PayPal isn't a bank, folks. If you treat PayPal like a bank, you will have a bad time.
Almost all horror stories you hear about PayPal involve the user treating PayPal like they were a bank. Just do not store money in PayPal... sweep nightly if you use PayPal for business. They even provide tools to make this automated.
The reason this policy exists is likely to remove super old liabilities for long-dormant accounts that have been long forgotten about.
PayPal is not interested in storing funds forever... they want you to buy stuff with it or transfer it to your real bank account.
This policy seems aimed at convincing people to "move it or lose it"...
1. Buy something from China.
2. Get a refund.
3. Account blocked for two weeks
1. Send €5. Add greeting note.
2. refuse to reveal last name and DOB of person mentioned in the greeting note to Paypal.
3. Have your account blocked and enter mailing loop hell with an Indian call center.
1. Have your account blocked for no reason
2. That's it.
No, Sir. I'm sorry. It's not just the storing of money side that doesn't work with Paypal.
I am currently in the mailing loop hell and had to message an old colleague who now works there for help. It‘s absolute insanity. You can‘t speak with a higher up. Each call, the new customer service rep has to start from the beginning. Every third call is canceled on you without notice. Every second call they ask you to reset your password and wait 24 hours.
I'm convinced that they just flag transactions from richer countries to poorer countries as fraud. But sending money from the poorer country to the richer country is completely fine.
I had a PayPal support person lock my account for fraud because I insisted that I needed to talk to a supervisor. She refused five times, hung up on me and locked my account. After two weeks they simply unlocked it again. No explanation, no apology. I never did get to talk to a supervisor.
That's where I am. Sent one trasaction via Paypal business, bank account forbidden and paypal business froze, with no option for me to ever use paypal business again.
Really interesting to hear. I haven't been a huge user of PayPal since eBay introduced Managed Payments, but my experiences with them in the past have always been surprisingly good.
That said, perhaps I was getting different support since they were probably processing around 10k of sales a month for us.
Sending someone money with a note is classic money laundering?
I'm not sure how that meets the pattern of money laundering any more than it meets the pattern of someone having a birthday.
This is a practice that occurs elsewhere in U.S. fintech as well. A bank account can become dormant if there are no deposits or withdrawals over a specified period of time as determined by the governing state. For California, it's 5 years, but for other states, it can be as soon as 12 months. Once an account becomes dormant, the holding bank is required to send the funds to the state through an escheatment process. Those funds are then listed as unclaimed property.
PayPal is not a bank, but but rather operates banking services performed through Synchrony Bank. PayPal manages individual accounts within Synchrony, and it performs required communications and actions on behalf of Synchrony bank. In the U.S., the bank is ultimately responsible for servicing these accounts, but a partner like PayPal can take on that responsibility with the bank's oversight.
Some more info for the curious: investopedia.com/terms/d/dormant-account.asp
Rather than perform this (potentially expensive and arduous) process of handing dormant funds over to the governing state, companies like PayPal opt to just slowly absorb dormant accounts. It's scummy and I hate it. I assume this transfer of funds also keeps the account from being legally considered dormant (since funds did move).
I have an account with a local bank so I can use their branch services as needed. I keep the balance high enough to earn 1¢ of interest every month, and I set up an automatic system with my main bank to transfer that 1¢ to me. Avoids the dormancy fee!
$10 is maybe a bit much, but I think the principal is fine.
Last year, I received emails from a bank I used 10 years ago, asking me to contact them. It turned out they'd been writing to an old address. I thought I'd closed the account, but it had £0.75 in it.
The bank spent much more than that trying to contact me, and I wasted far more time than it was worth closing the account. (They were used to the problem, I asked them to donate the money to charity.)
I assume the situation is this:
They have loads of dormant accounts that haven't been used in years but that have a few dollars on them. If they want to close these accounts, they have to find those people and give them their $7.59. By having a $10 fee, they can empty those accounts within a few years and then just close them without investigating anything. This would take significantly longer with a smaller amount.
A: Sir, I have an idea that will earn us sooo much money! Just charge a one-dollar inactivity fee on accounts!
Sir: That's a great idea! But I have a better idea that will generate ten times as much money - charge 10 dollars instead! I'm a genius. claims the idea, thinks about the promotion
Once you sync your bank account, Paypal can claw funds from your account for any reason it deems necessary.
Do not give them this access into your business's main operating account. Bite the bullet and open a separate, standalone DDA with another bank (not the same bank, that won't achieve its intended effect).
You can just connect it to an IBAN with 0 EUR/USD, and then requiring you to put currency on it before PayPal can withdraw (ie. no overdraw). My bank (bunq) gives me 25 IBANs.
bunq is awesome, but you don't even need a separate IBAN, you can (and should) simply decline SEPA direct debits ("SDD Core" for non-business, which has different regulations than B2B SDD).
And don't give them a SEPA mandate at all; there's a small link on the "add bank account" page that bypasses the SDD mandate while still allowing use of the IBAN for withdrawals.
Or, better yet... don't use PayPal at all. I closed my account years ago and don't regret it one bit.
It was unclear to me if they could claw funds in the USA way back when I looked. But I setup a small balance account and switched to it because I'd heard way back paypal managed to get people's bank accounts frozen for months in a dispute and if that was the same account you paid your bills out of you were in for a major hassle to you life. Which probably extorted a lot of people to give in.
I’m assuming DDA stands for demand/direct deposit account. Keeping a separate one with a low balance for internet accounts can help keep a primary account unaffected if paypal or other internet services initiate a transfer without your permission (could also be due to a compromised paypal account).
Yup. This is mandatory. I think doing it at the same bank would be fine enough, but if you can pull it off, go to a different bank. I definitely take that extra precaution myself.
I went thru the hassle of opening a new account with a new institution just for this. We may still close paypal after all (which is what i'd love to do in the first place)
> The reason this policy exists is likely to remove super old liabilities for long-dormant accounts that have been long forgotten about.
That’s exactly what this is. I don’t believe it’s meant to be a money grab towards existing customers (simply because it’s such a bad one). Everything has a lifetime. PayPal by now is full of accounts from dead people, money nobody is ever going to reclaim (even if someone out there has a better claim to it).
This money has to go somewhere, otherwise it’s very literally dormant. In my country (Belgium), the government has tools to let people find and reclaim money they may be owed that is sitting in bank accounts. But something like PayPal is not really able to do this.
With dormant fees, PayPal is able to create a lifetime on accounts with dormant money… they will eventually zero out.
That said, they’re still scum and nobody should use PayPal, ever, for anything. I work in fintech - if you’re using PayPal and need recommendations to replace it, reply with your use case and I’ll respond.
> In my country (Belgium), the government has tools to let people find and reclaim money they may be owed that is sitting in bank accounts. But something like PayPal is not really able to do this.
In the US, there's also a system of unclaimed property, administered by each state. States hold onto such property, and at least the few states I've lived in allow you to search online for it, and provide a means to have it sent to you on request. I've found a couple hundred dollars over the past 20 years, mostly cases where I've overpaid some sort of account, and then the account was closed, though I recall one case where Google had been the one to submit some unclaimed property to the state in my name (never found out what it was from).
PayPal could certainly set an inactivity limit -- say 5 years -- and then turn the funds over to the state listed in the account's user information. But they'd rather keep the money, and slowly siphon it off. I agree that this is a pretty bad money grab, but there's absolutely another option that would allow a PayPal user to reclaim that money later on.
> That said, they’re still scum and nobody should use PayPal, ever, for anything. I work in fintech - if you’re using PayPal and need recommendations to replace it, reply with your use case and I’ll respond.
....I'd imagine most of that would be "paying for stuff that has paypal as only payment method", or otherwise alternative being putting your CC information on the site you will use once and never again, and hoping that they have better security than paypal.
And the rest being "well I want to give my user easy way to pay for stuff and paypal is just that"
> if you’re using PayPal and need recommendations to replace it, reply with your use case and I’ll respond
I'm accepting donations for my open source software project (FreeSewing.org). I also need the shipping address because I send a little thank-you. What should I use instead that's available to people from different countries?
Have you checked out opencollective.com? Since you’re in Belgium your project is likely eligible for Open Source Collective Europe. They offer users a lot of different payment methods including card and even crypto since recently if you want to do that. They do have options to ask for a shipping address.
What country are you in? How do you fund your PayPal account?
If you don’t want a credit card because you don’t want debt, what you likely want is a debit card. Most banks issue it for free.
If you are in the UK, make sure to tell your bank to set your overdraft to zero.
If you are in the US, keep in mind that you are not building credit by choosing to never use a credit card (and yes I think it is stupid as well). I know there are zero-fee credit cards that can act as debit cards, I can find some recommendation if you like.
In the US, Privacy.com is also a cool issuer of virtual cards which may have features you are interested in.
If for some reason you don’t want a debit card either because you hate physical cards or something, know that Google Pay and Apple Pay also issue virtual cards on your behalf, and in some countries don’t need a card as payment method.
Why don't you want a credit card? They offer a lot of consumer protection and a lot of rewards, and if you use them responsibly, there's zero downside.
Reasonable, but that means you're not only leaving money on the table (in the form of credit card rewards or cash back), but also you're not taking advantage of a great benefit: credit cards give you a firewall between merchants and your actual money.
If a merchant fraudulently -- or even accidentally -- debits your bank account, then that money is gone. In many cases you will be able to get it back, but how long will that take? Days? Weeks? More? If the bad transaction is large enough, maybe you won't make your rent/mortgage payment that month. But with a credit card, the money is still in your bank account, and you can dispute the charge, and have it removed before you've spent your own money on it.
Yes, credit cards do require some discipline. I pay mine off every month, and incur no interest charges, but sure, there's the possibility that I could charge enough in a month such that I wouldn't have the cash in my checking account to cover it at the end of the month. I generally don't consider this an issue, though, as I don't have a compulsive spending problem, and I track my purchases well enough in any case.
In this day and age of incredibly poor customer service, I think it's invaluable to have some intermediary fronting the money for my purchases, in a way that lets me dispute transactions I think are in error before having to spend my own money on them.
This sounds more like you need better consumer protection that is government backed and written into law. You shouldn't have to have possible debt just to get that.
Burglary and getting ripped off by a company are two different sorts of things with different solutions.
Locks work because it stops a lot of opportunity crime. Simple and effective: For everything else, we have laws.
With consumer protection, what the 'get a credit card' crowd are basically saying is that sure, locks are available, but you have to be good enough to get one. Sorry about your luck, poor people that can't get one. Consumer protection laws are basically locks for everyone.
My point was that companies break the law a lot, and it usually takes a long time for those wrongs to be righted. By using a credit card, you avoid the harm in the meantime.
And nobody is denied a credit card just for being poor. What keeps you from getting a credit card is if you're poor but spend like you're rich, and so end up delinquent on a bunch of debt that bank gets stuck with.
I've had a credit card for over 10 years and get roughly 3% back on average which comes out to thousands of dollars each year. Never once have I paid any interest or fees. It has helped build my credit which is a big part I have over a 800 credit score. The money automatically is paid each month out of my bank account, I don't have to manually do anything
> The US is the only country in the world where you have such a credit history system built with credit cards.
Aside from the links posted in a sibling comment, I wouldn't say the U.S. credit system is built with credit cards: it's a fairly holistic metric that takes into account rent payments, loans, and a bunch of other stuff like "bankruptcies, foreclosures, lawsuits, wage garnishments or attachments, liens, or public judgments against you"[0]. Credit cards are lines of credit, so they certainly factor in, but the focus on your overall credit health, of which your credit cards may be a small part.
Use a debit card instead? You can only spend as much money as you have on the bank account. Except for the gas station, they can put a hold on your card for roughly the amount of a full tank and then release it after they know how much you refueled for. This can create a debt but is limited in scope.
Slight niggle, anyone can preauth for presumably a full amount and adjust the charge or cancel it (it's instant via the card networks, like refunds, your bank is lying to you if they say things like 5 working days etc)
If you pay their entire balance in full every month, which is what I meant by using them responsibly, then you are spending money you actually have, and you're also not paying any interest.
In Germany the banking industry has lost at least 2 high profile cases in the highest civil court in the recent years.
They are not allowed to change the terms of business without the customer actively accepting the change. This seems the most applicable case here. I guess such fee was not at all in their terms before, so just sending an email that now there is won't work.
Another case that loans must not have handling fees (on top of interest) might be less applicable here.
There was also a case affecting all businesses many years ago. A debt does not expire earlier than 10 years later. So if the business still owns the customer something, they can't just say, oh sorry it has expired earlier. This affects mostly gift certificates or prepaid phone subscriptions, but why not "inactive" money at Paypal.
worked for me until I logged in (EU), now it returns "he page you're looking for is no longer available.". I just checked in another fresh browser and I can read it fine.
Looks like it magically stops existing as soon as you log in from EU.
>Note: Personal accounts registered in Germany/Austria/Italy/Greece/Hungary/Poland are excluded from the inactivity fee assessment for 2022.
yep, excluded and apparently its secret! WTF does "for 2022" mean here? Are they planning to hide it until they can finally charge me?
They had to register as a licensed bank because E-money-institutes are a recent addition to EU law long after PayPal obtained its banking license.
The law is written such that you are either allowed to do nothing or you are a full blown bank. There is no carveout for startups or anyone who doesn't want to run a full bank.
> Almost all horror stories you hear about PayPal involve the user treating PayPal like they were a bank
That's something I noticed many years ago when PayPal complaints were big on Slashdot, and I was confused about why anyone would be leaving significant sums in their PayPal account. They've always made bank transfers pretty easy.
Unless you prefer not to link your PayPal to a bank account. There are horror stories out there of PayPal making bank withdrawals customers feel they didn't authorize.
I wish you could get them to just simply mail you a cheque to get your money out.
Years ago I found a solution to this problem I was comfortable with. I opened a separate (no fees) bank account just for linking to PayPal. I keep almost zero balance in that account except when I am in the process of moving money into and out of PayPal.
eBay forced me into this when they didn't support verifying with my existing bank, so I opened a new checking account just for these services. I wanted to be mad about it but the eBay customer service rep was really surprisingly helpful, and it's probably a good thing to do anyway.
Not sure about the US situation, but if PayPal withdraws money from my account for no good reason, I’d simply reverse the charge (2 clicks in my online banking). They can then sue, but that situation would happen if they want your money and can’t withdraw it anyway.
I actually don’t even know if I can sue them because I couldn’t find out if binding arbitration clauses in contracts for consumers are legal in the EU and Germany ;)
I'm one of them. Paypal kept preferring my bank account as the means of payment, -even- when not set as the default behavior. I forgot the reason now, but in short default only means default for some things.
I don't know if they've fixed that in the years since, but I've not linked a bank account since.
No. In the European countries which no longer have cheques (or where they are very rare), the electronic banking systems have strong regulations which should prevent major problems from PayPal having access to a bank account.
If PayPal take money from my account and I don't like it, it's a few clicks in online banking, or a phone call to the bank, to reverse the transaction and block any future transactions.
It is the same system as used for an electricity bill, where a variable amount is collected each time.
The 20 year long trail of horror stories from PayPal that would be outright fraud if committed by an individual person is all the proof I need that our system is completely broken.
Not really, electronic money license yes, but not a full bank (there is also no such thing as an "EU" license, member states still require individual licenses in that country to actually have access to the banking network and do things like offer credit cards, "e-money" licenses were created to allow limited use operations without the burden of obtaining a full banking license (in many member states it's not worth the effort, for anyone)
Unfortunately I can't test it or keep it updated anymore because, despite giving them many hundreds of dollars in legitimate eBay business fees, I was perma-banned without recourse (and in the process, I had to manually find via my bank a $1000+ clawback transfer they did but could not find in their system anywhere, and give them the info, so they could find it and eventually return it).
I'm curious why this tool's existence was necessary? If you have/had a business account, sweeping is free and built in - your onboarding rep would have even helped you configure it.
If you abused a personal account... well that may be a clue into why your account was frozen. PayPal only makes money off business accounts and their transactional fees... if you tried to circumvent that and were obviously operating a business, then they would have good reason to freeze your account.
Also, PayPal hasn't been part of eBay since 2014ish...
Paypal was still eBay's main payments processing provider until 2021-ish. Personal accounts are completely acceptable to use for receiving eBay order payments, and they definitely charge the transaction fees on sales. Lastly, sweeping should be available to accounts regardless of type, and you shouldn't have to talk to a person to enable it.
1) PayPal does not receive fees from your eBay activities. They are two completely separate companies. PayPal makes money by charging for business services. They provide free personal services as a convenience for everyone else - but the lights are paid for by business fees.
2) If you read the TOS for personal accounts, your eBay activity would be allowed if it was personal sale of stuff (think a Craigslist analog) or between friends and family members. Once you start operating a business on eBay and are clearly receiving payments for goods and/or services in a routine fashion that appears like a business - PayPal is going to want their cut too. This is not unreasonable.
3) A personal account has no need for sweeping, which is my guess as-to why this feature doesn't exist there. Sweeping is literally only useful for businesses that accrue daily revenue into the account... and if you are receiving daily revenue, you are operating a business - see #2 above.
It seems the entire problem was a misunderstanding.
Paypal has always loved keeping money they didn't earn. They should be treated like a crypto exchange: never keep your funds with them, only use them to transact then move funds away (if no other alternatives available).
Ah, i've avoided them for over a decade now - but that does sound very concerning.
Sounds even worse than the issues that made me abandon them originally (seizing on-paypal funds and preventing withdrawal via making verification process broken and obtuse)
>They love to debit any linked bank accounts to pay any fees or clawback any money so they can freeze it.
>And PayPal requires you link an account for verification now.
What's the problem here? If you give them access to your main bank account, you're an idiot. Just set up a separate account for the sole purpose of linking to PayPal. You should do the same for any case where you need to link a bank account to an external entity.
How exactly are they able to extract money from your account just from having account number and your name? Does this mean I can, too? (I assume you don't give them your password, and even then an outgoing transaction requires an OTP.)
It depends on what country you're in but in Germany this is possible. Businesses can just withdraw from your account. You can dispute this for a number of weeks though and can get it back. The business then needs to prove that you authorised them to withdraw the money.
> And PayPal requires you link an account for verification now.
Interesting, I wonder if this is only for new accounts? I've had an account for a good 20 years now, and I don't have a bank account linked, only credit cards.
My experience was you can unlink them after the account is up and running, but then you can't get any money out of there. (except by paying people with paypal of course)
With their inflated fees and treasure trove of user horror stories, why does anyone even use Paypal? And if they are forced to, why have there been no alternatives?
I have only ever used paypal to pay for things with a credit card. I was tricked into having the account at all by a fraudlent and misleading UI built by ebay and that's the only reason I had it in the first place. I did use it to pay for some things so I guess their plan worked.
Paypal recently, after a decade or so of use, demanded I hand over multiple forms of ID. I refused and said close the account. They refuse to close the account because I have not handed over ID documents that I don't want them to have on their files because they are untrustworthy both ethically and in terms of competence as you guys know well.
So the account is there ready to be hacked. I've pointed this out to them on about 20 separate occasions and they refuse to close it.
Paypal are crooks. It is in their dna. They're crooks for no reason, just from force of habit. You cannot trust them in any way. Society allowing them to have any market power whatsoever is completely insane. Yet another case of a cpu attached to a network being on the critical path of what some company is doing preventing otherwise intelligent humans from thinking a normal, critical fasshion about what they are doing and forming a minimally appropriate response, trapping the rest of us who literally cannot act at all.
> I was tricked into having the account at all by a fraudlent and misleading UI built by ebay
They've cut out the middleman and will just trick you directly. I don't have an account but I use it a lot for discogs. Everytime, it goes one of three ways.
1) They have a prechecked "Create Account" option, so that completing the purchase creates an account.
2) They use the classic "big, bold button" dark pattern, so that completing the purchase creates an account.
3) They require creating an account to complete the purchase. I've cancelled orders over this one.
It hasn't even been a progression. I've seen all three recently, and which one I get seems to be a dice roll.
The problem is their ubiquity for payments (manageable on its own, though some sites only take PayPal),
AND the most reliable/usable p2p micropayments UX for non-technical people and international, under one umbrella. Yes there's crypto but good luck getting your parents to use.
Unlike in Europe and elsewhere, Americans don't have good (and somewhat standardized UX for) direct payments from bank (e-check sucks), or bank-to-bank. And you'd never want to use wire ($18+) for paying friend back for pizza.
What does it leave? CashApp, Zelle, etc. ? And Wise for international. They only address a subset of the latter use case.
Wow, really? Never have actually encountered a site like that. So I can only assume it's rare enough such that it wouldn't be much of a hassle to just refuse to do purchase things from those websites.
Manning online bookstore. In theory they support credit card payments, but I guess they are not capable of handling 3D Secure protocol, so my attempt to pay with a credit card always fail with them. Every time I need to buy something from them I would create a temporary PayPal account (which I delete after the transaction :)
So from PayPal's perspective you signed up for an account willingly, used it happily for ten years, tripped some fraud detection or other where PayPal now thinks the account may have been compromised and locked it, asked for proof of ID to restore access, and you refused, and asked them to close the account.
What else do you want them to do? There's a bagillion compromised PayPal accounts actively scamming people. It's why PayPal G&S is the gold standard for buying stuff from people online. Like I get that closing the account seems like a safe action but letting someone who isn't the account owner do anything with the account is bad move.
Do you work in PR? Because that is 100% grade A PR damage control spiel and seems completely plausible and reasonable unless you know better, which both I and they do and so will you shortly.
There was no fraud detection, no flags, no payments to me ever. None.
Paypal demanded, out of the blue copies of drivers licenses, passports, bank statements etc that they have no right to, claiming they needed them to comply with law. Suspicious much? Well I sure was and am. They have only ever been an online click-clack machine for my credit card and nothing else. Ever.
I have the _right_ to refuse to do business with them if they unilaterally change their rules. I have done so.
There /can/ be /zero/ fraud possible by closing the account because I don't trust them and going elsewhere to get my credit card processed.
From their point of view it would be a negative metric. Better to not have declining account numbers you have to report so just block them.
They are just crooks from top to bottom. It's their default response. They are arrogant, obnoxious and deserve to be prosecuted and should be.
What I want them to do is repect my wishes not to be associated with them in any way and not to have an identity theft vector avaialble with people and an organisation I have justifiably decided don't trust when I have told them that is what I now want.
So f%#k them and anyone sticking up for the crooks they are.
> Paypal demanded, out of the blue copies of drivers licenses, passports, bank statements etc that they have no right to, claiming they needed them to comply with law.
I stopped reading your rant here because it's clear you are not familiar with financial regulations.
> I stopped reading your rant here because it's clear you are not familiar with financial regulations.
I think the issue is with shifting expectations with no clear way to terminate a business relationship. Not sure how being "familiar with financial regulations" would change that.
For what it's worth, harry8's post inspired me to close my Paypal account while I still can. Done.
Sortaaa. There's several financial regulations invoked in the USA that requires financial institutions to ask for proper identification IF continuance of business is pursued. However, there is nothing - to my knowledge - that compels PayPal to hold these identification vectors as "ransom" for an account held hostage from closure.
The thing is that having an account open at all is presumably because you intend to use PayPal at some point in the future. They could keep an account in an 'inactive' state but then that just moves the identity requirement further along to whenever the user tries to check out with PayPal once or move money.
GP doesn't want the account to be open, they've requested to close it and paypal has refused to close it because they demand information needed for an open account in order to, presumably, reactivate the account with all relevant identifying documents submitted for the moments it must take in order to close it, because they've developed a technical process that requires accounts be open and in good standing in order to be closed. Which given this situation is a ridiculous design decision unless you are interested in maintaining these data after the account should close.
Good observation. I should not need to be familiar with regulations in /your/ country either. The quote you outlined:
>> Paypal demanded, out of the blue copies of drivers licenses, passports, bank statements etc that they have no right to, claiming they needed them to comply with law.
Is a statement of fact. Make your accusation plainly about it if you choose to do so or maybe apologise for insinuating it?
How so? I'm not the person you're replying to, but I have used PayPal in exactly the same way over the past 20 years: only linking credit cards, and using it to pay for things on websites rather than having to give my credit card information to yet another random site. And I've never had to provide any kind of documentation in order to keep my account open and functional.
So clearly these "financial regulations" you speak of don't actually exist, or at least PayPal has just -- lucky for me -- conveniently forgot to comply with them for my account.
Also consider that there are two things at issue here: account ownership, and account operation.
PayPal seems to not believe that the grandparent is even the owner of the account. If they did, then they'd allow him to close the account. That seems distinct from allowing someone to operate the account, that is, perform financial transactions. Which, sure, depending on the kind of transactions or kind of account, that might require further verification. (But assuming the GP is telling the full story of how he uses the account, PayPal certainly does not legally need further documentation.)
So it's a little weird PayPal has taken the stance they've taken. If all they cared about was complying with "financial regulations", then they should have no problem with the account owner asking them to close the account. But clearly they are doing something shady, because presumably knowing the account password, or at least demonstrating having control of the email address and/or phone number (or other contact method) associated with the account, should be enough to satisfy PayPal in order to close the account. The fact that it isn't is a red flag that should make us question PayPal's motives here.
At any rate, the fact remains that using a PayPal account solely to pay for stuff online should not invoke any "financial regulations" requiring the account owner to upload ID photos or other documentation. If that were the case, every intermediary in payment processing -- like Stripe, Venmo, Square Cash, or even Google Pay (all entities I use but have never given identity documentation to) -- would be required to collect this information.
Now remove the "cpu on a network" being involved and see if you can think it through. You've never been murdered so there's no need for laws and regs. Equivalent with no cpu on a network. Obviously murder is pretty extreme and selected on that basis to underline the principle.
PayPal created an account without ID, they can close an account without ID. Using your logic, couldn't people just open a fraudulent account because they didn't present an ID? That is a much worse outlook.
The account (email) that created the PayPal account is requesting it to be deleted, that should be sufficient. If both accounts have been insecurely breached, that's really the user's fault. PayPal could even mark the account as pending deletion after 30 days if we're really worried about this.
You shouldn't be able to stand around and blackmail the user for even more personal information to sell or "accidentally leak" to advertisers under the guise of "security."
Why is Paypal G&S a better standard than normal credit card protection? Also if part of their offerings is something that is the gold standard in fraud detection and similar, why are there a bagillion of compromised accounts?
Normal credit card protections vary from country to country depend on regulations. E.g it's much easier to get chargeback in US than in many other countries.
At the same time PayPal is almost aways side with buyer no matter where account was open.
Mostly because individuals don't take CCs. PayPal G&S is some financial fuckery that can give CC like protections to two randos exchanging goods or services ayyy. Like if you buy concert tickets and they never show or don't work, get your money back. Venmo (which is PayPal so not surprising) and FB Marketplace do the same thing.
I understand but that reason/excuse only works to a point. They might not need to close it right away but should still close it soon. They should lock the account attempt to contact the person using their contact methods and give them perhaps 30 days (90 at most) in case:
- The person asking to close the account isn't the same person the account belongs to, and the person who created the account is on a vacation or something
- There is some nefarious activity in progress and closing the account would hamper dealing with it
...and after this they can close the account without demanding the ID.
It definitely happens in the UK, I've done this and also made the same mistake. I don't think it's illegal, because they give you the terms clearly: pay it off within x months and it's zero interest. It's not like Klarna where they say you agree to make a 1/x payment every month. It's also not (as far as I know) a direct debit agreement. Virtually every credit card company also does this; you have to request to pay the full balance every month if you want to avoid interest. The only exception I can think of is the Amex cash cards where you have to pay off in full mothly.
In the Netherlands all bank issued credit cards (visa or Mastercard) require paying it off every month. The balance is just deducted from the attached bank account and if that has insufficient funds you will incur the penalty there. At least it is very visible.
I've noticed it can be tricky to avoid PayPal at times due to their partnerships with other large companies.
Are there any decent alternatives that are viable competitors to PayPal that one might want to move to if their terms become unacceptable? If not, I guess there's always the notion of refusing to do business with those who use PayPal as their one and only payment processor.
> Are there any decent alternatives that are viable competitors to PayPal
I guess this lack of competition is the exact reason why PayPal can behave as such. I'm writing this as a very happy 10+ years PayPal user, however the number of complaints and horror stories I've read during all those years is so large that it probably means I'm rather the exception than the rule, for now (touches various things).
Every time we see a 'PayPal bad' report here, it's someone running afoul of a perfectly reasonable condition. The biggest one is people running businesses that take money now and deliver a product at some time in the future, putting all the liability for chargebacks on PayPal, and then freaking out when PayPal puts a hold on the business's funds till their product is delivered.
I'd say it's not the lack of competition that allows PayPal to have the user agreement they do.
It's the fact that PayPal's user agreement is as liberal as running a successful money transmitter business can allow.
Are there even that many businesses that only let you pay via PayPal? I don't think I've ever encountered one. I use PayPal often enough for convenience (and to avoid giving out my CC number for a one-off purchase from a new website), but I don't think I'd be too bothered if I had to close my PayPal account. And yeah, if I ran into a website that only accepted PayPal, and didn't have an account, I'd just move on and buy somewhere else.
Checking on user agreements, all clients of PayPal (Europe) Sàrl and PayPal Canada Company are covered, and I can confirm that clients of PayPal Pte. Ltd. (Singapore et al.) and PayPal Inc. (US) are NOT covered.
Definition of Europe seems to be EU, EFTA (ex. Switzerland which is governed by PayPal Pte. Ltd.), and UK.
Oh, that makes sense, I heard that Switzerland have bilateral treaties that allows them greater autonomy on financial matters.
I guess PayPal not setting up a UK subsidiary is mainly due to FCA being a decent institution (Britons might disagree, but have you tried complaining to the Luxembourg CSSF?)
I used PayPal since 2006, because of the promise that I'd get my money back if I get scammed.
A few years ago I played a browser game, Game of Thrones Winter is Coming. Chinese company. I'm in the EU. In the EU we have laws and regulations, if someone tries to scam you, you usually get your money or the product.
The US has less support for the customer, aka the customer is in a worse place.
In China you as a foreigner have no support.
I bought a 20 eur package of Margery Tyrell, because I like the way she looks. I thought when I buy I, I would have her in my collection and could use her as my avatar.
I bought it, but what I bought was 5 out of 10 requires tokens to unlock the base version of her.
So I paid 20 eur for effectively nothing.
It wasn't mentioned anywhere that I would need 10 tokens.
The next 5 tokens would cost 70 eur!
I wrote PayPal that this was a scam and that I wanted my money back.
The response was that I have no proof and the case was closed with no way of appealing.
I closed my PayPal account and will never return.
I will also never spend money on a Chinese game.
PayPal restricted my account for a very stupid reason 10 years ago, so I kept 1 penny in there until a couple of weeks ago. I finally closed it a few weeks ago, which had to be done through customer support due to the account value being lower than the transfer minimums. I hope I cost them a lot more than the value of the account.
I got screwed in 2002 on EBay using paypal: product never shipped but they kept the money. My CC company refunded me, but paypal wouldn't let me use it again until I paid the $500 that the CC company reversed. A few years later PayPal offered amnesty and waived the $500, so I started using them again in 2006, still using them. Damn, that's almost 17 years.
I recently closed my PayPal account - when they had that weird thing they were trying to add to their terms about fining people if they made posts that were wrongthink[1].
The total impact to my life has been about 35 seconds of inconvenience adding a CC to steam and a couple other things instead of paying with PayPal.
I'm in the habit now of divesting myself from any financial institution that attempts to influence or place controls on how I spend my money, or that gets involved with politics in pretty much any way, "right" or "left". I want my financial institution to be Switzerland and accountable only to their fiduciary responsibility.
When closing your PayPal account, do not forget to click the ~"ask us to delete your personal data" in the modal. Otherwise, they keep it even if the account itself is closed/deleted.
I'm removing my account and subsequently removing all other accounts that uses PayPal, like turbosquid, but I'm having a hard time. They say they don't delete accounts [1], I'm sure that's not legal. Does anyone had any tips on it?
Turbosquid is owned by Shutterstock. I would email their listed Data Protection Officer at privacy@shutterstock.com and ask then to delete your account.
One thing you can try, but it depends on your jurisdiction is for companies that say they don't remove accounts... just use faker to create some random information.
This is sure to put them ahead of Apple Pay, Samsung Pay, Google Pay, Zelle, and Venmo. Everybody will be excited to use the payment system that charges them the most money!
If I'm reading this correctly, it's only for accounts with 12 months of inactivity. If you go for a year without logging into the service, then maybe you're not a Paypal customer anyway.
You certainly won’t return after they suddenly charge you 10 dollar for the privilege of retaining your personal information. It’s a money grab, pure and simple.
> Accounts with zero balance won’t be impacted by this fee and this charge won’t result in any negative balance.
> If an account no longer has a positive balance after being charged this fee and remains inactive for another 60 days, this account may be closed after the 60 days have passed.
It's a way for PayPal to slowly siphon and eventually drain your account balance.
Actually this is convenient for me. I have PayPal account and can't close it, because there is like 1 EUR or something like that. But I am also refusing to connect my banking account to withdraw the money. So here I am playing waiting game with PayPal.
I second that notion. I had close to a thousand dollars in there, which I can no longer access because they have the wrong phone number on file. I can change my password, get confirmation email, etc., everything except actually access my account to enter the correct number.
By accident I found that for some payments they don't require the phone number (for 2FA which I never enabled/activated) - so I'm slowly "withdrawing" by searching for vendors that accept this method of payments. WTF, give me my money back, PayPal!
Worth noting here quickly, after all the (fully deserved by the way) vitriol against paypal and its decades of institutionalized, legally protected crooked practices: The world of web3 and crypto may be full of scams and scammers, but the much older world of normal finance and fintech is fundamentally little different at its core. It's only more stable, better protected legally and has covered its ass under certain laws and regulatory capture with superior lobbying for politicians to look the other way at things that are obviously crooked but legally grey enough that they can be ignored most of the time.
Thought the same thing. I got the notification and deleted my account.
It's pretty funny too, since someone asked me to Paypal them some money shortly after. As I didn't have an account anymore, we used Zelle instead.
I guess some middle manager gets to make some slides about how they made x amount of money out of inactivity fees, while ignoring all of the business the company lost.
You can't destroy a business when they have lobbyist that will get politicians to bail them out and send them socialism checks while they complain about people getting money to afford food.
>I stopped reading your rant here because it's clear you are not familiar with financial regulations.
This is the magic of HN. One day the community will be decrying crypto for being unregulated. "It is all a scam", "We need reasonable regulation", "Crypto is a ponzi", "There's no legitimate reason for irreversible transactions", a million more stock lines we have all read here before.
The next day HN will attack PayPal for their exorbitant fees, policies and other hurdles which are necessary to comply with regulations.
While some of PayPal's business policies are not defensible, most are understandable. Especially when you consider the regulatory overhead they have as a worldwide business.
If HN doesn't like it, one solution would be a less regulated environment. If users love regulations, they should accept the fees as a cost of compliance. Either way, if others choose to operate in an unregulated cryptosphere, it would be nice to see a bit of "live and let live".
Any kind of generalization is somewhat inaccurate. Especially as individuals are not themselves categories. Individual posters may or may not fit into this generalization. It is simply my perception of the prevailing preferences.
Would it be more palatable if I had singled out individual users and their post histories?
12 montsh is suspiciously short. maybe it's a marketing trick -- "we ll threaten them to make some transactions, then we will say we are sorry and remove the clause"
Luckily I had once set up an automatic billing live test for a SaaS product that I no longer market. The auto-billing was to verify that the system was still working. To this day I still get a monthly 0.02 payment from me to myself.
Which countries does this or does this not apply to?
I wonder if a creative lawyer could argue that the users with a PayPal card effectively have a gift card - which would make this illegal in the US for at least that specific subset of US users.
> Note: Managed accounts and accounts held by customers in the province of Alberta, which have a balance of more than $250 CAD and which have been inactive for less than five years are excluded. Accounts which have a balance equal or less than the existing FX settlement amount are also excluded.
> Note: Personal accounts registered in Germany/Austria/Italy/Greece/Hungary/Poland are excluded from the inactivity fee assessment for 2022.
> I wonder if a creative lawyer could argue that the users with a PayPal card effectively have a gift card - which would make this illegal in the US for at least that specific subset of US users.
Maybe that's why they refrained it applying to US users?
Standard non-negotiable contracts (where you can only accept or reject) are required by consumer protection laws in those countries to have an effectivity period of at least 60 or 90 days (depending on the specific country) from the publication and notification date.
Not quite, Accounting tends to dislike money sitting somewhere that cannot be accessed. It's hard to classify and track over time. But yes, Accounting also likes to see revenue increase.
The first time, but after that, since you'll have zero balance, you wouldn't have to log in again since there's no fee if you have no balance.
And technically, if you really didn't want to log in and if you have any merchants linked to your Paypal that can do auto-debit, you could make a purchase at that merchant to draw your balance down to zero.
My late wife has a PayPal account.
When she died I wanted to put my name on the account.
They requested a Death Certificate, which I provided.
They acknowledged the Death Certificate then demanded prof that she was dead, before they would transfer the account to my control.
I even talked to a Lawyer about this, who also got really pissed off at PayPal's attitude. Alas there is no money in the account so he said there really wasn't anything to do.
The only person that can close the account seems to be my dead wife, and she appears to have no current interests in PayPal's shenanigans'.
> If an account no longer has a positive balance after being charged this fee and remains inactive for another 60 days, this account may be closed after the 60 days have passed.
So, I guess they are going to autodelete my account (which has always held a zero balance)?
Interesting. The lawyer in me says that if an account has a zero balance then it wasn't "charged this fee" and therefore that sentence wouldn't apply. But the realist in me understands that this nuance is likely lost on them. The real question is: what sort of notice do they give before doing any of these things?
When it came to internet money they had a huge head start, the first mover of first movers and here they are; they are to payments what skype is to phone calls.
I have a dormant account to which I lost access because I've changed my phone number. When I try to reset my password they insist on sending me a sms even if I enter my answers to the security questions. Unable to contact them via chat unless I'm logged in.
The only option I have is to call them on a US number. I tried that and it went through an automated bot. Sorry PayPal, good luck with business
It really depends on your use-case. Revolut might be one of the options. Free account, easy money transfers between other users and virtual debit cards.
Is there actually a material cost for them to host inactive accounts?
Even if the end goal is profitability, seems they are very eager to throw their goodwill/brand into the wood chipper, which is going to be counterproductive in the end.
There are already tons of PayPal equivalent services that anybody can use. Not even sure what the differentiator is for them, or why they are relevant anymore.
Possibly. I know in the US, banks have to report dormant accounts under a certain value, which doesn't "cost" anything but a salary/bandwidth to handle the reporting/questions/etc.
Is this some kind of joke? Companies crave users whether active or not. They spend a lot of money trying to acquire new users, in fact one of their subsidiary sends me emails offering $10 to come back. In that environment how is PayPal charging an inactivity fee? Just boggles my mind. Even more so because it costs them nothing.
I can't acces my PayPal since few years, I've noticed PayPal that I need them to fix it, now I don't even remember how far I went trough their support without them doing anything, till I lost my patience and stop asking.
Presumably, this will hit anyone who forgot they had a PayPal account. They'll just take your money in the account if you have it to cover the fee, or they'll levy the fee and close your account, and you still owe that money.
> Accounts with zero balance won’t be impacted by this fee and this charge won’t result in any negative balance.
> If an account no longer has a positive balance after being charged this fee and remains inactive for another 60 days, this account may be closed after the 60 days have passed.
I don't care how they perfume this, I just got in and deleted all my bank and card details from my account. If I ever get charged anything even afterwards I'll go out of my way to sue them.
Nice. Maybe PayPal will be able to close the account I've been unable to close for the past seven years (!!!) that they've still been emailing me about, despite contacting support multiple times to try to close it.
My friend has has non US paypal account holding USD and it’s virtually impossible to send or transfer this money as USD without being forced to convert it (to native currency and back to USD) first at high fees.
While I agree PayPal sucks, it may be beyond PayPal's control. It seems that some countries (in general) want you to convert any foreign remittance into local currency, seemingly to allow better tax compliance for their anti-laundering requirements. It's crazy, but I'll put the blame on governments on this one.
Without knowing which specific country you're talking about this discrepancy exists, I cannot comment on that, but I'm sure that (except for inward remittance, which is converted to Argentinean pesos) Wise is not available in Argentina.
Well time o keep an eye on my Credit Card. If I see a fee from PayPal, I will tell the Creit Card Company to deny it. I will have to spend time to figure out how to close the PayPal account.
Are they required to send a notice in advance of assessing these fees? Or is a single email notifying you of their policy sufficient? Hopefully it's the former!
Seems contradictory to not assess a fee if you're at zero balance but if you drop to zero balance due to fees they reserve the right to cancel the account.
Investopedia has an interesting article, search "dormancy fee", but it's about credit cards, still doesn't seem like it could be legal for Paypal either.
That article says it's now illegal for credit card specifically but legal for other things like gift cards and bank accounts, so it's probably legal for Paypal as well.
My non-cynical take is that they have overheads for data in GDPR-esque regions. They want an excuse to easily eliminate that overhead. They can’t “just” take your money before closing so they need to justify it.
I've personally never had any problems with PayPal, but they've been putting in some pretty questionable policies of late (or at least ones that have been noticed.) Like the fine for misinformation? I don't see how that was an honest mistake, then they sort of replace it with fines for "intolerance" instead. Now this. I know they have a history of freezing people's funds and just flat out taking their money as well. I never store money there but do have a card attached for easy checkout.
Given the list of things one can do to prevent the inactivity fee includes the simple "Log in to your account", this fee seems fair to me, especially since they will also be emailing account-holders with enough time that they can take any of the activity actions before being charged.
One would wonder why someone would leave sums of money in an online account without even checking that it still existed at least once a year!
What seems fair is telling customers there will be a fee before they open an account. If they want to add a fee after the fact, they shouldn't be charging that fee without the customer opting-in.
Unfortunately not even banks do that. They change their fee structure all the time, only announcing that their new terms will come into effect starting date X.
Then you suddenly have to pay an account fee or pay a custody fee if you keep more than 50.000€ in your account.
In Germany banks are required to collect explicit agreement by their customers. Banks are sending out updated terms on paper, requesting a signature. Not just an "accept" checkbox.
That's probably why Paypal excludes German accounts from their fees. Would they even be able to process anything on paper?
> In der Vergangenheit sind wir von Ihrer Zustimmung ausgegangen, wenn Sie den mitgeteilten Änderungen nicht innerhalb von 2 Monaten widersprochen haben. Seit dem Urteil des Bundesgerichtshofs im April 2021 zu den Allgemeinen Geschäftsbedingungen der Banken benötigen wir nun Ihre ausdrückliche Zustimmung.
> Ab Ende November geht es los – dann brauchen wir das erste Mal Ihre Zustimmung. Im Online-Banking oder in der neuesten Version der App.
Almost all horror stories you hear about PayPal involve the user treating PayPal like they were a bank. Just do not store money in PayPal... sweep nightly if you use PayPal for business. They even provide tools to make this automated.
The reason this policy exists is likely to remove super old liabilities for long-dormant accounts that have been long forgotten about.
PayPal is not interested in storing funds forever... they want you to buy stuff with it or transfer it to your real bank account.
This policy seems aimed at convincing people to "move it or lose it"...