posted on August 31, 2001 02:52:06 PM new
I am treasurer of an organization that runs an annual scientific conference
called Precise Time and Time Interval. We tried to use PayPal for our
conference last year as a means of taking in registration fees.
Almost immediately we ran into trouble when PayPal accused several
prospective attendees of using credit cards fraudulently. We tried to explain
that the last people you would suspect of committing fraud would be eminent
scientists making advance payments to attend a conference! We told PayPal we'd
even take the loss if any fraud occurred. They ignored us.
Since we couldn't have our attendees insulted in this manner, we attempted
to sever our connection with PayPal and withdraw our money, whereupon PayPal
froze our account, holding $3200 hostage. E-mail and snail-mail complaints went
unanswered. Phone calls never elicted any information other than the fact that
"investigations were ongoing."
Finally, after five months, PayPal finally released our funds without a
word of apology. Needless to say, no fraud was ever detected. It turned out
that our $250 registration fee was just over the limit at which PayPal,
apparently randomly, challenges a large fraction of payments just to discourage
credit card scammers.
posted on August 31, 2001 04:21:47 PM new
Hi usno,
My apologies for the issues you have experienced.Our fraud detection system does (at times) catch legitimate users because the patterns appear to be fraudulent, which would lead to additional investigation time.
Please feel free to send me any information to [email protected] about this case.
posted on August 31, 2001 04:37:00 PM new
The problem is, there could have been no patterns. These were one-time charges, over a short span of time, by different people who had rarely if ever done anything like online conference prepayment. PayPal's trigger could only have been the size of the payment. This should not have been sufficient to accuse people of fraudulent card use. If you simply needed verification that the proper person was using a card for a large payment, why not simply call the cardholder?
If you want to check your records, look up PayPal account "PTTI Treasurer."
I am showing that this situation was resolved several months ago...is that correct? There were two accounts, money was transferred to the active account (that was withdrawn), and now there is one account active.
There was a delay in getting the response you needed, as that was when the customer service response time was much slower (2000 was a bad year for customer service because of the extreme growth we faced).
I can promise that a situation like this would not happen in today's environment.
There were several indicators that led to the account restriction (triggered by our detection system). I apologize that it impacted you in such a way. I can't cover our fraud detection methods in detail, as it is the leading reason our fraud rates are so low.
posted on August 31, 2001 05:14:55 PM new
Of the two accounts, one was for the PTTI Conference and the other was for my personal use. Only the personal one is still active, which I use for small auction transactions. Given my experience, I'd be afraid to use it for large transactions. I have moved the PTTI account to Citibank.
posted on September 2, 2001 02:14:06 PM new
Actually the best thing USNO did in resolving the "problem" was switching to a firm that is reputable namely citibank. Another former paypal user and more to come.
