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PayPal... where's the money?

A few months ago I wrote about the issue I was having with Paypal.

After many happy years using PayPal to make and receive payments as well as repatriate funds back to my bank account, I suddenly discovered that they had suspended my account.

The several thousand dollars of MY money that was in that account suddenly became inaccessible to me. I could not spend it and I could not bring it back to my bank account.

Then they demanded something I could not provide -- a utility bill addressed to my house. I could not provide this because all of my mail goes to my PO Box. That was not acceptable to PayPal -- who continued to hold my money for no good reason.

It was only after hundreds of my YouTube subscribers started emailing them with messages of complaint and outrage that they finally relented -- but the damage was done, as far as I was concerned.

I swore I'd never use PayPal again and since then, I have not.

For some reason I am unable to close my PayPal account (this action is not allowed at this time) so it will simply wither and die with a zero balance I guess.

How serendipitous it was that I decided to dispense with the services of this company that seems happy to play outside the rules with other people's money, because...

It seems that now a pretty large number of people are also discovering just how PayPal's lack of regulation and heavy-handed attitude to not releasing people's hard-earned money can affect them.

According to this story in Stuff NZ firms complain PayPal funds have not been paid when they have tried to withdraw them to their own bank accounts.

What the hell is going on here?

The simplest explanation is that it's a technical glitch -- but Paypal are not advising anyone of such a problem and that is bad, very bad.

People, like myself, who used to receive money from overseas sources and allow it to accumulate in their PayPal account until the exchange rate was suitable or until they needed it have found themselves up shirt creek without a paddle.

Likewise, those traders (large and small) who rely on PayPal as a method of collecting monies for goods or services are finding that the company's seemingly arbitrary decision to hold payments for an unreasonable length of time is hurting their cashflow.

Perhaps the biggest problem with Paypal is that it operates outside the regulation and controls that the banking system must conform to. If something goes wrong, if Paypal simply decides to pocket your cash or sit on it for six months there is nothing you can do about it except bitch and moan to your friends.

I had read many horror stories about funds belonging to individual, businesses and even charities being "held" by Paypal, pending some specious dispute or for some other arbitrary reason but figured it would never happen to me -- yet it did.

Now that it's happening to so many I think it only prudent to warn folk about the simple rules regarding the use of Paypal (that's if you must use it at all):

1. Do not leave funds in your Paypal account
2. Do not link your Paypal account to a debit card
3. Do not rely solely on Paypal for your earnings or sales

The best option (as I have found) however, is just to ditch them altogether in my opinion.

No company that feels it has a right to seize your money on a whim has any right to hold your money in the first place.

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