Paypal screws Johnny Long

[renderman]

http://www.hackersforcharity.org/259...shuts-us-down/

Basically Paypal has cut off Johnny from most if not all his money and left him stuck in Africa with little means to correct it. I'm speechless at this.

I had a subscription system running under WP-MEMBER for about a year before that software flaked out on me. Multiple domains caused problems that were irreconcilable. I had donations for our work in Africa coming in (not through wp-member) and a few hundred subscribers to Informer through wp-member. All said, when I switched to Suma, I had 10,000$US in my personal paypal account. That was my family’s support money as well as money for our food program in Kenya.

So I shopped around and picked up Suma. In the process, we had to switch to a business account (although I don’t understand why…wp-member was happily doing recurring payments without a business account). That’s when all hell broke loose. Paypal required a proof of non-profit status (we’re not a non-profit yet, no 501c3 paperwork from IRS) which we don’t have (I selected the wrong box I guess) a printed bank statement (harder to get than you might realize, being overseas) which because a REAL problem because the account was in my name, not the business name and other information. Because I couldn’t provide some of the info (501c3 paper) and the other info (bank stuff) took a LONG time, PayPal restricted my account, meaning my subscription payments are bouncing, and I can’t transfer money out of my account.

PayPal has frozen my assets. We have no source of income beyond the car money we just spent in Kampala on Monday. I may very well have to return to Kampala and get the car payment money back to live off of. We are stranded financially and physically without a vehicle because of PayPal.

I’ve called (Contact PayPal Customer Support toll-free at 1-888-221-1161) to lift the restrictions, but they tell me to email service. Emailing service is ridiculous, and a week goes by between responses. Last I got from them was that I couldn’t talk to them because I emailed from an address that wasn’t on the PayPal account. So I had to create another email account, and try again (a painful process).

Now they are telling me that the bank info I provided isn’t correct because the bank account isn’t in the business name. Now I have to switch bank accounts in PayPal (again, overseas, less that dial-up, VERY HARD), get another statement to them and hope they accept it.

At that point they will probably deny me again because I haven’t sent them the 501c3 papers.

I asked to switch to a for-profit account (even though we’re not) through the “PayPal resolution center” but have received no response. This would remove the requirement for the 501c3 paperwork, but I have no faith in this process because everything submitted to the resolution center must be in a graphic format (png, jpg, etc) and I was forced to take a screen cap of a text document explaining my case. (I mean seriously??) Nothing from them on switching to a for-profit account.

I’d love to go back to having a personal account, but I can’t even imagine how I would request that, how long it would take, or if it would even be possible,

The bottom line is PayPal has frozen my assets (which aren’t theirs.. how can they do this?) including all the support money my family is relying on.

I’ve spent hours on the phone (on hold) to PayPal at approximately 30 cents a minute to try to get this resolved only to be told to use email. I’m considering legal action over this.

HFC is at a complete standstill. We can not order shirts for the conference. Subscriptions are bouncing. Informer is down. Subscribers are (rightly) pissed because they don’t have what they’ve paid for. I can’t order the items for the DEFCON auction. There are too many problems to list here. The biggest is that PayPal has locked down my family’s survival money.

I have no clue what to do at this point.

Does the EFF have any leverage? I can’t tell you how tempted I am to just turn to the dark side here and…

[Schuyler]

Re: Paypal screws Johnny Long

Basically Paypal has cut off Johnny from most if not all his money and left him stuck in Africa with little means to correct it. I'm speechless at this.

Yeah, the Defcon angle was mentioned by one of his team members over on DIGG as well:

http://digg.com/security/PayPal_shut...2777#c26962777

We are working to resolve this. Johnny is attempting to set up another account for people to send money to, and we are working to set up contingency plans for Defcon. There will be a booth, no matter what. Disclaimer: I am a officer of Hackers For Charity. Double Disclaimer: I was not part of the banking bit. Triple Disclaimer: I will be the poor schlub trying to set up a Defcon booth with no money. <grin> This could be interesting.

Paypal have been miserable to so many worthy organizations over the years, it's a wonder they're still top dog in their industry. Many years ago I had my personal account with them shut off (only had like 7 bucks balance at the time, so not a big deal at all) and was given no means of resolution, no matter who I tried to speak to. I hope this isn't the case for Johnny, hopefully he and more people will turn to other services and encourage their donation bases to do the same and more importantly, hopefully he will be able to get a temporary influx of direct bank transfers, etc. to carry him through this ridiculous ordeal.

[kallahar]

Re: Paypal screws Johnny Long

There are many anti-paypal sites out there telling similar horror stories... The best advice I can give (too late here) is the same as buying on ebay - never send more money than you're willing to lose. Paypal is NOT a bank.

Kallahar

[Voltage Spike]

Re: Paypal screws Johnny Long

Basically Paypal has cut off Johnny from most if not all his money and left him stuck in Africa with little means to correct it. I'm speechless at this.

It sounds as though the real lessons are that you shouldn't use PayPal as a bank (transfer enough money out to work through these issues), maintain multiple sources of funds if you are out of the country, and get your paperwork in order before initiating something like this.

We may know that he is doing good work, but he conveniently skipped over the boring parts of laying the foundation for the organization. He was essentially running his organization in a manner that looked like a scam. First, he told PayPal he was a non-profit when is not (legally speaking). This means he was being charged lower transacation fees than he should have and was probably what first brought him to the attention of PayPal. Furthermore, he was transferring "organziation" funds directly into his personal bank account.

PayPal customer service sounds terrible, and I would guess a lot of people here wouldn't consider it PayPal's job to prevent fraudulent transactions, but PayPal is not definitively in the wrong here. My credit union isn't going to let me wire large amounts of money to Nigerian scammers. I know that many of the non-profits I am familiar with are not able to transfer donation funds directly into a personal account. As much as I hate to say it, Johnny Long shouldn't have expected to ignore the business aspects of his venture simply because they take too long or weren't very fun.

[d4mity]

Re: Paypal screws Johnny Long

via twitter securitytwits and tottenkop): Got an email back from Keely Fox, she has informed me that PayPal has restored Johnny Long's account.

[Schuyler]

Re: Paypal screws Johnny Long

via twitter securitytwits and tottenkop): Got an email back from Keely Fox, she has informed me that PayPal has restored Johnny Long's account.

Good to hear! That was a much faster resolution than I expected. Can't say I disagree with any of the above comments. I think, from the tone of his posting, that he was primarily frustrated that he had been operating under a personal account for a long time without a problem & though, yes, he should have been better prepared when it came time to make that transition, it didn't seem reasonable to cut him off from the money he had previously brought in.

I know little about the details, though, that was just the impression I got from the blog post.

[renderman]

Re: Paypal screws Johnny Long

via twitter securitytwits and tottenkop): Got an email back from Keely Fox, she has informed me that PayPal has restored Johnny Long's account.

Goes to show that when someone doing something good gets screwed, our community comes together like no other I've seen.

[noid]

Re: Paypal screws Johnny Long

Goes to show that when someone doing something good gets screwed, our community comes together like no other I've seen.

No kidding. Despite being global, we're a small community. When the good people get fucked around, people are quick to step up and offer support. This also goes to show why the bad people dont last long..

Now Johnny has some takeaways from this experience.

1. If you are doing non profit work, form a non profit corp
2. Put all of your NPO assets in the name of said corp
3. Separate your personal assets from the NPO
4. Fuck PayPal..I have yet to see a 'Pay Pal saved the day' story..but lots of the other kind..

As someone who's had to muck through both for-profit and NPO corporate paperwork, its a real bitch, but if you dont take it seriously and blow it off..well, this is what happens..

[barkode]

Re: Paypal screws Johnny Long

From personal experience with PayPal, I can say that if you want to be sure you get your money as soon as possible, get a lawyer on it -NOW-, and file suit -NOW- even if you do not intend on seeing the suit through.

If you can't afford a lawyer, file a suit for $7,500 in small claims court and make sure they are served immediately.

In short, I had a similar situation happen, where Paypal froze a five-figure sum I had in a business account that was rapidly accruing at the rate of about $10k a day.

Even if you end up meeting their requests completely - Paypal often will put you on "the six month freeze" where they say "Yes, you're apparently OK, but we're going to choose not to continue doing business with you, close your account, hold your funds for six months, then return them to you." This -definitely- happens, I have seen it personally with large balance accounts.

YMMV, they could totally come through for you in the end, but it may be a long road to get there.

I had to go the legal route to get it back, but I got it back. It never went to court, it was resolved once the lawyers got involved. The only way to get them to do anything expeditiously is to involve the court system. Simply filing the paperwork gets you access to the people who can take action. The minute they get served the paperwork (this can be < 24 hours after you file) your case will be categorized completely differently.

It is only a matter of time before a massive class action lawsuit gets filed against that company, or the SEC gets them. They're unbelievable.

Fuck those pricks.

[makumozo]

Re: Paypal screws Johnny Long

Outrageous. So what is an alternative to PayPal then? Aside from actually using a bank?

[Voltage Spike]

Re: Paypal screws Johnny Long

Outrageous. So what is an alternative to PayPal then? Aside from actually using a bank?

No, not really. Canadians are lucky enough to have Interac Email Money Transfer (EMT), but it doesn't really work internationally.

Edit: I should clarify that I am thinking of person-to-person transfers, usually involving email. I suppose in the case of HFC they could go with any number of processors via a form on the web page, but, depending on the donation sizes, I believe the fees are going to be higher.

[xor]

Re: Paypal screws Johnny Long

Outrageous. So what is an alternative to PayPal then? Aside from actually using a bank?

The usual; diamonds, gold, cash(I guess euros are preferred now to dollars), guns, and white women(just kidding).

xor

[The Dark Tangent]

Re: Paypal screws Johnny Long

Sounds like in the future if you don't set up your company/charity/personal bank accounts incorrectly, fill lout your paperwork, and set it all up the way you should you won't have a problem.

[barry99705]

Re: Paypal screws Johnny Long

The usual; diamonds, gold, cash(I guess euros are preferred now to dollars), guns, and white women(just kidding).

xor

Xor takes any women.

[[Syntax]]

Re: Paypal screws Johnny Long

I've had my own run ins with PayPal, there's so many holes in their system, people reversing transactions, stipulations they put on accounts, whenever there is a screw up the hold time is insane.. and then when you get hold of someone they never seem to be able to resolve the situation, its always something that will require back and forth communication between 2 parties and then weeks down the road a resolution might be found.

I as well do not understand how with all the bad word of mouth they are the leading online payment vendor.. Does eBay still own PayPal? because it surprises me that eBay would let a company they own be ran so (for lack of better word) crappily..