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  1. #1
    SitePoint Wizard Anat's Avatar
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    Can paypal take money out of or freeze money in someone's bank account?

    I know they can and do freeze the paypal account itself and they obviously have access to the money in the paypal account itself. Question is, do they also have access to the bank account of the user? the one you provide them to verify your paypal account and withdraw the money to?
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    Serial Publisher silver trophy aspen's Avatar
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    They have no authority to withdraw or do anything else with your bank account.

    IF they withdraw something without your permission contact you bank and you'll probably need to send in some kind of a form to reverse it.
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  3. #3
    ********* Addict jaiem's Avatar
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    That's why I was loath to use our bank account to verify our PP account. I much prefered it when they would snail mail you something instead.
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  4. #4
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    Originally posted by aspen
    They have no authority to withdraw or do anything else with your bank account.

    IF they withdraw something without your permission contact you bank and you'll probably need to send in some kind of a form to reverse it.
    Actually, if you are a business or premier account, you've agreed to let them take out of your account as per:

    When you receive funds through PayPal, if the sender's transaction is reversed because of a credit card reversal and you do not qualify for the Seller Protection Policy for that transaction, you will owe PayPal for the amount of the reversed transaction plus any fees imposed on PayPal as a result of the reversal. You agree to reimburse PayPal from either your PayPal account or by other means as described in Section IV.2 under "Receipt of Payments." Furthermore, if you open a Premier or Business Account after October 11, 2001, you authorize PayPal to debit your bank account linked to that PayPal account for the amount that you owe PayPal on transactions which were not covered by the Seller Protection Policy and which were not recoverable from your PayPal balance.
    At Section VIII #6 in the PayPal User Agreement

  5. #5
    SitePoint Member
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    Quote Originally Posted by v.Richard
    Actually, if you are a business or premier account, you've agreed to let them take out of your account as per:


    At Section VIII #6 in the PayPal User Agreement
    Actually, this was incorporated into the User Agreement to allow PayPal the option of debiting a bank account WHEN legislation is passed [according to PayPal].

    Because PayPal is neither a credit card processor nor a bank, it currently can not debit a personal bank account without account holder consent. Credit Card Processors and Banks however may. The legislation, pending passage, will expand coverage to non-bank and credit card processors, under certain circumstances.

    The User Agreement IS misleading. As written, you WOULD presume legislation is in place and action can be taken now. It was PayPal's intent to incorporate this wordage in it's User Agreement so new accounts will not be caught unaware when it does happen.

    One area where PayPal is heavy hit is credit card charge back fees - most of which can not be recouped without this legislation in place.

  6. #6
    Serial Publisher silver trophy aspen's Avatar
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    In anycase a user agreement, agreed to or not, does not nullify the legal protection built into bank accounts, in addition to the protection your bank provides. If it happens you can reverse it.
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  7. #7
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    Is there any way to avoid cc chargeback fees? Because I see way to often people doing this AFTER they have recieved their item. I heard something about waiting two days, is this true?

  8. #8
    Texan at Heart Corey Bryant's Avatar
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    Depends on the reason. You can get Verified by Visa as one measure to prevent the "I didn't do its". But the consumer usually has 180 days to decalre a refund.

  9. #9
    Serial Publisher silver trophy aspen's Avatar
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    Shipping to their billing address can give you protection. So can using AVS and CVV verification when doing the transaction.

    If a customer tries to do a chargeback and you have proof that the item was delivered to their door and signed for by them then you'll probably win.
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  10. #10
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    I lost $3.9 (no big deal) today due to a PayPal user using a "suspected fraudulent" bank account to pay me for a purchase. Didn't affect my account except that I lost the payment and was asked to provide proof of delivery if it was a physical item if I wanted the money back from PayPal under seller protection. Since I don't have physical items I'm out the $3.9 during the 'investigation' (shows "pending reverse").

  11. #11
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    I take that back. $320 reversed transaction by PayPal today (without notice yet). I recognized the order as likely fraudulent and mailed the customer, so I haven't lost anything (didn't fill the order), and the person who wrote back had no idea what my site was. Sounds like someone stole this person's account and started spending.

  12. #12
    SitePoint Member
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    Quote Originally Posted by aspen
    In anycase a user agreement, agreed to or not, does not nullify the legal protection built into bank accounts, in addition to the protection your bank provides. If it happens you can reverse it.
    Once an account holder authorizes it's bank to allow PayPal unrestricted access to funds (according to the user agreement), that legal protection is no longer valid.

    The account holder can not have it both ways; either PayPal has unrestricted access to the account or it does not. If a PayPal subscriber is not comfortable with the terms, they have the option of using another third party money transfer service.

  13. #13
    Serial Publisher silver trophy aspen's Avatar
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    I don't think so. No matter what you "agree" to with Paypal, banks have their own rules. Paypal might be able to sue you for the finds after you reverse their bank withdrawal, then your user agreement will come into play.

    I take that back. $320 reversed transaction by PayPal today (without notice yet). I recognized the order as likely fraudulent and mailed the customer, so I haven't lost anything (didn't fill the order), and the person who wrote back had no idea what my site was. Sounds like someone stole this person's account and started spending.
    Wait, paypal will hit you with a fee in addition to taking the money out. Because its your fault someone had their account hacked.....
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  14. #14
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    Great, something to look forward to..

  15. #15
    SitePoint Member
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    Quote Originally Posted by aspen
    I don't think so. No matter what you "agree" to with Paypal, banks have their own rules. Paypal might be able to sue you for the finds after you reverse their bank withdrawal, then your user agreement will come into play.



    Wait, paypal will hit you with a fee in addition to taking the money out. Because its your fault someone had their account hacked.....

    I must respectfully disagree. If this were the case, then Merchant Accounts would not be permitted to withdraw funds for disputed charges, inquiries and charge back fees.

    Banks are set up to protect the account holder, this is true, but once the account holder waives their rights to those protections, the waiver takes precedence.

    This is simply a matter of contract law. As with any contract, the terms can be modified with the consent of both parties. Once the terms are modified and agreed to, they supersede any previous terms.

  16. #16
    Serial Publisher silver trophy aspen's Avatar
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    You cannot waive anything with your bank by signing up with a third party.

    You can dispute chargebacks with your bank. You'll lose your merchant account but you can do it.

    Regardless of your agreement with paypal, you still have an agreement with your bank, and your bank will honor that agreement. Paypal will have to sue you to enforce their agreement. Without a court order telling them otherwise your bank is going to do as you say. If you tell them that you did not authorize the withdrawal or emptying of your account, then they will listen to you.
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  17. #17
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    <sigh> I tried!

    Quote Originally Posted by aspen
    You cannot waive anything with your bank by signing up with a third party.

    You can dispute chargebacks with your bank. You'll lose your merchant account but you can do it.

    Regardless of your agreement with paypal, you still have an agreement with your bank, and your bank will honor that agreement. Paypal will have to sue you to enforce their agreement. Without a court order telling them otherwise your bank is going to do as you say. If you tell them that you did not authorize the withdrawal or emptying of your account, then they will listen to you.

  18. #18
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    When you receive funds through PayPal, if the sender's transaction is reversed because of a credit card reversal and you do not qualify for the Seller Protection Policy for that transaction, you will owe PayPal for the amount of the reversed transaction plus any fees imposed on PayPal as a result of the reversal. You agree to reimburse PayPal from either your PayPal account or by other means as described in Section IV.2 under "Receipt of Payments." Furthermore, if you open a Premier or Business Account after October 11, 2001, you authorize PayPal to debit your bank account linked to that PayPal account for the amount that you owe PayPal on transactions which were not covered by the Seller Protection Policy and which were not recoverable from your PayPal balance.
    As of January 2004, our Terms of Use state that we will not debit bank accounts to cover a chargeback or fraudulent payment. Prior to that, while the TOUs allowed for it, we did so on a very, very limited basis.
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    Angry

    Quote Originally Posted by pbreit
    As of January 2004, our Terms of Use state that we will not debit bank accounts to cover a chargeback or fraudulent payment. Prior to that, while the TOUs allowed for it, we did so on a very, very limited basis.
    No matter what, your policy of reversals are just ridiculous. I *sold* my item and accepted payment through *your* service. Based on that, I found it okay to *deliver* the item assuming that your service performed necessary checks and/or you would take appropriate risks. Now I learn that the services you charged me for are completely worthless and mean absolutely nothing. Because you found, **3 months** later that the buyer's account might've been in fraud, you think you can just take the money back from me. And what am *I* left with?
    I can assure you that, whether this current reversal of yours on my account ends up positively or not, I will never ever ever ever again do business with PayPal and will do my best for as many people to hear about this. Good luck in keeping your business up this way.
    If anything is fraud - it's this whole sheninegan you call your business service.
    You *are* the weakest link - good bye!!

  20. #20
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    I'm sorry to hear about your experience. Unfortunately, online credit card processing has its weaknesses.

    In the US, credit card payments can typically be "charged back" up to 6 months later. And for "card not present" transactions (online, phone, mail order), the merchant is almost always on the hook.

    PayPal improves on this in several ways:
    1) Payment are password-protected making unauthorized PayPal transactions rarer than unauthorized credit card transactions.
    2) Nearly half of PayPal payments are not credit card transactions. Instead, they are bank transfers and PayPal balance-funded, both of which are much less likely to be fraudulent.
    3) PayPal offers Seller Protection Policy which protects a large percentage of PayPal payments against chargebacks.
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  21. #21
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    Quote Originally Posted by pbreit
    I'm sorry to hear about your experience. Unfortunately, online credit card processing has its weaknesses.
    Funny you should mention that. Let's see, if I owned a retail store and wanted to accept Visa, what do I have to do? Get in touch with them, sign a contract that I will (basically) ID buyer/bearer of Visa card. Later, if I accepted a fraudelent card but I followed all the rules, would Visa charge *me* for the loss? No way!
    Same thing here. I just followed the rules where you acted on my behalf and you ID's the buyer - didn't you??

    And from my side, this is how things work: I see Money Order, I say great, got the money, let me ship the item. I see PayPal ****confirmation**** of payment, I say great, got the money, let me ship the item. Well, not bloody likely. Apparently, I can end up with no money and no item regardless of this ***confirmation*** of yours.
    Here's the way you can get the money from me: get my item back!! In the meantime, your access to my bank account is denied!

    Quote Originally Posted by pbreit
    3) PayPal offers Seller Protection Policy which protects a large percentage of PayPal payments against chargebacks.
    I heard the same thing from your CS person - and it's not quite true. Everywhere in your legalese, you will find that in order to qualify for SPP the seller must be in US or Canada and the *buyer* must be in US. Otherwise - no SPP. Well, my buyer is in Canada. Am I protected - no way! Fantastic! I sure hope people read these discussions *before* they allow PayPal payments!!
    And here's the excerpt from your leagelese that confirms what I said:
    Quote Originally Posted by paypal
    At this time, the Seller Protection Policy is only available for U.S. or Canadian sellers transacting with U.S. buyers, and for U.K. sellers transacting with U.K. or U.S. buyers.
    Read the whole thing at https://www.paypal.com/row/cgi-bin/w...pp_eligibility.

  22. #22
    SitePoint Wizard silver trophy
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    lcdata, Please direct customer service issues to PayPal directly and not through SitePoint. We are not mediators. If you want advice from other members about your situation that's fine but don't use us as a customer service method for PayPal.

    If you have something to say to them about your business relationship with them or your account, do it directly.

    Thanks,

  23. #23
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    Just lost another $240 to paypal. Already lost over $300 in the past two months, so now it's over $500. They reversed an April 2nd sale due to possible fraud, and there's nothing I can do about it.

  24. #24
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    Quote Originally Posted by lcdata
    Funny you should mention that. Let's see, if I owned a retail store and wanted to accept Visa, what do I have to do? Get in touch with them, sign a contract that I will (basically) ID buyer/bearer of Visa card. Later, if I accepted a fraudelent card but I followed all the rules, would Visa charge *me* for the loss? No way!
    Same thing here. I just followed the rules where you acted on my behalf and you ID's the buyer - didn't you??
    Actually, with a Merchant Account, if a card holder doesn't learn about identity theft until after the statement arrives, they are well within their rights to dispute the charge. This can be as much as 60 days after the transaction occurred. The credit card companies are not going to "eat" that disputed charge, so it is charged back to the merchant.

    The difference between PayPal and a Merchant Account, is Merchant Account charge backs are always deducted directly from the checking account. You are given the opportunity to challenge the charge back, but 99% of the time, favor is with the card holder ... even when you do everything right!

    This is a part of doing business; it's not one of the more pleasant parts, but one none-the-less. Most business people factor a 20% loss into their pricing calculations to cover things like this.

  25. #25
    Serial Publisher silver trophy aspen's Avatar
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    Since Alexis is apparently still posting I thought I'd present some more evidence in my favor.

    http://www.paypalwarning.com/WallOfShame/Default.asp

    Posts 3 and 5 on that page (perhaps more) are instances of an individually successfully disputing/blocking paypal's withdrawal of funds from their bank account. So much for it not being possible huh?
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