Report: #706482

Complaint Review: Paypal

  • Submitted: Tue, March 15, 2011
  • Updated: Wed, March 23, 2011
  • Reported By: Rose — Filer Idaho United States of America
  • Paypal

    United States of America

Show customers why they should trust your business over your competitors...

I am a maunfacturer and I sell my product online, I used paypal for my shopping cart.

I had a couple of charge backs. Then paypal froze my account They wanted tracking info. on the items I shipped out, which I provided them. All except two which were not shipped yet. I told them I could not ship the two untill I could get my funds released so I could get the supplies for the two items. The person I talked to at paypal had the nerve to tell me that I should not be using money from paypal to get my supplies, that I should be using other funds.

So they are telling me how to run my business and how to spend my money!! I told them to hold enough money for the two orders that had not shipped and release the rest, but they would not do it. I even asked them if I cancelled the orders if they would release my money. But that did not work either.

I had contacted the buyers and they were ok with waiting a week or two, but now one has cancelled. In the mean time I keep getting orders and they keep holding my money.  Now I can see why some sellers on ebay refuse to take paypal for payment.
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This report was posted on Ripoff Report on 03/15/2011 06:30 PM and is a permanent record located here: 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. Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report. READ: Foreign websites steal our content

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#1 Consumer Comment

Ronny, I fully understand Paypal policy.

AUTHOR: Steve - (USA)


I fully understand Paypal policy.
I have been a Paypal user for about 11 years as with Ebay too.
There was no misunderstanding of Paypal policy.

However, Paypal is the place you will find the retards, crackheads, and such.
I can guarantee to you that I do not fit into that category.

PayPal engages in a multitude of bad business practices, and some of those practices are straight out unethical, as well as borderline illegal, depending on the state of occurence.

In most states, a bank, or money processor can only place a "hold" on the exact amount of money in dispute. The entire account can only be frozen if there is EVIDENCE of fraud, or by court order.

Therefore, notices of complaints being sent to all involved parties and governement agencies is the way to go, as it creates a paper trail that can be used later in court, and also for investigation by governement agencies.

Letters work.

For example, I just had some dirtbag with questionable insurance rear end me. The claims department at Infinity Insurance denied the claim. Again, an unethical and illegal act by big business. There was no question of liability as I was sitting still at a red light. I immediately wrote some letters of complaint to a few governement agencies, including the State of Florida Dept of Insurance Regulation, as well as the board of directors, individually and others.

Guess what, within a week of that mailing, my phone was ringing and it was the same idiot claims adjuster that had previously gotten rude and nasty with me, this time very nice and informing me payment in full was in the mail, etc.

Letters work.
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#2 Consumer Comment

Steve is a RETARD..

AUTHOR: Ronny g - (USA)

..and a CRACKHEAD ghetto deadbeat. Take another hit bro.

This report is regarding Paypal HOLDS for a is what you need to understand..and this as well is copied from the PayPal website..

What is a temporary hold by PayPal?

When a temporary hold (temp hold) is placed on a payment, the payment is
delayed. The money is not available to the person who sent the payment
or the person who is receiving the payment.

Dispute-Related Holds

Whenever a claim, dispute, or chargeback is opened, PayPal will generally place the payment in
question on hold. The funds will remain in your account, but cannot be withdrawn until the issue has been resolved.

Once a decision has been made, your funds will either be released to you or refunded to the buyer.

To check the status of an open dispute, or to offer a refund to the buyer at any time, simply log in to your account and click on your open case.

Payment Holds

When some sellers receive payments, we may hold the money in a pending balance for up to 21 days to help make sure that there are funds in the seller's account to cover potential refunds or claims. The funds may be released early if PayPal determines that the transaction has been fulfilled and customers are satisfied.

While funds are pending, the money belongs to you but isn't available to spend or withdraw. If you're a PayPal Money Market Fund customer, you'll continue to earn interest on the total balance, even while the funds are held.*If payments on your account are held, we'll notify you. PayPal will re-evaluate your account every 35 days and decide whether or not to continue holding payments. If we decide to stop holding future payments, we'll contact you.

My payment is on hold due to an open dispute, claim, or chargeback. Why?

When a dispute, claim, or chargeback is open, the funds will be held in the seller's account and will not be available for use. The funds cannot be withdrawn and will be considered "disputed" until the dispute, claim, or chargeback is resolved. This ensures that the funds are available if a refund is needed. The seller can use these funds to issue a refund anytime during the dispute by using
the Refund link in the Transaction Details page. Once the dispute, claim, or chargeback is resolved, the remaining funds will be released.
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#3 Author of original report

paypal ripoff

AUTHOR: Rose - (United States of America)

Thanks for the information I will write letters to the banks.
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#4 Consumer Comment

There is recourse. Paypal registered with most states..

AUTHOR: Steve - (USA)

You DO have recourse against PayPal holding your money.

PayPal is regulated by most states depending on each state's requirements. Each state has laws that affect how Payment processors like PayPal operate.

Your money is also FDIC Insured, and you can file complaints against PayPal with the various banks that PayPal holds your money in.

Direct from the Paypal site:

You do not need to keep funds with PayPal in order to use our service. If you do hold a balance, you can do so in two ways: (1) PayPal, as your agent, will place your funds in a pooled account at an unaffiliated FDIC-insured bank or savings institution, which is eligible for pass-through FDIC insurance coverage; or (2) you can elect to earn a return on your funds by enrolling to invest all funds that you receive into the PayPal Money Market Fund. The PayPal Money Market Fund is not FDIC insured, not guaranteed by any bank and may lose value. PayPal keeps a record of the amount of your balances, which you can check by logging in to your account through the PayPal Web site at any time. Balances held in currencies other than U.S. Dollars are not FDIC-insured.

If you do not enroll in the Money Market Fund, then in the unlikely event that an FDIC-insured bank in which we place your money fails, your balance placed at the bank would be subject to FDIC pass-through deposit insurance coverage, along with any other deposits you hold at that bank, up to a total of $100,000.00 USD. Pass-through deposit coverage is contingent upon PayPal maintaining accurate records and on determinations of the FDIC as receiver at the time of a future receivership of any bank at which we place your funds. FDIC pass-through deposit insurance protects you only against the failure of the bank at which PayPal places your funds, and does NOT protect you against PayPal's insolvency. Through the terms of our User Agreement, we believe that your funds will also be protected from any claims of PayPal's creditors and will be returned to you even in the unlikely event of a PayPal insolvency.

You can access a list of the banks where we place your money here.


As of June 30, 2008, your PayPal U.S. Dollar balances are held at the following institutions: Bank of America, N.A., Citibank, N.A., HSBC Bank USA, N.A., RBS Citizens Bank, N.A. and Wells Fargo Bank, N.A.

You can file written complaints with each of these banks against PayPal, and even with the FDIC.
Also file written complaints with your state banking department as payment processing services must comply with state banking rules.
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#5 Consumer Suggestion

You've just encountered Paypal's infamous "hold" policy.

AUTHOR: Jon r - (U.S.A.)

I had a similar experience with my eBay sales.

Paypal has a charming little setup where they act like a bank, but aren't leagally a "bank" and thus are free of the restrictions imposed on typicall banks (despite being owned by eBay, they are still considered a forign company in the US). In this case they have a policy where they are allowed to put ANY amount of money on "hold" indefinatly. They did this to over $1k I earned from eBay sales, they held them for over a month. Their support is useless, and either is not able to or refuses to release funds. Sadly, you have little recourse but to wait for them to decide to release your funds.

Despite their claims that this is for security, it's far more likely they just want to make interest on your money. I can see them holding funds of sellers with fequent complaints (even then, they have no reason to hold them after the sale is complete), but I have had none and I'm willing to bet you haven't either.

All I can suggest is to do as I did and leave Paypal behind (and with eBay now requiring Paypal to be offered, that means leaving eBay as well). They are too shady, and play games with our money. There are other payment processors you can use for your business. I suggest Google Checkout or Amazon payments. Both charge similar to Paypal - but don't put holds on your money. They do the right thing and leave it up to the buyer to file a dispute. And there is no need for your customers to sign up for accounts with Amazon or Google unless you want to require it.
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