Paypal, the self proclaimed "easiest and safest way to pay online," has been a constant nightmare for me for about the past month or so, as I first told you about here.
From the Paypal website: "The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing…"
So, again I ask, "Why do you need a copy of my Social Security card, my drivers' license, and proof of my address?"
It is a question that I have asked several of Paypal's customer service reps on a daily basis for about the last week. They say that it is the US Patriot Act, but continually keep changing the reasons that they are freezing my account.
The first time, they wanted me to fax them a copy of my ID, a copy of my Social Security card and a 'qualified' piece of mail.
Paypal's email to me:
"We are contacting you regarding the limitation on your account. To restore full access to your account, we require the following information:
* Please provide a copy of a government-issued photograph identification (i.e. passport, driver's license) that provides date of birth for the user registered on this PayPal account.
* Please provide a copy of a utility bill verifying the address registered on this PayPal account.
* Please provide a copy of your Social Security card that displays your full Social Security Number (SSN). We will also accept a copy of your W2 form, 1099 form or paystub that displays your full Social Security Number (SSN).
You can upload scanned documentation or print a fax cover page in the Resolution Center. The Resolution Center can be accessed by logging into your PayPal account. You may reference the fax number on your fax cover page or fax to: 303-395-2802
You may also mail the information to:
PayPal, Attention: Compliance
P.O. Box 45950
Omaha, NE 68145
Please be sure to include your email address on the cover sheet of your fax or letter.
Once we receive and review your documentation, we will notify you via email regarding the status of your account.
Please do not reply to this email. This mailbox is not monitored and you will not receive a response. For assistance, direct all questions to email@example.com.
We appreciate your patience and understanding regarding this matter.
PayPal Compliance Department
PayPal, an eBay Company"
I faxed them all of this, along with not one, but two pieces of mail with my current address on it: a doctor's bill and my student transcripts.
Then, they said that they never received the fax in their encrypted fax system that according to them is state-of-the-art; my vital information (a copy of my real state issued ID card and a copy of my real Social Security card) was lost in cyber space.
I called and spoke with a customer service rep named Josh:
"Me: I faxed you my vital information and now you claim that you don't have it? What happened to it?"
Josh: There are a lot of things that could have happened to it. You could have put the papers into the fax machine upside down.
Me: You lost my vital information and now you are saying that it is my fault?
Josh: There are a lot of things that could have heppened to it, but we use an encrypted computer system that has never been sucessfully hacked, so your information is safe.
Me: Safe, yet you cannot find it. Which, by the way, can you send me something to verify who you are?
Josh: If you go to our website…
Me: The website that Paypal wrote, that Paypal controls and that Paypal can put any information on that they want to? You are aware that any 12-year-old can write a website, right? I don't want to go to your website, I want you to send me something in the mail.
Josh: We are a website, we don't use the mail.
Me: You offer to send people checks don't you?
Me: Don't you send them through the mail?
Josh: Yes, but that is one of the only exceptions to that.
Me: So, if you send checks through the mail, you can send me something in the mail, you just won't. Do you have an ad package? A PR package? Anything to verify that you are who you say that you are?
Josh: If you go to our website…
Me: The website that you control and can write anything you want to on there?
Me: So, are you saying that you want me to fax you my vital information to prove who I am, but you refuse to validate who you are?
Josh: You chose to use Paypal. If you don't want to send us the information, then you don't have to use Paypal.
Me: Actualy, Josh, I don't have a choice to use Paypal. Associated Content uses Paypal exclusively to pay their writers with. So I have to use Paypal. You are holding my money hostage, demanding that I send you my vital information — and when I did, you lost it. Now you want me to send it again?
Josh: If you want to use Paypal.
Me: And what happens to my money in the meantime, Josh? it is sitting in Paypal's bank account collecting interest isn't it?
Josh: It is in your Paypal account.
Me: So, Are you telling me that my money is not in a Paypal bank account? Are you paying me interest on it?
Josh: Paypal doesn't pay interest. You chose to use Paypal. If you don't want to comply with this, then we will put a hold on the money for 180 days and delete the account.
Me: What federal organization regulates Paypal?
Josh: I'm not sure.
Me: Is Paypal FDIC-insured?
Josh: Yes we are."
Actually, Josh was mistaken about a few things that he told me:
Being the future award winning legal analyst/journalist that I am studying to be right now, (OK–I have no life, and am a research maniac, but still) I did a bit of research and discovered some very interesting facts about this self professed easy pay company:
Paypal is not a bank, and is not insured by the FDIC.
Paypal has been the defendant in thousands of lawsuits collectively since its inception in 1999. Most of the suits are concerned with antitrust laws. EBay currently owns Paypal and is accused by their vendors of forcing them to use Paypal exclusively to both pay and receive funds. The law governing this seems to be the Sherman Act which was enacted in 1898 by Congress. EBay cannot make their vendors use their own private pay-me company to transact business.
Paypal was established by Peter Thiel, Max Levchin and Elon Musk, in 1999, under the company name of Confinity. Their business design was to be a borderless currency that was exempt from federal regulations — but almost immediately became the target site for crooks of all kinds, looking to launder money, and use the service for ill-gotten-means. It also seems to have been a favorite of organized crime groups for the same reasons.
Paypal has indeed been successfully hacked on numerous occasions according to many sites that I checked out.
One blogger claims that a hacker got into his account and stole $3,800. He claims that Paypal not only knew that his account had been hacked, but that even knowing this, they refused to replace his funds–which inevitably caused other debts to bounce creating a book keeping nightmare for him. He is allegedly a litigant in one of the many lawsuits against Paypal.
As far back as 2005, Robert Dale writes "…The next day, they terminated my account because of a "high level of credit risk"… This means that PayPal now holds my funds that were in the account for 180 days ($1,700), to prevent the risk of chargebacks…"
Paypal is even being sued for alleged patent violations in Connecticut.
The New York Times reports Paypal is keeping records on people who are not now, never have been and never will be Paypal customers. “Good people on the Internet leave footprints,” explains Scott Thompson, president of PayPal. “There are e-mail accounts, I.P. addresses, things that accumulate over time that you can find on the Internet if you rummage around.”
According to CBS News, Paypal made a deal with the State of New York in 2004 to pay fines of $150,000 for misrepresenting their services: "PayPal, which has 40 million customers worldwide, had specifically stated that it provided the same rights and protections of a traditional credit card transaction, said Attorney General Eliot Spitzer. But consumers were often denied those rights, he said."
Paypal was acquired by eBay in 2002, and currently boasts 87 million customers worldwide.
Giving credit where credit is due, when I called back and spoke with a customer service rep named Gwindalyn (and threatened to report Paypal to the Federal Trade Commission), she electronically transferred my funds to my bank account.
Figuring that I was already in it with both feet anyway, and curious to see how far this was going to go, I faxed my information to Paypal a second time.
I called them back the following day, and spoke with Lanny. He said that the fax was too dark and they could not read it, so there was still a hold on my account.
Me: You've got to be kidding. Are you asking me to fax this information a third time?!
Lanny: I understand your frustration, but unfortunately, yes I am.
So, I faxed it to them on the lightest possible setting and used photo-quality.
As I was in line to fax my information, I struck up a conversation with the guy in front of me named Scott. Scott told me that Paypal had put a 180-day hold on his account before, and that he doesn't use them anymore. Guess that means that their customer count is down to 86 million, nine hundred ninety nine thousand, ninety nine. Interesting…
Was my account released? Not a chance…
I received this email:
"Since you are unable to complete the appeals process, access to your PayPal account will remain limited. Your PayPal Debit Card application has been denied as we were not able to confirm your identity using the information you provided.
In accordance with our User Agreement, any funds in your PayPal account balance may be held up to 180 days from the date the limitation was placed on your account. The balance is held to cover any disputes that may be filed against the account. If any funds remain after the 180-day period, you will be notified via email with information on how to receive the remaining funds.
PayPal Inc. an eBay Company"
They said that they couldn't verify that I was actually who I said that I was, yet, on my profile page it still gives me a history of my transactions, as well as my banking information.
I called and spoke to Jordan:
Me: Why is my banking information available for me to see if you have doubts that I am not who I say that I am?
John: We are not saying that you are not who you say that you are, we are saying that we cannot verify your identity with the information that you provided us.
Me: But if you cannot verify my identity, then there is doubt about who I am, and you are showing my banking information to someone who may have stolen my identity?
John: We are not saying that anyone stole your identity, we are saying that we cannot verify the information that you provided us.
Eventually John told me that they checked my address with Experian, and they had a different address for me than I provided.
Me: I sent you two pieces of mail with my current address on them.
John: But that's not the address that Experian has on you.
Me: Are you saying that the government documents that I sent you are not valid proof of address?
John: This information could not be verified with Experian.
So he gave me the number for Experian to update my profile with them.
Side bar: If I am the one updating the profile on Experian, what exactly is the point?!!!
At this point, it is beginning to become laughable–but leaving no stone unturned, I called the number that he gave me for Experian and followed the prompts that he suggested to speak to a customer service rep.
It was a woman named Charm, in the Phillipines, who seemed to have difficulty understanding what I was saying. So, now, on top of everything else, my personal credit information is being outsourced out of the country — the absurdity of proving that I am the American citizen that I claim to be, to someone who is not an American citizen, and doesn't seem to understand what I am saying, is beyond words.
Charm told me that it would cost me $1 to get a copy of my credit report and after a nine-day free trial, I would have to pay $14 per month for their service.
I then called Paypal back, and asked them why I was required to purchase a service from Experian in order to keep my account with them. I spoke to Jordan, who gave me the email address to annualcreditreports.com. He said that I could use that site to get the credit report that I needed to call Experian back and update my information with them.
When I used the annualcreditreport.com site, they already had my current address on file!
I printed out the report and called Paypal back again. I spoke to Dave this time:
Me: Dave, I have to warn you, at this point I am a hostile customer — just want you to know this in advance.
Dave: Yes, I see here that your account has limited access…
Me: Dave, that's why I am rather hostile at the moment.
Dave: I see here that we couldn't verify your account with Experian.
Me: Dave, Paypal is a fucking liar. When I accessed Experian, they already had my current address on file. I printed it out, would you like me to fax it to you?!
Dave: Ok, let's please keep this professional. I will put it back in to be reviewed again, but yes, if you can fax the Experian credit report to put on your account, too much information is always better than not enough information.
Me: Ok, so you want me to go back to Workforce again tomorrow, and fax you this information, so that you can figure out another reason to freeze my account…
Meanwhile, Associated Content saw the first article that I wrote on TheWrap about this, and sent me this email:
We saw your blog posting regarding your issues with PayPal. We did attempt to send your most recent Performance Payment on 8-11-10 and it was immediately denied by PayPal and sent back to us.
We'd love to assist you more directly, but PayPal will only work with account holders to resolve any issues. So, please contact them again. It's best to log in at PayPal and then click on the "Call us" link (it will give you some custom information), but their phone number is 1-888-221-1161. Please let us know when the account has been restored so we can re-send that Performance Payment to you. Thank you.
I wonder if corporate at AC is discussing a way to pay their writers, that doesn't rely on a company with such a shady history behind them…