August 22, 2017

Problems With Paypal: A Cautionary Tale

How many of you keep tabs on what's going on with your bank account? Do you trust the companies you do online business with to take out only what you authorize? If you don't regularly monitor the activity on your accounts, well, of course you should.

Last month I noticed a Paypal deduction for about $36, but I couldn't recall what it was for. I have to say that the ability to pay after delivery has muddied the waters a bit here, because a Paypal deduction on my bank statement doesn't tell me to whom the money was sent, only that Paypal deducted it. I have to keep my own records, which I do. But I couldn't find neither order receipt nor order confirmation for any such amount.

There was nothing on my Paypal activity webpage, so I became concerned. I filed a suspicious activity case in the Paypal resolution center, received an auto-email reply with a case number, and was told I'd hear back within a certain amount of time.

Two months passed, I'd heard nothing, and there was no record of either open or closed cases on my resolution page. Eventually I found a phone number, punched in my case #, and got a recorded message informing me that in July 2016 I'd made a claim for so many pounds sterling but the case was decided in favor of the seller. HUH????? I looked back through my July 2016 activity, found one purchase I'd made from Great Britain, but for a different amount. However, I'd received the product, was happy with it, and in checking my bank account, they were indeed paid. If I was trying to get my money back I think I would have remembered that and pressed the issue long before a year had passed!

The only way I could protest was to open another case file, but that one has been dismissed as well. I was told I would find more information on my resolution page, but that says I have zero open cases and zero closed cases, so there is no record of any of it. Of course these email notifications come from no-reply email addresses, so there is no way to ask questions.

In browsing complaints on the Paypal community forum, I see increasing complaints of folks feeling scammed. I realize some of these will be sour grapes, but I don't think it's sour grapes to have a legitimate concern about why Paypal helped themselves to money from my account and isn't being forthcoming with enough details to convince me that it was a legitimate deduction. Fortunately I'm only out $36. But it could have been $136 or $336 and there would have been nothing I could do about it, especially since Paypal doesn't need my authorization to do this.

Do you remember when price scanners first hit the stores? People were suspicious of them so stores would give you the item for free if it scanned differently than the price on the shelf. Now I find items regularly scan for higher than the price on the shelf. Sometimes they'll correct it at the cash register for you, sometimes they won't. But that's assuming you catch it.

Another thing that bothers me are those introductory gimmick prices. So many months for one price and then the regular price. Except that the fine print rarely discloses what the regular price is. Charter got us on that one, but with a different twist. If you pay attention to Charter adverts, then you know they offer 12 months discount and then the regular price. With us, the price with up again after our second 12 months at the "regular price." When I called to find out what was going on, I was told that was our agreement, i.e. a second price hike after 24 months. But no where have they ever advertised that, and of course it was all done over the phone so we have no documentation. I think I would have remembered something like that!

And here's one more. Do you keep track of those "authorization holds" placed on your account any time you use a debit or credit card? Usually these are for the exact amount of purchase, but some restaurants, hotels, motels, and gas stations  add on anywhere from $25 to $100 or more above the purchase price. We learned about these several years ago when our bank statement showed we'd been overcharged for a motel room. Usually these holds "fall off" when the bank processes them, but sometimes they don't, as in our case. Fortunately Dan was able to get a live person to tend to the problem and we got a refund, but it was a hassle nonetheless.

Folks, are you paying attention? It's so easy to shrug off a little here and a little there, because it's such a battle to correct a problem. No, I'm not hollering "conspiracy," but the larger any system gets, the easier it is for mistakes, glitches, sloppiness, lack of caring, or downright dishonesty to cause problems. And the larger the system, the more layers of bureaucracy get piled on to increase it's ineffectiveness at solving problems. With our entire economic system being reduced to digital numbers on a screen, it's a disaster just waiting to happen.

This is two rants from me within four weeks! I must be getting ornery in my old age. 😁

27 comments:

Trema Minning said...

I totally agree. There are too many crooked companies out there these days.
We had an issue with the cable company a few years back. Our agreement was $69/month all included. cable, phone, equipment, ect.
Our first couple bills were fine, the third month we were being charged $14.99/month for "anticipated tech support"
What??? So, if we may need there help? It was ridiculous. We finally had to switch companies. After we called them out on the issue, every month we had a new charge or problem.

Unknown said...

I've read far too many horror stories about Paypal to ever trust them with significant sums. I have the option to get paid via check or Paypal for some online work I do, no direct deposit option. Despite being a heavy traveler and checks being inconvenient for me, I take the check every time. The banks are bad enough, and they're regulated - Paypal isn't even regulated! I will NEVER trust Paypal.

Frugal in Essex Tania said...

If it's an expensive item I always pay credit card for protection. I've had on bad experience with eBay and it was resolved immediately. I am always cautious. If it sounds too good to be true then it probably is.

Leigh said...

Trema, I'm curious as to what cable company that was! We had a similar experience with State Farm. We stayed with them through several interstate moves until we got here. Every month there would be an extra $10 to $30 added to the bill, with no explanation. I'd call to ask about it, the gal would check to see what the problem was, and every time she'd come back and tell me it was a mistake - to ignore it. We finally found out that the charges were coming from our previous State Farm office in Florida. They were trying to reclaim fees for a supposed third driver they said was on our Florida policy! Huh? There was no third driver in our family so State Farm got dumped.

Unknown, peace of mind is worth it. Smashwords through paypal pays me for the eBooks I have published with, so that's the one I'm trying to figure out. But just canceling Paypal doesn't seem very safe either - they already have my account numbers.

Tania, I'm glad you didn't have any trouble resolving your problem! Seems all too often the problem isn't resolved in the public's favor. Very hard to trust after something like that.

Woolly Bits said...

we've recently had problems as well! we ordered something, which we received, but the company claimed they didn't get the money from paypal. after a lot of to-ing and fro-ing we were told that we didn't pay, were charged - only to be charged twice for the same stuff within days! apparently they first payment was deduced after we made our complaint! it took us a lot of work to get our money back - 4 weeks of constant hassle:(
and in the supermarket I complained about double charged items and was recently told by the manager "you win some, you loose some"! I nearly killed him for that remark - so if I do get charged less sometimes (I always check the receipt, that happens next to never:() it's ok to overcharge me at other times??? it will even out in the end or what? I don't care if he thinks "bitch" every time he sees me - I only have a certain amount of money and stuff is expensive enough as it is! I was even told by another customer that there is no point in checking my receipt, because the ladies at the till have no advantage in overchargeing me! no, they don't - but the shop does, whether on purpose or not!if an item on sale is charged 1 euro more (or whatever amount) - 100 customers, who don't notice = 100 euro more for the shop? I could rant endlessly - but unfortunately only our own vigilance can help - and, as in your case, sometimes not even that:( the only advantage I have is that I have a pre-paid "credit card" - they cannot take off more than I put in in the first place, so I can keep the damage fairly small with it.

Leigh said...

Bettina, the more global our economic system becomes, the more prevalent the problems will become. There was a problem here awhile back with cashiers adding "cash back" to debit card purchases without the shopper's knowledge, and then pocketing the money. That's an excellent idea about the prepaid credit card. I know there's a charge to buy one, but at least you know the exact amount, and you're right, they can't overcharge it!

Susan said...

Thank you, Leigh, for bringing this up! I am very leery of PayPal and am contemplating cutting off my account with them. There are just too many opportunities to overcharge and there is virtually no way to access a human in order to deal with it.

Judy said...

What I'm hearing here is similar to what I'm hearing across the web. What originally was a good idea (Hubby used them a lot) has soured. Paypal has branched out into the credit-card business and they have abandoned/neglected their roots. They have now become too big/too impersonal. I personally don't use them and if they are the only way to buy something on line, I don't make the purchase.

Quinn said...

This made me check my paypal transactions for the year...no problems, I'm happy to say, but thanks for a needed reminder! Sometimes the gap between a purchase and the record of payment is long enough (or my memory is short enough) that I forget what a particular expenditure was, and then I have to doublecheck my own records or calendar. I use a credit card for nearly all my financial stuff, and I remember once when I saw a credit card expense for over a hundred dollars worth of flowers that "I" sent to someone in China - not very likely! Fortunately, Discover fixed that right away :) But now I have my account send me an email every time the card is used, so if I've not used the card that day, I will be able to get it straightened out right away, before I can forget about it.

Leigh said...

Susan, that's the problem. And apparently anybody can make a claim and potentially win, without even notifying the person the claim is against.

Judy, we're discussing those very things. One problem we have is that so little of what we need is available locally. No one acknowledges a homestead and livestock market, so items aren't available. We certainly need a way to minimize potential damages!

Quinn, we definitely need to keep a diligent eye on our bank accounts! Good thing you caught that error and discover was willing to correct the problem.

Debbie - Mountain Mama said...

It's good to be cautious and keep an eye on your bank because you never know these days, do you? So many scammers out there!

Farmer John said...

I appreciate your last two rants. It's really why so many of us have chosen to live a simpler life and interact with "the machine" as little as possible. Enjoy your site very much. Thank you

Lynda said...

Leigh, as a rule you should NEVER allow any company or person access to debit your checking account. All of the money in your account becomes at risk. If you go through a credit card to pay with Paypal it becomes a very secure way to do business. Especially if you use American Express, which I highly recommend that you do.

At any time, over many years as a customer, there has been any problem at all, they have instantly resolved it, and they always will trust their customers over someone else. There are free AmEx cards and some like blue cash which also rebate a small percentage of your purchase. And they double the warranty time for everything you buy... And really neither I nor anyone I know has ever worked for them. Next best is Chase, and bringing up the rear is Discover - They were worse than worthless when I charged something to a misrepresenting crook on ebay.

Many years ago when Paypal was new, our older son (who was a college student at the time) used their service to buy some small item and gave them his debit card to use. The next thing he knew he had a check to bounce! The $1300 in his account was all gone and his identity was stolen. He fought and struggled with this for months before giving up. Apparently someone at the fledgling Paypal had stolen his identity or at least they were careless with his information.

So, again, don't give anyone access to making withdrawals from your checking account. The only exception I make is for utility bill payments, a few of which will not accept credit card payments. Even there, I am uneasy.


Lynda said...

Oh, and if you have a decent email server you should NEVER delete any email relating to any business transaction. This makes them searchable forever. I have been able to easily find receipts for things I purchased ten or twelve years ago.

Little Homestead In Boise said...

Ironically I am in the class action lawsuit against Paypal when they were withholding part of the payment until it cleared or shipped. Very illegal. I'm hoping they'll send checks this year since it's been settled. Better to be careful!

Leigh said...

Debbie, so true! Now I'm wondering if anything else happened when I was too busy elsewhere to notice. Sad to be paranoid about such things, isn't it?

Farmer John, thank you, I appreciate your comment! What I don't want to be is a complainer - the world is filled with complainers. Nor someone who thinks that talking about a problem is the same as doing something about it. I very much agree that the only doing now is to simplify and extract oneself as much as possible. This incident made me realize we need to take another step.

Lynda, great advice! I'm honestly not sure if Dan or I even qualify for a credit card, since we have no debt. Having no debt is just as bad as having a poor credit rating, apparently! But I'll have to check into the free American Express to see if we qualify. So sorry your son had to go through such a fiasco. People who haven't experienced the horror of identity theft really don't understand.

Nancy, Paypal does offer customers the option to not pay until delivery, is that what you're talking about? I've opted for it but the delayed payments get confusing because Paypal only reminds you they're going to take such-and-such an amount from your account, but neglect to remind you what it's for. If it's a class action suit, you'll be lucky to get even $5 out of it! The lawyers take the lions share.

Trema Minning said...

Leigh, the cable company was Time Warner Cable, now Spectrum(I'm in Ohio). This "new" company seems to be just as sketchy!

Leigh said...

Trema, so Spectrum took over Time Warner Cable. Spectrum owns Charter too! The company that lied about our 12-month introductory internet offer!

I wanted to mention that I made a return visit to your blog, but couldn't leave a comment because I'm not a Google+ member. I was sorry that you had such a hard time having a good vacation!

Kristina said...

Thanks for the heads up. I have a paypal account, but only for selling handicrafts. I do not have it linked to any bank account. I am considering closing it too. We just had our joint checking hacked (again) and it was Hubby's debit card. I hate those cards - so easy no matter what, for them to be hacked. It was better when we had checks and cash. In fact, I may resort to that for my sales from now on.

Leigh said...

Kristina, it's interesting that you don't have your paypal account linked to a bank account. I didn't realize that option was available! You could still lose what you keep at Paypal, but at least they couldn't help themselves to more than is there. So many places use paypal, like Etsy and eBay, that's it's hard to find options. Have to agree about the debit cards. And now some folks are pushing for cashless because it will be "safer!" I notice their sales pitches never mention all the hacking and abuses that take place. In the end, it just makes for easy pickings by online predators.

Ed said...

I don't use PayPal very often just because I have heard horror stories though I've never had one myself. I also link PayPal only to my credit card which has more fraud protection than linking it directly to a bank account.

Like you, I do check my records and occasionally discover mistakes but generally I've never had trouble getting them corrected.

Tewshooz said...

I now only use my credit card thru PayPal. They want a bank account to fall back on and I gave them one. Then I changed banks and did not tell them. That was 5 years ago. So there is no way they can access any of my bank accounts. I never use a debit card, either. How hard is it to write a check?

Leigh said...

Ed, it's worrisome that more and more people are having problems with things like Paypal. But when something becomes so mainstay, it's seems easy to just leave the system in place in spite of its many flaws.

Tewshooz, that's a great idea! Dan and I are talking about changing banks anyway, since the one we use now is so out of the way. We use checks for all our bills, no autopay ever. Also try to use cash instead of the debit card, which would be easier if we had a more convenient bank.

M.K. said...

This is indeed a cautionary tale. I wonder how it will ever resolve? Do you have any recourse? I don't use paypal much, but I do agree it's so important to check statements, online site records, and accounts. They do make mistakes.

Leigh said...

M.K., the only recourse was to appeal, but that was dismissed. What's worrisome is that they could do this without notification, authorization, or explanation. Considering the moral climate of the times, I would expect this sort of things to only get worse.

MIKE REIFFIN said...

Tried to dump the whole bloodsucking crap pie but even the fascist country now has a 37 percent tax on everything you have as if sold at its highest ever appraisal or assessment exit fee....

MIKE REIFFIN said...

Tried to dump the whole bloodsucking crap pie but even the fascist country now has a 37 percent tax on everything you have as if sold at its highest ever appraisal or assessment exit fee....