- Report: #443362
Report - Rebuttal - Arbitrate
Complaint Review: Paypal - Ebay
Paypal - Ebay12312 Port Grace La Vista, Nebraska U.S.A.
Paypal Inc - Ebay Inc, Paypal is holding over $1700 for 6 months because they believe I am "high risk" and "suspicious" La Vista, Nebraska
My name is Warren **** and I wanted to share a story with you on how I was taken advantage of by Ebay (a San Jose, CA company) and Paypal (a La Vista, NE company, owned by Ebay). I was told that they would be holding over $1700 of my money for six months, without providing any valid reason why, other than they were suspicious. The reason I am writing you is because after doing some research on these topics, I found that many other honest consumers had virtually the same story, and I believe that this is a dishonest and unlawful tactic used regularly by the company to earn interest on millions of customers' dollars while they suspend users' accounts.
First, a little background on my situation. My partner, Mike Pizzo, and I owned an online/brick & mortar record store in Las Vegas, NV for over ten years. We started out in the bedroom, selling records online and it grew into a physical record store that offered both walk-in and online business. With the advent of digital music however, we saw our business start to decline rapidly over the last few years, and ended up having to close our store. Still having an outstanding monthly business loan payment with the bank, after we closed our mail order business, Mike and I decided we could both sell our personal record collections that we had built throughout our respective lifetimes to help pay off the loan. We decided to use Ebay to do this.
We had used Ebay to sell items when our store was open, and had done over 2000 transactions on the website, maintaining a positive feedback rating of 100% for many years. One of our old employees, Steven Boyd, had created an account for us several years ago for selling used records online. After not using the account for several years, once the store was closed, Mike resumed using it to sell his personal record collection. Unfortunately, Mike was had taken a job at the time, and could not handle this perfectly. Not having used Ebay before as previously our in-company employees handled this he made some mistakes early on, resulting in some negative feedback from customers. The Ebay sales were still run honestly, but did hit a few speed-bumps along the way, earning negative feedback from a small handful of dissatisfied customers. The account's rating dipped to around 96% positive which last time I checked, is still an A rating. However, Ebay put a temporary hold on the account, saying that any and all customer service issues had to be resolved, and then they would review the account in ten days for reinstatement. He did exactly that, taking care of any outstanding issues or unhappy customers, and completely restructured how he would handle Ebay business. After the ten days however, despite the A rating and over 2000 positive feedback entries, Ebay said that the account was in the bottom one-percentile of sellers on Ebay, and it would not be reinstated. The strange thing was, they never pointed to a specific incident or reason as to why the account was closed, and would not accept any type of appeal.
Still having the loan payment to worry about, I decided that despite the fact that the company account was banned, I would take matters into my own hands and create a personal account for myself, under my name, and sell my personal record collection on Ebay. This way, I could take the responsibility of paying the company's loan using my own resources. I created my own account, under what would be my new company, Vintage Collection, and begin to sell my records via Ebay. Everything was going smoothly, I had done over 100 transactions and earned a 100% positive rating. However, one night, I made the mistake of logging onto my account from Mike's house. Ebay somehow tracked this, and suspended my Vintage Collection account saying that it was linked to the banned account. I tried calling and emailing them and explaining to them that this was my own personal account that I was using to sell my records, and it was not linked to the old account. They disagreed, and despite a perfect, 100% positive rating, banned me from ever using Ebay again. Here again, I was told that they would not listen to any appeals or respond to any further emails.
Well, here is where the story gets VERY interesting. Mike and I, still having this loan to worry about, needed to come up with a new way to pay it off. We found a new website called Discogs.com, which allows users to sell their personal, used records and CD's, outside of Ebay. We decided to team back up, and sell both collections via this website. We would handle the business together, and given our experiences with Ebay, had streamlined the shipping process and customer service fulfillment. Discogs is currently doing a great job for us, and we have had many positive transactions with it, and like Ebay, we have a 100% positive feedback rating, so everything is going smoothly.
Where the problem lies, is that we have been using Paypal to accept electronic payments for our Discogs.com sales. Paypal, as you may know, is owned by Ebay. Things were just getting off the ground with Discogs, and suddenly we discovered that our account had been placed on temporary hold, because of some highly suspicious activity. As to what this activity is, we have no idea. They said that during the hold, we could not close our account or extract our money from it, and we had to handle a series of steps for them to review the account for reinstatement. We thought this would be easy enough. Among these steps were the 1) verification of of my home address via a letter sent to my house 2) tracking numbers of packages we had shipped to our customers 3) verification of my bank account information and 4) receipts from our suppliers. Well, that last one seemed a little unreasonable to us, especially considering that many, many people who use Paypal are selling old, used items from around the house on sites like Ebay or Craig's List, and they do not have the receipts. We were able to provide them with all of the requested information, except for article four. Instead, I sent them my picture ID, explaining that I was the supplier, as the owner of a closed-down record store, and this was my personal collection of over thirty years.
We figured this would be sufficient, but it was not. I called Paypal and spoke to many different people on the phone, and they explained to me that my account was frozen because of problems I had with Ebay in the past. They said that they would review the information that I had sent them, and we could move forward from there. I figured that this would be no problem, and I would be able to have my money accessible as soon as they reviewed my information, as everything I provided was true, accurate, and completed to the best of my ability. What I found instead, was that my account was deemed as a potential high risk, and that they would be holding on to my money that I earned selling on Discogs.com - $1783.67 for 180 days! No evidence of why I was a potential high risk was provided, I was told they simply reviewed the account and it was frozen. I was livid I had done nothing wrong, I provided them with all of the requested information I could not understand how this could be legal. They explained to me that their User Agreement states that they can hold your money at any time for any reason they choose! This of course presents a huge difficulty for me, because now I cannot pay my loan.
I began to do some research on this topic on the Internet. What I found were pages and pages of people with virtually the exact same story as mine some having totals of over $8000 frozen by Paypal without being given a valid reason as to why, simply suspicion. Many have theorized that they company is acting unscrupulously, freezing accounts with large sums of money in them so that they can tie up millions of dollars for several months at a time and in turn, earn interest on it. The practice of holding a client's money for any reason they choose, of course is detailed in their User Agreement, however since I have been conducting business honestly and diligently, I never figured I would have to worry about it.
I also found on the Internet a website where a gentleman in a similar situation to myself, had over $5000 frozen (((link redacted))). He explained that he got Paypal to unfreeze the money instantly by simply emailing them and saying that he would report them to the Better Business Bureau, the US Federal Reserve, and various state Attorney Generals. Within five hours, he got a telephone call from Paypal, who said they would release his money, and this was at 9:30 PM on a Sunday night. Two months later, after seeing his website, they contacted him and reinstated his Paypal account, perhaps hoping he would remove his story from the website.
I figured I would take similar action, and drafted my own letter, explaining to them that if they did not return the money to me by April 9th, 2009, I would take similar action against them, reporting them to the Federal Trade Commission, the Better Business Bureau, and several state Attorney Generals. I also explained that this would be the beginning of a multi-faceted campaign against them that would continue until my money was released. I have included this correspondence in this packet as well for you to review.
Twenty-four hours later, I received an email from Thomas of Paypal's Executive Escalations department. And for the record, it was just Thomas, no last name was provided. This Thomas explained to me that he felt it was time for Paypal and I to discontinue our business relationship completely because we were a potential high risk and then explained that he would make an exception and review my account in 45 days for a potential early release of funds. So basically, again, they have canceled my account, without providing me any solid evidence as to why, and frozen my money. The letter does not promise they will release my money, only that they will review my account in six weeks. To me, this is unacceptable, because already I have been through two or three reviews from Ebay / Paypal, which never result in anything but buying themselves time before the decide to cancel you. This also catches a raised eyebrow because despite my high risk factor, they were willing to deal with me, hoping that I would call off the dogs, so to speak, and blindly accept the option for review after 45 days, which again doesn't promise anything. I feel if they were not engaged in abusive, unfair business practices that might spark an external investigation, they would have simply denied me any request, and allowed me to write as many letters to as many outside entities as I chose.
The reason I have written you is because I believe Paypal is conducting unfair business practices on legitimate consumers like myself. A quick Google search will show hundreds of results of people in similar situations to me including a website dedicated entirely to the topic (www.paypalsucks.com) and I feel it's time that something is done about it. This company is owned by Ebay, and I think people out there are afraid to challenge them in court, because they feel they cannot win.
Regardless, I have decided to make it my life's work to make sure that justice is served in this matter, and will unflinchingly pursue a resolution, with extreme prejudice. This is why I have written you and several other parties. Any help would be appreciated. Thank you for your time.
Las Vegas, Nevada
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This report was posted on Ripoff Report on 04/14/2009 12:04 AM and is a permanent record located here: http://www.ripoffreport.com/r/Paypal-Ebay/La-Vista-Nebraska-68128-8236/Paypal-Inc-Ebay-Inc-Paypal-is-holding-over-1700-for-6-months-because-they-believe-I-am-443362. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.
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