I've had this happen to me with $50K and it wasn't 'lies or made up' in that case, I suspect most of them are much like mine.
You realize you're up against a giant in a foreign country that says they'll release your funds in 6 months time. So rather than spend 50 K on American lawyers and end up with nothing even if you win you grit your teeth and get on with your job vowing to never use the service again. And they did pay out after 6 months.
In my case I've not even managed to stand by my vow because I had to pay a few people using paypal. But I'm no longer accepting paypal payments myself and I would advise everybody to keep their account balances as low as possible.
> But I'm no longer accepting paypal payments myself
> and I would advise everybody to keep their account
> balances as low as possible.
Sound advice. In my new private project, I redraw from paypal every 200 euros. Thankfully, that's a lot of redraws (for certain definitions of a lot) and I'm a bit behind redraws but I learned the lesson from the losses the company I work with endures every month. Details in this same thread. (http://news.ycombinator.com/item?id=1679288)
edit (recovered because parent deleted their comment):
> citricsquid wrote:
> And you're in the "legitimate claims" part, like I said. What's the story behind your problem, why did they take your $50k?
endedit.
To this day I haven't a friggin' clue. We were in their beta program when they started with batched money requests, we helped them debug their stuff and came with a bunch of helpful suggestions. We had over 30% of our customers using the paypay monthly money request to renew and had a whole pile of back-end stuff to handle the details.
boom one day to the next our account is frozen. But, and this is the juicy part, outstanding money requests were still being honoured and the money was taken from the users accounts when they tried to pay us.
So, from the users point of view they had paid and wanted service, from our point of view we did not receive the funds. Of course we realized the users couldn't help that so we gave them service anyway and only got their payment 6 months later. If PayPal would have at least stopped transferring money in to that account we could have made a different arrangement with those users for that month (fortunately this only affected the 'running' month for which money requests had been made).
Not a single person at paypal ever thought it worth their time to tell us why our account had been frozen.
I realize wallet systems are hard, that there are lots of people that will flock to a system like that in order to defraud it and so on. But when you're that close with a customer that has been in your pilot program and you freeze their assets and stonewall then you have a bunch of issues in your company that need taking care of.
PayPal, and by extension their parent company Ebay, sucks.
Re. Ebay, I alerted them recently to a bunch of guys that moved from Africa to London that are on their dutch auction site (yes, it's that complicated) using ripped images and fake details on vehicles and they're still at it, again, no response whatsoever.
I think that plenty of people are in the 'legitimate' claims part, and I'm giving you an illustration why we don't bother fighting. Personally I recognize too many elements in most of those stories to chalk them up to being bogus, what do those people have to gain from claiming paypal froze their accounts for no reason.
On my end there is nothing to gain, it's just another experience with a large company.
I've seen Paypal described as a fraud detection company monetized by a payment transfer front-end. With that core competency in mind, it astounds me how bad they are at recognizing communication from a customer that deserves attention and response.
Virtual access billing, a Dutch IPSP run by a bunch of friends of mine. They use segregated merchant accounts so the risk of them going belly up is minimal.
You realize you're up against a giant in a foreign country that says they'll release your funds in 6 months time. So rather than spend 50 K on American lawyers and end up with nothing even if you win you grit your teeth and get on with your job vowing to never use the service again. And they did pay out after 6 months.
In my case I've not even managed to stand by my vow because I had to pay a few people using paypal. But I'm no longer accepting paypal payments myself and I would advise everybody to keep their account balances as low as possible.