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Background:
In order to earn miles & points, many people “manufacture spend”. That is, people find ways to increase credit card spend (to get rewards) while getting their money back. There are many techniques for doing this, and PayPal is a component of some of them. Unfortunately, while these techniques are perfectly legal, they are often also used for money laundering and other illegal activities. As a result, PayPal frequently freezes accounts of those who manufacture spend because they appear to be doing something illegal.
In response to a recent post about PayPal freezing accounts, an anonymous PayPal employee stepped forward and offered to answer our questions. In this post, I’ve summarized answers to three such questions. Many more questions will be answered in future posts.
Question: Once an account is frozen, is there a good way to get access to frozen funds in less than the stated 6 months?
Funds are held for 6 months to prevent overdrafts in case charge backs are received. This is legal. That said, while Customer Service agents can’t release limitations on your account, they do have the ability to release funds.
Recommendation: Call to let PayPal know what you were doing that led to the frozen account and ask politely for a check to be mailed, or to be granted access to a portion of the funds. This may require several calls (wait a few weeks each time). It’s essential to be nice to the person you speak with.
Question: I’ve heard of people who have had their PayPal money tied up for years. Is that legal?
I believe this to be a misunderstanding of what has happened. Accounts that are no longer being used eventually go into escheatment.
Editor’s note: Google says “Escheatment is the process of identifying customer’s deposit (checking, savings, etc.) and time deposit (CD) accounts that are considered abandoned and remitting the funds to the appropriate state if the customer cannot be contacted to re-activate the account.”
Laws regarding escheatment vary by state. Generally, after 2 to 5 years, the money from those accounts goes to an unclaimed funds account in the state in which the account was registered.
Funds may also be tied up longer when law enforcement is involved.
Bonus question: Why do you work for such an evil company?
I like working for PayPal. It’s a good job and I enjoy the work I do.
I don’t believe that PayPal is evil. They’re constantly improving. When PayPal started, there were no other businesses like it. It is sort of a half bank and half money services business. As a result, PayPal is expected to follow rules and regulations designed for both businesses. It’s an overwhelming set of responsibilities and PayPal is doing its best to meet those requirements and serve its customers.
Further, the work PayPal does to prevent money laundering is important. True money laundering is done by true criminals including those involved in drug dealing, prostitution, tax evasion, child pornography, terrorist financing, etc. I see it as a very good thing that PayPal takes active steps to prevent money laundering.
Previous Answers
Please see:
Much more to come
Anonymous (AKA MSnowden) has many more answers for us. As I receive the answers (based on questions asked by readers in response to the original post), I’ll do my best to summarize those answers and alter phrases to protect Anonymous’ identity. Stay tuned.
Other questions?
If you have other questions for Anonymous/MSnowden, please head over to the original post and add your question to the comments section (if no one has already asked the question). Here’s the original post: Anonymous PayPal employee to answer manufactured spend questions. Don’t forget to press the “Previous Comments” button to see older comments that have fallen off the front page.
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I just added 3 claims to the Cepeda vs PayPal Settlement. Some good soul took these fascists to court and there will be a settlement for those who had their accounts frozen. I may even take a day off from work and go to the court date in Oakland US District Court for the Northern District of California Case No. 10-CV-02500 SBA. I am curious to get a close up look at a modern day fascist. Kindred spirits should come and we’ll have drinks downtown Oakland after the gavel comes down.
hey Ak, what exactly did you say in your emails to PP Exec folks? also is your acct still limited? I ask cause I still have a few MyCash cards with no way to load or get em refunded since the PPMC site errors out when I try to login — my guess because my PP acct is limited.
there doesnt seem to be a solution to this. but I’m willing to try any new avenues to get my frozen funds as well as unused MC funds back.
You should receive an email from paypal if your account is limited.
If you have received an email then:
Directly write to executiveoffice@paypal.com without any apology and ask them to release fund within one week. Let them know that you are ready to file a complaint to Consumer Financial Protection Bureau, your State Attorney General, Federal Reserve and BBB.
Consumer Financial Protection Bureau
http://www.consumerfinance.gov/complaint/
The United States Federal Reserve
https://www.federalreserveconsumerhe…mcomplaint.cfm
Provide your phone number and email address. Executive Escalations team will respond by phone call from area code 402 within few days. They will ask you few questions on funding and withdrawals. They will enable your PayPal account for bank withdrawal.
Do not waste your time with those nice customer service representative who will do nothing.
[…] PayPal employee answers: Faster money back? Why work for evil? – More answers to your questions about PayPal and manufactured spend from an anonymous employee. […]
Jim Cramer just announced Apple will be targeting PayPal in new product next year. It would be a great time to short PayPal stock
Wow, I can’t believe some of the feedback this post is generating. You guys realize this blog is provided for free and that you don’t actually have to read everything, right?
FWIW, I find the info in here really interesting and valuable. Thanks.
This post was OK. I honestly don’t get why it has attracted SO MANY trolls in the comments section. Greg is just trying to add some insight, albeit limited, but I don’t think that is really his fault. People need to relax!
I appreciate hearing from the PayPal employee and the work you do to provide information to your readers. (I would like PayPal employee to offer more juicy/useful tidbits.)
I tried the CSR route that anonymous has suggested without any result. After multiple tries with CSR; the only way I could get my money back was by writing an email to 86 paypal emails I found on the internet. It turnout that few of them were very hire up in the chain. Within 3 days, I received a call from paypal executive office area code 402-952-xxxx. The follow-up emails were via executiveoffice@paypal.com. They immediately released fund hold. I could withdrew fund to my bank account.
I do agree with most of your readers. There is nothing new that anonymous is sharing.But, continue your good work. Hopefully, one day we may find something interesting.
Thanks for the posts Greg and thanks to Anonymous for the info. Long time PayPal user but for legit sales on eBay (just junk not trying to earn a living or MS) and I appreciate the info. I have never considered PayPal for MS but I don’t really MS considering my brick and mortar full time business spends a hefty 6 figures a year on my credit cards. Keep it up, ignore the complaints and thanks again.
Greg, thank you very much for these articles. “Paypal Snowden” thank you very much to you too! Obviously, if you deposit $10k in you bank and then write $1k “suspicious” check and your bank closes your account and holds your money for 6 month you will be very angry even its legal. But how many banks you have in your city? Paypal is unique and has a certain monopoly. They do a lot of good, thats why we use them. They also are abusing some of their customers because this is the only game in town and they can decide whose business they want. The only solution would be competition in this field. For some reason it does not exist, so any tips on how to deal with Paypal are helpful. BTW, Paypal does not need PR in MS community, so I doubt they benefit from this.
“True money laundering is done by true criminals including those involved in drug dealing, prostitution, tax evasion, child pornography, terrorist financing, child pornography, etc.” -PayPal Anonymous
It’s obvious that this PayPal person knows nothing about money laundering. “True money laundering is done by true criminals”? What?!?!?! Terrorist financing? Child pornography X 2? Huh?
“True money laundering is done by true criminals” is exactly correct. It’s not money laundering unless the gains from criminal activities are involved.
Drug dealers, pimps, purveyors of kiddie porn, tax evaders and terrorists all need to hide the origin of the cash they are working with. I can imagine that PP is pretty popular with the kiddie porn crowd.
If government regulation of PP is anything like the bank where I work, I can promise you that they have serious regulatory risk and they bend over backwards to show they aren’t facilitating money laundering.
Google paypal and terrorist financing and the first article that pops up is:
http://www.latimes.com/nation/la-na-terror-arrest-20150208-story.html
Thats a recent article from this year, so obviously people are using PayPal for nefarious actions. I am guessing this MSnowden guy knows something….
I was too afraid to search for paypal and child pornography…so I will just take their word for it.
No useful information whatsoever from Anonymous. If one calls to Paypal customer service, one probably finds out more useful info. “Anonymous has taken on real risk.” Really, what risk? Was something said by Anonymous that Paypal wouldn’t want us to know? Looks like a corporate fluff piece.
Whoever they are, they could be fire for talking to the press. Most corporate jobs have this policy where you have to be authorized to talk to journos and bloggers.
I am somewhat disappointed with the lack of specificity in these answers (i.e. there isn’t any cold hard fact that we didn’t know last year from here or on flyertalk), but assuming Anonymous is who he claim he is, I am glad to see that some insider insights confirm what we have speculated. I’d much rather trust this info from a PP employee, than from a former PP user who has not even touched the service in two years. Bravos for this series and, like FrequentMiler pointed out, if you don’t find these posts useful just move on to somewhere else.
Thanks!
I’m surprised that so many people say that there is little of value written so far. This is the first time I’ve learned:
1. That customer service agents have the power to release frozen funds.
2. The specific triggers that are likely to lead to account reviews.
I’m sure some will say that these things are well known, but I promise you that I can list a lot of other things that are “well known” about PayPal that are actually wrong.
I’m not surprised by the negativity shown by several commenters, but I’m extremely disappointed in the negative comments directed towards the PayPal employee. Anonymous has taken on real risk in coming forward to try to help us. If you don’t find it helpful then move on, or ask detailed questions that may lead to more helpful answers.
The fact that My Cash cards are almost impossible to use without risk is not the employee’s fault, but Anonymous sees that it is a problem and is trying to offer help.
Personally, I will continue to hate PayPal as a company, but I’m very thankful to Anonymous for coming forward.
I can see why people are being negative towards this guy. He’s telling us to be nice to the people at paypal while they treat us like scum. He hasn’t given any useful information either…basically he is just telling us how great paypal is. You should listen to your commenters and not just write them off for being trolls.
“Be nice to CSRs” is a fairly generic advice that works just about in every situation, though. Just because we are upset with an airline (which happens all the time) doesn’t mean it’s the crew’s fault; and yelling at them wouldn’t get us anywhere, either.
I gotta say…this is more interesting than most of the stuff I read here.