Oh my!

Paypal Does it Again

Posted on March 12, 2012 by Helen Killer

You may recall that back in December, I had a series of infuriating exchanges with PayPal.

After collecting almost $20,000 to buy Christmas toys for needy children, PayPal forced me to manually refund every contribution, while keeping the fees of these transactions. When I balked, they attempted to freeze this money for 180 days, with no recourse, effectively ruining the holiday for 200 families.

Initially, Paypal's justification for this was that I had used the wrong method to collect this money, but this was later dismissed as false by a PayPal executive.

What it really came down to was this: When you collect a lot of money in a short time, it triggers a review.

I have no problem with a review under these circumstances. My problem is with the way these investigations are resolved.

Once your money is frozen and you're in panic mode, you are now at the mercy of the customer service representative, who is asked to make "a judgment call." This is where it all breaks down. PayPal's policies are so confusing that the representative inevitably grows frustrated at being unable to explain them. This escalates matters, and almost always ends up with PayPal collecting interest on your money for six months, while your business or project gets deeper and deeper into trouble.

After a worldwide public shaming in December, and again in January, when this violin story came out, I had hoped that PayPal would be much more thoughtful in making these decisions, especially when dealing with people who are attempting to assist charities.

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