PayPal Embezzles

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Sep 11, 2017
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#1
I am having with PayPal, Inc. I had tried resolving the problem a few times with the company's customer service representatives, both through online chat and telephone, but to no avail. I next elevated the issue to the primary contact listed on Christopher Elliott's advocacy website, Shawn Farrell in Scottsdale, Arizona, but Mr. Farrell never responded. I then elevated the matter further, to the secondary contact, John Rainey, in San Jose, California, but Mr. Rainey as well never responded. Below I have copied these messages I had sent to Messrs. Farrell and Rainey. I believe that any further attempts I may try to resolve the matter with other management at PayPal will be futile.

This matter has its origins in my sale of various items through Ebay. Items were sold to several different buyers, and Ebay used PayPal to process payments from the buyers. Once the buyers made payment to PayPal, I shipped the items sold to their respective buyers. Now PayPal holds the money derived from the sale of these items.

The standard method of having funds transferred from PayPal to an individual involves "linking" that individual's checking account to PayPal, with PayPal thereafter transferring funds to the linked checking account free of charge. PayPal users have a right to use this method specified in the contract ("user agreement") posted online by PayPal. See http://www.paypal.com/us/webapps/mpp/ua/useragreement-full. There are alternate methods of having funds transferred from PayPal, all of which involve payment of fees; I have no use for these alternate methods, I have no desire (nor should I be required) to pay the fees involved for such alternate methods.

The PayPal system for linking to an individual's checking account is automated. To link a checking account, an individual enters the bank routing number and account number. However, whenever I tried to do this, the automated system responds with, "We're sorry. We're not able to process your request right now. Please try again later." The same message appears even when I try again later. The PayPal customer service representatives have been unable to resolve the problem, and have been unable to link my checking account directly. The only advice they have been able to provide is that I should close out my existing checking account, and go to a different bank, open up a new account at that bank, and then see if linking the new account would work with the PayPal automated system. Obviously, that's not a reasonable resolution.

The amount of money presently at issue, being held by PayPal, is now $303.28, but I expect it will grow as I sell more items through Ebay. The resolution that I would like is for PayPal to link to my checking account so that the funds can be transferred to me without any fees. It is difficult to view this matter as a dispute because PayPal appears to recognize the fact that I am entitled to receipt of the funds. But its customer service representatives are unable to remit the funds to me. The fact that PayPal is holding money that belongs to me, yet is keeping that money for itself, is the very definition of embezzlement. It may not be a large sum of money, but PayPal's refusal to hand over my money to me is just wrong.
 
Jan 6, 2015
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#4
Does the country you used when you opened your account match the country in which the checking account was opened?
 
Sep 11, 2017
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#8
Did you use the term embezzlement in your letter to PayPal? I would think that's a likely reason why they have not responded to you. Accusing them of embezzlement is a loaded charge to lob when you're wanting their help.
No, I have not use that term with PayPal. I use it only here as my characterization here of PayPal having lawfully come into possession of the money, but then refusing to turn it over to its rightful owner.
 
Sep 11, 2017
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#10
In one of his online stores, "I wanted to share a car — not these parking tickets!," Christopher Elliott wrote: "Wait, they admit that the charges are wrong, but they don’t do anything about it? That makes this consumer advocate’s blood boil." That is the same case here. PayPal admits that the money belongs to me, but they're not doing anything about it . . . they are just keeping the money for themselves without lawful reason.
 
Likes: Artrina

Neil Maley

Moderator
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Advocate
Dec 27, 2014
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www.promalvacations.com
#12
Sep 11, 2017
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#14
If the first contact has not responded after a week and then write to the next one, stating you wrote to the number one who never replied. * * * Let us know how you make out after you have gone all the way up the Executive chain.
I have gone up the chain to the point of reaching out to the company's CFO at its corporate headquarters, and no one in management has thus far responded to what I think is a relatively small claim (about $300). The next steps up are the COO and the CEO, both also located at corporate headquarters. My thought is that, given the lack of any response thus far, going further up the executive chain, and attempting correspondence with people with increasingly more responsibilities, it will be futile. Do you think otherwise? Do you know if there is any history as to the responsiveness of PayPal executives?
 

Neil Maley

Moderator
Staff Member
Advocate
Dec 27, 2014
19,717
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#15
We recommend finishing the process , going to the top executives one at a time.

If PayPal isn’t compatible with your bank, your option is to request a check being mailed and no I get using them.
Why don’t you post the letter you wrote here? Maybe we can help edit it to get a better response.

We have seen one or two closed PayPal accounts reopened by writing but we’ve never had an situation that your bank and theirs didn’t work.
Remember- PayPal is not a God given right to use- it’s a service they own and they can do business with who they want to do business with. I would have set up my bank account before I took in any payments.
 
Likes: jsmithw
Dec 19, 2014
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#16
I'm sorry to hear that you are frustrated, but here's a reality check. Paypal is NOT embezzling your money. By your own admission, they acknowledge that it is your money, and they have not taken any of your funds without your consent or knowledge. You can get your money out of paypal via other methods, you are CHOOSING not to.

Paypal's own FAQ states:
Here are some common issues you might encounter when linking a bank account:
  • The bank account must be a U.S. bank.
  • The bank account can’t be linked to more than one account at a time.
  • The bank account can't be linked if it has already been linked to 3 previous PayPal accounts.
  • The name on the bank account must match the name on the PayPal account.
We can confirm accounts from most banks and credit unions. Unfortunately, there are some banks that are not compatible with PayPal, including most online only or prepaid bank accounts.

Do any of the above conditions apply?

Have you checked with your bank to see if there is an issue on the bank's end?

If you are unable to link your bank account, there are other options for retrieving your money. Yes, some of them require a fee, but you could also transfer the money to a friend or family's account that is linked to a bank account and transfer the money out that way.
 
Sep 11, 2017
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#17
True, it is not a "God-given" right, but where two parties enter into a contractual agreement, as is the case here, there exists a legal right. Interestingly, I have being using PayPal to obtain the postage I use to mail the items I have sold to their respective purchasers, and PayPal has had no difficulty in taking money money from me to pay for that postage. The problem is money going in the opposite direction, from PayPay to me. Here is the most recent message I sent to PayPal (through its CFO), redacting only my personal information:

John Rainey
Chief Financial Officer and Executive Vice President Global Customer Operations
2211 North First Street
San Jose, CA 95131-2021

Dear Mr. Rainey:

About two weeks ago, on August 30, 2019, I sent the below-copied e-mail message to Shawn Farrell, Customer Solutions Group Leader for PayPal in Scottsdale, Ariz., but I never received an acknowledgement or response from Mr. Farrell. Might you be able to dig into my inquiry, and have a responsible person from PayPal get back to me? I would greatly appreciate it.

Regards,
[My name and contact information]


Shawn Farrell
Customer Solutions Group Leader
9999 North 90th Street
Scottsdale, AZ 85258-4420

Dear Mr. Farrell:

I have been getting the run-around from various lower-level individuals at PayPal, Inc., all without a relatively straight-forward issue being resolved. Consumer advocate Christopher Elliott identified you as an individual who could cut through the corporate bureaucracy to solve the problem; he provided me with your contact information.

Using E-bay, I had sold several items, and PayPal, Inc., processed payments. At present, PayPal, Inc., is holding $221.36 in an account in my name. According to the contract between PayPal, Inc., and myself, I have the right to “transfer the money via a standard transfer to [my] bank account linked to [my] personal PayPal account for free.” I have attempted on several occasions establish a link between the PayPal, Inc., account and my bank account, but without any success. Attempts have been made with both my primary bank account, at Iberiabank, and the joint bank account with my spouse, at National Bank of New York City. in each case, the PayPal, Inc., system responds with, "We’re sorry. We’re not able to process your request right now. Please try again later."

PayPal's telephone customer service representatives have been unable to resolve the problem. I have also e-mailed PayPal, Inc., customer service representatives, both to avoid miscommunication and to have a written record in the event that legal recourse becomes necessary. Still, the problem remains unresolved. The most recent response from a PayPal, Inc., customer service representative is the following excerpt written by "Anne":

"Thank you for contacting PayPal.

"I can sense the urgency of this matter. Let me review your activity details to address your concern. Upon reviewing your PayPal activity, it shows that security system is blocking option to add the bank ending in xx97 because we just need to make sure that this is not unauthorized.

"Our internal security system is an automated system which reviews all of the details of every transaction that is made through PayPal. This is similar to the way your bank or credit card issuer approves transactions. For security reasons, we cannot see what aspect of this transaction has caused our internal security system to intervene. In order for us to let the transaction go through, we will need to talk to you over the phone to validate your information."
Can you cut through the red tape and resolve the issue? I see from your LinkedIn page that you have been with PayPal, Inc., for over eight years, that you support many subordinates, and that you possess the desire and capability to improve the customer experience. I would be pleased to provide you with whatever information PayPal, Inc., needs to confirm the validity of my bank account information. In fact, I have already spoken to Iberiabank, and it is ready to have my bank account linked with PayPal, Inc. If need be, we can establish a conference call between myself, yourself, and Iberiabank representatives so as to facilitate this account linking.

Regards,
[My name and contact information]
 
Sep 11, 2017
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#18
The definition of "embezzlement" is not that important here, other than just giving a general characterization of what PayPal is doing. (The legal definition of "embezzlement" varies somewhat from state-to-state, it is generally defined as the fraudulent conversion of the property of another by one who is already in lawful possession of it; serious interference by PayPal of my right to the money constitutes conversion.) What is important is that PayPal knows that it possesses my money, and is interfering with my right to that money.

As to the putative limitations with respect to bank accounts, none of those conditions apply here. I did check with my bank, spent a good amount of time discussing the matter with the bank, and the bank confirmed to me that there are no issues on its end.

I have no friend or family member with a linked bank account.

The agreement between PayPal and myself does not obligate me to pay any fees to receive my own money. I am not asking for PayPal to do anything than what we agreed upon, and so there is no reason for me to pay any further fees to PayPal for it to perform its obligations.

To me, this is a case where PayPal and I have a contractual agreement. PayPal has breached the agreement by refusing to turn over the money of mine that it is holding. I would like PayPal to respect our agreement voluntarily.
 

Neil Maley

Moderator
Staff Member
Advocate
Dec 27, 2014
19,717
18,384
113
New York
www.promalvacations.com
#19
Here is the most likely reason you aren’t getting a response- you mention possible legal action:

“ and to have a written record in the event that legal recourse becomes necessary”

You told PayPal you want a written response in case legal recourse becomes necessary. Of course no one is going to respond because any response could be used against them.

I’m sorry to say you might need to contact an attorney at this point because I don’t think you are going to hear from them with what you wrote. THAT we see often once any mention of “legal” is in a letter.

I had a suspicion there was something in your letter that is preventing a response.

In Chris’s article on fixing your own problems and why a company might be ignoring your letter:
https://www.elliott.org/answers/how-to-fix-your-own-consumer-problem/

Threatening. If you’ve ever wanted to end a complaint letter – or phone call, for that matter – with the words “I’LL NEVER FLY YOUR AIRLINE AGAIN!” or “I’LL SEE YOU IN COURT!,” then let me offer a little advice. Don’t. Threats won’t just guarantee your failure. You could also end up on a company’s blacklist (oh yes, they have them), or if your threat is serious enough — say, you threaten the president of the company with bodily harm – you could find yourself on the wrong side of the law. Interestingly, when I see one of these letters in my inbox, it’s often attached to a note sheepishly asking me why the customer hasn’t heard anything from the company.

I’m sorry to say I’m not sure there is anything else we can assist with at this point.
 
Sep 11, 2017
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#20
I have encountered the problem of companies always wanting others to telephone them, and not to have anything in writing. So when things start going awry, and one needs to document actions in writing, a consumer needs to be able to explain why it is necessary to put things in writing (otherwise it would be deceitful).

It sounds like the best thing to do here is to sue PayPal and get a judgement against the company. Fortunately, PayPal does have offices in New York City, so I would be able to sue the company in the New York Civil Court, small claims part. It is fairly easy to sue, but it does take longer to get a judgment than settling the dispute without going to court.

Previously, I had an experience with Greyhound Lines, where that company would not respond to correspondence. I sued Greyhound Lines in the New York Civil Court, and at the very appearance a representative of Greyhound Lines could not do enough to get us to settle the matter (it was only a few hundred dollars). But what I got out of it is that certain companies just have a policy of ignoring their customers, and not responding unless they are sued. It is less expensive for them to settle with the few who sue, then to deal with all those who complain through their customer service representatives.

Perhaps PayPal is like Greyhound Lines: it will not respond unless and until it is sued.