I have used PayPal for over a decade, usually once or twice a month to make small purchases when buying something off Craigslist or Facebook marketplace. I also occasionally use it to split dinner with friends. I don't use it for business and I don't use it for anything sketchy.
I recently received an email from PayPal saying that my account had been permanently banned. No appeal, no reason given. I logged in separately to make sure this was a real email, at first I thought it must be phishing. It was real.
The only thing I can think of which might have precipitated this. I got a few invoice requests though PayPal a while ago from people/businesses I had never heard of. This is a well known and documented scam where they spam invoices en-masse and hope some people pay them accidentally (I did not pay them, but the PayPal UI makes this very easy to do and there is no way to decline or dismiss the requests).
Not a big deal for me since I don't use PayPal for anything critical, but I figured a reminder was in order in case anyone still thinks it won't happen to them. If it could happen to me, it can happen to anyone.
Will be removing my bank account from it right now.
I refuse to use SMS as a second factor, so using it as the _only_ factor for what is effectively a bank account is absolutely batshit insane. They’ve completely lost their mind.
https://www.paypal-community.com/t5/Managing-Account/How-do-...
(No affiliation; I'm just a happy customer.)
There are a lot of checks on top of that which individual banks may or may not implement or care about, but at the end of the day those two numbers get you 99% of the way there. And for an organization the size of PayPal they're really going to be given the benefit of the doubt by banks.
That was the end of my interactions with PayPal.
Luckily I paid through my credit card on Paypal since I disputed it through them. If I had linked my checking account, they would have help a fraudster steal 700 dollars from me.
I went to another state to pick up a car I had bought. I needed to pull $10k of my own money in cash out of the my banks to pay the seller. I checked with the banks before I left to make sure it would be OK.
I arrived in Utah to meet the seller and we go to the bank to do the transaction, and my banks suddenly don't want to let me cash out that much money. I ended up having to kludge the transaction together with some my cash and credit card advances. I didn't quite make the full sale amount so the seller let me take the car and sent me the pink slip later.
Second fact: online banking used to do instant bill pays. Now anything above a trivial amount has to be scheduled. It didn't used to be that way.
Combining these two suggests to me there is a liquidity shortage in the retail banking system. Paypal may be under the same liquidity pressures and using fuzzy TOS reasons to hold money because they don't have the liquidity to handle all of their transaction demand.
The thing I wonder about is why did online banking start requiring scheduled payments for anything over a $100 or so about five years ago? Now they often make me wait a few days to clear a payment, unless it's internal to the bank itself (e.g. my checking account to pay off my same bank cc account).
I'm sure they're investing my money short term and the holds give them more time and flexibility to do so. However, tying up account money in short term invesments means their liquidity will be reduced.
If you were PayPal would you not invest user funds overnight (or longer) based on projections of inflow/outflow? If not you'd be cheating your shareholders. However the temptation to hold on to user funds as long as possible would be constantly present. That's almost certainly what's happening.
Paypal receivables account has no overdraft protection and not overdraft allowance. If a withdrawl over the value of the account comes in, it is denied.
Connect that account to paypal.
Next, in the Paypal receivables account, setup an external transfer from the receivables account to the main account. You will have to validate the ownership of the second account usually by posting two small transactions that were auto posted to the account as part of the validation process. This takes a couple days. Once that is done, you can transfer money from receivables account to main account but not the other way.
Transfer money out of paypal to the receivables account, transfer money from receivables to main. Use a credit card to spend money with paypal.
You can set up two way transfers if you need to put cash into that account for transactions and you still get a similar level or separation, I just prefer to use a CC instead because they'll help you out if you want to dispute or reverse a transaction and paypal may not.
Note that this may not work everywhere in the world. For example, in Australia, the legacy direct debit system will happily put an account with no overdraft into negative balance.
I’m not sure if the modern replacement (PayTo) has the same behaviour. In any case, legacy direct debits will probably stick around for years.
The best option is to simply avoid PayPal.
My bank (BoA) allows me to have multiple checking accounts so long as you satisfy the initial deposit requirement, and maintain sufficient balances in other linked accounts, so this looks like a good way forward. I think I'll switch other apps to use this new receivables account to contain their potential blast radius.
but I definitely have the same question, I always deposit anything sent to me via paypal, venmo, whatever right away so there's zero balance.
good luck telling a bank to un-authorize someone from being able to deposit or remove money from your account though, I had to call them up and they didn't even seem to know how to do it.
somehow it isn't just a checkbox, it seems to me like revoking that permission should be vastly easier than providing it...
Why?
"But Zelle’s terms are clear: You can’t cancel a payment once it’s been sent if the recipient is already enrolled with Zelle. And if you send money to someone you don’t know for a product or service, you may not get your money back for a product or service that’s not delivered."
https://www.elliott.org/problem-solved/how-to-get-your-money...
The difference with crypto is that you're not going to be filing a Regulation E dispute against someone on the other side of the planet.
I got scammed 500 USD using Wise, so it's not like these services help you in any way.
That said, with things like Wise (which I'd never heard of until your comment), it pays to read the fine print and avoid the ones that don't offer any real protection for you.
Not your keys, not your coins.
"Don't use paypal, cash solves this!"
Both systems have the same problem, in that people need to use intermediaries to accomplish the transactions they want to accomplish. Crypto solves nothing, it converts problems into different problems.
This site also has a very very US focused attitude, especially around banking and finance. I wish comments from people from other countries with far deeper issues would speak up more so that people on this site would get a better understanding of what happens to them and why this is a bigger issue than just paypal.
The fundamental difference with all these Internet-centric companies is they have no useful support channel, nobody that will talk to you, you're just arbitrarily blocked with no recourse, your money is stolen, end of story.
Traditional banks have branches where you can at least go talk to people. For example in the last year I've been helping an elder relative manage their banking and that has led to the account being blocked a handful of times (somewhat sensibly, as I can see how some of it could've been perceived as unusual activity). But they have a branch with actual humans (no AI bots) so I go in and explain and provide paperwork and all is fixed. By now I'm on first-name basis with one of their support agents so I can just call them directly, they know and remember me and all the circumstances of the account and have the authority to fix things.
Although admittedly, in this case it looks like their previous post was just a comment somewhere, not a full Tell HN post like this one. So I wouldn't get too bent out of shape over this case.
EBay just banned my account last week for listing a Macbook Pro with stock image, removing it to adjust the title, relisting it with a photo of the "About this Mac" to show that the specs were correct. (Can't think of anything else that would even be remotely related).
Also, the messages component of the Ebay web app was completely down the whole time so it made it impossible to respond to any users that were asking questions about the MacBook Pro. Completely insane. Apparently making listings is "harmful to the [Ebay] community"
100+ phones. Mostly "activation locked", all "no charger, no accessories".
50+ laptops, all "no charger, no accessories".
All blatantly stolen goods.
Nah bud. How do I know you are not the person who stole it? So I guess he went back to the seller, asked for an exchange. Seller said no, so he said “I have all your information, and I have the legit owner, so give me a different phone or I give him your info to take to the police.” Seller exchanges the phone and guy gives me the info anyway, including the listing.
I take all the above discoveries to the police. Who, I kid you not, first say “he’s probably not the person who stole it”, though I could have sworn selling stolen goods was still a crime, and said as much. They declined to get involved.
That's why I wonder at folks stealing iPhones and iPads. They are basically unsellable.
and thankfully backed up all my critical data, but still have not been able to get a hold of anyone at Amazon.
It seems like our ability to interact with a corporate entity has become an afterthought + that all the machinery driving customer interactions (UIs, special support chat hidden, dark patterns everywhere...) have become a total impediment to actually getting something fixed.
I thought it was that PayPal was built, then bought by eBay so the could double dip.
[1] https://jessesingal.substack.com/p/i-fought-the-paypal-and-i...
There are legitimate reasons companies pushed for arbitrtion. Namely streamlining and keeping away frivolous lawsuits, but there's the side bonus (for them) of scaring people away. Like that author described, companies make arbitration out to be this big, scary, unwinnable process, but it's really not like that at all.
Unfortunately I can't share the details, but someone I know filed a wrongful termination case against a large tech company. They dragged it out for two years with motion after motion, running up his legal bills every month. He hung in there and won eventually.
So don't assume they'll just roll over and settle.
I'll repeat the advice I gave there: run away from PayPal as soon as possible. It's not worth the risk.
Examples of paypal being shitty abound. Why do people keep falling for it?
Surely you can take them to court (if you have time to burn)?
Absolutely correct.
Even worse, winning the lawsuit does not mean you'll see the money. It only gives you the right to do things like attach liens onto their assets. You have to actually do all that footwork (and pay the associated expenses) yourself.
So suing is a clusterfuck nightmare, and after winning, collecting what you're owed is a second clusterfuck nightmare.
The truth is trust no banks—I had Mercury Bank and First Republic help someone steal over $120,000 from me—I'm not kidding!
Trust no one-distribute your money in lots of places so if one is crooked you are not dead.
Franchise Tax Board of California felt like I owed them taxes (which I didn't) and emptied one of my bank accounts without even giving any advance notice. Luckily it was a smaller one. A year later and I still haven't gotten my funds back, even after having my accountant spend hours on the phone with them and them promising to give it back.
And you're right... people on this site time and again keep going after crypto as being a horrible scam... yet they keep on using Paypal. Well, if you hate crypto so much, what would be a better solution to the Paypal problem?
Op posted this before: https://news.ycombinator.com/item?id=30269141
I go on about (most) crypto(-related things) being a horrible scam (because it is) and also have avoided PayPal since very early in its existence, except in the very rare instances where a business for which there is no alternative requires it, which I’ve run into exactly once in the last decade (was a more common problem in the early 00s.)
The world isn’t a dichotomy between crypto and PayPal.
anecdotal evidence isn't really worth much, sorry.
there is a reason why this story is trending on HN 5 months after the op originally got banned. it is because this keeps happening over and over again to untold numbers of people. the thread is full of endless amounts of similar complaints. you're here responding to the comments at the bottom of the page. you can choose to ignore all of that and make it personal to your experience, or you can listen to the warnings and try to find solutions that help others beyond just yourself.
> The world isn’t a dichotomy between crypto and PayPal.
really, because you said so?
Ugh, sorry to hear you are going through this.
It's astonishing how incompetent (and/or corrupt) some organizations with power are.
Anyway, more fuel for my fire to make things better.
But the people creating and maintaining crypto wants neither of the above, because they all detract from its value as a scam.
I have never had a problem sending someone crypto (I'll admit though, offramping can be a b*tch). I often lose hours of my life on hold with banks when they block a payment and/or freeze an account for a regular transaction.
> low transaction tariffs
If you avoid BTC and ETH and use something like XLM or NEAR you can get dirt cheap fees and fast settlement times.
> stable valuation
Yes I 100% agree with you there.
> But the people creating and maintaining crypto
I would agree with you and say perhaps between 30% and 90% of people creating and maintaining crypto only care about short term gains, but I'm an optimist and think the minority that believes in it will triump in the end.
Any other recommendations for invoicing Australians for software/SaaS from the US?
Or Wise, which will just give you a (virtual) account in Australia: https://ale.sh/r/wise
Also, you're exposing yourself to a non zero risk of whatever exchanges you're using at the time to process your transaction/withdrawal go bust.
And on the crypto side, USDT transfers on Ethereum (the most expensive chain) are usually less than $5. Currently about $3.40[2]
SWIFT is much more expensive and slower, feel free to check SWIFT numbers.
[1] https://help.coinbase.com/en/exchange/trading-and-funding/ex...
I can't remember the exact legal/technical wizardry they've used to get around this, but this has always been a crucial part of the PayPal business model. It's not a bank, it just makes people think that it is one.
As others have said, don't keep any money in PayPal and if possible, try to attach a secondary bank account to your PayPal account to limit your exposure. I've had a PayPal account since I was a teenager and knock on wood have never had any problems, but I always immediately transfer the money out of PayPal as soon as possible.
https://en.wikipedia.org/wiki/PayPal#Offices
But, I've heard several times they have most of the law firms in Luxembourg on retainer. So, it's extra difficult taking them to court (with representation), due to "conflict of interest" with this majority of Luxembourg law firms.
There are many further examples of their EU legal approach here on HN, if that helps. eg:
* https://news.ycombinator.com/item?id=32742258
* (lots more from a quick search)
It sounds like they've removed my card from the UI, but they can still charge it if they want.
In any case, I'm going to close my PayPal account and hopefully cancel that card within a few weeks.
* are notified of the ban * there is an explanation * some process to appeal
This will get even worse the bigger the tech players get. They can afford to throw a lot of people under the bus because they are only a small percentage of users.
The account closures are driven by the BSA/AML process (and briefly by operation chokepoint). By law, we are not allowed to tell the account holder the reason for the account closure - this is to prevent scammers (and the overwhelming majority of closures were of shady accounts) from learning the detection pattern and changing their behavior.
So, don't blame the banks/card programs - blame the regulators.
https://www.cogini.com/blog/paypal-know-your-customer-failur...
I'm out of the country, I complete 4x $20 payments to a friend I'm visiting. I try to do the 5th and it wants to me to "Add a Mobile Number" to verify my identity.
Brilliant PayPal. You already have my email+mobile on file. It says confirmed. I have 2FA enabled. And now, to verify my identity, you need me to enroll a "new" phone number. How in the **, exactly, is that going to verify my identity. And how screwed up are your systems that your left brain and right brain are out of sync.
Granted, I basically have to call them every 2 years for some similar sort of "your website just told me to go F myself, can you press the magic buttons to fix it since you can't, you know, actually fix your systems.".
EDIT: The clencher to this story is calling PayPal and getting the sweetest older lady from Texas that, without asking me any further verification questions, pressed a button and said "okay, try again", and wouldn't tell me anything else. Only to hit the same issue ~24 hours later.
I have a story like this for Schwab. I have a story like this for both my credit unions. Capitalism driven banking baby. What a joy.
Most of these websites only uses PayPal as a method of payment, kinda forcing the user to do the same.
https://medium.com/incerto/the-most-intolerant-wins-the-dict...
Tell them you can't purchase with them because they don't offer alternative payment.
it's the other way around, in my case, they pay me using PayPal.
With that in mind, it doesn’t even make sense to me why payment receivers accept it, because there would be huge adverse selection in who uses PayPal - if the only value add is that it makes it really easy to chargeback, your customers using it are probably much more likely to chargeback.
Of course chargebacks can be justified, but they can also be used to steal things. In the old school internet where everybody was afraid of handing over credit card details it might have made sense to use PayPal - maybe it still does in countries with low CC adoption - but it doesn’t seem to be generally useful outside of that context, except for chargebacks.
And then on top of the chargebacks you get all the jank inherent in a really old legacy product working in a regulated space, that is also integrated with tons of other payment platforms owned by the same company, which likely share a lot of policies/code in a way that creates tons of bugs and edge cases.
I am sure their user agreement gives them some leeway to hold the funds for some period of time, but I would be surprised if the law allows them to permanently keep the money, with no legal recourse.
Seems like this is might be the case of it? I'd imagine one of these people turned out to be scamming people they'd ban accounts that have transacted with them?
> I don't use it for anything sketchy.
Sending money to strangers seems sketchy to me. I certainly wouldn't do it. shrug
Anyway, PayPal isn't "special" - you risk being banned from literally any financial institution for seemingly no reason. You can read a million stories about people being banned from credit cards and banks online.
But even if he was, what's sketchy about it? I've purchased things from strangers and sent them money with PayPal before. Is that not legit?
fast forward a number of years, and i cannot access my account anymore because KYC and other regulation requires identification, which doesn't match the account name. there were just over $100 in the account, but they are not mine anymore.
A good reminder for me that I still need to move off of their platform.
That self-exceptionalism? Yeah, most of everyone that hasn't already internalized not to use PayPal will do the same thing you did.
It's futile. Let me guess, do you use a Password Manager (bonus, other than LastPass?)?
Here's another futile one, you, yes, you, really need to make backups and replicate time-snapshots off-site.
Yeah, but... you know... I'm like, busy and stuff. And realistically it'll never happen to me anyway.
When doing business I expect to be paid by direct bank to bank transfer, regardless of how small the amount is. Even between friends, we send bank transfers. No cheques, no 3rd parties, no escrow.
Luckily the only subscription linked to it was my Nintendo Switch online account, and that was easy to fix. I didn't have any funds stored in the account luckily, but there's no way I'm risking anything else with them given the experience I had with customer support.
Maybe I should just try to get banned instead?
(Not that they make it easy, mind you)
Our ACH system (plus the uncertainty of money clearing, holding periods, fraudulent checks / debits) creates such bad side effects for everyone, this PayPal situation included.
I know there are some efforts to initiate a Fed-administered transfers system, but have no idea how it's going.
We (with US government as a mediating authority) don't seem to be in control of having an effective banking system, and it's just getting more confusing over time.
What's really stuck with me is that it seems that anti-fraud legislation in many countries allows PayPal and, most importantly, traditional banks to accuse a customer of fraud and close their account without having to provide the actual reason that triggered the anti-fraud checks.
Consider people who sell through Amazon or even use Amazon for distribution. Amazon can arbitrarily decide you’ve violated their TOS, suspend your account and freeze any funds you’re due for things you may have already shipped.
You may be in limbo for months. It might be impossible to reach a human to resolve it if you’re not of sufficient size.
I get the need to combat fraud but what we have here is a financial incentive for companies to freeze and basically steal your money. Even if you eventually get it back just holding it has value.
That’s a problem.
Well, I've been better off without Paypal, their ban did me a favor. Paypal will die in a fire of its own making.
Venmo etc. probably have similar risks.
Use a credit card for more expensive stuff. If you are not able to get a credit card for some reason, I'm not sure what to recommend as an alternative. Suggestions?
I used PayPal as a primary payment source for a business I had 10 years ago. I’m still receiving messages about someone “canceling a payment request” from 2010, so there is definitely a way to do so.
Would it be safe to use it that way?
Yeah it seems kindof arbitrary. I've abused my account doing weird stuff for years and it's still fine.
Not sure anyone you can fully trust.
This was 10 years ago, to be fair, but have you tried simply calling support and explaining what happened?
I sent some money to a colleague's PayPal account who was collecting money for another colleague's leaving collection. I used the name of the colleague who was leaving as the note/reference on the payment.
A few days later I received an email from PayPal asking me to provide the date of birth of the colleague who was leaving and that the money would be held until the request was resolved. They claimed it was to meet regulatory obligations.
I called them and said I refuse to provide the info because I felt it breached GDPR laws and besides, it had nothing to do with them.
The money was eventually returned.
They subsequently claimed it wasn’t intended to be their policy. And then they said oh yeah it actually is our policy.
UK banks do this as well, could be anything from having direct debits not sent despite plenty of funds in the account, so you lose things like domain names, websites, to being banned from accessing funds from your account and caught in a regulatory loophole with the banks refusing to talk to you. Their internet surveillance of customers is excellent!
I've been locked out of my bank account for 6 weeks with the banks refusing to talk to me, Cahoot (Satander), GiffGaff are the latest to mess me around, basically they can d546dcddb8d207a80fe40e762023fbee !
Because I remember what the employees of the state did to me as a kid. Scopolamine is used on infant age primary school kids right here in the UK.
