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PayPal Rant
Large payment puts account on hold

10+ Year Member

Msg#: 3318811 posted 12:29 pm on Apr 23, 2007 (gmt 0)

I'll start by saying that I have been using PayPal for years and have never had any issues with them until now. During the last 6 months I was given access to my client's PayPal account to manage their SEM spend (mostly payments to various vendors ranging from $20-$300 per payment), all was going well until last week…

A programmer that we work with IM'd me asking why I disputed the latest payment of $300. After doing some research I found the following:

A large invoice was over looked by the accounting people at the company that was payable to their graphic designer. The amount was just over $2000 – while not a huge sum, they wanted to get the money to the designer ASAP, so they decided to send him the money by PayPal. That is what triggered the issue.

PayPal flagged that transaction and as a result the whole account. They asked the designer for various information about the transaction and when they received that they asked my client for more info about the company. Until they review everything, they will not let the designer get his money that we paid (which PayPal already deducted from the company credit card), nor will they allow the client to receive payments or make any other payments.

As if that is not enough, payments that were made a few days before and a few days after that big payment (but before the account was flagged) are also being held and PayPal is asking the sellers for more paperwork. These are payments that we have made to these same sellers multiple times in the past for the exact same amounts.

As you can guess I am a bit frustrated at the moment, and quite embarrassed about this. Has anyone else had similar issues? Any suggestion on what we can do to avoid future occurrences of this type of hold up?




WebmasterWorld Senior Member bwnbwn us a WebmasterWorld Top Contributor of All Time 5+ Year Member

Msg#: 3318811 posted 7:25 pm on Apr 23, 2007 (gmt 0)

I might ad we had been paying for services through paypal for a couple years as well never a problem then out of the blue.

This happened to us as well we supplied all the required information got the account reopened and paid another charge, well you guessed it they closed the account and we had to just about get a lawyer to get the money refunded from our AM card.

They charged the card then put the account on hold so we were out the charge the client didn't get paid it was a nightmare.

We have cancelled all dealings with them and won't go back, completely lost to their thinking or lack of it...

I see paypal going like AOL is down..


5+ Year Member

Msg#: 3318811 posted 8:27 pm on Apr 23, 2007 (gmt 0)

Wow! I had figured that they had cleaned up this side of their business since the eBay purchase. Makes me think twice about doing business with them.

Their sales team has been contacting us pretty aggressively recently. They have asked us to add their new Paypal Express Checkout feature to an ecommerce site, and are offering $5000 up front to "help with transition costs". Pretty attractive offer, but getting cut off from the funds even once would negate that.

Thanks for the heads up. It sounds like Paypal still has their heads up something as well.


WebmasterWorld Senior Member bwnbwn us a WebmasterWorld Top Contributor of All Time 5+ Year Member

Msg#: 3318811 posted 8:45 pm on Apr 23, 2007 (gmt 0)

I would take the offer and have them as a secoundary processor. I would not ever let them be my primary processor then keep the funds cleaned out each business day and you should be fine.

Anytime you can add an extra processor for processing orders especially in an ecommerce site I would do it....


WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

Msg#: 3318811 posted 9:56 pm on Apr 23, 2007 (gmt 0)

We have seen about 3m in/out through them in 8 years. I'd guess 30k transactions. Not a single glitch.

> Any suggestion on what we can do to avoid future occurrences

The biggest thing is becareful who you deal with. Almost always it is about the receiving person and not the sender. Especially when dealing with 'one offs' that don't fit the norm.

Don't allow external people to have access to your account. IP mismatch is one of the cheif fraud flags. That is 100fold true if they are non US based employees.

Also, certain internet sectors are known to attract very close PayPal scrutiny. Things like pharm, hosting, adult related, and other historical problem areas get the full look by paypal when matters of fraud are at issue.

When your paypal rep calls or emails - talk to them and get to know them.

Now with the Yahoo deal (and rumors of a Microsoft deal), I think PayPal is going to continue to grow by leaps and bounds.


10+ Year Member

Msg#: 3318811 posted 8:34 pm on Apr 24, 2007 (gmt 0)

Now PayPal is asking to account owner to enter his SS# inside their system. Normally this would not be a problem (if you trust their security & privacy). However, Murphy heard about the situation and did his thing.

As it turns out, someone stole the account owner's credit card last summer and opened a PayPal & eBay acount with the stolen info. The owner quickly worked with them to close down these fraud accounts. The problem is that PayPal's automated systems show the owner's SS# as part of the fraud account and does not allow the same SS in 2 different accounts.

So after a while on the phone with PayPal (yup - he actually got someone on the phone) we are waiting again after he explained the problem to them. Still in the no-man's land where they deducted the money from the credit cards but refuse to refund it or relrease it to the payee until this whole mess is resolved.


WebmasterWorld Senior Member essex_boy us a WebmasterWorld Top Contributor of All Time 10+ Year Member

Msg#: 3318811 posted 11:37 am on Apr 26, 2007 (gmt 0)

I suspect this isnt a Paypal problem but a problem experienced by many people using online payment systems as a whole. We just hear of it more often about PP due to the size of the firm.

More often than not I do steer clear of PP but I would imagine thats irrational based on what ive just said


10+ Year Member

Msg#: 3318811 posted 12:10 pm on Apr 26, 2007 (gmt 0)

As a merchant I would agree - I would never want PayPal as my only/main source of accepting payments. But in this case we use it to send payments to various vendors. Unfortunatley not all of our vendors accept credit cards (except through PayPal)


WebmasterWorld Senior Member piatkow us a WebmasterWorld Top Contributor of All Time 5+ Year Member

Msg#: 3318811 posted 12:21 pm on Apr 26, 2007 (gmt 0)

The trouble with emoney providers is that you can open an account very easily but if you hit certain transaction thresholds then you trigger a whole load of checks under whatever money laundering regulations exist in your jusrisdiction. With a straight bank account the checks are all done up front on opening.

With a post like this it would help to say which country you are in as PP has many different national operations all with different regulators.


10+ Year Member

Msg#: 3318811 posted 12:31 pm on Apr 26, 2007 (gmt 0)

Me and my client are in the US.

Corey Bryant

WebmasterWorld Senior Member 10+ Year Member

Msg#: 3318811 posted 4:14 pm on Apr 26, 2007 (gmt 0)

Just like with any processor, there are limits involved. Usually with a merchant account, they ask you the average ticket and expected highest ticket item.

If you see any charges that are over the highest ticket item in your transaction, contact the provider immediately. Remember, the provider will have to pay if there is a chargeback and the provider will want its money.

It is always good to keep in communication with the provider on large ticket items and respond to them in a very timely manner. Even though they might not be able to respond to you right back because they might be dealing with scores of transactions, it will show them you are working with them and they will speed things along



5+ Year Member

Msg#: 3318811 posted 2:55 am on Apr 27, 2007 (gmt 0)

We have seen about 3m in/out through them in 8 years. I'd guess 30k transactions. Not a single glitch.

Brett, your customers are by in large good ones with clean track records I would safely assume.

asMy problem with Paypal is that they have a hair trigger with the nuclear option...total lock down of an account with one transaction that may need closer scrutiny. Let's say one has $25,000 in a PP acct and pays $300 to an account holder who has had problems in the past...what is the logic of locking out the one making the payment from access to funds that are rightly their's?

Why not just put the one transaction on hold until PP does it's due diligence?

It's not the size of PP that more cases such as this are reported...it is the neighborhood that PP does most of it's business in...Ebay which is wrought with fraud. This is why they have such insane policies.

case in point [webmasterworld.com]


Msg#: 3318811 posted 3:17 am on Apr 29, 2007 (gmt 0)

If P****L were a decent option I would not read a P****L thread on here every couple days. It would be a non issue.

Stop dropping so many links to this organization. It makes me paranoid about whats really going on here, whether there is some sort of referral issue involved.

Corey Bryant

WebmasterWorld Senior Member 10+ Year Member

Msg#: 3318811 posted 1:01 pm on Apr 29, 2007 (gmt 0)

I doubt anyone is dropping any links to Paypal. Most people know Paypal. And most use Paypal. This is the biggest problem. Things go well, there is nothing to complain about. That one day when you get an email saying funds are on hold or we need to verify a transaction - what happens? Instead of people complying, they immediately come to the boards to complain about a company.

It's human nature. Just like the power company. We wake up in the morning, and expect the power to be on. But we can remember those days when the power went out. And if it was off for more than 30 seconds, 75% of the people were probably getting ready to call to find out what the problem was and when it was going to be back on.

Paypal is dealing with a lifeline - money. And things happen from time to time. And with the thousands of transactions done every day, chances are pretty good that something will happen, some time



5+ Year Member

Msg#: 3318811 posted 2:12 pm on Apr 29, 2007 (gmt 0)

that was a link to another thread on WebmasterWorld regarding Ebay

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