your karma is leaking 

My first successful website back at the turn of the millennium focused on providing free information and advice on accepting credit cards online. As a result I spent a fair amount of my time each day testing out new payment processors and shopping carts, putting transactions through and speaking to other people about the pros and cons of each.

Throughout this process I regularly heard horror stories about Paypal and very rarely used my own Paypal account, instead favoring alternatives like 2CheckOut and Clickbank for processing my own payments. However over the last few years I’ve found myself using Paypal more and more simply because it makes life so easy.

That was until March 13th this year, where Paypal decided to close my account without reason, without warning and without explanation. Since then I have lost domain names that weren’t renewed, I have lost business because I haven’t been able to accept private advertising payments for some of my sites and I have wasted huge amounts of time and effort trying to get to account back. All to no avail.

What follows, therefore, is a complete breakdown of the entire experience to serve as a warning about using Paypal for your business. The conclusion, based on my own experiences, as well as numerous other people, is to avoid using Paypal for your business.

The fact is that they are too unreliable, offer the worst customer service in the business and they can and do close accounts at the drop of a hat – whether you’ve done anything wrong or not. In other words if you rely solely on Paypal, you could find your business goes up in smoke overnight. You have been warned…

How My Paypal Account Got Closed

Pulling my hair -  TGIFOn 13th of March this year I sent out an email to one of my lists, recommending an excellent product I’d just bought, together with my affiliate link. The affiliate network hosting the product pays commissions via Paypal and I’ve never had any problems receiving my commissions before.

I should also mention that whilst I made a number of sales, the volume/value of these was nothing out of the ordinary for my account and no refunds/chargebacks were received from customers.

However a few hours after sales started to come in, I received an email from a client telling me they tried to renew their advertising on one of my sites, only to receive a message that my Paypal account was unable to accept payments.

I quickly logged into my account to find that I had received a Paypal limitation, and that Paypal were requesting information from me in order to re-activate my account. Namely they wanted proof of ID and my address.

I did think at the time that this seemed a little odd as I have been using this account for many years without major problems and have also sent through similar documents in the past when requested.

However I bit my lip and submitted the requested the documents that very same day. I also sent through an email to their account limitations department requesting information on the problem and asking if there was anything I could do to speed up the process. The email contact form I filled in clearly stated that I should expect a response within 24 hours in an ideal world, and 72 hours at the outside.

No such response was ever received. Ironically at this point I hadn’t even received an initial email from Paypal telling me there was a problem with my account – it was only because of emails from clients that I noticed myself.

Frustrated with the broken promise about a response within 72 hours, I rang the limitations department on 20th and spoke to Michael who told me my account should be up and running by the end of the day. He checked the documents I had uploaded and told me that everything looked fine from his perspective and that I would receive an email shortly to confirm the situation.

I, of course, received no such email. Attempting to be patient, and still with no response from Paypal, I gave them an extra 24 hours before ringing the limitations department again for an update.

This time I spoke to Daniel who assured me he would look into the situation himself and email me personally that afternoon. Once again this did not happen.

Clearly the limitations department at Paypal is dreadfully run and I’m sure I’m not alone in being the recipient of numerous broken promises from them.

In an attempt to tackle the situation from another perspective, on 23rd of March I decided to contact the customer complaints department to express my dissatisfaction and hopefully speed up the account review process.

This time I spoke to a lady called Jennifer who promised to look into the situation. This time I did actually get a response though she only emailed me later that day to say:

“Your account should be reviewed today by 6.30pm and an update will be sent to you through email. This will be done as a priority.”

By the following day there was still no response on the status of my account so on March 24th I rang and spoke to another agent called Steven who assured me (like everyone else) that he would get it sorted. Once again, I received no response.

By this point, after sending uploading the requested documents, sending a polite email and making four phone calls to different people (and even getting a supervisor involved) I still had no idea what I was meant to have done wrong, how to resolve the situation or what was even going on their end. Frankly, none of the staff seemed to have a clue either.

And that is where we sit today. After three weeks I have still received no communication from Paypal about my account. It just sits there, unusable. I even decided to use their formal complaints procedure to request further information a few days ago but even that process failed to produce any kind of response.

I have, in essence, been blackballed by Paypal. I have no idea why, or what I am meant to have done. Their call centre has been less that useless. They don’t respond to emails. And if that was the sole source of my income, I would be tearing my hair out by now.

Not to mention the fact that there is still money in my Paypal account which I can no longer access.

What a sad, sorry state of affairs. Infact, it seems from some research I have done based on interviews with ex-Paypal employees that in these situations the absolute worst thing you can do is to upload any requested documents if your Paypal account is limited.

The reason is that not only will these documents not help to get your account re-activated but even worse – the main goal of requesting these documents is to “blacklist” you so that you’re unable to ever open another Paypal account in the future – even if you’ve never done anything wrong!

So what now? Well, I’m considering a formal complaint through the Financial Services Ombudsman which I hope will cause Paypal at least a little of the discomfort that they have caused me. I’m also considering using the Freedom of Information Act to request information on my account and why it was closed without warning. If I have any luck with either I’ll update this post to reflect that – just as I will if I ever hear anything back again from Paypal. Though, frankly, I’m not holding my breath.

However the moral of the story is clear. Paypal is a badly run organization that will revoke access to your account (and your money) at any moment without warning, without explanation and without recourse.

If you’re currently using Paypal to accept payments, or you’re considering doing so in the future, I would strongly recommend you look for an alternative. Let my experience be a lesson to you – and if you need any more evidence just spend some time exploring Paypal Sucks – there are stories there that will make your toes curl.

Have you ever had any problems with Paypal? What happened? Please leave a comment below in the hope that other Paypal users who have had their accounts limited or closed without warning can learn from our experiences…

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I'm passionate about building online "lifestyle businesses" that require minimal time to run and allow for maximum enjoyment out of life.

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