In December of last year, I sold some software on eBay and received the payment through PayPal. It totaled a little over $400. I shipped the software through UPS, and it was hand delivered to the recipient and signed for. The buyer submitted a claim through PayPal that he never received the item, even though I had tracking info. PayPal decided in my favor. So one month later, I got a notice that a chargeback was debited from my account, leaving me with a negative balance. The buyer ended up with the software and his money, and I got a restricted PayPal account and a -$400 balance to take care of. I contacted law enforcement in the buyer's area but was told it was a small claims issue and I would have to pursue it that way. Too much hassle. Long story short, I did not add funds to my PayPal account to clear up the negative balance in time, so they sent it to a collections agency.
This is where the story gets crazy! In July of this year, my 21-year-old brother, who does not live with me or share any info (phone number, email address, etc.), sold an amplifier on eBay. The total sales price was $960. The payment was made via PayPal. My brother has had this PayPal account for two years and never had any limited access, but he had also never received any money, as it was always used for making payments. He initiated a bank transfer, and three days later he got an email stating the transfer had been reversed and he needed to verify some info, so he complied and assumed that took care of the issue. Another few days passed and he received an email stating that his account had been linked to an account with a negative balance and that it needed to be resolved before his funds could be released. PayPal customer service would not release any info as to who he was linked to. A month had gone by when we found out it was linked to my negative account. They linked us through IP address, because I had logged into my PayPal account a few times from my brother's computer. So this means that roommates or cousins or co-workers can be held responsible for others' accounts simply through IP address. After several emails and phone calls, we were told the final decision is to hold the money for 6 months to "review" the account, at which time the funds MAY be released.
I find it interesting that PayPal only limits the accounts that have a positive balance. They must be earning quite a bit of interest off all their limited accounts. I paid my negative account and resolved my issue with PayPal over a month ago, and they have still not released the funds. And they have not limited my husband's account, which he has had for years, even after he received a payment stating it had been linked to an account that was under review for suspicious activity (my brother's). PayPal will now not return any of our phone calls and will not respond to our emails.
It is amazing to me that this could happen. If a family member and I had checking accounts at the same bank and mine was overdrawn, they could not debit my family member's account for my negative balance. If I defaulted on a loan or credit card, no one else would be responsible but me or a co-signer, regardless of us sharing a phone number, IP address, or physical address.
So I have resolved my issue, but PayPal is still holding over $1000 of my family's money.
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