Ever since we launched Premium RPNet, we’ve used PayPal as our primary method of payment. One of the few reasons of choosing PayPal was the ease of integrating it into our backend system and the fact that PayPal is one of the most common ways to make payments.

Of course, we had heard about all sorts of horror stories about PayPal, but we figured that since we were legitimate in every way, we would not have much of an issue with them in that regard. All was fine for a couple months, until…

A week ago, my partner Dman decided to apply for the PayPal Debit Card. We figured that would provide us with easier and instant access to the business funds and be more convenient in every regard. Little did we know that when we applied for a PayPal Debit Card, we were actually applying for a PayPal limitation and frozen funds.

Following the day Dman submitted the application, our PayPal account was frozen. The message we received was this:

As part of our security measures, we regularly screen activity in the
PayPal system. During a recent screening, we noticed an issue regarding
your account.

To meet financial service industry regulations, we need more information to
help confirm your identity. To provide this information, please go to the
PayPal Resolution Center.

Sure, we did not have any issues. PayPal wanted more information to confirm my partner’s identity, and he was more than happy to provide that information. He uploaded the necessary/requested documents. He then called them up and they confirmed that the limitation had been placed because of his Debit Card application, and that the submitted documents would be reviewed within 4 days. We did not really have anything against that. We did not have any payments to make within those 4 days, so all was well.

2 days ago (when we had the major downtime and had just finished resolving it), we got an email from PayPal with the subject, ‘PayPal appeal denied’. I could not quite believe my eyes, but I knew what followed in the email was doom. Here’s what it said:

Since you are unable to complete the appeals process, access to your PayPal
account will remain limited. In accordance with our User Agreement, the
funds in your PayPal account balance will be held for up to 180 days from
date of your limitation. The balance is held to cover any disputes that may
be filed against the account.

Your PayPal Debit Card application has been denied as we were not able to
confirm your identity using the information you provided.

I actually ended up reading that email a fair few times. I really could not understand what they were trying to say. Apparently, they failed to verify the information that we provided them, about our identity. Ironically, they had limited our account on 2 separate occasions in the past, and we gave them the EXACT same documents. And they were verified and accepted. So what was different this time round? Did Dman’s identity suddenly change? Did his complexion differ? Or is/was that just an excuse from PayPal to hold all our business fund to earn interest from it?

Nothing they did, makes sense. It never did. I’ve failed to understand their reasons. Regardless, that’s not where it ends. Following the email, Dman called PayPal to find out why/what they had failed to verify. The ’specialist’ or the ‘customer support rep’ was vague. She would not tell him what specific detail had failed. She just told him, ‘if it failed, it failed’. She also mentioned to him something about the USA Patriot Act disallowing them to continue serving us as customers because the account owner’s identity could not be verified (again, that makes no sense because there is no such clause in the USA Patriot Act). That was a downright lie. These ’specialists’ had no idea what they were talking about.

The very next day, I decided to call one of their Senior Agents (these senior agents apparently have the power to make changes to an account, restore access to it, etc). I got a fair few phone numbers off a website (Screw PayPal). There were a few numbers on that list that were no longer in service. But the ones that were working, were also not answered. Every working number that I tried gave me a message about the agent being off desk. I first tried to call them at 12:30PM EST. So I figured maybe that may have been the lunch time. But, to no avail. I tried calling all of them, every hour, up until 5PM EST. Never managed to get hold of anyone.

Giving up on that (or let’s just say, putting it off for day 2) I decided to call their usual toll free customer support – the same Dman had tried the day before. Not that I really expected anything to come out of that (that number and the ’specialists’ there are far from help), but I sure hoped I might make some progress. Before doing that, though, I sent an email to every email address I could find. A few failed to deliver, the rest were apparently sent. Have had no response to anything, as yet, though.

So, I called the same old support. Talked to the support rep there about my account issues and she told me it was limited because the identity could not be verified. I wouldn’t be put off that easy, so I decided to argue on that. I repeatedly told her that the exact same details had been verified/accepted in earlier cases and now they were magically being denied. She said ’stronger government regulations’ required them (PayPal) to verify each customer in detail. Of course, as usual, that was a crap statement. My partner had been told something about the USA Patriot Act and I was being told about stronger government regulations. So much for PayPal’s policies.

She mentioned the fact that since customers could not ‘personally’ be verified, they needed the correct documents (which were provided to them, but they apparently failed to look at them in detail, I believe). I asked her, in return, if my partner visiting their office would be enough proof of his existence and his ‘validity’ or whatever it is that they needed to confirm but that comment was ignored. Crap much?

In the end though, I got an email address (compliance@paypal.com) where I could send an email asking reasons for the failed verification. I was told I could expect a reply in 24-72 hours. But I have this feeling that I won’t be getting a reply even if I were to wait for a week. So, the only way to talk to the compliance department is via email (or at least, that is what I was told). I will be, however, trying every possible PayPal number I can reach (and find a live human at). There’s lots of business funds in that account that we’re not giving up on.
Which, brings us to our current situation. We do have this server paid for, for the entire month so we could say we have that much time to sort this issue out. We were told we could issue refunds while being in a limited state, however, that does not seem to be possible because I do not see any link(s) to issue refunds (where I previously could). Otherwise, me and Dman had contemplated going that route.

We have a few other alternatives, but I sure hope we get this issue resolved ASAP. I’ll keep this blog post updated with progress on how we’re doing on our PayPal situation.

My advice, to everyone who deals with PayPal here, is to NOT apply for their Debit Card. You’ll get screwed. If you have lots of PayPal balance, withdraw it immediately. Do not leave any excessive funds lying in your account, unless you want a nice little happy surprise from PayPal designed for ‘your protection’. If you don’t use PayPal, close the account and change all associated bank details and CC details. Trust me, you don’t want to deal with PayPal unless absolutely necessary. And if you have been in a situation similar to this, share this story. Let everyone know what PayPal does with its customers.

Remember – if you apply for a PayPal Debit Card, you’re in fact applying for a limited account and frozen funds. Don’t go that route.

~Hamza