PayPal PayPal is zooming you sellers San Jose, California

I recently discovered, quite by accident, the scam that PayPal is perpetrating on eBay sellers.

I recently had the misfortune to open an account with PayPal but I had to obtain some tickets to the local Apple Wordwide developer Conference. The original ticket sale had sold out in 12 hours and I was stuck bidding for scalped tickets on eBay. On my company's instructions, I bid for and won two tickets. However, when I attempted to complete the transactions, I discovered that PayPal had no intention of completing the transactions using the credit card I had registered, Instead they insisted that I give them my bank account info so they could but me through a 2 day process of verifying that I had access to my bank account and was (I guess), therefore, the person I had claimed to be when I registered the credit card. Well, I can understand that given the scum on the net, although they could have pointed that out when I registered my credit card and not my bank account when I created the account. Oh well.

But my sellers were in a time-constrained market and very concerned that I might be a deadbeat (you can't blame them). One threatened to list the ticket again. To head off this eventuality, I sent email to both sellers, telling them about my travails with PayPal and both agreed to give me a few more days. So two days later, verification done, I finally processed the two $2500 transactions and my PayPal account reported that both sellers were "paid".

But imagine my surprise when I received an email from just one of the sellers, saying that he had just received an email from PayPal warning him "Don't ship your goods yet. The transaction is being "verified". This process usually completes within 24 hours". He sent me a copy of the email since we had established contact directly by email. Just one of the two sellers received that email. The other received a notice of payment. Hmmm.

Well, I contacted PayPal by phone and wrote a summary of this event to the company, asking for an explanation of just exactly what they were "verifying" now. Well, as you might guess, they could not provide any insight on that. I conclude that our buddies at PayPal, like any bank, are scamming its customers by holding some percentage of its transactions for just a little longer than necessary, and likely profiting hugely by the float. Perhaps it allows them to "verify" that they have made as much as they can without rousing suspicions. It is likely that, had I not had direct email contact with the seller, neither of us would have been the wiser.

I promised in my report of this incident to PayPal, that in the absence of their response, I would report the incident in a public forum. Perhaps they will have some comment now.