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PayPal is no GayPal: another PayPal horror story
75 points by WillyDmz on Dec 15, 2010 | hide | past | favorite | 41 comments
Hello HN,

One of my side projects is a small gay discussion group online. It sells certain services (not pornographic in nature, it is the digital equivalent of a support group) and I had to use PayPal for payments for certain business reasons, unfortunately.

Today my entire PayPal account was frozen, 700 dollars was stolen from me, and I can't seem to get anybody at PayPal to deal with me rationally and overturn this decision.

I believe that some automated filter at PayPal saw the phrase "gay phone sex" on the site, but missed out the total description around that text that made it perfectly clear that it was NOT any kind of gay phone sex or any kind of pornographic service.

I'm not a rich man and I depend on this money to pay rent and I'm in a real jam here. If anybody at HN has any connections at PayPal and can help me out, I would really appreciate it.

Please email me at wd1993 AT gmail if you can please help me out. Thanks.




Say what you want about PayPal but they don't discriminate. They screw everyone regardless of race, religion, sex or sexuality.

To the OP: Like so many people, I lost money when PrayPal[0] locked me out of my account. No amount of faxing documents, emails or phone calls would convince them that it was my account and my money. I ended up just walking away.

A suggestion might be to go talk to a gay rights group and try turn this into a civil rights / discrimination issue ... they won't want the bad press.

[0] PrayPal: Put money in and pray you get it back out again.


I agree, attacking this from a gay rights angle will probably be the best approach. If he can get a major publication to run with this, PayPal will have to respond.


Really sad to see this idea, and even more to see it upvoted.

It's obvious the account wasn't shutdown due to 'gay rights'.

This is like an incompetent woman who was sacked suing for sexual discrimination.


Except that the incompetent woman really did deserve to be sacked. This guy did not deserve to have his money kept from him. He is also probably correct that some brainless automatic filter went off over gay phone sex.

Paypal cheats. Hard. End of story. The more money they can lock up for longer, the more they make. It's a great big moral hazard built right into their business model that creates a disincentive to operate fairly so huge that even Mother Theresa would have a tough go of it.

Squeak whatever wheel needs squeaking to get attention. Even if it's a gay wheel.


No. Paypal being unethical doesn't give the OP the right to be unethical.

There are people who are actually being discriminated against because they're gay.

Using it as a level because your site triggered a stupid 'phone sex' filter via user-generated-content is wrong.


Paypal probably has to cope with millions of $ worth of fraud a day. The fact one or two false positives crop up from time to time isn't surprising.

The terms of service clearly state that sites of a sexual nature are not accepted.


While false positives are a fact of life with any filtering system, they have no incentive to FIX the problem, as those false positives lead to their being able to hold funds indefinitely, earning interest at least, and potentially absorbing the entire balance.

This is called a moral hazard, and it should be pretty clear to you.

Paypal has a very long, very well documented history of triggering holds on accounts, and never resolving them.


Definitely. My account was recently frozen under a 'random check' to very my phone number. They didn't like the fact that I didn't have a land line phone number, cell phones are not accepted! It took 3 weeks to get it verified through their customer service.


That's an issue, since I haven't had a land line since 2002 or so. I don't even know my direct cell line any more: every 5 or 6 months I have to look it up in Google Voice.


eventually someone picked up on customer service that didn't care and just verified it without asking any questions.. others though wouldn't do it.


Merlin Mann's comment seems so fitting:

http://twitter.com/#!/hotdogsladies/status/12525667593752576


perfect


Fitting like, if you said PayPal should have to suffer eating Moroccon food everyday to someone who ran a Moroccan cookery group?


Right at the top of:

https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&c...

you have:

"You may not use the PayPal service for activities that:"

"relate to sales of [...] (e) items that are considered obscene [...] (g) certain sexually oriented materials or services"

I work on (amongst other things) a gay online discussion group/social network. A lot of what's discussed on there would probably be considered obscene by the population at large, and is certainly sexually orientated in many cases.

I suspect your site is similar. Care to post a link to it?

eg, Someone saying "Gay phone sex is great!" is probably ok. Someone saying "I just had a gay phone sex call where they said they'd do [x] to my [y] while swinging from the [z]" may not be.


Thanks, but I would prefer to remain a bit anonymous until I can get this sorted out.

My goal with this thread is to try and get some connection to somebody at PayPal that can help me.

There was nothing obscene on the site, and in our FAQ, it was made clear that this wasn't a gay phone sex service. Regardless, the PayPal employee I spoke to agreed that it wasn't some obscene porno or sex service.


It's hard to build grassroots support for a site nobody knows about.


+1 for "while swinging from the [z]"


I love a good PayPal bashing as much as the next guy (I've had my own poor experience with them), but there is a significant amount of detail missing here.

It's unclear to me that you've actually contacted them - by phone, not via email or their online support gadgetry. Have you? If so, what (specifically) was their response?


I spoke with somebody on the phone, and they viewed the site and agreed that it wasn't pornographic, but their decision is final and can't be overturned.

I asked to speak to a manager. They said a manager would get back to me, but no response yet and I'm guessing they won't ever call me back.


Have you tried contacting any news organizations? I can imagine a few in and around San Francisco would probably be interested in this, as it has a direct impact on Gay Rights.

This seems like complete discrimination. They shouldn't be able to freeze your account for having any references to "gay X" any more than they should be able to freeze your account if you were advertising "african american X".


Let me know if you feel otherwise, but it could be reasonable for paypal to want to distance itself from "african american phone sex."


Random discrimination agains minorities is never a wise move for a public company. It would not be wise ling term but they could be some short term gain if they pander to some extremist gaining ground in government.

I don't think they realize just how noxious this is to small companies. Pay pal is convenient but they are Earning a recommendation for unreliability large this kind od thing is enough to put a start up in serious danger. I hope star ups are not forced to play it squeaky clean and forced to discriminate in order to avoid loss of liquidity.

It sounds like it takes no more than a bad word or rumor of some outspoken group to get cut off. By bad word I mean gay black muslim independent.

I feel sorry for our non white non catholic friends. There seems to be a growing movement in the US to fragment our nation and KUt the others off from income and protection of law.


Any reason you say Catholic specifically? I understand why you would expect eastern religious to experience discrimination, but in my experience Christians as a whole are basically safe and Jews don't really have any problems either. If anything the Catholics are discriminated against more than other Christians although I certainly wouldn't say that either group see much trouble.


My guess, as mentioned, is that some phrase on the site triggered some automated process that locked the account.

Is it related to orientation or do just the words "phone sex" trigger something? I have no idea how PayPal works internally.


How many times have you called back?

Generally, every time you call, you'll have another shot at it. Even if they're taking/referencing notes, if your case truly is reasonable, someone will make it happen on their end. In every case, that's always worked for me.

The phone is the secret for everything - customer support, making sales, getting jobs, etc. :)


All this Paypal "we had to use it for business reasons" stuff reminds me of a family friend who was a Mcdonald's franchisee and got screwed over by Mcdonald's corporate and vowed to never eat at Mcdonald's again after being able to exit the business. Sure enough, 3 months later, there he was going to Mcdonald's. Excuse? "Well it was the only decent place to stop at this exit."

If you chose to use Paypal for business reasons, then you should own up to having possibly made a bad business decision. There are alternatives: Amazon Payments, Google Checkout, WePay, and 3rd party payment processors.


Ebay is the sole reason I still use paypal as a consumer. It seems very hard or impossible to buy things on ebay without having a paypal account.


That's fair enough, I'm not an Ebay customer (I manage quite well via the Amazon marketplace and places like extremedeals). I wonder if locking people into their system causes Ebay any decreased revenue. That would be hard to test for though if there are no other payment methods.


This area seems to be a real problem for a lot of people. I suspect, though don't have evidence to back it, that this type of problem extends beyond just paypal - to all merchant accounts and processors.

I've found that there is another problem related to payments too. Fraudulent chargebacks. Small businesses often aren't good at following up on things and end up throwing a lot of money away because some customers habitually do chargebacks for things like "don't recognize charge," etc... and then get their money refunded because the business owner doesn't reply to the request quickly enough (the window to reply is very short).

I don't know if any services address this or not, but I would be interested in helping to solve problems around merchant accounts.

If there were a centralized site that people like WillyDmz could go to then maybe the individual could garner a bigger voice. How cool would it be to see how much money any specific merchant is holding back? Maybe a site like this could get a little more attention.

What do you think? If anyone would be willing to work with me on this, we can make it happen. I'm capable of building out the code for it; would need a designer and a marketing person to help. If anyone interested, let me know.


After all the crap I've heard about PayPal we'll definitely be using another service when we start collecting payments soon


Ugh, why does paypal care about sexual orientation?

For future reference, seems that a merchant account with Visa or Mastercard is fine even for hate groups like the KKK. http://www.christianconcepts.net/informat.htm

If those douchebags can charge cards, Im sure you can figure something out.


But not for wikileaks apparently. Though I see your general point as they probably aren't discriminating. Paypal seems to do many 'random account verifications' these days. They freeze the account until its verified.


What's the URL of the site? My side project is also a gay discussion site (gaygeeks.org) so I'm surprised I don't know who you are :-)


Hey, cool site. I'd prefer to remain a bit anonymous until I can sort this out though. Thanks.


I think the worst possible scenario is them paying you the money after 180 days, although your account will remain locked.


It's an aside, but wanting anonymity while asking for help/connections probably isn't going to get you very far. If you're willing to provide more information to someone who can help before that person puts his/her reputation on the line by trying to make a connection for you, that might help you to be taken more seriously.


Why don't people ever recommend suing Paypal in small claims court? It takes time, but won't that force the issue?


They may be able to lock your account, but I don't think they can keep the money. I suspect they will mail you a check for the $700. In the meantime, I see from their website they are located in San Jose. Find their mailing address and send them a certified letter.


And this is why people should be working on getting paypal legally classed as a bank.


I wonder how many years we are going to have to wait for a congressional hearing on PayPal (which afterwards will change nothing but at least it will be on the national agenda for awhile).


Contact a few players in the gay media, or some of the more popular gay bloggers.




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