PayPal can be abusive
Thursday, December 17th, 2009Apparent Software has suffered an encounter with the abusive anti-fraud squad at PayPal. I’ve personally had an experience that exactly matches their story. This is what happened to them:
I log into my PayPal account and what do I see? “For my protection” they have limited the ability of my account to withdraw or send money but most severely, they also disallowed the account to receive payments!
Frantically, I go to MacGraPhoto’s buy page, click buy and see a message “The seller can’t receive payments at this time”. At about the same time I get an email from a potential customer that says that he can’t buy the bundle. In the server log I see other people trying buy the bundle and leaving. Lost sales. Not good. Not good at all.
My PayPal’s page lists lots of things that I need to provide to PayPal regarding my personal identity and regarding the sales. Some requests are totally not relevant to the case or to our business.
…We talked about the nature of the business. They wanted to see some shipping confirmation and tracking numbers. I explained that we’re selling downloadable software and the “shipment” is actually an email with license codes. I also explain that it’s a 2 week promotion where we bundled with some other developers for a mutual sale. She then asks me to fax to her signed agreements that they, the developers, allow me to sell their software. I tell her that we only have email correspondence and she says ok, fax it.
I prepare a fax with our terms and conditions document, 6 email correspondences where other participants agree to the terms and also, in the first page, explain the whole issue of the bundle sale. Total of 26 pages. It takes almost a day to see the faxes in the system. Finally on Nov 22 I get an email that they’ve received the documents.
I call back customer support, finally get another “limitations specialist” who checks the faxes and says me that it looks ok but I’ll have to wait to get my answers over the email in the next 48 hours.
After 24 hours I receive an email that includes:
– Please provide a letter of authority from the original copyright owner
and copy of the licensing agreement which states you have the authority to
duplicate and distribute the product.…I ask the person to reconsider our previous documents and tell him that we started to collect signatures (we indeed emailed the 6 developers by this time and asked them to print and sign a one-page, three sentences paper about the bundle). He said ok. Wait another day or two.
During the day we collect most of the signatures and then I receive another email from PayPal. The subject was new: “PayPal appeal denied”.
I had exactly the same experience with PayPal in early 2002 – I had a big spike in sales, which they thought was suspicious, so they limited my account. I called them and they asked for documents. I faxed them documents and then they asked for more documents. I had about $2,000 sitting in my PayPal account, some of which I’d been planning to use to pay my rent that month. I was forced to borrow money from friends, with the promise that I would pay them back as soon as I could withdraw money from my account. My friends were a bit baffled – many of them did not know what PayPal was, but assuming it was like a bank, they couldn’t understand how a bank might simply freeze one’s account without first getting a court order.
Every time I satisfied one of their requests, they’d make another request for more data. 6 weeks went by.
In the end, they restored my account, but for 6 weeks they threw my life into chaos. At that time I was receiving most of my money via PayPal, so it was as if I’d suddenly been fired from my job or something, not being able to receive any money from PayPal. Their customer support was the least helpful customer support I’ve ever dealt with.


