I am a Web content writer / editor and I opened a PayPal account to collect money from my foreign customers. It all seemed to be so convenient and easy. I didn’t have a credit card to verify my account, but they said that didn’t matter. I got several payments from my customers and withdrew money twice. They sent the money through demand draft that was payable in India.
Then I made a mistake and entered my ICICI Bank debit card number in the PayPal website to verify my account. I didn’t know that a debit card cannot be used to verify a PayPal account. I did it because "Visa" and "International" was mentioned on it. I got a message that the bank had denied my debit card. I entered it a few more times to make sure that I had not entered the wrong number and got the same response.
The next time I logged into my PayPal account I got the message that my account had been frozen. The reason given was that my bank had denied my debit card and informed PayPal that a card associated with my account had been lost or stolen. I had, in fact, had a broken debit card replaced. I was told that I would not be permitted to with draw the $277 in my account unless I faxed a utility bill to them and provided a valid credit card number for verification of my account.
I faxed them my landline phone bill immediately, but they still demanded a credit card number. I tried to get a credit card, but found that it is not easy for a freelancer to qualify for one. PayPal told me that I was being prevented from withdrawing my own hard-earned money for my own good. They said that I could ask my customers to deposit money into the account, but could not withdraw it.
I have been requesting PayPal to return my money and close the account since the last 4 months, but they are still refusing to give me my own money and demanding a credit card number. I have no dispute with my customers, or anyone else, but they don’t care. I have still not managed to get a credit card and have given up hope of getting my money.
It seems that PayPal is a private organization that can do as it pleases. When you sign up for an account, you are asked to agree to terms and conditions that give them unlimited rights. They can freeze your account at any time, without any warning and take away your money. There is no higher authority you can appeal to for justice.
PayPal monitors the accounts of users for any suspicious activity. If there is any dispute, or you make a mistake, like I did, your account will be frozen without any warning. After that you are at their mercy and you will only get automated responses to your appeals. You are just a number on their database and they don’t care about you.
Some advice to PayPal users is mentioned below:
This service is preferred by many overseas customers, so it is worth having an account.
Always withdraw money from your PayPal account immediately. Maintain a zero balance, because your account can be frozen at any time.
Use this service with caution and have a backup plan ready at all times. Explore other options.
Don’t use this service if you don’t have a credit card or are not willing to give your credit card number
There are no fees for joining and neither are there any monthly fees.
PayPal charges a small fee for each transaction.
At present they remit money to people in India by demand draft, which is sent by ordinary post.
There is always the danger of the DD getting lost in transit.
Update (August 8, 2007)
More than a year has passed and I still haven’t got my money.
It is ironic that PayPal refuses to speak to me but hired writers responded within 5 minutes of my post, to defend PayPal, and to put all the blame on me.
I wonder why they ask unsuspecting customers for a debit card number, when a debit card cannot be used to verify a PayPal account.
I complained to the Better Business Bureau (BBB), and PayPal responded by saying that they had to take measures to protect their customers. I asked PayPal if the money now belonged to them, and if not, why they were not taking necessary steps to return it to the rightful owner. There was no response.
They said they may consider my request if I faxed them my photo ID and proof of my new address. They also said they could sue me, as per their terms and conditions!
I have given up hopes of getting my money, though they have taken more than Rs. 11, 000, which is a lot of money, for me.
I can complain to the Federal Trade Commission, but it is not worth it. So that is the end of it. PayPal gets to keep my money.