I keep hearing about Paypal problems. Should I avoid Paypal?

PayPal blows chunks. There is nothing convenient about it. They will keep your money at their whim for reasons they won't disclose. It costs you great amounts of time to try to get it fixed. I use computers and do electronic transactions daily, but will not use PayPal again - trouble is, they won't let me close my account! No one needs this kind of brain damage, and even if I have to deal with payment via snail mail, it is well worth it, because at least I know I will get it eventally. Can't say that for PayPal.

I know a company that does the same thing against Paypal. It's called www.ezLAWSUITS.com

PayPal recently released my funds to someone after that other party provided a bogus tracking number for an item delivery. Even after I've provided USPost Office investigation information documenting that the tracking number was bogus PayPal just blows me off. PayPal blatantly says that the other party provided "a tracking number" etc. so the case is closed, even though the tracking number has been documented as having nothing to do with me or my transaction - Incredible.

I used to sell computer related items on ebay. There was a point where I was at my peak with laptops, my most expensive item. I sold over 10 in one week(averaged 3 a week), among other things, and paypal immediately gave my account 'limited access' and ebay in turn suspended my account, both actions occured nearly simultaniously without any warning. My feedback was almost 200 without any negatives. As requested, I provided receipts for all my merchandise, some dating back a couple months and faxed over my apartment lease agreement. My buyers were somewhat understanding at why I wasn't shipping their items. After nearly TWO WEEKS paypal tells me to ship all items. After the buyers state they received them, they would consider releasing the money. I didn't think it would be wise to ship over $5,000 of merchandise only to have paypal 'consider' if they would give me back my money. I refunded all the money to my buyers and let each one know my situation. Some were understanding, some left negative feedback, some had already filed chargebacks with their credit cards and some even had their accounts set to limited access and were very angry with me. I had NO INCOME from my ebay business and was sitting on close to $15,000 worth of inventory with a paypal account that had limited access and a suspended ebay account. I ended up paying finance charges on my credit cards for a few months while taking a hit on my remaining inventory by dumping it ASAP on craigslist. The funny thing is, when my account had a few thousand dollars in it while it was 'limited access' paypal stated they wanted to start to process of closing 'our relationship'. They said I would get the money back in 180 days. Well, after the chargebacks hit and I refunded all it, my account was negative. At that point paypal said they cannot close an account with a negative account! I had to close my bank account and all my credit cards that were tied to paypal in fear what paypal might do. Looking back at my ebay account littered with negatives at the end and no longer a registered user, ebay/paypal made me out to look like a deadbeat seller who tried to pull a fast one. I HATE ebay/paypal.

You just have to treat it for what it is: another on-line banking service. Personally I find it fast, convenient and reliable.

I have to disagree with you. PayPal is NOT a on-line banking service in any way, shape or form. They are not regulated by any government entity and follow no banking accounting practices but their own. They are NOT FDIC insured either. Should they disappear from the internet some day, so will your balance within PayPal.

Don't get me wrong, I've been a member of PayPal long before they were even called PayPal. I just want the facts to be clear.

Fact:

1. PayPal is NOT a Bank.
2. PayPal will do Credit Checks on you when you sign up with them.
3. PayPal will request your Social Security Number (SSN) when applying for their credit card (HIGHLY NOT recommended).
4. PayPal will request access to YOUR bank account (NEVER use your daily bank account, always open a new empty Bank account to link).
5. PayPal is NOT FDIC insured.
6. PayPal WILL take your money without your authorization should their be any chargeback's or buyer claims against you (and charge you $10).
7. PayPal is the number one hacked site in America.
 

I’ve read your comments on Paypal and the follow up’s from your readers. I have to say I am on the side of your readers.

Ask yourself the answer to this question:
Paypal were purchased by Ebay in 2002. They tried to integrate it into the Ebay solution by getting sellers to ‘voluntarily’ adopt Paypal, for 6 long years. A very large number of sellers did not take this up or, like us, took it up (got some experience) and then dropped it like a stone. Why do you think this is? Also, Ebay/Paypal failed so catastrophically to achieve the ‘voluntary’ integration that they had to make it compulsory in 2008 to get the take-up. Why do you think this is?

We are a seller on Ebay, and have been for years. We had a couple of ‘nasty’ experiences with paypal and refused to take their payments. Now, Ebay forces seller to accept Paypal. Its supposed to be an option but, given the way the buyer is taken through the process, 99% of the screen is Paypal, 1% is alternative methods. Hardly fare.

Now we are forced to use Paypal again, we are back into the realms of their ‘processes’ again. To put this into perspective, we sell 25,000 items each year, less than 1,000/4% of which go through Ebay/Paypal (therefore 96% go through other sales and payment methods). However, in the last year, 96% of our ‘issues’ have been with Paypal and 4% with the others. To give you two cases briefly:

1. Guy buys an item. It arrives on a tracked service. The box (designed to protect an item in transit and take the knocks and blows of the process) was marked upon delivery. Guy refuses to sign for it until he has inspected it. He and the driver open the box (160cm x 60cm x 55cm and 34kgs) to find the content is perfectly fine. He signs the drivers ticket accordingly. He then squeezes the item back into the box (it never fits the same afterwards) and puts the item in the cold store at his work for 17 days. He gets it out of the cold room and carries it for 30 minutes in the rear of his car, to his home. The boot/trunk was left open, and the parcel bouncing around inside, because he couldn’t close it down securely. When he gets it home he takes it up stairs and unpacks it. He found it was substantially damaged (any wonder). Made a claim through Paypal and won!!! His money was refunded despite reams of evidence provided by us.

We appealed the case and it was overturned, based on a written statement from the delivery driver. The twist was that Paypal will not now put the situation right financially. They want us to pursue the customer through the Small Claims Court process in the UK.

2. Guy buys a home build self assembly childs ride on jeep from us. Arrived OK, no issues reported at point of delivery. 44 days later the guy contacts us and says ‘its damaged’. He made a chargeback through his credit card company to Paypal. Paypal failed to represent us, telling us they didn’t have sufficient resource (head: Paypal wins; Tails: Seller looses). His money was refunded.

In both of the above cases, our terms and conditions of sale are very clear and the customer committed to them. Also, Statutory legislation in the UK/Europe is very clear as to what the buyer and seller must do and was 100% in our favour. Paypal has considered it self above the law in both cases.

Our solution, and I suggest you all consider this as well (the more of us that do it the better).

a. Open a case with the Financial Services Ombudsman (UK) http://www.financial-ombudsman.org.uk/contact/index.html 0845 080 1800. Although Paypal are not regulated, they have to comply with this in order to be able to trade in the UK. You have to prove a financial loss (easy to do). The FSO will examine the case and impose a decision. In both of our cases this has yielded a positive outcome for us. Can’t disclose the full details because of the ‘gagging order’ imposed (but I’m sure you get the idea).

b. Ask the Financial Services Ombudsman to liase with the Financial Services Authority. Whilst Paypal are not regulated (and work very hard to make sure they never will be) the FSA has the power to revoke their licences to trade in the UK. The more cases they see/hear of, the stronger the argument for compulsory corrective action and/or revocation.

c. For those Ebay sellers, ask the FSO to also involve the Competition Regulator. Ebay forcing seller to use Paypal is anti competitive and not good for the market or users (only for Ebay/Paypal share holders).

d. Paypal record your telephone calls. They will tell you one thing and then do something else. Ask for a copy of the conversation. They MUST provide you with this, if requested, within 30 days of receiving your request. If they fail to provide it (as they have with every request I’ve made), report them on line to http://www.ico.gov.uk/ Again, these are the regulators and can stop Paypal trading IF enough complaints are received.

In summary, if you can avoid Paypal, then do so in any way possible. This applies to both buyer and seller. If you have to use them, always always always fight your corner. Go to the FSO every time (it works) and ask them to involve their colleagues at the FSA and (for Ebay users) the Competition Regulators Office. We do not have to tolerate Paypal’s hiding behind their Luxemburg address OR using the Monopoly created for them by their parent company Ebay.

No you should not use paypal, visit paypalblows.org to find out why, and these reasons will blow your mind!

Paypal is for people who are lacking in some way. With all the information out on the Internet about Paypal it is incredible that people use it at all. It is a wolf in sheep's clothing, a trojan horse, a predator. People who can't get credit, people who can't take credit, young people with no experience with credit, these are people who might need to use Paypal. It actually mystifies me that people who don't need to use it, especially as there are now other ways to send and receive money, are still using it. Leo, your lack of responsibility in taking your tenuous credibility and using it to defend Paypal is a major life error. Clean up your act.

I bought two XP Professional discs from a man on ebay and paid using paypal.When the discs arrived they didn`t work properly(they registry keys weren`t correct)so I made a claim with paypal.In the end they emailed me saying I would get a full refund once I had posted them back to the seller,I sent them special delivery to the address suplied by paypal but they were returned to me saying addressee unknown.I phoned paypal in Luxumberg and explained what had happened and was told not to worry ,they will sort it out.....well it`s 15 days since I last heard from paypal and still no refund!!! I would say only use paypal if there is no other way to pay and certainly don`t believe them when they claim to protect your rites as a buyer or seller,THEY WILL DO WHAT IS BEST FOR PAYPAL and sod the rest of us

Thanks for the link to the FSO, PayPal has 'lost' £500 somewhere between the USA and UK. PayPal claim they sent the funds transfer, my bank says nothing has arrived.
Cybraxjon on yahoo