PayPal Catches Heat for Freezing Charity Account

PayPal today issued a public apology after it came to light that a scrooge in the payment service's accounting department froze an account belonging to an organization collecting donations in order to hand out toys to underprivileged kids. The site's 'mistake' was using the "Donate" button, which a PayPal rep informed them was only for nonprofit organizations. posted a transcript on the conversation between it and PayPal, and it underscores the frustration of dealing with customer service, as well as the opposite risk of pissing off the wrong person. Regretsy took its beef online and posted all the gory details on its blog, including this tidbit:
PayPal: Only a nonprofit can use the Donate button.
Regretsy: That's false. It says right in the PDF of instructions for the Donate button that it can be used for "worthy causes."
PayPal: I haven't seen that PDF. And what you're doing is not a worthy cause, it's charity.
That's right, a PayPal representative made the distinction between a "worthy cause" and "charity," even one that's attempting to hand out toys during the holiday season.

Regretsy, being the snarky blog that it is, had a little fun with PayPal in the process, but there was nothing funny about the underlying issue of PayPal's callous attitude. The predictable result in this day and age of the Internet was an online backlash that ultimately forced PayPal's hand.

"Though we can’t comment specifically on the account due to our privacy policy, we can confirm that the funds have been released and we are working directly with the account holder on this matter," PayPal said in a statement. "Just like anyone else, we believe strongly in helping those in need, especially around the holiday season. We are working with Regretsy to make a donation to help their cause, and we’re truly sorry this occurred."

Happy holidays.
Via:  PayPal
LeahDaisyD 3 years ago

Unfortunately, PayPal did not bother to contact Regretsy prior to releasing the statement claiming:

"...we are working directly with the account holder on this matter"

So, that would be a LIE!

This is an example illustrating the need for investigation, regulation, and probably prosecution -- and most definitely litigation. It is amazing to me that a company – which is most definitely a financial institution – can arbitrarily freeze / seize a clients funds for 180 days. I want to know how much client $ they have “frozen” on any given day and how they are profiting from that. The Paypal apology was an “we’re sorry we got caught” and did nothing to clarify their policies or outline how they would change their processes. The States Attorneys and the IRS need to get over to PayPal and start digging!

If you don't like the idea of doing business w/ a company that can randomly freeze / seize your account, then please read Andy Greenberg's article at Forbes

CLo 3 years ago

lol, you posted this right after i read the Regretsy coincidence. back to the track, paypal is doing right move otherwise more hate on paypal. i got few forum members stop using paypal after this break out

Inspector 3 years ago

wow... really now paypal? This support should be fired, obviously he doesn't use his brains to help others as a support is suppose to do. When ever im answering support tickets on a forum i mod, i always show niceness even though that guy may be on an endless loop of pissing me off. It would of been better worded if it was "I am not aware of such PDF, may you please direct me to it?" minus the worthy cause and charity part...

Manduh 3 years ago

The funny thing is, in Paypal's statement it says "we recognized our error and moved as swiftly as possible to fix it" however, if it wasn't for the internet community pulling together, this would have just been swept under the rug.

I went to the site and read the full post they made, I could not believe the type of replies the Paypal employee made! He/she should be axed ASAP. There was no professionalism in any of it! :gasp:

jonation 3 years ago

paypal has a history of power-tripping. its more than just one assistant, he has bosses that pass on instructions.

LLeCompte 3 years ago

Paypal, always finding a way to screw things up.

thunderdan602 3 years ago

Way to expose crapal! :-)

Resin 3 years ago

Ha! I was wondering if this story would make it to HH.

PayPal underestimated Regretsy. Promises to only screw over smaller less internet savvy customers from now on.

slugbug 3 years ago

PayPal is owned by Ebay right? Enough said.

Super Dave 3 years ago

I LIKE Ebay, slugbug!

LBowen 3 years ago

Good to see the power of the internet keeping Paypal in check.

If you don't like how you are being treated by customer service, bring your claim to where a large portion of customers can see it and their service reps will be doing everything they can to resolve your issues.

oasis789 3 years ago

The main problem is, as a consumer, there's not very much I can do to fix this. Yeah I can complain on their Facebook wall and all, but I still use Paypal for small transfers between friends and most small online purchases, because its easy (iPhone apps etc) and most online retailers only have Paypal as the payment option. Until they have Wepay, Dwolla, Google checkout, Amazon payments etc implemented, I can't actually give them that business. Personally I'd be happy that they made a switch, so they can potentially pass on the savings on transaction costs down to me, the consumer.

omegadraco 3 years ago

@LeahDaisyD most U.S. based banks have the right to freeze funds for many different reasons. Now I am not saying PayPal was right in fact I agree they were wrong in doing this... but it could have happened with any bank.

Now as for that support person wow what a total idiot and are they not required to know the policies or be able to read them before making a decision. "worth cause" does not equal charity as I have seen the donate button on software companies sites etc.

Paypal went downhill quite a bit when ebay took them over, but it is still by far the easiest way to transfer money between private parties.

OSunday 3 years ago

The only thing with this is that this could easily just be some snarky, wise-a$$ of a customer service employee working for PayPal who's portraying PayPal as some force of evil that doesn't find charity's to be a worthy cause.

I think its interesting that PayPal hasn't responded to this more attentively, a mis-characterization as such REALLY casts them in a negative light even if PayPal does have a host of great services and features, no one wants to be associated with a company that causes problems for charitable organizations... or a Scruge or Grinch in this particular case

Super Dave 3 years ago

Did y'all catch the part about Regretsy being a FOR PROFIT charity? Has anyone here ever visited If not, take a look HERE. As you can see, this is no Red Cross, Goodwill or Salvation Army website. Now I'm not going to defend Paypal's screw-up, but honestly, the problem was rectified quickly. I'm surprised to see so much PayPal hatred!

AKwyn 3 years ago

I have to agree... I mean I hate PayPal as much as the next guy but they've been adamant in helping me out with my problems; I guess if you manage to know how PayPal works and if you're determined enough then PayPal can work for you somehow.

jonation 3 years ago

i dont understand how following the paypal instructions isnt knowing how paypal works? they even froze her personal paypal for no reason. paypal has been know to ride a high, judgemental horse. They deemed this woman as being a fraud and would not let go- you really need to read the posts on the site to get a true feel.

LindaMC 3 years ago

What some of you don't know is that paypal is owned by General Electric and they also own eBay, so they can do what they want. I do not deal with any of them, I ripped up paypal's card, will not deal with eBay or buy anything GE. Geoffrey Immelt the CEO of GE moved the company to China and built a company there that will compete with America's Boeing, in building engine's and many other things. If we are smart, which I am and hope you are to, don't buy anything from General Electric Again, it's up to you. To me this company and CEO are traitors to this country.

Super Dave 3 years ago

[quote user="LindaMC"]What some of you don't know is that paypal is owned by General Electric and they also own eBay[/quote]

Please cite your source.

jonation 3 years ago

this should be interesting...

jpapenfuss 3 years ago

You guys need to realize that the "quotes" offered from PayPal aren't actual quotes, but "humorous paraphrasing". That is, a step short of libel in the one-sided tone being offered.

We're getting one side of a story, and that side is coming from a troll site. There's more to this, rest assured.

jonation 3 years ago

here's the otherside (sounds like someone got featured on this "troll site"):
And they admitted it was their fault. shocker. they pull this sh!t all the time. there are literally blogs about it. the wikipedia section for criticism and litigation will give you a good idea.

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