weeks to get verified. I was little bit frightened because I had a good balance there and my account is very active.<p>I was surprised that with the VCC and the 3 years-old verification, my account is still verified and there is no limit to my transactions. Hell, the verification process only took me 5 minutes!
I read on the PayPal website that the verification process is a very strict one (and is similar to military process or some crap like that).<p>So is the PayPal verification process fundamentally broken? How it stops legitimate users, while fake ones are not caught? Why PayPal is not working on this? What's problem actually?
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sdrinf
The verification process for buyers, and money receiving services is a rather
straightforward debitcard existence + validity check. Note, that Paypal's risk
exposure in this situation is limited, and they have literally a decade of
experience knowing what these risks are.

The verification process for sellers, and especially for people wanting to
accept credit cards is another matter entirely. Due to the higher risk
exposure for Paypal, a number of factors are taken into consideration here,
such as your credit score, personal / business background, nationality,
business type, and vertical-specific risk exposure.

You mentioned, that you're doing business via a fake account. For as long as
real (non-fraudulent) money is exchanging hands, you're mostly good from PP's
risk-exposure POV. However the moment you'll start exposing your account to
fraud, and your risk profile goes up, will be the second when Paypal will bail
on you, with no recourse -after all, you are using a fake account, and
breaking TOS.

Do your own reality-check, and determine if this is an acceptable risk for you
to do business via PP. You might want to also start exploring your options, to
have at least one other payment provider to fall back on, as insurance.

Hope this helps.

~~~
csomar
Thanks. This is really helpful. I'm using PayPal because some clients and
services only pay with it. I'm spending the money on online services and to
buy stuff. Does this make me exposed to risk?

Another thing, I'm using my real information. Just a fake address. I heard
from a user that he did that and then when he got caught, the disabled his
account and transferred his balance to his bank account. Can this be true? And
what are the legal issues that can happen?

I'm doing legal stuff.

~~~
sdrinf
> Thanks. This is really helpful. I'm using PayPal because some clients and
> services only pay with it. I'm spending the money on online services and to
> buy stuff. Does this make me exposed to risk?

Clients here are the only thing that could expose you to risk: if any of them
attempts a fraud on you via PP, that will register, and can lead to account
disabling, as described above.

> Another thing, I'm using my real information. Just a fake address. I heard
> from a user that he did that and then when he got caught, the disabled his
> account and transferred his balance to his bank account. Can this be true?
> And what are the legal issues that can happen?

Might be true; I'm sceptical though -there were large number of reported
cases, in which no money was refunded after disabling the account.

Legal-wise, while they _could_ start a lawsuit, so far there has been no
precedence of PP doing so -it simply doesn't make any cost/benefit sense. The
most likely outcome is disabling your account, with no money back, and no
recourse.

Hope this helps.

