December 10, 2001 9:44 PM   Subscribe serves to caution potential customers and those using PayPal for auctions or business of PayPal's faults. From their dicey terms of service to their unhelpful/unavailable tech support, to story after story of PayPal's wrongdoing, to a whole list of links to other people having PayPal problems.
posted by mathowie (26 comments total)
I've never had a problem with Paypal.
posted by kv at 10:12 PM on December 10, 2001

I haven't had a problem with paypal either, but all of these stories start out "for X years I used paypal extensively with no trouble, and then..." It worries me a lot.

Paypal has been convenient, but K5 is setting up to accept credit cards directly for things, and I think I'll encourage people to use that rather than paypal in the future. Just too many horror stories. We'll probably still accept paypal, but I don't think I'll be keeping much money in the account.
posted by rusty at 10:18 PM on December 10, 2001

I had a major problem with paypal, the second time I used them, and my money was locked up (not much thankfully) for several weeks. Their tech support was a huge pain, so I generally avoid them if at all possible at this point.

With that said, pretty much any company, esp. newish ones, could get a similar list of problems. If you figure most companies have issues with x% of cases, and help/support is generally lousy, you could see a site like these anywhere. Nobody takes the times to make and/or post to a
posted by malphigian at 10:24 PM on December 10, 2001

And further, reading the stories, I'm now terrified, and will probably just cancel my account altogether. What gets me is that apparently, they have given themselves authorization to take whever they deem appropriate out of whatever bank account you tie to the paypal account. Now that scares me. Yes, I realize, it's buried right there deep in their legalese, but yeesh. I don't particularly want to have any of my bank accounts subject to a provision like that.
posted by rusty at 10:24 PM on December 10, 2001

Whether this is accurate or not, the paypalwarning folks have been spamming newsgroups pretty heavily. Some have accused them of doing so because they're getting kickbacks from alternates they mention. Do a google usenet search:
posted by cps at 10:42 PM on December 10, 2001

*cough* - swiped from slashdot - *cough*
posted by shoepal at 10:51 PM on December 10, 2001

yeah, (unfortunately) it seems odd for people to put time, money and effort into a website that's just warning people about a web service. one web service. is revenge and personal satisfaction enough? or could they be doing it for other reasons. colour me skeptical.
posted by kv at 10:54 PM on December 10, 2001

Geez, Matt ... had anyone other than you posted this site I'd think that MeFi just got spam-posted! :-)

We've used Paypal virtualy since day one, for hundreds of transactions, many of which were for hundreds of dollars at a pop, and have never had a problem.

I've also done some volunteer time on various boards where folks come to help get their Paypal problems resolved (I work in customer service for a very large mail order company in real life), and can only say this - 90% of the Paypal horror stories you hear start from a single point: small time users not understanding what a "Credit Card Chargeback" is, and how it can effect them.

Yes, certainly Paypal makes a certain number of mistakes, as can only be expected when they deal with hundreds of thousands of customers per day, and yes, I'll be the first to admit that their Customer Service department is among the worst I've ever seen in fifteen years of service consulting, but I'll never believe that they are the Satan Incarnate that many of these anti-Paypal sites would have us believe. I've come to the point where unless I see it on a police report or a court document I won't believe most of the "I'm an innocent bystander who got hosed" stories, because, almost always, after you probe a bit you find out that, well, yes, the "poor defrauded user" might have done something a bit dodgy or questionable somewhere along the line (again, not always true, but more often than you think).

Bottom line: Its the internet, and just about anyone can say just about anything and lots of people will believe it ... and now more than ever, there are webmasters such as who appear to be willing to post every nasty anti-Paypal story that comes along (without, often, bothering to check the details or truth of the story), just to further their ... well, their vendetta against

Color me skeptical as well.
posted by anastasiav at 11:10 PM on December 10, 2001

Yes, and this was started all by a usenet spam from the other day - the anti-Paypal site having a link to Citibank's rival c2it pay service. Hmmmm...
posted by jca at 12:10 AM on December 11, 2001

For what it's worth, I heard about the site via Phil Agre's RRE list, and was skeptical about whether the site was true or not. The links heading off to places like seem to hold up the stories on, but it could be one giant scam for citibank's rival service.
posted by mathowie at 12:46 AM on December 11, 2001

I think with just about any product there's a "" or a "".

Companies are going to have problems, and some people are going to run into them, while most receive nothing but good service. I doubt PayPal is any different.
posted by Mark at 1:02 AM on December 11, 2001

I'm a bit annoyed at people who say that just because they don't have a problem with PayPal, it means that no honest user should have a problem. Whether it is a citibank conspiracy I cannot say, but I do know that my PayPal account was suspended 2 weeks ago (without informing me afterwards), and after faxing in the requisite information, PayPal has yet to contact me with information about further action. Even if I discovered these sites before using PayPal for transactions, I wonder if it would have made a difference, because in my mind, I was doing nothing wrong! Sure there may be chargebacks, or something fishy going on with someone I accepted payment from, but until they tell me, how will I know?! If you're curious, I am moving, so I sold merchandise who's total exceeded $2,000. Is that a crime? I won't know until I hear back from PayPal...

Sorry, I'm venting. But the bottom line is: my animosity with PayPal comes not from them restricting my account, but from their silence on the issue. In my mind, until they begin addressing my issue, they are stealing $2,000 from me...
posted by harrycaul at 1:06 AM on December 11, 2001

Ugh, I'm so tired of hearing this crap about paypal being so evil, etc etc...

Now, some of the complaints seem valid, such as accounts suspended for unknown reasons..

However, I am tired of hearing sob stories about people ripped off by someone on eBay or elsewhere, and "PayPal didn't do anything about it"...

PayPal has always advertised itself as being akin to "emailing cash". If you paid a guy on the street $20 to go back to his apartment and get you some item from it, and he didn't come back, would you blame the US government for not having insurance on the $20 bill you lost?

PayPal is NOT an escrow service, and is not meant to act as any sort of intermediary between transactions. It is nothing more than a more convenient means of transferring money than cash or money order.

I use paypal frequently, and while I've had no problems, I'm sure there are some people who have. Regardless of this fact, the preposterous moanings of people complaining that PayPal didn't act as the police for them are getting rather old.

The moral of the story: Don't buy stuff from people you don't trust.

Also, when using paypal, always keep a $0 balance. I don't know why you'd want to leave money in that account anyway. I keep my balance at $0 by withdrawing immediately upon receiving a payment...
posted by twiggy at 1:22 AM on December 11, 2001

I don't doubt there's people who have had issues with PayPal. I also don't think there's a "giant scam".

But the tone of the paypalwarning site is a tad too hysterical for my taste; that combined with spamming newsgroups (which the paypalwarning folks denied was their doing), and the fact that paypalwarning was getting paybacks for c2it signups from their page (which they admitted, but claimed irrelevant) does make me suspicious of motive.

Caveat emptor applies with everything out there.
posted by cps at 1:41 AM on December 11, 2001

I agree, Skallas. PayPalWarning does a good job of highlighting an important fact about the company: It isn't a bank, so customers have none of the protections they could normally expect in dealing with a company that handles their money. I use it for small auction payments and the like, but would never trust it with anything more substantial.
posted by rcade at 6:08 AM on December 11, 2001

i was reading the wall of shame and noticed that a great deal of the problems seemed to arise when people started verifying their accounts by giving out their bank account numbers...

i don't know about anyone else, but i've never even considered giving paypal, or any company of the sort, my bank account number... at least with a credit card, you have a half decent chance of getting unauthorized charges reversed.
posted by jerseygirl at 8:08 AM on December 11, 2001

Jerseygirl -- that's what they require in order to open up a Paypal account.
posted by jennak at 10:19 AM on December 11, 2001

No, they don't. You just need a credit card account.
posted by jerseygirl at 10:47 AM on December 11, 2001

They require the bank account number if you want to accept payments. You can send payments without it.

I don't think it was always that way, I think it is a newer requirement.
posted by daser at 10:56 AM on December 11, 2001

Jennak -- I should clarify my previous point -- when you sign up, you put you're allotted a $1000 spending limit and labeled 'unverified' until you 'add and confirm a checking account' and confirm your email address. You are constantly prodded to add a bank account to your profile, but if you do not do so, it doesn't hinder your Paypal spending (up to the $1000 limit).

"An Unverified member is one who has not completed the bank account verification process. If you have not yet done so, you can confirm a bank account to obtain Verified status."

Bank account number disclosure is not required at sign up for a regular account, it's just an incentive to get more spending. Optional in any case.
posted by jerseygirl at 11:01 AM on December 11, 2001

LiveJournal uses PayPal as its primary service for processing accounts. Recently, we had problems with some of the accounts people paid for with PayPal not properly notifying us, so we requested support... and not a lot was forthcoming.

Fortunately, I knew a veep over there, who was extremely helpful. We started getting replies immediately. Several phonecalls and numerous emails later, the problem was resolved - it turned out to be a bug in our code that they helped us detect. We even had an account rep assigned to us to help us out, as needed.

Overall, I am very impressed with PayPal. They are best, most ubiquitous service with the lowest rates, and they do a difficult job and make it look easy.

Yes, they may have less-than-adequate support in these dry times, but the problem is that their support is pure overhead - overhead doesn't generate revenue, and is death in this economy. If they have to provide weak support for awhile in order to make it through these rough days, fine with me, because the web needs them. They're irreplaceable, really.

Yes, they may provide better support for big sites over individual users. Yes, they may not be insured by the FDIC. Yes, they may even outright suck at times, but that doesn't mean they don't suck less than their competitors...
posted by insomnia_lj at 12:01 PM on December 11, 2001

insomnia_lj: They are best,

Obviously a claim in some dispute.

most ubiquitous service

This is true.

with the lowest rates

The lowest rates of who? Compared to traditional CC processors, their rates kind of suck. They're at least at the high end of such services.

There seem to be two major classes of horror stories. The ones that run along the lines of "I didn't understand the service" don't concern me. The ones that describe paypal mucking around with people's bank accounts do concern me, very much.

And when the rest of us need some support, will you give us your friend the veep's phone number?
posted by rusty at 2:44 PM on December 11, 2001

I just got finished dealing with a small PayPal fiasco that wound up being my own fault because I am apparently stupid. The first time I talked to customer support I spoke to a rude, stupid man who was incredibly annoying and impatient. I'm pretty sure I was quite pleasant to him and gave no clues to how stupid I was being.

The second time I talked to customer support I spoke to a really nice and helpful woman named Amy who suggested various solutions and was really great. Her being so excellent reinfuriated me about the first guy I had talked to weeks before.

Of course in the end it all wound up being my fault and the only wrong-doing on PayPal's part was employing a guy at customer support who was a bit of a dick or was having a bad day or something. I have my money now, I'll keep using them.
posted by frenetic at 5:18 PM on December 11, 2001

I have a couple questions. First why would PayPal care if people are using for fraud? If they just are using it as an "e-mail cash" kind of thing then I would think it would be in their best interest to turn a blind eye unless law enforcement became involved (with warrant and what not). I'm not seeing how they are benefiting from closing suspect accounts.

Which brings me to my next question, if they are truly evil and just want to drain your back account... how do their accountants deal with that extra cash? This isn't a one man shop that can cover up "expenses", they have to report things. Which also means there would have to be a policy on to when to steal the money and where to put it, etc. Such a prominent company can't have been flushing extra funds in without some kind of leakage from the inside. When you think about this as less as "businesses are evil" and more like "why would businesses do this" then things start to fall apart.
posted by geoff. at 6:43 PM on December 11, 2001

It's more like, they want people to feel confident using their service. They're not a bank, but they want people to feel as secure using PayPal as they do if they are using a credit card. Liability has little to do with it; no one is, for instance, going to go after Amex for facilitating certain terrorists' purchases of certain airline tickets.
posted by kindall at 7:35 PM on December 11, 2001

I had paypal depost about $100 into my dad's checking account, but somehow only a few cents made it.
posted by mcsweetie at 11:23 AM on December 13, 2001

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