Please be aware that this is our story but this is happening to tens of thousands of people, not just in Texas but all over the world.
On September 14, I opened an account with Paypal. At that time it was for the purpose of transferring moneys to people or business programs I wanted to get into on the Internet.
Somewhere around Oct. 15 an Internet friend suggested that people were having trouble funding their egold accounts and it might be a business I might think about.
As a semi retired businessman, because of a heart condition, I researched this and found that many of the people needing their gold accounts funded had paypal accounts also.
Subsequently I opened an egold account and funded it with a thousand dollars. I started advertising on my web page that I could help people change their dollars into gold. Business started to move slowly until people realized that I made fast transactions through Paypal and was honest.
My reputation grew rapidly and soon I was doing $200,000.00 a month in transactions with Paypal alone. Somewhere around Christmas I got a charge back notice saying that I was in receipt of potentially fraudulent funds. They "Paypal" asked for certain information in regard to the account named, which I provided.
When I called they said it was under investigation. As time went on day by day these transactions kept coming in to the tune of over $20,000.00 worth of so-called fraudulent funds "stolen credit cards." My calls to Paypal only resulted in being passed from one clerk to another with no results.
When I did finally get to middle management personnel all I received was a canned speech but no help. They"Paypal" accepted the credit cards and in return sent me a confirmation e-mail stating "you've got cash."
The money was in their accounts and three to six weeks later Paypal is saying the accounts were no good. I checked some accounts and found this to be wrong. These people proved that Paypal had debited their accounts and had their monies.
In late January they gave me another support number to call saying I had a "red carpet" account, that way I could speak with management people, a week later they froze my account.
This did not allow me to make any transactions but allowed people to make deposits into my account, which I requested be stopped until our problem was resolved. They refused to do this and took other peoples money to satisfy the negative balance in my account. I requested this by email and phone on February 5. My account became positive and they opened it.
I started transferring gold into my customer's accounts again trying to catch up and then they "locked" my account. As of today they have me $20,000.00 out of pocket money and a negative balance of somewhere in the $9,000.00 range.
Now they are e-mailing my customers saying they should file fraud charges against me. Also telling them that they have had many complaints against my account and basically that I'm the crook.
My customers are behind me and now send me monies in other ways. This I have proof of. See attachment
My point is Paypal is not what they say they are. As a supposed financial institution or so, the only thing they are concerned with is getting accounts which adds up to transaction fees regardless of whether they are legitimate or not.
I now see that their policies are strictly set up to protect themselves not their legitimate customers. Their security is at best nonexistent.
1. I did not accept the accounts THEY DID
2. I did not have access to their bank accounts or
credit cards. They did
3. I kept my commitment to my customers THEY DIDN'T
4. I researched what accounts I could and proved
them wrong THEY DIDN'T
We went to arbitration on the 21st and 22nd of January and the decision is due at the latest on the 4th of April. As I sit here today, I'm asking myself "WAS IT WORTH IT". Well yes and no.
Yes, because most of my 60 yrs. I've believed that when you feel your in the right you fight for a principle, as most of you have.
We don't know whether we won our case yet, but I do now know that principles come at a high price. The agony that Hanna and I have gone through in the past 14 months is priceless.
We have over 95k in credit card debt, 14k of which went to the American Arbitration Association, (in a court it would have cost less than 1k) over 4k traveling to San Francisco. Legal fees have exceeded 100k and I still owe my attorneys over 30k.
A year and a half ago we were trying to prepare to retire. Thanks to paypal we now are looking at possibly losing our home as well as everything else we've worked for all or lives.
Paypal has filed a protective order on the case guess they don't want you to be able to make a judgement for yourselves. Ignorance of their ways is power. If a court finds me in violation of this ridiculous order then so be it.
At least I will go to jail knowing I have done my best to warn my fellow Americans of the possible pitfalls of doing business with them.
I have come to the realization that terrorism does not just rest in the hands of bin laden, (he will kill you), but Peter, Max, Reid and the staff of paypal will make you feel like like a bomb has leveled you.By the way, when Peter Thiel was suppose to testify at my hearing he didn't have the intestinal fortitude (GUTS) to show up.
Well the verdict is in. Paypal forced us into arbitration and we lost. Well we did get $5,000.00 taken of the $18,976.29 under the seller protection program, which means we only owe paypal $13,976.29 $784.97 interest and $312,213.50 in attorney fees and $26,703.91in paralegal fees. So much for doing business with them.
In the near future we will publish the entire contents of the case so that if anyone is interested they can judge for themselves.
We were forced into arbitration. We were trying to settle our differences and had refused their one sided offers, which mainly included that we not reveal anything that happened. This would have prevented us from telling others our experiences and how to prevent it from happening to them.
What we found yesterday was that they needed to have 3 lawyers and two paralegals to prove their case. Their case according to their primary lawyer was "a simple contract dispute".
Being forced to seek legal counsel, after we found out they had started proceedings against us, we hired an attorney in Texas, because the arbitration was in California we needed one there also.
This simple contract dispute resulted in tens of thousands of pages of documents.
Their contention was simple, if you used a credit card to send someone money and they sent it to someone else who sent it to another, all through their accounts we was responsible to pay paypal back.
Also if paypal took a credit card that failed the address verification check, which happened twice on one account we were responsible. Now answer this one, one of our customers sent 3 separate transactions, all with the same credit card the first transaction was reversed, but the others were not.
Basically what ever happens, paypal is not responsible. They operate outside of banking regulations and do not protect anyone, but themselves. This we believe is against consumer law because as a merchant they have a responsibility to their customers.
The arbitration process is, to say the least, a violation of a persons right to a fair and impartial trial. The arbitrator in our case was a well-known San Francisco corporate lawyer.
Because we did not have a lawyer at the time, we had no choice. To our dismay, after returning from arbitration in San Francisco, we found on the Internet where a corporate lawyer from New York wrote that arbitration favors the big corporations 95 % of the time.
Below is the California civil code that was entered into law in 1989. The arbitrator chose to ignore this when it was noted in the final brief filed by our attorneys.
1748.7.
(a) No person shall process, deposit, negotiate, or obtainpayment of a credit card charge through a retailer's account with afinancial institution or through a retailer's agreement with afinancial institution, card issuer, or organization of financialinstitutions or card issuers if that retailer did not furnish oragree to furnish the goods or services which are the subject of thecharge.
(b) No retailer shall permit any person to process, deposit, negotiate, or obtain payment of a credit card charge through theretailer's account with a financial institution or the retailer'sagreement with a financial institution, card issuer, or organizationof financial institutions or card issuers if that retailer did notfurnish or agree to furnish the goods or services which are thesubject of the charge.
(c) Subdivisions (a) and (b) do not apply to any of thefollowing:
(1) A person who furnishes goods or services on the businesspremises of a general merchandise retailer and who processes, deposits, negotiates, or obtains payment of a credit card chargethrough that general merchandise retailer's account or agreement.
(2) A general merchandise retailer who permits a person describedin paragraph (1) to process, deposit, negotiate, or obtain payment ofa credit card charge through that general merchandise retailer'saccount or agreement.
(3) A franchisee who furnishes the cardholder with goods orservices that are provided in whole or in part by the franchisor andwho processes, deposits, negotiates, or obtains payment of a creditcard charge through that franchisor's account or agreement.
(4) A franchisor who permits a franchisee described in paragraph (3) to process, deposit, negotiate, or obtain payment of a creditcard charge through that franchisor's account or agreement.
(5) The credit card issuer or a financial institution or aparent, subsidiary, or affiliate of the card issuer or a financialinstitution.
(6) A person who processes, deposits, negotiates, or obtainspayment of less than five hundred dollars ($500) of credit cardcharges in any one year period through a retailer's account oragreement. The person shall have the burden of producing evidencethat the person transacted less than five hundred dollars ($500) incredit card charges during any one year period.
(d) Any person injured by a violation of this section may bring anaction for the recovery of damages, equitable relief, and reasonableattorney's fees and costs.
(e) Any person who violates this section shall be guilty of amisdemeanor. Each occurrence in which a person processes, deposits, negotiates, or otherwise seeks to obtain payment of a credit cardcharge in violation of subdivision a) constitutes a separateoffense.
(f) The penalties and remedies provided in this section are inaddition to any other remedies or penalties provided by law.
(g) The exemptions from this title specified in Section 1747.03 donot apply to this section.
(h) As used in this section:
(1) "General merchandise retailer" means any person or entity, regardless of the form of organization, that has continuously offeredfor sale or lease more than 100 different types of goods or servicesto the public in this state throughout a period which includes theimmediately preceding five years.
(2) "Franchisor" has the same meaning as defined in Section 31007of the Corporations Code.
(3) "Franchisee" has the same meaning as defined in Section 31006of the Corporations Code.
Stoney
Killeen, Texas
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