Is PayPal run by a bunch of monkeys?

Last week, I got locked out of my PayPal account "for security purposes." What this means is that I can no longer use my PayPal account until I go through a tedious verification process that will take up to 2 weeks. In the meantime, I can't buy anything with PayPal, and recurring transactions automatically fail.

PayPal's account verification process is senseless, and I will never use recurring PayPal payments for business transactions ever again (and you shouldn't either). Here's why:

PayPal's Account Verification Process

Why did this happen? I created a second PayPal account to use in testing an app. After creating the account, I transferred $1 from my regular PayPal account - you know, the one I've had open for 10 years. Well, this move triggered something at PayPal, and they limited my account. To get my account reinstated, here's what has to happen:

Change my password
Update my security questions
Wait for verification of my location, by waiting 7-10 days for PayPal to send me a verification code IN THE MAIL. (PayPal has an alternate phone verification process, but they couldn't verify my location with that.)

Flaws in PayPal's Account Verification Process

Aside from the fact that I'm annoyed that my account got locked in the first place, I present several flaws in their current account verification process:

If I'm a hacker who is logged into a PayPal account, how it changing my password going to solve anything?
Also, if I'm a hacker, how is RESETTING my security questions going to help?! If anything, I should be challenged to ANSWER them, not reset them. This defeats the purpose of security questions.
If I happened to be out of town for a while, or unable to check mail at the address on my PayPal account, I'd be screwed, since that's the only way to complete their verification process. What if my address were out of date?

Why I will never use recurring PayPal payments for business transactions ever again

You see, when PayPal decides to limit your account, any recurring transactions - you know, any payments that are processed monthly - straight up fail. You'd think if you had pre-existing recurring transactions, PayPal would run them, since they were set up before there was any "suspicious activity" on your account. Nope. Instead, several critical subscriptions for my business have now been cancelled. This includes my Springloops SVN subscription that I use to manage and check-in all of my code, a mission critical service for me (there were others, too). What a joke.

I thought it would be nice to use PayPal to manage recurring subscriptions when it's available, so I could manage recurring transactions all in one place. Instead, this little incident makes me realize that I can't even depend on PayPal for that. As if I didn't already hate PayPal enough, this puts the icing on the cake.

So the moral of the story is, if you run a business and charge recurring payments, don't even bother providing PayPal as an option. You and your customers will only end up getting screwed.

Comments

Andy

This is an interesting read. I use subscription payments all the time. Have you found a better alternative for auto pay subscriptions by chance?

William Penrod

I've had bad experiences with PayPal too. They also don't like certain parts of our Constitution like the 2nd amendment. You can't use your own money to buy or sell guns, ammo or any other merchandise they don't approve of. Of course no surprise here as they're owned by Ebay, a bastion of left wing whack jobs.

Cory Watilo

Except for Meg Whitman, of course. =]

JMJ Squared

@Cory - Is your verification phone mobile? If they fear your acct may have been compromised, and since they may not be able to say definitely when that ocurred, doesn't it make sense to halt all activity until the verified acct holder says,' Okay'?

@Andy - I live in NYC and, if a crime were committed with a gun or ammo bought thru PayPal (or anyone else, for that matter), that middleman would be sued to death by Mayor Bloomberg and, probably, the victim/vcitim's survivors. I would, too. Wouldn't you? Weapons are a high-risk, higher insurance-premium-ed, higher possible-downside transaction. PayPal probably is being careful... and exercising THEIR Constitutional right to decide in what they do-and-don't want to participate. Freedom goes both ways and those who want it for themselves should defend it for others.

Guys, terrorists are among us! I suspect you both got tagged by (over?)reaction to that fact. Suck it up.

EDIT:

@Cory - I got so carried away, I forgot to say what I dropped by for in the first place: Thanks for the "Pleiades Theme". The Seven Sisters are one of my favorite out-of-this-world thingys. Getting some js errors but think that is a site problem.

Thanks again.

Ben Smith

Yep - happened to me too but because I only have a cell phone verification took about 4 weeks and required a letter (yes, paper). My account's been open for a hell of a long time and dispute-free the entire time. Made things really tricky over Christmas as I tried to buy gifts from onine services / renew subscriptions.

The joke is you can't even close your account whilst it's being verified...!

John Matthews

Same thing happened to me. PayPal is the absolute worst. They get you coming and going. I actually had this same thing happen to me this week. I'm planning on calling them and just asking them to cancel my account entirely.

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