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Heed the commandment of control! A story about PayPal.

Anything related to matters of the mind

halfer

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Oct 14, 2022
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Hey everyone,
I'm new here! Read the books (or rather listened) a while back and occasionally lurked. Now I have a story to share, so I had to make an account. I hope someone will get some use out of this. Spoiler: I didn't put all my money into PayPal's hands, but what happened was a real wake-up call.

The story began on Monday at 3 AM. I was asleep, but that didn't stop PayPal from sending me an email.
"After careful examination of your account, we have decided to close your PayPal account to protect ourselves from financial losses. You won't be able to use your account from now on." (my translation)
When I woke up in the morning, that lovely message was the first thing I saw. I wasn't exactly sure what to think. PayPal had locked payments on my account before, requesting a copy of my ID and more information on my business. I got up and checked my account. My mood immediately dropped. There was no question, no documents to upload, just a red banner. My account had been permanently terminated.

"No need to panic," I thought and called the support line. The lovely lady at the other end, who obviously had nothing to do with the decision, said she was sorry to hear about my situation and took a look at the data available to her. In the email, they hadn't even told me a real reason as to why my account was being terminated. I never even had a dispute or chargeback on my account. They merely pointed me towards general sections about account termination in their terms and conditions. In fact, they gave me numbered sections even though their terms do not have numbers anymore, and the provided section names didn't even exist. It shows just how much they care. Anyways, the lady said that the system showed her that there was a decision Sunday night (interesting time for a "careful examination") and my info wasn't accepted. This was the additional business info requested including my ID (which they had accepted previously). She suggested I try and submit my passport and provided me with a link where I can upload it. I did, and the upload showed as successful. Even though this part of PayPal requires you to be logged in, it doesn't show anywhere in your account. It also doesn't send a confirmation email. When you go back to the site later, it is as if you've never uploaded anything there.

Two days later: Nothing happened, so I used the phone app, which allows you to send messages for specific issues you can select. I described my everything and forwarded what the lady had told me including my passport. Five minutes later, I had a reply from the PayPal account auditing department. It was basically a copy paste of the original email, completely ignoring what I wrote. The only additional info they gave me was that the decision was permanent and that they are never going to tell me the reason to preserve their "integrity". Another slap in the face.

I have done quite a bit of research, and unsurprisingly, there are a lot of cases of PayPal terminating accounts. It's a massive company that probably has to deal with plenty of actual malicious users. The interesting part is that I found lots of cases with the exact same pattern as mine. Your account is running fine until they ask you for more information on your business. They seem to do this because of presumably automatic flagging based on something that happened with your account. Payments are locked until you provide the info, but you don't have to wait for confirmation after submitting it. Once they do make the decision (perhaps also fully automatic), one of two things happens:
  1. they continually keep up to 1/3rd of your incoming money for 2+ months.
  2. they outright terminate your account.
When your account is terminated, you can't do any payments or withdraw money. They withhold the money for 180 days or never pay it back if they think they need it to cover their damages. This is where the legality becomes questionable. Here in Germany, I found some information about past cases with multiple rulings against PayPal. They were forced to pay the money back immediately. PayPal has the right to be compensated for any damages, but since they have no actual evidence of wrongdoing, they have no valid reason. The problem is that there is no ruling that disallows them from doing this practice altogether. So they just do it, and now I have to wait 180 days or take legal action. Even if I get reimbursed for the costs, it hardly seems worth the time and up front cost to get about ~$2k back early. Well played PayPal.

Ultimately, I didn't quite violate the commandment of control when it comes to PayPal. My funds are in multiple places. So why did I choose that title? Because this incident made me reevaluate every account/contract that I depend on. It made for a perfect example of just how little power one has when dealing with a goliath like PayPal. You think you own the money in your PayPal account? Think again. There was no dispute, nothing malicious on my squeaky clean account, but they didn't care, and now I can't have my money for 180 days. Thankfully, I'm not doing ecommerce, but not having PayPal is also going to suck regardless.
I'm going to work twice as hard to rid my business of as many dependencies as possible. Some things are going to be difficult, but it will be worth it.

I know this isn't the shocker story of someone losing their six-figure Amazon business overnight, but maybe that is exactly why it is useful. The commandment of control lurks everywhere, and you need to realize which parts of your business you do not control even if you're not putting everything in one basket.
 
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halfer

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Oct 14, 2022
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I appreciate your post, however I have two questions:

1. What type of account did you have?
2. What type of product/service did you sell?
1. A PayPal business account. I think that's what you're asking?
2. In terms of service, I did sell one-on-one consultations on computer related things. Other than that, I only had affiliate revenue related to my YouTube channel, which made up the majority of money. I know, ironic. I obviously always had a plan to move away from being so dependent on it, but now I'm shifting priorities to make that happen as fast as I can.
(Sorry for not being super precise, but I do enjoy myself some privacy on the internet)
 

MJ DeMarco

I followed the science; all I found was money.
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So sad that in today's economic/business climate, that I need to do business with companies I absolutely LOATHE. PayPal is one of them, among others like Adobe and Intuit. I look at these companies as necessary evils, and as soon as some other entrepreneur offers a better solution, take it. Canva has absolutely obliterated Adobe's market share.
 
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Antifragile

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So sad that in today's economic/business climate, that I need to do business with companies I absolutely LOATHE. PayPal is one of them, among others like Adobe and Intuit. I look at these companies as necessary evils, and as soon as some other entrepreneur offers a better solution, take it. Canva has absolutely obliterated Adobe's market share.

Add SAGE.com to the list. Took me 10+ years but finally a few alternatives came up and I switched forever! What a relief.
 

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