

Paypal's fraud prevention routine does it again - rahoulb
http://scottishrubyconference.com/posts/149
Once again Paypal suspends an account for suspicious activity and asks for clarification.  Except this time it's a repeat of the same "suspicious" activity that has happened for the past four years, asking for the same documentation that has been sent through previously.
======
ffffruit
I love the fact that people with no authority and no respect for privacy
whatsoever arbitrarily just ask for bank statements from their customers. I
have had estate agents ask for 6 months of bank statements for no apparent
reason and when I declined they got furious with my insubordination. This was
on top of a written / signed letter from my direct boss with regards to my
salary and job status.

My bank statements = none of your business

~~~
citricsquid
Just to clarify, they don't want to see your bank statement, they want to see
the covering sheet that verifies who you are and the address you're at. I had
to provide my "bank statement" to Paypal a year or so ago and all I provided
was the sheet that states my account # (they have this already) my address
(they have this too) and then my banks information (sort code etc) which I
don't think is private?

Your bank statement = covering sheet that proves the account is associated
with you and your address, not x months of payments made and taken.

~~~
waqf
Maybe so, but since they didn't in any conceivable reading of the phrase "bank
statement" make that clear, I think ffffruit's point stands.

------
DanielBMarkham
I have no sympathy for Paypal -- every time I've dealt with them it's been
like talking to a robot -- but in all fairness they do something that's really
hard. Can you imagine the number of people who are either trying to rip Paypal
off or are using Paypal to rip other people off? I'm left thinking the only
reason Paypal works is because the founders were too stupid to realize what
they were getting into. (Although if you've never read it, they have a great
startup story)

The thing that's especially onerous here is the fact that they keep screwing
with the same customer the same way _over and over again_. I agree with the
author of the post -- that's just too much crap for too little return.

~~~
smackfu
Yes, just look at Western Union for a service that has a long history whose
reputation has been practically destroyed by scammers.

~~~
mst
I used WU's online service for a while. Then for no apparent reason it locked
me out, and I've been able to figure out who to kick to get back in.

Possibly ironically, this has resulted in me falling back to my backup payment
sending approach - paypal.

------
lachyg
This has just happened to me with my new business that saw exponential growth
from the previous month. They asked me for all information within 2 days, from
Friday, so basically they wanted me to work over my weekend.

Which I sent to them, and then they say that they'll follow up and it's been
like 4 days. What pisses me off, is that they don't return the same courtesy /
haste that they expect from us.

~~~
ErrantX
I have found the only real solution to this is to make merry hell for a couple
of days until it becomes easier for them to fix it than leave it.

I got down to half hourly emails to the customer services manager "in charge
of my case", but was ultimately worth it.

~~~
lachyg
I'll give them one more day ;)

~~~
lachyg
Got a reply just then. They told me, and I quote:

"Stella is out of office recent days for holiday. She will follow up the
investigation of your account when she comes back."

~~~
lachyg
^ Can't reply to your post, but I'll just do it here.

Of course, I told them that asking prompt replies, especially on non business
days (with the threat of limitation) was unacceptable if the same courtesy was
not going to be returned, and asked someone else take over.

~~~
steveklabnik
> ^ Can't reply to your post, but I'll just do it here.

To prevent too much back and forth, the 'reply' button disappears, but if you
click on 'link' to go to the page directly, you should still be able to reply
anyway.

------
Joakal
Four years and having the account frozen every time? Those organisers must
either be very patient or desperate to use paypal. Why wouldn't other payment
processors work; like Moneybookers, Wepay, or bank transfers, etc?

~~~
patio11
The short version? Accepting payments internationally is _effing hard_ and
_effing expensive_ and the risk of fraud and other illegal activities is
_astronomical_. Paypal does it _head and tails better_ than any other
organization.

~~~
rahoulb
I do agree. But I feel this complaint is different to the "I started making
money and Paypal suspended my account" complaints that are normally posted.

It's the repeat nature - asking for the same documentation over and over again
- that's so annoying here.

~~~
citricsquid
It's not _really_ repeat nature. It's the same account, but it's for a short
period of time each year which would seem suspicious to me, when they claim
it's a conference they say the following:

"4/ Our bank statements are none of your business. 5/ The details of our venue
agreement and insurance are also none of your business."

So they're refusing to _prove_ it's a conference but requesting that Paypal
are "reasonable"? Having your account verified once and then go dormant in
payment receipt for the majority of the year then start again would seem
suspicious to me... especially when their justification isn't something
they're willing to prove.

~~~
rahoulb
Well I can't speak for the organisers, I'm just someone who attends.

But they have proved that they are a conference for the same dates for the
previous three years.

And the implication is that Paypal are asking for more documentation than
previous years ("the documentation you are asking for _this year_...").

------
mcantor
Every time I read an article like this, I wonder again: Why is no one
competing with PayPal? People talk about sites like Google Checkout or WePay,
but they are not viable alternatives, either because of different fee
structures, international availability or other issues. Is PayPal doing
something _so hard_ that none of the incredibly talented and intelligent
people in the startup world feel capable of challenging them? I feel like
anyone who can replicate the right subset of their features (to start with)
and guarantee good customer service would _instantly_ have tens of thousands
of jilted PayPal customers signing up. "PayGuys: We're Not PayPal". From zero
to hero. Am I crazy?

~~~
originalgeek
Why is no one competing with PayPal? Because these stories are the exception,
not the rule. PayPal has posed absolutely no problems to our business since we
adopted it early last year. I feel like a total idiot for drinking teh
internet kool-aid and boycotting them for so long.

~~~
dangrossman
I do 6 figures a year through PayPal, and my account is now over 10 years old.
It's never once been locked/frozen/restricted.

~~~
iuygtfrgth
Mine has been locked for nearly 10years

I signed up when it was only available in the US now it's avialable in
Scotland I tried to register for the UK version. You can't register for the UK
cos you have a US account, you can't use the US account with a UK credit card.
I asked them to delete the US account and it's now stuck in some sort of Limbo
where I can't open a UK account cos I have the US one, and I can't log into
the US one because it's been deleted. Once a year I spend a few days emailing
them to try and sort it out.

------
ladon86
And here I am about to launch a service on Thursday with PayPal as my payment
processor. I didn't really want to, but for my customers it's basically a
requirement.

I'm expecting to take about £2k in the first few days, so I'm almost certain
the account will be limited; I've preemptively supplied most of the info
listed in this article to try to mitigate that.

I'll be sure to update HN on what happens.

~~~
oscardelben
Note that when your account gets limited, your customers get an email which
basically says that you are suspicious, and you can't accept any new payment
until you get it fixed. I highly recommend that you DON'T launch with paypal
unless you have all the documentation sorted out. And no, I don't know what
you should do exactly.

~~~
fr0sty
>"DON'T launch with paypal unless you have all the documentation sorted out"

That is the problem. It appears to be impossible to know in advance whether
your documentation is sorted out.

Even if PayPal had a 'how to not get locked out and look like a shady
operator' HOWTO somewhere on their site the situation would be more acceptable
but right now it seems people have to live their life with the (vain?) hope
that their capricious payment-processing overlord will continue to smile upon
them.

------
jellicle
But when I click to register for this conference, they're using Paypal as
their sole processor.

So what's the point? Complain all you want, you're still using Paypal THIS
YEAR, after being screwed over 4 years in a row. When push came to shove, you
picked.... Paypal.... to process your payments. So by your own actions, you've
shown you think Paypal is the best processor available.

~~~
mconnell
They're using <http://www.stagehq.com/> this year for managing tickets.
Currently the only payment gateway they support is Paypal.

------
jdp23
It would be great for a bunch of small companies and 501c3s who have been
affected by this to file a complaint with the FTC and state Attorneys General.
At the very least, it could get some higher-profile media attention to this
long-standing pattern of abuse. And with luck, somebody will decide to
investigate ...

------
apedley
I had someone sign up for a subscription, 1 payment each week for 6 weeks.
After the 3rd it stopped charging the client. It was just frozen, saying the
next payment was due to be taken out of their account on a date that past 6
days ago.

So contacted support and their reply was, well how do we know they actually
subscribed.

Well I don't know, maybe they could have looked at their records and seen the
IP address and paypal account associated with the subscription with their
attached bank accounts and credit cards.

Paypal is great when it works but when something goes wrong it really goes
wrong and support just doesn't help.

Anyway, I use a proper merchant now for CC payments. I will most likely
implement PayPal once again but just as an option and right at the bottom of
the list.

------
geekfactor
That leading quote is great:

Sufficiently advanced incompetence is indistinguishable from malice.

\-- Clark’s law

------
ROFISH
Not to white knight Paypal, but selling tickets is a highly fraud risky
payment event (opposed to just selling stuff). It has a high number of
chargebacks due to possible event cancellation, people not showing up, or
people just not liking the event. You would most likely be required to send
this paperwork for each event to most any credit processor.

Typically I've found that with Paypal there's no immediate cost of entry (just
start accepting payments) but paperwork is required over a certain threashold.
But try to use any regular credit processor, they'll require your paperwork
done in advance, and since you're doing an event with tickets, it might take a
few applications until you find one with decent rates who will accept your
risk.

------
redthrowaway
So when's the next PayPal going to take over? This is a company that had a
great idea a long time ago and a whole bunch of terrible ones since. It needs
to go away now, and we need a company that does what they do better.

------
tluyben2
Paypal is horrible (We had this happen so many times...) and there are many
cases where they simply _stole_ money without giving reasons or ability to
dispute without going to court against a giant, but it's just not possible to
go for a competitor, because that would cost you too much sales from clients
who don't have/want to use a competitor. And a lot of Europeans at least don't
want to use their CC online.

We tried AlertPay which works fine, but the fees are too high, still, they
seem a good alternative if you want something that just works for now.

------
kondro
So, does someone have a solution for setting up a US merchant account from a
foreign country for the best choice of merchant fees and service providers to
bill through?

I hate all these "don't use PayPal" comments but even for first-world
countries like Australia, setting up a merchant facility that can accept
foreign currencies is really, really hard and very expensive.

------
iamelgringo
They should really use <http://WePay.com>.

~~~
patio11
Somebody has to mention it so I might as well: WePay is not available in
Scotland.

<https://www.wepay.com/about/faq#thirteen>

~~~
iamelgringo
_Touché_

------
pavel_lishin
_This is the fourth year that we have run this conference, and every year
PayPal have restricted our account._

"I keep hitting myself with this hammer, but it keeps hurting! What am I doing
wrong!?"

------
jefe78
Forget Paypal! I'd be MORE inclined to support an organization/product if I
saw that they'd opted out of using their service.

At least until they change their policies. They seem so arbitrary sometimes.

~~~
lachyg
That's not feasible in most situations.

~~~
jefe78
Maybe not, but it would be nice to see.

------
mironathetin
For me, Paypal is simply a no go. If Paypal is the only way to pay, then there
is no way to pay. (But there are still bank accounts and credit cards).

------
rwebb
These fuckers do this to us every year as well. Seasonal business also. They
seriously asked us to fax them our URL. Assholes.

------
spankythemonk
Here's waiting anxiously for Bitcoin to put these guys out of business.

------
cmelbye
Trick me once, shame on you. Trick me twice, shame on me.

