PayPal froze my account for two weeks and requested so much personal information that I felt like I was being investigated by the Federal Government. I honored their every request. Every day when I called, I was told that they had received everything they needed and that my account would be reopened in 24 hours. However, once the 24 hours were up, I would receive an email stating that they needed more information.
It cost me over $15.00 in fax costs. Some of the documents I faxed I had to fax again several times because they lost them (with all my personal information) or claimed that the document was unreadable. They also cost me over $75.00 in finance fees from my credit card companies, because they had my money frozen and I could not pay my bills. Their customer service agents knew very little about the process to unfreeze my account and would lie just to get me off the phone, after I spent 40 to 60 minutes on hold every single day for the two weeks.
I also had a substantial loss of sales through eBay because I could not accept payments for Buy It Now auctions. I believe the total was approximately $180.00 in lost sales, plus over $50.00 in wasted listing fees that eBay will not refund. I was very kind and complied with all of PayPal's requests, but apparently that was not enough. They even reversed money from my bank account that I had already written checks against.
I asked for an explanation of why they "froze" my account and got a generic answer like "Oh, it is a random service to help protect you and buyers." If it were random, why was my neighbor "randomly selected" three days after I was? PayPal was not upfront and hid what they really wanted from me. For instance, they required proof of shipment, which I provided. Then they said that they wanted proof of delivery, and I spoke with one of their customer service people about this. I cannot guarantee what happens to the package once I give it to the shipper, which is why I recommend that all my clients purchase shipping insurance.
This ordeal was absurd and ridiculous. As far as I am concerned, it is just harassment, and I am researching alternatives to the great PayPal.
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