Paypal: no pal of mine after devastating my bank account

I’ve always been nervous using Paypal. The fear of a hacker cleaning out my bank account arises every time a new phishing email asks me to hand over my Paypal information. I never expected Paypal to be my nightmare-come-true, but they have devastated my bank account and blamed it on me. Be forewarned.

I made a purchase on Ebay a few weeks ago. To pay for it, I chose Paypal’s “other funding” option. The checking account that I use for Paypal does not have any money it. Instead, the account sits open so that I can use the debit card from my primary bank account to make purchases. Call me paranoid, but I made this arrangement when I was getting new phishing emails every hour and I was nervous about Paypal security — back in the days before Google Checkout.

Choose the other funding option, click on next, and the payment screen defaults back to the checking account. You the consumer must notice that your first option has been changed for you by Paypal, and before pressing the button to pay, it has to be changed back to what you originally wanted.

I didn’t notice the change — Paypal is supposed to be convenient — and was conned by Paypal into using my checking account instead of my credit card to pay for the Ebay purchase. Wouldn’t have been a big deal if that checking account actually had money it.

So here’s where the situation went from bad to worse. Paypal purchases attached to a checking account are treated like checks. Subtract $34 for insufficient funds fee from my bank. Since I don’t monitor that bank account, I found out a few days later when by bank notice came. Tack on more fees.

So I got on the phone with Paypal. I hope you never have to experience the Paypal version of customer service for yourself, but take my advice and ask for a direct phone number if you have to be transferred to a supervisor. Four times my call was dropped, and I had to call back, go through the automated system, wait for a long time for someone to answer the call, just to be transferred again and get dropped again. After two hours on the phone, I’m staring at a dead receiver, once again cut off by Paypal, so by the time I got to Sean, a supervisor in “escalations,” I was escalated all right. Downright mad.

Sean fed me the same bull as the people below him, which I refused to accept. They claimed that it was my mistake. They have record that I chose the “other funding” option, clicked continue, but didn’t notice on the payment screen that Paypal defaults back to the checking account option. It was up to me to notice and re-change it back to my original choice.

I compare this sort of slippery deception to ordering a steak and getting fish. Both meals cost the same amount on the menu, but the restaurant is pushing fish because of the higher profit margin.

Paypal makes more per transaction when they can withdraw funds directly from a checking account rather than processing a credit card. Paypal pretends their motive isn’t to design a system that tricks people into using the option that’s better for them. Bullshit. I worked in web development, and I know that every step of the process is analyzed. They know very well that their servers default back to the checking account option. Don’t insult my intelligence by pretending otherwise.

After telling Sean that I’m a journalist and my fiasco dealing with those greedy bastards is making me want to write a story about it, Sean refunded my request for $30. Even though the NSF fee from my bank is $34, I had $5 in the account. As long the balance isn’t below $0, I don’t care.

My balance now is in the negative $50 range, AFTER PAYPAL HIT MY ACCOUNT THE SAME DAY THAT THEY REFUNDED MY MONEY!

That’s right, after talking to their supervisors and getting a refund, they repeated the same mistake for the same transaction. So now I’ve accumulated $68 in NSF fees, plus $7 for my account being in a negative balance. The bank I use is 900 miles away; they don’t take payments over the phone. So I have to wire money to get money in the account. That’s $10 on my end, $10 on their end. Add it up and I’m now $95 in the red.

The original purchase was for $32. I just paid $127 for a $32 item. But wait, the fun is just beginning.

My time is worth $50 an hour at the low end of my billing scale, and I’d already spent three hours on the phone with my bank and Paypal before discovering their continuing efforts to fuck my financial world. Add on two more hours of arguing on the phone with a variety of supervisors, getting cut-off almost every time I was transferred, contacting the corporate office to get someone on-the-record, and they have cost me $250 worth of time, plus extreme aggravation and stress worrying about my finances.

What’s that worth in court? We’re about to find out.

Paypal deliberately setup their system to default back to the option that pays them more money. Usually, people have money in their checking accounts, and whether the purchase is taken from one account or another doesn’t matter. Paypal is like the restaurant that pushes the high profit items. I ordered steak, they delivered fish, but they’re splitting hairs to say it is my fault. Like the server saying, “but you said you like fish, what’s the problem?”

The problem is deception. The problem is I’m out a lot of time and money. Problem is, Paypal acknowledged their mistake the first time, why not the second time? They refunded money for a mistake they made (getting caught was the mistake), then won’t refund more money for repeating the same mistake.

A supervisor named Carrie invited me to report on this story if I felt like it was something that the public needs to know. Carrie, at your request, this is the beginning. Next, every friend of mine in professional journalism and blogging is getting a link to this post and my personal phone number. Then I’m filing complaints with the banking commission in the state where my bank is, filing complaints with the BBB in my state, your state and everywhere in-between, and I’m going to put my legal training to good work. If I can get a lawsuit to discovery, I will uncover the information proving that Paypal deliberately designed a flawed system. I will push for certification as class-action, then I’ll call by old pal Stan Chesley in Cincinnati, who loves nothing more than to run a legal Roto-Router up a corporate ass.

Now to post and call-in some favors. Don’t let Paypal screw you. Don’t think they’re your pal, either. They’re only your pal when they’re making money off of you — any way they can.

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