Saturday, 21 January 2012
How to Survive Being Limited by Paypal 1: The First Rejection
At anytime they choose, they can take their toys away and make you go and sweep out the cinders, poor and alone and dejected.
They do not need to give you a reason, it is all there in their terms and conditions so that the moment you sign up, you are at their mercy.
Paypal is not a bank. It is an intermediary which transfers payments between a buyer and a seller so that the buyer does not have to give out their credit card details online.
When you sign up to their service, you give them permission to access your credit history and to check up on you in any way that they see fit. In the second paragraph of their terms and conditions, they state that any money you keep in their system will be pooled along with other users and put all together into a bank account to earn interest. This interest is paypal's interest and you have nothing to do with it. Herein lies the major problem, set out in black and white right at the beginning of their T & C. They use your money to earn interest.
So, obviously, it is in their interest to keep your money for as long as possible.
There are two types of limitation by paypal and both of them allow paypal to lock you out of your account for 6 months.
A temporary limitation is subject to your providing any details that they ask for. There may be a certain transaction that they are unsure about, or they may ask you to prove where you got the goods that you are selling by sending them invoices for the items you are listing.
By logging in to your paypal account, it will be possible to see what sorts of documents they want to see to help you to unlimit your account. With over 15 million users in the UK, it is impossible to see how they can investigate each case properly and much of it must be automated. Nevertheless, if you do as they ask, then your account can be usually unlimited.
The other type of limitation is the permanent kind. In this case, Paypal will send you a cryptic email saying that your account is limited because you have breached their violations policy and this means that you will be permanently suspended with no way of getting your account back. They will hold you funds for 6 months so that they can pay any fees or disgruntled buyers, and then finally, they will let you have your money and send you a 'Parting of ways' email.
(The Snow Queen, Hans Christian Anderson (1805-1875), and because of this they clamp down hard on anyone who goes against their rules and instead of giving people the benefit of the doubt or taking each case on an individual basis, they just use the same strict criteria to judge everyone.
The problem is that Paypal has become such a universal and easy way to pay that, for many people, it seems that there is no way that life will survive without it. Freelancers, online retailers and other service providers depend on paypal for their livelihood. And often the only payment that buyers will prefer is paypal because, as one buyer said to me, they only trust paypal as a way of sending money online because it is thought to be very safe.
A permanent paypal limitation is a double blow because firstly it hits your income hard. Many thousands of people have taken to online retailing as a way to make ends meet between jobs, or even given up the day job to sell things online.Without this income stream, they can feel hopeless and helpless.
Secondly, it is a complete rejection. When they reject you, they use words which make you feel like a criminal. In many cases they give you no reason why you have been thrown out, only that you have 'violated' something. They have thrown you out of their exclusive and popular club and shut the door in your face, and no amount of begging and pleading on your part will make them open it again. This makes it even harder to turn around and walk away. You do not get to have the last word and there are no ways to make them listen. You really do feel like a gnat trying to make the elephant notice it. And a criminal gnat at that.
In part two of this series, I will highlight how people try to get around this problem...