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Old 01-14-2010, 01:56 PM
eshop1 eshop1 is offline
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Join Date: Jan 2010
Posts: 1
Default paypal truth?

I am running an e-shop and wanted to switch to paypal to accept the payments.
But after I read horrible things about it I need to get an advice on whether sign up to them or not.
Here is what people say about it:
Random Credit Check = $5000 Frozen
Today without warning Paypal "closed" my account with $5,772.91 dollars in it. They say on the website and in several calls I made to them that they will not release the money due to a routine credit scan they made and didn't like what they read in my equifax credit report.

What closed means by their definition is I can't take the money out and I earn no interest on the money for 6 months. Almost 2 months have gone by since this happened and this is still the situation. They say when I signed up for Paypal I signed a standard agreement that says they can freeze the money in my account any time they want to. I strongly suspect they are earning interest on the money and, in effect, this is a scam on their part to make millions of dollars. I have 100% positive feedback as a seller on eBay (which owns paypal) and I've sold over 100 items. I have a feedback score of 86 with many of these being repeat business that doesn't cause the feedback number to increase. The money was frozen from an auction in which all the winning bidders gave me positive feedback except for one non-paying bidder in Italy who never sent the money despite repeated emails so, of course, I never sent him the item. (The amount of the non-paying bidder is $500.00 --- but since he never sent any money by Paypal or any other means I fail to see how this could play a roll in the "closed" account).

Periodic non-paying bidders are, unfortunately, a fact of life on eBay --- fortunately a rare one in my experience. The other eight winning auctions of the "freeze" auction all gave me not just positive but glowing feedbacks saying they both received the items I sent them and were extremely happy with them. Without the money from PayPal there is a very good chance I will lose my family home as well as my mother's home we are attempting to bring up to code. I, my wife, and two sons have lived in our family home for around 18 years. My mother, before she was institutionalized lived in her house (with my father, me and my sister in the earlier days) for around 50 years. We were planning on renting out my mother's house to help pay for the expenses of her staying at Alzheimer Gated communities which charge $3,500.00 a month and more.

Ironically, before this happened, I was a big fan of Paypal..

Why PayPal freezes (aka limits, aka restricts) user accounts and how to get it unfrozen (aka unlimited, aka unrestricted).

Knowing why PayPal froze your account has a lot to do with how to get it unfrozen.

Based on others stories and experiences, here are some possible reasons:

you have more than one PayPal account, or PayPal thinks you have more than one PayPal account.
you clicked on a link in an email that you thought was from PayPal, but it really was a phishing scam.
you moved into a house or apartment that used to be occupied by a con artist who used PayPal to steal.
you got a new phone number, one used by a con artist who used PayPal to steal.
you use an ISP that assigned you an IP that was used by a con artist who used PayPal to steal.
you paid someone, like a con artist who used PayPal to steal.
someone paid you, like a con artist who used PayPal to steal.
your name and/or address is similar to a con artist who used PayPal to steal.
you sold something to someone who questioned it's authenticity.
you bought something from someone who had someone else question the integrity of what they sold to you.
you registered a bank account or credit card that someone else used one time.
you accessed PayPal at a friends house one time, and that friends account was frozen.
your friend used your computer to access their PayPal account, which was later frozen.
you sold an item that is a common item often sold by con artists who used PayPal to steal
you bought an item that is a common item often sold by con artists who use PayPal to steal
you accessed PayPal via an anonymous proxy service.
you sent more than $2000 to someone.
you received more than $2000 from someone.
you participated (knowingly, or unknowingly) in the "work at home" money shuffling scam.
you sent money to someone in foreign country that PayPal considers "evil."
you received money from someone in a foreign country that PayPal considers "evil."
you used your PayPal ATM card in a foreign country that PayPal considers "evil."
your account was "corrupted" by a criminal posing as a PayPal employee.
and other reasons that only the dark wizard of PayPal knows about.

Welcome to the world of PayPal customer service.

Paypal froze my account. How do I get my money back?
The key to the solution is knowing which one of the reasons above caused the account to be frozen in the first place. If they are accusing you of being someone else, you need to convince PayPal you are not. Most likely, PayPal is not going to believe anything you say. And if you admit to knowing the person they have linked to your account, it seems that makes the problem worse. It could be a legitimate error on PayPal's part. Like your phone number or address are the same ones used previously by someone else. Someone who had a problem with PayPal. So you might try showing PayPal that their information is old and outdated. If on the other hand, they are linking accounts based on ISP or IP, you'll have to prove to them when you got your ISP and that it's not at the same time as when the other person allegedly used it.
Your account could also be linked based on who you paid and who paid you. This will probably be impossible to resolve. If you made more than one payment or received more than one payment from an account PayPal has determined is fraudulent, the game is pretty much over. The only recourse I see is challenging the assessment made on the other account. You'd have to work with that other party to prove to PayPal that they are wrong in their determination. Hire lawyer. Spend money. Roll the dice.
It could also be you used a friends computer or they used yours. This is going to be very difficult. Or it could be any of the other reasons listed above. I would suggest you write a letter to the attorney general of Nebraska, California and your state. Tell them what happened, just like it happened. Ask that they investigate. Get their information on the Links Page( You might also hire a local attorney to write a letter on your behalf. Our experience is that PayPal completely ignores user complaints, phone calls, faxes, & email, but does respond to government investigators and private lawyers. From a user in the UK: People living in the UK can complain to the BBCs consumer watchdog program(, or the FSA or the FSO( or you can write to: The Office of the Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London E14 9SR.
They froze my account and demanded that I fax them documentation. I did, but they said they didn't get it. Now what?
First realize PayPal is asking for that information for their own purposes, not yours. Providing the information might get your account unfrozen if it's one of the "identity" issues above. However giving PayPal that information also provides them with information they could use against you if they don't believe you. If you believe this is just an honest misunderstanding, and you trust PayPal with your information, you should prepare copies of all the documents they ask for and mail them to PayPal. We suggest you create two sets of documents and mail them certified mail, Return Receipt Requested, to the two addresses we have for PayPal (see the FAQs page( with a letter explaining the situation. You should always send them certified mail, RRR, so you can prove that you did, and when you did it. When you get your green cards back in the mail, if PayPal has not resolved the problem, make copies, and write your letter to the Attorneys General of your state, California and Nebraska. (You can find this info on the links( page.) Include your letter to PayPal, your copies of the green cards and a letter asking that the AG's start an investigation. Don't bother playing the fax game. It's just a ploy/delay tactic.
Additionally, you may report complaints to the Complaint Assistance Unit of the Division of Consumer Services of the Department of Consumer Affairs by contacting them in writing at 400 R Street, Sacramento, California 95814, or by telephone at (800) 952-5210.
According to the terms of the class action lawsuit settlement agreement, PayPal is supposed to provide you with the reason your account was frozen, and the information they have (subject to their privacy policy and fraud prevention policy). You should ask for this information if they don't give it. It may tell you what direction you need to go to resolve the problem.
Also, note that just because you get your account cleared up this time, there is nothing to prevent PayPal from freezing it again. It seems, once an account is flagged, it'll always be on the "suspect" list. They rely a lot on computer analysis of accounts and too little on common sense.
Lastly, I have to say... PayPal is not crack. You can walk away from it anytime. I hope you'd step back and think about it, why would you want to do business with a company that puts you through all this in the first place?


For those of you who are first time visitors to, the information you are about to read is 100% TRUE.

For over 8 years has been assisting the public in making an informed decision about using PayPal. Every day, thousands of upset paypal users from all over the world visit seeking answers to questions like how to get involved in class action lawsuits, why PayPal froze their funds, why PayPal withdrew money directly from their paypal or bank account, why PayPal is holding their money for 6 months or longer and the list goes on and on.

For those of you who don't know this,
PAYPAL IS NOT A BANK. It is officially classified as a "Money Service". Therefore, PayPal does not have to follow Federal Banking Guidelines. These guidelines are in placed to help protect an individual's bank account from being frozen without warning, explanation, or recourse, for months at a time. Sadly, PayPal continues to do just that, to thousands of PayPal accounts, every month.

We currently have over 63,000 registered members who have documented countless thousands of complaints on this website. We even have stories from Ex PayPal Employees and Managers who resignedbecause of PayPal's business practices, as well as thousands of detailed horror stories posted all over our website about people being Robbed, Abused, Unfairly Treated, Lied To And Cheated By Paypal.

Every day we receive tons of emails from people who thought they could trust PayPal with their business only to discover, as so many before them already have, that there account has been limited and their
funds frozen, money held, or money pulled right out of their account. These people placed their trust and livelihood in PayPal's hands only to be told that their accounts have been locked indefinitely without appeal.

Explaining your version of what happened, in most cases seems to
make no difference. PayPal can refuse to provide you with detailed information from their investigation and does not have to disclose documents they relied upon to make their decisions.

You can expect to wait
AT LEAST 6 MONTHS before you see your money again. In some cases, the wait time can EXCEED 6 MONTHS and run into a shady Grey area, where "NEVER"Seems To Be A More Realistic Time-Frame.

People who complain about it have reported experiencing
terrible Customer Service including extra long hold times, delays, and dead-end auto-responder e-mails like this one:

[Thank you for contacting PayPal. We apologize for the delay in responding to your service request.

After review, the decision has been made to keep your account locked. This decision cannot be appealed.

If you have any further questions, please reply to this email.]

Press them a bit harder and you may convince them to do an investigation. However, don't count on PayPal considering your side of the story in the investigation. Just consider this an easy way to Blow You Off And Get You Off The Phone.

PayPal is no stranger to complaints
. According to the San Francisco Chronicle, there are approx. 100,000 COMPLAINTS OUTSTANDING AT PAYPAL. In many instances disputes can run on for months leaving people frustrated and out of pocket as they are unable to access their accounts.

But Why would Paypal want to routinely freeze the funds of their merchantsas a part of their core business model?

Here is a clip from the San Francisco Chronicle that basically sums it up:

U.S. District Judge Jeremy Fogel of San Jose refused to dismiss a lawsuit that seeks class-action status on behalf of thousands of PayPal customers nationwide. A common allegation is that the company brushes off or stalls customer grievances for months and meanwhile freezes the customer's account and pockets the interest(So that's how they make their money!). No wonder they freeze so many accounts!

When you open a paypal account, you agree to allow PayPal to play Judge, Jury and Executioner in every dispute situation. Your money is taken from a customer's credit card, or paypal account, and transferred into a paypal account, not your bank account.

Make No mistake about it: PayPal profits handsomely, earning interest on the millions of dollars left sitting inside thousands of frozen paypal accounts.

So What Can You Do To Protect Yourself?

Is it true or not?

Thanks in advance
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Old 01-14-2010, 02:23 PM
Michael Michael is offline
i Wanna Learn Too
Join Date: Jul 2009
Posts: 169
Thats ture
but , if you continue a legit and legal business and don't try to cheat paypal
you'll definitely have your problem account without any problem .

all of us had serious problems with paypal but i can say its still the best and the most popular payment processor
Funny world it is
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Old 01-14-2010, 11:22 PM
KCtech KCtech is offline
Join Date: Dec 2009
Location: Denver CO
Posts: 59
Default hmmmm
I may be bias because I setup merchant accounts, but can you afford for your money to be frozen and not have access to it for 30 or more days all the while not able to sell anything using PayPal because your account is being reviewed?
check this store you can buy things with a very cheap price

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Old 01-22-2010, 04:24 AM
Journals009 Journals009 is offline
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Join Date: Jan 2010
Posts: 9
Wink Truth Nature of Paypal
The truth nature of Paypal is always unknown. Will someone clarify the issue.
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Old 01-24-2010, 06:19 PM
saramedows saramedows is offline
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Join Date: Jan 2010
Posts: 19
PayPal is just providing services with the collaboration of different banks and multinational companies. so the thread starter better know, the problem with his account. However almost all things have been mentioned in right way.
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Old 03-01-2010, 06:52 PM
supershine supershine is offline
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Join Date: Feb 2010
Posts: 220
Hey this is really interesting and although I am shock a little bit about the story. I love this information at least we got a backgrounf about paypal.
check this store you can buy things with a very cheap price

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Old 03-09-2010, 04:15 PM
twitter twitter is offline
Join Date: Mar 2010
Posts: 22
they have houndrats of clients, probably if you cheat paypal you will get frozen account!
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Old 03-19-2010, 09:19 AM is offline
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Join Date: Mar 2010
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oh wow that's a lot of money to get frozen..
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Old 04-05-2010, 10:43 PM
TriNi TriNi is offline
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Join Date: Apr 2010
Posts: 3
I use Paypal as well. Not to deal with HUGE sums of money such as thousands of dollars.. well at least not yet, but I've been dealing with hundreds so far.. and I've never had a problem with them. I think as long as you follow their rules, and don't try to use any kind of scams or fraud.. you'll be fine.
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Old 04-06-2010, 06:37 PM
breadnbutter breadnbutter is offline
Join Date: Apr 2010
Posts: 28
I wish you the best of luck. I wish I had some advice to help you with =(
check this store you can buy things with a very cheap price

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