My company will commence legal proceedings tomorrow and would love to hear from anyone else that has taken PayPal to court in the UK.
PayPal has stolen more than £27,000 of our money earned over 3 years!
Since we first started 3 years ago, our company has used PayPal to process 100% of our transactions. From a total of close to 10,000 transactions we've had only 5 or 6 disputes from our customers so we’d consider ourselves to be a 'good' PayPal customer.
On Saturday 6th October we tried to withdraw £7,000 (from a £27,000 PayPal balance) to the company bank account associated with our PayPal account. These funds were needed in order to pay one of our customers via a bank transfer immediately. It was the first time in our company's history that we've tried to withdraw funds to our bank account as until then we've always kept them in our PayPal account. PayPal's system notified us that the withdrawal needs to pass through some security checks so as a concerned customer I contacted PayPal and spoke with a very helpful representative named 'Chris' who after looking at the situation wrote me an email confirming that the funds will be in our bank account by no later than Monday morning. I forwarded this email to our customer in order to prove to him that it was PayPal who was responsible for holding back the payment but that they had also confirmed in writing that we had more than enough funds on our account to cover the transaction and that the funds would arrive in our account by Monday morning. Based on this confirmation our customer released a car that we had purchased.
An hour or two later, a different PayPal representative called me to discuss the increased volume of business we were doing. I explained that we have new customers and things are going very well and that we expect our revenue to continue to grow. This is what any young start-up hope for!
Hours later I’m informed that payments on our platform are no longer working. I then learn that PayPal have imposed an Account Limitation to our company account meaning that we can no longer receive payments, we can no longer make payments and we can no longer access the £27,000 credit that we have on our account. Basically it means that our entire business can no longer operate. In their email to us they quote the reason for the Account Limitation is "Under the Acceptable Use Policy, PayPal may not be used to send or receive payments for activities that involve an entry fee and a prize, such as raffles, drawings or lotteries. Due to applicable laws and industry regulations, we do not offer approval for these types of transactions.”.
We are aware of this policy and prior to developing our platform 3 years ago we discussed what we do and how we would use PayPal to process transactions. We sell ‘virtual currency’ called ‘Raffall Credit’ that can only be used within our platform to a) subscribe to a premium accounts and b) to enter prize competitions.
The PayPal transactions are NOT used to send or receive payments that involve an entry fee or a prize. The PayPal transactions are used to purchase non-refundable credit to be used on our platform. Furthermore, our platform does not facilitate raffle or lotteries even though we sometimes use these terms for marketing purposes.
Complaints Department
On Saturday evening I spoke with ‘Granya’ from the complaints department and after providing this information and explaining the situation, she understood the situation and suggested that although not her decision, based on the new information provided it would seem likely that the Account Limitation would be removed.
On Sunday morning I spoke with someone else from the Limitations Department who also said that after reading Granya’s notes and going over things with me, that I should not worry and that based on the information provided, its likely that the problem would be resolved. He said that some limitations have ‘No appeal’ status where ours did not.
On Sunday afternoon I received an email from ‘Paul’ from the Brand Risk Management department saying “At this time, the limitation on your PayPal account cannot be removed until the below issues are resolved.”. There was no mention or reference to the information I had provided with PayPal so we had no idea if our information has been received and/or reviewed.
We called PayPal again and spoke with ‘Paul’ from the Limitations Department who informed me that ‘Paul from the Brand Risk Management’ team was not working on Sunday that caused further confusion as we had just received an email from him. However, after explaining the situation in great detail to Paul, he also agreed that based on the information I provided, he will request that the situation be reviewed again and I had no need to worry as it should not count as grounds for an Account Limitation due to what’s been mentioned earlier on in this letter. He said he has a friend working in the Brand Risk Management team that was working now so he immediately contacted him via your internal messaging/email service and asked him to look over all of the notes on the system. He also suggested that he would contact another department so that we could receive an approval so that this could never happen again further down the line in the future. Paul said he would contact me later on and although he was due to finish work at 18:30, he would be working later due to his workload. Paul was extremely helpful and understanding. However he didn’t call me back as promised and nothing has been resolved until now.
SUMMARY
Our company has £3,000 left in our HSBC bank accounts. We have £27,000 in our PayPal account and rely on this money to operate our business.
On the back of your email sent on Saturday, our supplier has released a car that we were purchasing from him on behalf of our customer. We owe the supplier £7,269.20 and he released car and we are no longer able to pay him even though PayPal assured us the money would be in our account in order to do so.
Our platform generates a lot of money for good causes and charity. Much of the money in our PayPal account is due to be paid to Cancer Research UK today. You are effectively stealing money from them as well as us!
If we had wanted, we could have withdrawn our money from PayPal to our bank account on a daily basis and if we had have done so we would have +£30,000 in our company account and could then continue to work and even find alternative payments partners such as Facebook, Apple and Google, who have already approved and are already familiar with our platform due to the fact that we provide a safe and secure solution to a problem within the space that we operate in which is good for everyone involved!
At the very least we believe that we have significant legal grounds to request access to our funds that we’ve earned honestly and correctly providing a quality service to our customers. Not only have you been complicit in allowing us to use PayPal for 3 years to process all of our payments, you have profited by it. We have a large history of communication between our company and PayPal, be that via your online contact forms or via calls and emails. Throughout this communication we have often discussed the functionality of our platform and we believe that we can prove a significant degree of incompetence on your part which in turn has resulted in your decision to impose an unjust account limitation and block £27,000 of our own money.
We have consulted with a law firm and some of the charities that we work with and should you not contact us to at least discuss ways in which we can resolve this, we will use their contacts and power within the media to make sure that this story is told to the public.
You may be a multi billion-dollar company. But don’t let that fool you into a false sense of security. Customer service should be the backbone of your company and although today you are the biggest and strongest, it doesn’t mean that you will be tomorrow! I think that you’ll find public opinion tends to side on the ‘little’ guys when it comes to stealing money. You might not look at it like this, however the story in news might read, “PAYPAL CHEATS CHARITIES OUT OF REVENUE EARNED FOR GOOD CAUSES!”
