Thanks again, but some here seem to have implied that they freeze the whole account. Am I misunderstanding? I certainly hope so, and besides, random freezes sound like a very strange business model.
Cheers,
R.
Roger,
If this is my story you are referring to, about my entire bank account being frozen the instant that a dishonest seller hit the "start a dispute", button, no you are not misunderstanding, because that is exactly how it works. People who are asserting that Paypal does not do this, have not read the current user agreement, or have not had it happen to them. It was for people who think that this CAN'T happen to them that I posted the short version of my story, so that they could learn something without having to learn it the painful way, like I did. Ignorance is bliss, right up until the time it's not and you are out $8,000.
You can go back and read my original post, but here are the provisos which flesh the story out a little more accurately as far as "can this same thing happen to me".
Technically, Paypal does not "freeze" your bank account in the legal sense that the IRS can freeze your bank account, but the effect is exactly the same-your money is not available to you until Paypal says it is. They hold it, as if it belongs to the buyer, until they make a decision. In our case, I sold an amplifier worth $8,000 for a friend of mine who did not have an account on the buying/selling site. The money went into my Paypal account. I transferred the money to my linked bank account, which is my only bank account. I wrote my friend a check for his $8,000. Some time later, the buyer destroyed the amp. Because he actually understood how Paypal rules work, and he was dishonest, and he knew how to game the system, he just filed a dispute with Paypal stating that the item was "not as advertised" and demanded a refund. Paypal, in these situations, instantly "freezes" all the money in your Paypal balance, up to the amount in question, which, in this case, was $8,000. If there is not $8,000 in your Paypal balance, they "freeze" whatever else they need in your linked bank account, up to the amount in question. I did not have a total of $8,000 in my bank account+paypal balance, so yes, Paypal froze me out of being able to access my liquid assets, and they will do the same to you in a similar situation. The only source of funds I had was my credit card, and it would stay that way until the case was adjudicated. I had taken photos of the amp before it was packed for shipment, and at various stages of the packing. None of that mattered because none of that proved that the amp was working when we shipped it.
In the absence of incontrovertible proof, Paypal always sides with the buyer whether he is lying or not.. It wasn't always that way, but has been that way for several years now. That is great if you are a buyer, but sellers are at the buyer's mercy.
Was our word against his, so Paypal sided with the buyer. My friend had to write him a check for $8,000 to make him go away, and to unfreeze my assets. So he was out an $8,000 amp, AND $8,000. Lesson learned.
Yes, the best way to avoid this is to link your Paypal account to a separate bank account with not much money in it, but this creates one problem as well, which no one has mentioned here. In our case, if my Paypal account had no money in it and had been linked to a separate bank account, with no money in it, and to a dormant credit card, and if Paypal had demanded that we refund this guy $8,000, we could have just ignored it, and there would have been no money for the dishonest buyer to get his hands on. BUT, the Paypal dispute remains open in perpetuity until that "debt" is paid off, and the seller can no longer use his Paypal account. Well, he can use it but every time he sells something and money goes into his Paypal account, it instantly is transferred to the Paypal account of the buyer who filed the dishonest claim. And if it had been originally an Ebay sale, because Paypal and ebay are still linked insofar as this is concerned, you would have to open a new ebay and a new paypal account under different names if you had not paid off the dishonest buyer, and thus lose whatever ebay goodwill you had built up over the years.
I write all this because, plainly, there are some people posting here who don't understand what they have actually agreed to when they signed the user agreement. I am not trying to be argumentative, rather just trying to let people learn from my bad experience instead of their own.
There are dishonest people in the world, and logic suggests that they buy and sell in equal numbers. If you are an honest buyer, Paypal protects you very well these days from unscrupulous sellers. Paypal offers no such protection to sellers.
