posted on December 20, 2006 11:37:53 AM new
My uncle (R.) was selling jewelry for about a year now. He has a business partner, both names are on the “Business Name”. Fair amount of good feedback on Ebay. Last week Paypal closed the account, out of the blue and now holding $4000.00 hostage.
The letter R. got stated that Paypal run Credit Report check and because it was not good, they decided to close the account.
THAT’S IT! That’s the reason. No complaints from customers.
Not only they closed jewelry business down before Holiday Season, but they are holding lots of money back. Paypal gave 2 options to get money back.
1) Refund money to customers (can’t do that, customers got the merch. alredy)
and
2) after 180 days, Paypal will send refund check to the business.
They closed the business down, they are holding money hostage for 6 months.
We called Paypal, spent hours on the phone, talked to the supervisor…no help at all.
No immediate help, I should say, because he answers are, fix your credit report , (but you know how long that takes)….
posted on December 20, 2006 11:44:20 AM new
Did they run the credit report on your 'UNCLE' and/or his business partner OR 'the business jointly owned by the two'??
Does 'the business' operate outside Ebay,say a store front??
They should get a lawyer to speak to Paypal.
[ edited by hwahwa on Dec 20, 2006 11:46 AM ]
posted on December 20, 2006 11:56:35 AM new
they run report on my uncle who's name comes first on the business name.
they do have a store front busness.
we asked paypal to either remove one name off business or do transfer ...nope. "NO" is the answer for everything....
posted on December 20, 2006 12:02:52 PM new
my uncle's credit report is bad, true.
that is what caused the whole thing.
2nd business partners credit report is good, but they say that does not matter at all.
posted on December 20, 2006 12:03:45 PM new
IMO, his uncle's credit should not be a reason for PayPal to hold $4,000 hostage. I think PayPal is pushing the envelope here and the uncle needs to consult an attorney. If the credit report was such a problem for PayPal, they could merely have closed his PP account and sent the money back to him. Now, they're using $4,000 of someone else's money without having to pay interest on it.
I think there is more to this story than just a bad credit report because I don't think just that makes it legal for PP to withhold someone's money.
posted on December 20, 2006 12:05:00 PM new
Just had to add that I have a bankruptcy on my credit report. PayPal hasn't shut me down. Of course, I'd never leave that kind of money in my account.
posted on December 20, 2006 12:05:19 PM new
P.S. finding the right lawyer would be hard, they do not have one and it would be costly.
they are located in NY.
posted on December 20, 2006 12:08:21 PM new
I don't leave much money in Paypal account either.
I also thought my uncle is not telling me everything, but when I called paypal on his behalf, (he was on the phone too), it is the credit report thats the problem and that's it...
it is absolutely ridiculous, I also think they want to hold on to four thousand for six months for free.
posted on December 20, 2006 12:12:31 PM new
We have quite a bit more in a paypal account and our credit is bad...really bad...and yet we are still operating using paypal. We have never used the card for any large purchases or anything but we can withdraw the money and use it at will. It sounds fishy to me!
posted on December 20, 2006 12:18:48 PM new
I know, it sounds so weird, that's why I called Paypal, becuase I thought there must be something else.
Nope...that's why I am asking for help here...
I even have the letter from Paypal, here it is>>> (THE LETTER IS REAL, I DID CALL PAYPAL, 402-935-7733 is the real number they send in the letter, right?)
Dear R. XXXXXXXX,
We regret to advise you that PayPal has determined to close your account.
The following notice explains the reason for closure and the process for
disbursing any remaining balance.
As part of our account review, a consumer credit report was obtained from
the credit reporting agency identified below. The results of the report
contributed to the decision for account closure. Equifax did not make this
decision and is unable to provide you with specific reasons why the
decision was made. However, you have the following rights under state and
federal laws:
The right to obtain a free copy of your Equifax consumer report if you make
such a request to Equifax within 60 days of your receipt of this notice and
The right to dispute the completeness or accuracy of any information
contained in such report by notifying Equifax directly of your dispute
You may contact Equifax by telephone using their 1-800-685-1111 phone
number and selecting the 'denied credit' option. Then follow the
instructions that are given.
If you prefer to use a mailed request, send the following information to
Equifax: first name, middle name, last name, spouse's name (if applicable),
home address, home address for the last five years, date of birth, social
security number (required), and copy of declination notice (this form).
Mail this information to:
Equifax
P.O. Box 740241
Atlanta GA, 30374-0241
Disbursement of your account balance can be handled in one of two ways:
Option 1. Your remaining account balance can be used to refund the buyers.
If you would like to pursue this option, please reply to this email with a
list of buyers you would like to refund. Include the email address, date,
and amount of the transaction. If you need to refund in bulk, please
provide a date range in which you would like all transactions refunded. We
cannot issue partial refunds
Option 2. Your remaining account balance will be held within your PayPal
Account for 180 days in order to minimize chargeback risks. Once the
180-day period is completed, a check will be sent to your home address
In the event of a dispute, PayPal will seek to recover the funds from you
by debiting your PayPal balance and, if there are not sufficient funds in
your PayPal balance, PayPal reserves the right to collect your debt to
PayPal by any other legal means.
posted on December 20, 2006 12:21:41 PM new
On Paypal site,it does say they will run credit report on us from time to time.
Paypal is protecting itself,if the seller has bad credit,where does he get his merchandise?
Does he really have the merchandise on hand?
Are these merchandise any good?
Will he seller ship the goods??
Chargeback always hit paypal ,not the individual who uses paypal,so it is holding the fund for 180 days in case of chargeback.
You said your uncle has shipped the goods,then he should get his $4000 back in 6 months.
How much has he sold on ebay in the last 30,60,90 days?
and how long has he been using Paypal??
posted on December 20, 2006 12:24:31 PM new
fair amount of feedback, selling for about a year now.
all goods were shipped and received and pos feedback left.
posted on December 20, 2006 12:26:03 PM new
Contact your local congressman and ask them why they continue to allow a company clearly involved with banking practices to operate outside of federal regulation. You may be interested in this article:
Since your uncle is in NY, it might actually be worth attempting to contact the office of the NY attorney general, Elliot Spitzer. It seems like he's been aggressively pursuing customer complaints against Paypal.
******************************
posted on December 20, 2006 12:50:03 PM new
It could be what is in his credit report?
If his wholesalers complained he has not paid for his merchandise,then he could be selling goods which do not belong to him.
If so,do the wholesalers have claims to the proceeds??
posted on December 20, 2006 01:08:45 PM new
it could be the contents of the credit report. Any kind of criminal actions in his past? Those things are now also being investigated by a lot of credit companies.
posted on December 20, 2006 01:31:15 PM new
Maybe someone with ebay filed a compliant?
If no one files with paypal within 45 days of the account being closed or the last transaction - then that should be it. A bidder only has 45 days to file if I understand correctly.
Paypal has to be breaking some type of law with this one.
I'll be right back - got to go withdraw all my paypal funds!!
posted on December 20, 2006 01:32:38 PM new
On Yahoo shopping,some shops which sell electronic goods often have fund withheld by their merchant account providers,it could be in the 5 figures.
Some will have their account closed .
If your uncle has store,does he have a merchant account in good standing.If so,he could always accept credit card using his account.
It is hard to speculate without knowing what is said about him in the credit report?
Dont try to open another Paypal account,they will find out.
It is more than 45 days,if a buyer goes to his credit card issuer instead of Paypal,he could do this up to 3 months and for intl transaction,it could be 6 months.
posted on December 20, 2006 01:35:40 PM new
I would definately contact some authority on this subject. If a lawyer is not present there are cheaper options. A fraud department at your local police department should be able to direct you in the right direction. It sounds odd, that is all I am saying. Where did you get the number you are calling? From the email or from the paypal site itself?
Just trying to think if a scammer got the account. It has been known to happen. Try to call paypal and bring up the fact that you have contacted an attorney and the local fraud department, they may just sing another tune! I have also found with paypal you could call one minute and have the rudest, nastiest customer service agent in the world. The next minute you have the most helpful representitive you could ever ask for. Depends on who you get sometimes.
posted on December 20, 2006 02:29:03 PM new
cherachael,
Firstly, anyone and I mean ANYONE using PayPal should never, ever leave a balance (especially a substantial one) in their PayPal account. They are simply asking for trouble. Need I remind everyone that PayPal is not a bank and given their capricious attitude to its customers isn't likely to ever qualify for a U.S. banking licence anytime soon.
If I was in the situation as described, I would be on the phone to my attorney and then writing a letter to the NY AG describing the facts. Follow it up with letters to the NY newspapers about how PayPal is forcing your uncle out of business just before Christmas playing up the Scrooge angle and the zero complaints from satisfied eBay customers. Companies like PayPal hate bad publicity especially around quiet news periods like the holidays when there's usually a dearth of 'real' news stories.
Next, I'd suggest my uncle's business partner apply for in his sole name a merchant account and Google Checkout account. Any online business especially should never rely on a sole supplier as they did with PayPal.
Since PayPal is offering to refund your uncle's customers - I'd suggest he email them and ask if they would like a refund and to pay him again by money order or check. Explain that he hasn't been paid yet by PayPal (being held hostage by the terrorist organization known as PayPal) and is facing a grim Christmas and uncertain New Year. Apologize for the inconvenience, but that this has been forced upon him by a large, faceless corporation that outsources many of its worker to sweatshops in India and godlessly worships at the altar of the Almighty Dollar... play upon the little man against the large, corporate monster bogeyman, etc. He should be able to get some cash back that way, but don't refund them until he gets confirmation that the buyers will repay by money order or check.
posted on December 20, 2006 02:49:32 PM new
Sadly, I don't think there is much you can do, other than wait out the 180 days. The terms are in the Paypal User Agreement:
"...If the investigation is not in your favor, PayPal may return funds to the sender and restore access to the remainder of your account, continue to limit your account access for up to 180 days as is necessary to protect PayPal against the risk of reversals...
...Any of the following events may lead to your account being limited:
xx. Reports from credit agencies of a high level of risk;"
posted on December 20, 2006 02:59:15 PM new
Agitprop offered good advice. User Agreement or not, PayPal is not above the law. I have a feeling it operates above the law fairly frequently. The problem is that no one has the money to fight them. However, there will come a day when PayPal's practices are called into question. They'd better have the right answers.
Never, ever, ever leave more in your PP account than you can afford to lose. PP is a scammer's friend.
posted on December 20, 2006 03:03:51 PM new
PLEASE NOTE:
thanks to everyone!
Goods have been shipped and received by customers and there are no complaints from anyone!
Basically, he is asking for my advice, (I have been on Ebay since ‘97). I do not know what to tell them. $4000.00 is a huge amount of money for them. English is their 2nd language, (to write letters, etc). I am helping as much as I can, but I do not have the time to really get into it.
I was just wondering what is the best or fastest way for them to get back on the horse, (aka. back in business).
I also wondered if this was legal..., but I see it is sort their right to do since they do put it in the agreement.
[ edited by cherachael on Dec 20, 2006 03:27 PM ]
posted on December 20, 2006 03:14:05 PM new
If they have a merchant account,they can still accept credit card payment using their own merchant account.
Or like Agit suggests,sign up with Google checkout,it is free for one year.
They can also open an account with Propay and accept credit cards.
There is also auctionchex,check it out.
This is kind of a wakeup call for everyone-welcome to America,protect your credit like you would protect your virginity !!
[ edited by hwahwa on Dec 20, 2006 03:16 PM ]
posted on December 20, 2006 03:25:15 PM new
NEVER leave that much money in your PayPal account. Never. In my case, after I hit about $300 in PayPal, I siphon off half of it to a checking account, which we use for monthly bills.
Also, you are spending an inordinate amount of time trying to help your uncle and his partner. If their English isn't very good, they probably need to sharpen that up a bit to do business in this country. That's aside from the fact that they need to get their own lawyer. I know I sound harsh, but at some point we need to encourage people to solve their own problems.
If you ARE frozen, accept the reality that this isn't some mistake that can be corrected by an e-mail or phone call to a nice customer service person; you've been SCREWED, and it's NO accident or misunderstanding. This company is now your enemy and is probably not inclined to do anything to help you, unless you're one of those unfrozen for "show" purposed as described above- but I'll bet they don't even account for 2%. So don't waste your time with "customer-no-service" e-mails and phone calls. Yes, most of the contact numbers listed on this site are accurate and the people listed are real employees- but believe me; they generally have NO power to say anything but "NO." If you've been frozen, your "case" goes to a special group within "customer service" who's entire mission statement could be summed up as "we've got the money, we're going to keep the money, so explain this to the customer in any plausible fashion- as long as the final answer remains ''we get to keep the money'." Also, these folks will oftern be extremely rude to you- which is all part of the plan; you weren't really supposed to call them in the first place, and they don't want you to even THINK about calling back. Those repeated requests for copies of drivers licences and so forth are simply a ruse and a stall tactic. Believe me... they KNOW who you are, and this information does NOT keep getting misplaced. They're wearing you down, and it usually works. By the THIRD request for you to gather and send the same information, they most people will simply give up and say "it's not worth it." Don't threaten to sue or waste your money having a lawyer send PP a threatening letter, 'cause it dosen't work. People who SAY "I'm gonna sue" DON'T 99.9% of the time, and PP knows this. What DOES work is to hire an attorney and actually FILE SUIT. When they're hit with requests for discovery and are faced with having to send executives to depositions and so forth- most of the time your case will be "re-investigated". You'll then be cleared and your money will be returned. If that dosen't fix it, then, for some reason Pay-Pay must really, really feel that you ARE scamming. Most people simply won't go this far, since hiring an attorney, filing suit and so forth actually exceeds what PP has taken from you- and believe me, they DO know this.
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