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Mon Nov 3 2008 08:37:17

Something Smells Bad with eBay's PayPal eCheck Glitch

By: Ina Steiner

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I haven't seen a situation like this in a very long time - if ever. PayPal is holding eBay seller funds when buyers pay with eChecks. But neither company has publicly announced the problem, adding to the natural tension between buyer and seller in eBay transactions where trust is crucial. The problem is over a week old and is ongoing.

It is surprising that the State Attorneys General have not looked into PayPal's recent policies of holding seller funds (and we're hearing it's not just the seemingly inexplicable 21-day holds, we hear PayPal is also instituting 5-percent, 90-day holds on certain high-volume sellers unless they put up a PERSONAL guarantee) - and now this glitch with eChecks. What recourse do buyers and sellers have when PayPal holds funds, whether by policy or due to a glitch?

Glitches happen, but it is inexcusable not to acknowledge the problem to your own customers. I spoke to PayPal about this problem on Wednesday, and they said they would get back to me on Thursday. I followed up, with no response.

eBay and PayPal need to do a few things, immediately:

Acknowledge and explain the nature of the problem;

Place the missing funds in sellers' accounts;

Allow sellers to ban eCheck payments;

Communicate with buyers;

Automatically reverse any negative buyer ratings for sellers involved in eCheck payments over the past 2 weeks.

PayPal also needs to compensate sellers for "borrowing" their money interest-free, and they need to do a much better job of explaining eChecks to buyers. Most buyers don't even realize PayPal is funding their transactions via eChecks, a whole separate issue!

You can read the full story in AuctionBytes Newsflash, and let us know if you've been affected by the problem.

Update 11/3/08: PayPal said it put in a fix on Friday morning to prevent the problem from happening to new eCheck transactions, but is still working on a technology fix to release the funds to sellers accounts for those affected by the glitch. PayPal said users may call PayPal customer support to initiate a manual release of funds on a case-by-case basis, or wait for the fix. You can find the phone number by clicking on the Contact Us link when logged in to PayPal. Stay tuned for updates.




Comments (124) | Permalink

Readers Comments

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Anon

Mon Nov 3 09:01:58 2008

What's really sad is that the sellers are going to pay the price thru Neg's and bad DSR's and I doubt ebay will concerned in the least.

They just keep getting worse and worse.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Mary Jones

Mon Nov 3 09:02:34 2008

How ON EARTH, can paypal and ebay get away with this???? This is ILLEGAL. AND THEY KNOW ITS HAPPENING AND ARE HIDING IT!!! Why is this NOT IN THE NEWS

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Mary Jones

Mon Nov 3 09:03:05 2008

How ON EARTH, can paypal and ebay get away with this???? This is ILLEGAL. AND THEY KNOW ITS HAPPENING AND ARE HIDING IT!!! Why is this NOT IN THE NEWS

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Jonathan

Mon Nov 3 09:04:59 2008

Remember the week long total outage at PayPal right as the holiday season started a few years ago?  Nothing learned by PayPal by that or any other problems along the way!  PayPal has a total disregard for quality and their customer.  How many people actually believe a word PayPal tells you?  Once eBay purchased them, it was downhill from there.

I am working as fast as I can to switch my customers over to Google Checkout.  That still does not help with eBay transactions, and in those cases I am working as fast as I can to help my customers migrate over to Amazon.

Ebay/PayPal are doing everything they can from the book of how to piss off your customers and they are doing it well!

Who is at fault?  IMHO it is the fault of the stock holders for not voting out the board.  The management of eBay and PayPal are right up there with Enron.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: AC_in_mich

Mon Nov 3 09:09:39 2008

    Well, I SURE am glad I have been taking a ''break'' from eBay.  Maybe, if the Dem's get in, they can start looking at eBay and Paypal.
    You know if Meg is the Secretary of the Treasury, there won't be squat done!

AC

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Ron

Mon Nov 3 09:10:09 2008

This is silly. No, downright stupid. Since one of my buyer's payments got held up by this, I have called PayPal twice about. Both times I got a long-winded but content-free non-answer that basically promised nothing. However, the rep I talked to did agree to send an email to my buyer explaining that the problem was on their end and that it wasn't my fault. And, I'll be darned -- she actually sent it! My buyer, who is a repeat customer, has indicated that she is not worried about it and won't let it affect the feedback or DSR's she'll leave for me.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Mike Fallon

Mon Nov 3 09:11:51 2008

For the record, I received one of the erronious PayPal emails just yesterday (11/2/08). This is the second such notice I've received in the past few days. When I received the first one, I forwarded it to PayPal's fraud folks (spoof@paypal.com), as I smelled a phishing attempt. Here's their response to my concern: ''Although we've determined that the email you forwarded to us is not a phishing attempt, our security team is grateful for your concern.'' Ah, yea.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Russ

Mon Nov 3 09:12:37 2008

And to blame it on the IRS reporting debacle is poor - that happens in 2012 for the 2011 year unless I have misread the poop.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Nancy

Mon Nov 3 09:18:12 2008

In re: the erroneous e-mail sent about Improved Seller Protection

**Unfortunately, this email incorrectly states that it's now easier than ever to be covered against items-significantly-not-as-described and items-not-received claims, chargebacks, and reversals. To clarify, the email should have said it's now easier than ever to be covered against unauthorized payments and items-not-received claims, chargebacks, and reversals. Our improved Seller Protection does not extend coverage to items-significantly-not-as-described claims, chargebacks, and reversals.

Who is writing this stuff, a NINE YEAR OLD?

Does it cover chargebacks and reversals or NOT?

Maybe they should hire some people who are at least 21 years old, and try PAYING them more than 8 dollars an hour. Oh yeah, and they could try hiring some AMERICANS. I hear there are lots of folks out of work.

That would help.

About half of the people they have answering their phones have no idea what they are talking about.

I think it's TIME, PEOPLE, to write your Congressmen/women and Senators, TELL THEM THIS JOINT NEEDS REGULATION.

About as bad as Wall Street.

If they are holding your money, file a complaint with your AG in your state.

You cannot steal money from anyone at any time, it's ILLEGAL.

If it came out of the buyers bank account, and you don't have it, file a complaint! Write them one last time, tell them if you do not hear back within 24 hours you will be filing a complaint with the AG. Put every single detail about when it came in, when it should have cleared, what the BUYER told you about it clearing his BANK ACCT, etc. And then take a SCREEN SHOT,(hit SYS RQ) drop it into MS WORD. You need a copy of the letter. MAKE SURE you get a copy. You'll need that when you file.

And COMMUNICATE with your buyer, let 'em know what's going on, in detail. Find OUT if it came out of their bank account, and when.

These guys process billions of dollars in pymts, and they act like crazed children playing tiddliewinks.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: anon

Mon Nov 3 09:19:21 2008

they told me today it is a technical glitch they are working on fixing

sure -  they don't give a crap
screw sellers and buyers

who else but ebay can do something like this and not fix it after 1 week

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Jennifer

Mon Nov 3 09:20:17 2008

I had an eCheck not clear last week and subsequent email from Paypal.  I called Paypal at 888-215-5506 and they manually cleared the eCheck.  
Or so I thought until just now.  I got an email saying it was cleared and shipped the item and just looked and it has NOT cleared!  Now I have an expensive piece that is being delivered today and I haven't been paid!

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: TekGems

Mon Nov 3 09:22:03 2008

We've been looking at manually adding tracking numbers for high dollar Paypal transactions. This will allow us to retrieve our money faster after Paypal verifies delivery of the product.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Luis

Mon Nov 3 09:33:27 2008

I have two eChecks in that situation and because they Cleared and I got the PayPal email to proove it, I see no problems to send the items to the buyers.
I got an email from PayPal (after sending a total of 6) saying that they were trying to find a work around the glitch, that in prgrammers parlance means they probably have a blackhole loop in their software and quite often they are not easy to sort out. That doesn't excuse the lack of information
Cheers

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Nancy

Mon Nov 3 09:55:27 2008

People need to know that when abused by paypal like this, they have to go OUTSIDE paypal to get attention.

Contact your State Attorneys General office and file a complaint.  I promise you when these complaints start showing up in multiples, paypal will be contacted and asked to explain the holdup in releasing funds that belong to account holders with paypal!

Complaining only to paypal gets you nowhere, never has and never will.

NOTE: These paypal issues are only happening on ebay/paypal transactions, not to paypal's other account holders not involved in paypal.  That should tell you something as well.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Pam

Mon Nov 3 09:58:06 2008

Thank you, Ina, for bringing this topic out from hiding. We who are caught up in this loop have felt very helpless. Ebay WILL NOT  publicly address the problem on the Systems Announcements board at Ebay's website, which indicates something very serious has happened, perhaps a security breach? Why else would they admit to sending out a letter with a ''click - on'' link to Payapl accounts? I am so glad you and your team are now on top of it.
Pam

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Jim S.

Mon Nov 3 09:58:24 2008

Yeah, I had one last week that PayPal posted manually for me.

And, the eBay shipping calculator is still broken. This is really getting old.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: fedup

Mon Nov 3 10:01:56 2008

This whole matter of paypal randomly holding up buyer payments has gotten totally out of hand. I first heard of this a few weeks ago when some sellers that I paid on ebay asked if I could please leave feedback immediately when I rcvd the items as paypal would not release the funds until they knew the shipment was delivered. So since when is feedback considered proof of delivery ? These were sellers to whom I had been buying from for years. The payments to them were instant payments not payments from a checking account that needed to clear. Paypal is clearly overstepping the boundaries now. If I was to pay a seller with my credit card or if I received a payment from a buyer that paid directly by credit card there is no way the credit card companies hold up funds to the recipient until proof of delivery appears somewhere. So it seems that first ebay has successfully destroyed a perfectly good selling platform and now their paypal subsidiary is intent on ruining what had been a perfectly good payment system. No system will ever be 100% perfect but in their maniacal quest to tweak every single aspect of every transaction ebay and paypal are rapidly destroying the basis of what originally made them a great selling platform. As as seller I can tell you that is has now reach the point where ebay / paypal now make more profit on many of my sales than I do. Obviously this is likely happening to many other sellers too and a situation such as that cannot possibly continue before either almost all trustowrhty sellers quit or the ebay platform is totally destroyed. I have been selling on ebay 10+years and by direct mail for 36 years and have never witnessed any business so intent to unravelling everything they ever built up.

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Jennifer

Mon Nov 3 10:05:37 2008

Welllllllll, I just called paypal back and asked to speak to a supervisor.
This is what I was told.  
I told the girl that I would NOT hang up until the money was in my account.  She acknowledged that Paypal has the money and that it was "safe to ship" since Paypal has the money.  WHAT??????  So I said, "IT'S NOT YOUR MONEY!!"  After listening to her read her talking points for 2 or 3 times, I told her I want MY MONEY IN MY ACCOUNT Immediately.
Now get this!!!  She says, "As a courtesy to you, Paypal will give you a 'Provisional Credit' one time for the amount.  It will take 3 to 5 business days for this to appear on your account."
HUH?????  Another 3 - 5 days for this money to be put in my account?  And then when further questioned she said that Paypal will REMOVE this money once the glitch is "figured out" and the money can be put into the accounts.  That may take an additional week or longer.  So although they will give you a courtesy "Provisional Credit" at this time, they will take it back when they figure out the glitch and then allow the system to put the money into your account eventually.
I kept saying, "IT'S NOT YOUR MONEY!" and that there should be no "Provisional Credit" as that means it is money I can't spend since Paypal can remove it at any time.  She just repeatedly read from her talking points.
So anyone know of an attorney who wants a class action lawsuit against Paypal?  I'm ready to be the first in line to sign up and will be more than happy to give all the emails and snapshots of my account to prove this theft!
What compounds this is the fact that eBay forces us to use Paypal and then steals our money from us!

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Wake-Up!

Mon Nov 3 10:16:33 2008

eBay is a complete disaster.

eBay has failed to publicly report the problem for a reason.

This is all part of the planned small seller genocide. They know exactly what they're doing. This is simply a part of their contingency plan.

You see, many small sellers have no choice but to sell on eBay. Thousands of American families have built their lives and incomes around what eBay used to be. Hanging on for hope that things will get better. So sellers feel trapped into staying or face utility disconnections, foreclosures and  for the well-being of their families.

But, after all the lies, humiliation, and abuse withstood, small sellers, the heart and core of eBay, will ultimately suffer the wrath of this purely evil empire and fall victim to the eventual destruction of their business and livelihood -per eBay’s unwinnable and unattainable polices.  

The evil powers that be at eBay know this, and this is just another way to make sure if you don’t leave willingly, you WILL get ''dinged'' into oblivion. You have to look at the scale of these tactics. One seller getting dinged off the site really doesn’t amount to a drop in the ocean.  

However, you have to look at this from the true and massive scale of small time sellers on eBay. Millions of small time sellers will fall victim to their plan and millions will disappear leaving only China garbage and Diamond PowerSellers.

eBay will fail. All evil company’s eventually get bogged down with their own lies and deceit, and swallowed by their own quicksand. The shareholders are finally opening their eyes to these Enron tactics and they don’t like what they see.

SELL YOUR EBAY STOCK NOW!

Something Smells Bad with eBay's PayPal eCheck Glitch   Something Smells Bad with eBay's PayPal eCheck Glitch

by: Camille

Mon Nov 3 10:17:11 2008

I am a seller caught up in this, too, with a cleared but "unclaimed" eCheck. I've sent a letter to the Senate Banking Committe as well as to the rep for my state, and to Fox News. I'm not sure how to approach the AG for NY - if I should fill out the two page complaint form or the web contact-form.

I'm not a powerseller, by any means, and my payment isn't as large as some I've heard of... but it's large TO ME. And now I'm hearing of this affecting other types of Paypal payments - credit cards and instant payments, too. I'd leave eBay, but I don't know where else I'd go. And I need this.

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