Monday, May 19, 2008

My PayPal Horror Story

It's time to tell everyone how we have been treated by PayPal. I posted, briefly, on the topic back in 2005. Since the following true story has now been posted on a public website, I am also offering it here -- in hopes other people will comment and/or go to these forums. Here's my PayPal horror story (edited slightly from the post on

Over the past three years, I've read various posts on this website, but never joined in order to tell my own story. I guess I always hoped that PayPal would one day email me to say it was all a huge mistake -- and that they were setting the account straight, refunding my money, refunding money to my former customers and maybe even adding a little interest payment to the mix. Unfortunately, that has not happened.

I got tired of telling this story to people within a few months of when it occurred... but now it's time to tell the world. PayPal took me for more than $4,250.00. To be blunt, PAYPAL STOLE MY MONEY. Over the past three years, I have complained to everyone who would listen -- and many who obviously didn't care to hear the story. NO ONE has done anything -- and my finances have suffered significantly because of the problems caused by PayPal (and eBay).

I'll try to make the story as short as possible... but you need some reposition, so as to add credibility to what I am saying. BTW, I am NOT hiding behind a pseudonym or changing things around in any way. My PayPal ID was CharlieJ. My eBay account was CharlieJ. I am Charlie Jarman, the owner of those two accounts -- and this is my story. Any errors herein are due solely to my crappy memory and are NOT meant to change the facts of what happened to me.

I joined eBay when it was still called AuctionWeb -- back in April, 1997. Over the next few years, I bought and sold many items on eBay. Eventually, I started taking PayPal as the primary means of payment for items I was selling. PayPal also became the primary means for selling on my website (formerly and through wristwatch forums around the Net. My business: Watchbands, wristwatches and a book I wrote on Rolex (the company & their products) entitled The ROLEX Reference Guide.

By 2004, I had accrued somewhere around 3,500 transactions with PayPal (includes buying and selling). I have sold everything from $10 watchbands to a $10,000 Rolex President via eBay -- with many paid via PayPal. I was a Silver PowerSeller with 99% positive feedback when this horror story all started. PayPal Verified and all that jazz, too.

On July 1, 2002, I severely injured my back. To make a longer story shorter, I'll just say that the back injury caused me much pain, insomnia and discomfort (still does). As such, I was late shipping some items to customers. That is a sentence, BUT it is not just a few letters in the story. It is my admission of fault. Yes, I screwed up by not taking care of several customer orders in a timely manner. Not an excuse, but my idiotic reasoning was that my wife and children could help me pack and ship. In any event, I was late and didn't ship some orders as promised. BTW, we're not talking about hundreds of orders -- maybe 30-35, at most. If you want to check for yourself, look at the eBay feedback page that is still in my name - CharlieJ. My feedback was down to 98.x% positive, but you can see that the problem with late orders was pretty sudden. [Keep in mind that I have not had access to the eBay "About Me" page since 2005. What I am telling you is factual.]

Anyway, I refunded a few customer payments, shipped some watchbands for free and gave some folks extra items in order to make up for the slow shipping. A few people filed PayPal complaints -- all of which were resolved within 48 hours. The straw that apparently broke the camel's back was a $600 watch I sold to a guy in France. He paid on a Monday and filed a PayPal complaint for non-receipt on Friday. There was NO WAY for the package to get to him in France in just four days. I explained to PayPal and to the customer -- along with providing the shipping confirmation info. Nonetheless, my account went to LIMITED ACCOUNT status. At the time, I had around $2000.00 in my account. I never received the $600.00 for the watch -- and never have been given access to MY ~$2000.00.

I tried to convince customers who had orders pending that I didn't have their money (it was in the limited account). Therefore, I couldn't ship merchandise. As you can imagine, that didn't go over well. Some of them were not able to get their money back from PayPal because the email wrangling with PayPal had gone over the 30 day limit for refunds. So, the customers were out and I was out. And who had the money "in limbo"? PAYPAL.

After several months of emails, calls and faxes to PayPal, I pretty much gave up on ever seeing my money again. In the meantime, I had a few thousand dollars (at cost) worth of watchbands and books sitting around with no way to sell them. My reputation on the watch forums was shot. My eBay account was suspended the same day my PayPal account was "limited". I don't cuss, but boy if I did...

A couple more months went by... and then I got a bright idea. I gave my wife all of the inventory I had. She created a PayPal account, and an eBay account. She started selling the remaining inventory of watchbands. It didn't take long for PayPal to limit her account (claiming "suspicious activity") -- get this, with the promise of opening it back up *IF* she would verify her information for them within a day or so. [I still have the email/letter somewhere.]

She sent faxes, verified everything, copied her drivers license, and on and on. IMPORTANT: She even sent USPS confirmation receipts to PayPal showing that EVERY item in question had been shipped and received by the customer. PayPal kept ~$1250.00 from her account -- in the LIMITED ACCOUNT status. So, we were now out:

$2000.00 = my PayPal acct
$1250.00 = her PayPal acct
$ 600.00 = the last watch sold
$ 350.00 = cost of watchbands delivered, but pymt not rec'd
$ 50.00 = postage, LD phone calls, faxes, etc.
$4250.00 (approx) TOTAL
Of course, there are more losses in this ordeal, but those are the ones I can validate easily.
To date, my wife and I have filed complaints with:
  • FTC
  • BBB - Nebraska
  • BBB - California
  • Attorney General - California
  • Attorney General - North Carolina
  • Attorney General - Nebraska
  • and even tried to get the FBI involved as PayPal's embezzlement crossed state lines
NONE of the aforementioned agencies have done much of anything. One told us we would have to provide certified letter receipts for every bit of correspondence, ad nauseum. A couple told us our complaints were not within their jurisdiction. And a couple never even responded.

So, here I sit -- NO side business to supplement my income; A bad reputation that could have been fixed, but is pretty much irreparable now; ~$2600.00 gone from my account; ~$1600.00 gone from my wife's account; NO way to buy/sell on eBay; NO way to sell the inventory still sitting in my home.

Most people you talk to won't believe that PayPal steals money. I am living, breathing, proof. Most of the information I have shared here can be backed up with paperwork, letters, faxes and research online.

I would be happy to settle with PayPal -- for $4250.00 they owe me and my wife + interest on that money + the "limited account" status being abolished on ALL PayPal accounts + a change in their policies that would allow sellers to dispute and be provided some sort of hearing on the matter.

For those who still don't believe PayPal is ripping buyers and sellers off, check out these sites: (where I posted my horror story)
I'm sure there are others!


Anonymous said...

i will not use paypal. there is nothing wrong with writing checks to purchase goods. online transfers of payments are great for the utilities, phone, etc.,
but if im buying a watch, accept my check, or forget it.

Anonymous said...

I am amazed by some of the ignorant comments that are being made here. For example one person writes that he doubts PayPal is freezing accounts for "nothing." Fact of the matter, PayPal IS freezing accounts for nothing and denying people access to THEIR money for 6 months or longer -- in the process destroying many vulnerable, yet potentially successful, online businesses. Almost ANYTHING -- in most cases what innocent is -- can trigger PayPal's "anti-fraud" system which will then automatically limit a person's Paypal account, send them an automated email, and then you have thousands of people IN ONE DAY trying to contact an untrained and powerless PayPal customer service staff of about 500. Take a look at SOME of the reasons as to why PayPal may limit your account:

So keep the ignorant comments in check. Also, the arrogant people who use PayPal and eBay and never had a problem quickly become believers when they do eventually run into problems -- and MOST DO!

Also, if anybody is interested: New Ebay and PayPal Michael Moore documentary -- HELP MAKE IT HAPPEN. You can get the information here:

Anonymous said...

I worked for a reputable company that sold on ebay. We were rapidly growing and had employed over 60 people. One day, without notification or reason (our feedback was stellar, we had a whole department devoted to customer satisfaction) Our ebay and paypal accounts were shut down. over 60 people immediately, and unnecessarily lost their jobs due to this. Ebay still can not explain why we were dropped but can assure us that they wouldn't let us back. To make matters worse. Ebay advised all of our customers with pending orders to either, not pay if they haven't already, or to file a pay-pal dispute if they have. At the same time they are telling our customers not to pay us, they are charging us for all the listing fees for auctions they had canceled. Since we were no longer on ebay, of course, all the paypal disputes went through. We made good on EVERY order we were still able to download into our system. But these companies single handedly, unnecessarily destroyed over 60 jobs in a time when the economy is already struggling. Ebay and paypal are directly complicit in the failing US economy and are responsible for countless unemployed people around the country. They should be both brought up on federal charges.