Of course PayPal like any other payment processer would have strict policies for handling money. If they didn’t they surely would be out of business fast. According to CNNMoney published today, PayPal not only has an elaborate system to keep the fraudsters out, sometimes this system, “Traps legitimate businesses and charities in its filters, and proving you're no scam (sic) involves a ton of paperwork and time.” PayPal will be doing a complete overhaul of their security system.
"These are not minor -- these are aggressive changes," said Anuj Nayar, PayPal's senior director of communications.” "This is a fundamental shift in our business operations." "We want to be clear about how people can get out of the [frozen funds] situation," he said. "We need to get better about helping people, or explaining why actions are being taken."
As it stands, CNNMoney goes on to say if PayPal believes there is a scam involved it will freeze accounts for about 21 days. However, it can freeze accounts for up to 180 days. “To get access to their money, users are often asked to provide the kind of documentation that a product seller would have, like several months' worth of sales records. But if you're running a fundraiser or selling tickets to an upcoming conference, you don't have that paperwork. Even for those with extensive paper trails, the appeals process can take months to resolve. The Web is filled with enraged blog posts, websites like paypalsucks.com, and a Tumblr called "Conferences Burned by PayPal."
Accounts which have been frozen by PayPal
According to CNNMoney science fiction writer Jay Lake who has colon cancer also had his fundraiser account frozen. Luckily for him he was a celebrity. Lake stated, "If it weren't for my small bit of fame, if I were the guy down the street, this could have taken months."
“As of 2011, PayPal operates in 190 markets and manages more than 232 million accounts, more than 100 million of them active. PayPal allows customers to send, receive, and hold funds in 25 currencies worldwide.” “As of 2012, PayPal accounted for 40% of eBay's revenue, amounting to US$1.37 billion in the 3rd quarter of 2012.”
Some business owners, charities, and fundraisers alike have been caught up in this web of paperwork and frozen accounts. It is about time PayPal is taking the initiative to change their policies.