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PayPal offers a convenient service for sending, spending, and receiving money online. They also offer the PayPal My Cash card which can be used for manufacturing spend. It’s possible to buy My Cash cards with credit cards, then load the money to your PayPal account, then withdraw the money in various ways. For those seeking credit card rewards, it sounds perfect. Unfortunately, PayPal will almost certainly freeze your account if you do this often. And, when they freeze your account, they won’t let you use or withdraw funds for 6 months. I recently warned people away from this technique in the post “Beware buying PayPal My Cash cards.”
In response to my warning post, I received an intriguing email:
Hello,
For reasons of keeping my identity hidden I have created a new email account to contact you about PayPal MyCash. I currently work for PayPal and am privy to a lot of info that might help your readers out. I would love to answer some questions regarding shutdowns and hopefully clarify the issue. I am a frequent traveler and I understand the need for manufactured spend and I don’t want those that do it to be punished as this is something I do myself. [..edited…]. I have to do this anonymously because I could lose my job since I am not acting in any official capacity, but I feel the need to help out my fellow frequent milers. Let me know if you would like to set something up.
Thank You
Anonymous PayPal employee
I was, of course, extremely interested. I did worry, though, that this could be a prank by an internet troll hoping to humiliate me. So, I asked for proof that they were really a PayPal employee. I promised to keep the information confidential, of course. In response, Anonymous PayPal employee (hereafter referred to as Anonymous) sent convincing evidence. Of course I still can’t rule out the possibility of an internet troll going to great lengths to prove their false story, but I think its unlikely. I’m convinced enough to risk it.
Process
I’ll start the ball rolling by asking several questions myself within this post. Then, readers can add their own additional questions. When I receive answers from Anonymous, I’ll follow up with one or more posts to report the answers.
My Questions
Here are my questions for Anonymous:
- Do you know of any safe way to use PayPal to manufacture spend? Is there a pattern of use that will avoid shutdown?
- Once an account is frozen, is there any way to get it re-opened in good standing? In my experience, all appeals (via phone or email) get rejected without any chance to plead one’s case. I would love the opportunity to prove that I’m not the money launderer they seem to believe I am.
- Once an account is frozen, is there a good way to get access to frozen funds in less than the stated 6 months?
- I’ve found that, after having an account frozen, it is possible to create a new account just by using new email address. Later, though, when I requested funds from my frozen account, my new account was frozen even though I hadn’t done anything with the new account that should have raised suspicion (grrrr). Assuming there’s no good way to reestablish a frozen account, can you recommend a good way to establish a new account that is less likely to be shut down?
Your questions
If you have additional questions for Anonymous, please add your questions to the comments section, below. Please try not to duplicate questions others have asked. Before writing your question, refresh the page and read through the comments section to see the latest reader input.
If you have private questions, you can email them to me (frequentmiler at gmail dot com) and I’ll pass them along.
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[…] response to a post about PayPal freezing accounts, an anonymous PayPal employee stepped forward and offered to answer our questions. In this post, I’ve re-written and summarized answers to four such questions. More questions […]
I wonder how the costs of PPMC are divided between the store (say CVS), incomm, and PP. Who gets the $4? who pays the CC processing fees?
Does PP actually lose money when someone buys, loads and liquidates PPMC quickly?
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[…] 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 […]
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What about using mycash funds loaded to PP then paying your PP Extras card down with the funds?
[…] 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 two such questions. Many more questions […]
I used to use Paypal Debit cards to load Serve Cards. I would purchase PP MyCash, load my account, and load my Serve cards. I never had a problem doing this. I would also occasionally buy money orders. Then I also began loading Nationwide Visas with my PP debit cards, and within a week for my account, and a couple of months for my husband’s account, I got a “warning letter”. I believe the fact that I was earning 1% cash back on these loads may have drawn attention to my account. Upon receipt of the letter, I immediately suspended all manufactured spend activity for the associated account.
I consider it too dangerous to risk losing mine and my husband’s Paypal accounts, as I often buy and sell things, especially on ebay, so the risk of losing the accounts is too great. I would now like to purchase PPMC cards and use Paypal Debit cards only to pay bills, which I would consider to be within the terms of the agreement. However, I have heard of people who previously engaged in MS activities getting shut down for using PPMC cards to pay bills, even when their use is totally legitimate. So I haven’t loaded or used PPMC cards since receiving the warning letter. I have NEVER loaded an account with PPMC and then withdrawn the funds to a checking account, I always purchased money orders or loaded Serve cards with them.
Given the above:
1. Is Paypal more likely to be alerted to MS activities if the activities are earning 1% cash back via the Paypal Debit card?
2. If you have previously engaged in MS activities and received a warning letter, then begin loading your account with PPMC cards and using the Paypal Debit card to pay legitimate bills like car insurance, for example, do you still have chance of getting shut down? Does it matter what type of MS activities you engaged in in the past?
These questions are mostly academic for me, since there is no good alternative to Paypal anymore and so I won’t risk my account with them, but I am curious. Thanks for your help!
When should we expect to see some answers?
Thanks. Sub.
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You know already what’s the most important question.. How to avoid shut down? Should we at all MS with PP? Once 2 years ago I bought PP my cash and I can’t sleep since why even to sell it?
What about PPDG ? Real limits, how many accounts one can have, why it tells me to use different method of payment
If you’re MSer and not PP spying or testing the waters then you know the relevant questions, why don’t you start with answering them
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it seems no one has any questions, which is weird. it is too suspicious why would he want to help us? there is nothing there for him… what’s his interest? just to help us? risking his job?… anyways, let’s see what happens next. thank you FM!
You have to click “previous comments”
There are a whole bunch of questions posted.
thank you, Vic!