Paypal killing my company

Status
Not open for further replies.

Sethdood

New Member
I have run an internet eBay business for the last 2 years, and just like every other ebay seller, I accept my payments through Paypal. I sell cellular phones with service contracts, and I am a legal, registered, tax paying company. My entire experience with Paypal has been littered with unwarranted account limitations due to the risk of the electronics industry, which is understandable. However, time and time again I have my accounts shut down, and I keep sending them MORE then the required information to have account limitations removed. I have been nothing but transparent, and on my latest account I have received no major complaints. My eBay seller is a Platinum Powerseller and member of Squaretrade, and we are very obviously a legitimate company. However, Paypal chooses to harass us with account limitations, restrictions, and terminations. This time around, I sent Paypal tons of sensitive documentation before my account was even in question, including but not limited to: supplier information, invoices, photo IDs, scanned Credit Cards, tax forms, NY State business certificates, and sister company EIN numbers. I thought this would be more then enough to satisfy them, but they have just terminated that account following a failed appeal on account limitations. If my account is not restored, this time it means bankruptcy for my company.

The first time this happened, it was with a Paypal Premier account, and my account was terminated after doing over $5,000 a week in business for a few months. There was about $4,000 in the Paypal account when it was limited, at which time Paypal sent out a letter to all of my previous clients suggesting that they ask for refunds. Even though it was stated both in the listings and to a letter to paypal, that I was selling service contracts and deals and NOT just electronic hardware (the equipment), I had already fulfilled my obligation to the buyers by sending them everything they needed to obtain said advertised deal via email. There is an eBay category for this type of sale, and it is not uncommon or unorthodox to the point where scrutiny is deserved. All cases were awarded to the buyers anyway, sending my then limited account into the negatives. Paypal pursued that negative balance as damages, and forced me to pay them off through a bill collector. Also, the entire time which I was doing business with this account and my subsequent accounts, I was forced to refund any client who opened a claim before withdrawing my profits (often totaling $1,500 or more per week), and also leave over $1000 in the account, our of fear of Paypal's trigger-happy account limitations. Our tendency to refund our buyers was then used against us in our appeals of the account limitations, helping them reach the decision to terminate the account. This also led to the destruction of the adjoined eBay account with negative feedback and complaints, spurred by Paypal's decision to inform my buyers that I was a fraud.

I then employed a manager underneath me to run his own eBay and Paypal account and continue sales, since I could not do so on my own. The situation here mirrors the events of my first account, only by proxy, again with a Premier account. We were lucky enough to save that eBay account, which was then and is still a Powerseller account in positive standing. We were much more cautious with our methods, refunded buyers much more quickly, and spent more money in squaretrade, once again in fear of account limitations from Paypal. The limitations eventually did come, and that account was also shut down within a few months of sales, and any money left in the account was kept by Paypal, or wrongly awarded to buyers.

After a few more months of forced downtime, I incorporated in my own state for the first time, as opposed to the out of state company I was using to run these accounts. I enlisted a CPA and business lawyer to advise me on how to handle the business. I opened a business account through Paypal in hopes that it would be taken more seriously. On legal advice, I waited a month do start doing business, and I sent an email to Paypal containing the all the information I listed earlier. We ported the old eBay account onto this new Paypal account, and ran a weeks worth of listings, purposefully starting slow, and sold just a little under $2000. I went to withdraw $1200, and received a call from the account review department of Paypal. I was asked for tracking numbers on the one claim I had opened, which I then provided. I also was asked for a rundown on the type of business my company does, which I also provided. Knowing the methods of Paypal, I asked the rep if this meant that my account was to be limited, and she said no. Within hours of that call, my account was limited, and Paypal was asking me for the documents and information I had already sent them, which they (after confirming the receipt of said documents over the phone in a previous conversation) claimed to have no record of. After calling and reaffirming that I had sent these documents weeks before my account was limited, and after once again uploading these documents to Paypal, I was told once again that my account access should be shortly restored. Instead, I received a letter from Paypal stating a denial of my appeal to lift said limitations, and that they would not be pursuing any attempt to lift my limitations and restore account access.

It is clear to me that it is time to seek legal action against Paypal. If they do not restore my account, I will be seeking damages for:
1) Forced refunds and wrongly awarded claims to buyers from all three accounts, totaling anywhere between $20,000 - $50,000.
2) All money held in the accounts permanently due to limitations, roughly $8,500.
3) Decreased selling volume and negative incentive to hire additional sellers during selling times, out of fear of account limitations, for the full duration of 8 months (the only "uptime" I've had out of almost 2 years of business), which is approximately $2,000 per week, totaling $80,000.
4) Unlawful persecution of a small business/favoritism toward already established larger companies, damages yet to be assessed.
5) eBay fees for all sold listings which Paypal has, in one way or another, obstructed the ability to collect rightful remittances, totaling almost $13,000.
6) Forced downtime due to unwarranted account limitations for one year and 6 months out of two years of business, which profited an average of $5000 per week during unrestricted selling time; the damages being roughly $450,000.
7) Mental Anguish leading to illness- Since the problems had started, I have been to the doctor 6 times with sinus infections, vertigo and migraines, all caused by stress. Previous to this, I can show a 10 year long clean bill of health. Damages also yet to be assessed.

Please offer any advice you may have on this current situation, as well with suggestions for any legal council who may better represent my company.
 
I still don't know what exactly Paypal is angry at you for and they sent specific instrucitons including a warning to purchasers. The details are extremely important. While it's possible Paypal is wrong, I would be very highly surprised if they sent out the letters you state without some reason which they believe is highly justified. Evidently there were disputes with your buyers and we need to know exactly the dispute - not your take on it.

Unfortunately this is a very fact specific issue. It may take a lot more than a post here to understand and resolve. You will likely need an attorney since it sounds as though Paypal/Ebay is convinced you should be shut down.

Regarding your damages, most of them are never going to happen, e.g. damages for future earnings for years that aren't mitigated by your opportunity to do something else, your mental anguish, etc. People have contract disputes all the time but you can't just claim that every pain you have is now their fault. Let's just get down to the issue at hand and exactly why Paypal feels justified. I wish you luck and hope the business survives and that you're successful. It sounds like you've done a great job with your businesss.
 
Apparently we are not the only one in the same boat.

Recently we wanted to cancel our paypal account because they are putting too much in the minimum reserve..., about $30,000. The only way to get that money is to cancel the account and wait for 180 days. So which we did. As soon as we cancel the account, they put us under the visa/mastercard black list, how BS is that???

Can anyone help us? Thanks in advance.

Regards,
Kevin
 
gemm.com refusal to pay

sold cd on gemm for 3years(on behalf of tokyo based client)-had 8000list catalogue-average $100 a month
i requested a copy of my catalogue to make bulk ammendments(my original had beed damaged)-for 3weeks they stalled(never ever sending my catalogue)
gemm owner called me-claiming courtesy call-he was removing my catalogue for bootlegs(our cataloge had no titles other sellers were offering)
gemm is one man operation-
owner then e-mailed he was keeping my final due payment of $200-when i asked for actual specific titles he claimed were boots-got no reply-but for a specific obscene gay themed hatre-mail-surprisingly signed by him
i want the 200-but also now want so much more
have been advised so many options-what is best option?
 
Status
Not open for further replies.
Back
Top