Paypal and money laundering regs

[Simpo Two]

Over the years I've obviously been a busy bunny and it seems that in total I've received over £4,500 into my Paypal account (and earned them over £150 in the process).

For some time I've had e-mails asking me to 'resolve' the situation:

'PayPal is required by law to comply with European Union Anti-Money Laundering regulations by collecting information from customers when they receive more than the set limit in total payments. These steps need to be completed as soon as possible to comply with this regulation.'

What they actually want are my credit card details (which I'm sure I had to give them at the outset as proof of identity). Anyway, there's about £500 in my account and today they've blocked it completely because I haven't given them what they want.

I don't have a problem confirming my identity again, but I'm annoyed that I'm being put over a barrel and forced to give out CC info.

Has anyone else hit this problem?

[JustinP1]

Me.

Paypal are just nasty. IMHO it has nothing to do with them fulfilling regulations, just a way of semi-forcing you to sign up for a business account. Did you get to that bit too?

To get access to my money I basically had to tell them company details, a VAT number etc even though it was a personal account. I ended up havingto ring them.

[Simpo Two]

JustinP1 said:

IMHO it has nothing to do with them fulfilling regulations, just a way of semi-forcing you to sign up for a business account. Did you get to that bit too? To get access to my money I basically had to tell them company details, a VAT number etc even though it was a personal account. I ended up havingto ring them.

Interesting, thanks. I already have a Premium account because in the past I've needed to accept payments from buyers using credit cards. Is that what you mean by 'business account' or is it another level with higher fees - which they can hoover straight from my own CC if I give them the details?

The account is not connected with any business so if they want a VAT number and company details they'll be out of luck.

[Pappa Lurve]

AML directive 2 is about to be replaced with AML directive 3 in a few weeks time which changes things. However, European regs, which do differ a little in each country mean that they do need to seek increased customer ID as an acount hits approx £5k.

[Simpo Two]

Pappa Lurve said:

AML directive 2 is about to be replaced with AML directive 3 in a few weeks time which changes things. However, European regs, which do differ a little in each country mean that they do need to seek increased customer ID as an acount hits approx £5k.

OK.

But I'm still loathe to use the CC as ID. Am I worrying unduly or do you think I could use a utility bill?

[JustinP1]

Simpo Two said:

JustinP1 said:

IMHO it has nothing to do with them fulfilling regulations, just a way of semi-forcing you to sign up for a business account. Did you get to that bit too? To get access to my money I basically had to tell them company details, a VAT number etc even though it was a personal account. I ended up havingto ring them.

Interesting, thanks. I already have a Premium account because in the past I've needed to accept payments from buyers using credit cards. Is that what you mean by 'business account' or is it another level with higher fees - which they can hoover straight from my own CC if I give them the details?

The account is not connected with any business so if they want a VAT number and company details they'll be out of luck.

Definately a business account they were pushing for, as I have a Premium account too. I would follow through the process and see what it asks you for.

Another factor may be that it does seem that they are becoming overly geared toward buyer confidence as the downfall of the seller. Someone recently bought something from me on ebay for £170, and paid straight away by credit card and I shipped out the item. The next day the £170 is 'put on hold' and then taken from my account again. The person was a fraud and apparantly used a stolen card, and despite Paypal telling me that they have accepted payment and put the funds in my account, apparantly they can remove the funds at any time if a 'chargeback' occurs for any reason.

From that point I have removed funds from the account as soon as they are paid in. The last transaction is from someone *who knows* they are trying it on. Of course, Paypal immediately take the funds from your account pending investigation. However the account is now in minus, and as I have really had enough I went to delete my credit cards from the system to ensure they can't take any money away...

...and lo and behold they won't let me delete my credit card which the account is in minus!

So... it is my guess that having a credit card there means that they can cover themselves and just take the money from your card... I would beware!

[Simpo Two]

Hmm, yes, my 'be cynical' warning light is flashing away merrily.

I've just sent them this:

'You have recently blocked my account because of 'EU money laundering regulations'. This may or may not be true, but in order to make you happy you want credit card details. Firstly, as I'm a Verified member with a Premium account, don't you have this information already? Secondly, if it is Proof of Identity you're after, why do you insist on a credit card and not, for example, a utility bill, passport or driving licence?
I am not happy giving you information which will allow you to take sums of money from me without authorisation.
So, what is it you are really after, (1) Proof of Identity or (2) a way to take money from me?'

We'll see what happens...

[Pappa Lurve]

Simpo Two said:

Pappa Lurve said:

AML directive 2 is about to be replaced with AML directive 3 in a few weeks time which changes things. However, European regs, which do differ a little in each country mean that they do need to seek increased customer ID as an acount hits approx £5k.

OK.

But I'm still loathe to use the CC as ID. Am I worrying unduly or do you think I could use a utility bill?

A CC is one form of ID, there are a range of others but they would I think need to be certified. However, assuming you would pass, E-KYC (elctornic Know Your Customer) should be fine. I would guess you would get through that without a problem.

[Simpo Two]

Pappa Lurve said:

However, assuming you would pass, E-KYC (elctornic Know Your Customer) should be fine. I would guess you would get through that without a problem.

Jeepers, I've never heard of that! How do I do that/get one of those then?

[Pappa Lurve]

Simpo Two said:

Pappa Lurve said:

However, assuming you would pass, E-KYC (elctornic Know Your Customer) should be fine. I would guess you would get through that without a problem.

Jeepers, I've never heard of that! How do I do that/get one of those then?

You don't! We have a system here where each of our guys can run ID checks on 50 people a day. We will soon have it fully automated so there will be no need for any human intervention in about 80% of situations.

Just depends on volumes. Also, it is the difference between putting your money through a company like paypal who are perfectly OK or working with a real bank (even if we are tiny and have a staff of only about 18 people!).

[timskipper]

Simpo Two said:

Hmm, yes, my 'be cynical' warning light is flashing away merrily.

I've just sent them this:

'You have recently blocked my account because of 'EU money laundering regulations'. This may or may not be true, but in order to make you happy you want credit card details. Firstly, as I'm a Verified member with a Premium account, don't you have this information already? Secondly, if it is Proof of Identity you're after, why do you insist on a credit card and not, for example, a utility bill, passport or driving licence?
I am not happy giving you information which will allow you to take sums of money from me without authorisation.
So, what is it you are really after, (1) Proof of Identity or (2) a way to take money from me?'

We'll see what happens...

I completely fail to see why you're making such a fuss over nothing. What do you think they're going to do with your credit card info, fund the PayPal christmas party?

It's really not worth all the hand-wringing, and sending them a sarcastic e-mail isn't exactly going to help you. Have you tried phoning them up? You get lovely sounding very polite Irish girls on the phone!

I put several thousand pound a month through PayPal in one way or another, never had a single issue.

[JustinP1]

timskipper said:

Simpo Two said:

Hmm, yes, my 'be cynical' warning light is flashing away merrily.

I've just sent them this:

'You have recently blocked my account because of 'EU money laundering regulations'. This may or may not be true, but in order to make you happy you want credit card details. Firstly, as I'm a Verified member with a Premium account, don't you have this information already? Secondly, if it is Proof of Identity you're after, why do you insist on a credit card and not, for example, a utility bill, passport or driving licence?
I am not happy giving you information which will allow you to take sums of money from me without authorisation.
So, what is it you are really after, (1) Proof of Identity or (2) a way to take money from me?'

We'll see what happens...

I completely fail to see why you're making such a fuss over nothing. What do you think they're going to do with your credit card info, fund the PayPal christmas party?

It's really not worth all the hand-wringing, and sending them a sarcastic e-mail isn't exactly going to help you. Have you tried phoning them up? You get lovely sounding very polite Irish girls on the phone!

I put several thousand pound a month through PayPal in one way or another, never had a single issue.

That was me too until a couple of weeks ago.

45 minutes on the phone last week over one issue - £175 out of my account without authorisation.

Literally just got off the phone where I waited for someone to answer for 24 minutes - and that was the fraud team!

After I learnt the first time to empty my account, this new refund of £107 is showing as a minus on my account so it wont let me use the account until them I pay them the funds they have decided to hold. There has been a fraudulent claim been processed against me for concert tickets the buyer actually went to...

...Paypals response - As long as the buyer sends the item back and provides proof of posting, in this instance used ticket stubs, then Paypal will give them a full refund.

In the meantime I am not allowed to delete my credit cards - as they intend to refund the fraud the money and take the money from my card.

I am sorry but I was duped in exactly the same way as the OP. I certainly regret it.

[Simpo Two]

timskipper said:

I completely fail to see why you're making such a fuss over nothing. What do you think they're going to do with your credit card info, fund the PayPal christmas party?

See Justin's reply. Can I have you CC number as well please? I have a CC terminal but may not take any money from you... how lucky do you feel? That's my point. I don't sign DD mandates for BT either, because the last time I trusted them with an open door to my bank account they grabbed £100+ and it took nine months and three letters to the Chief Exec to get it back. Been there, done that.

timskipper said:

It's really not worth all the hand-wringing, and sending them a sarcastic e-mail isn't exactly going to help you.

There's a difference between sarcasm and cynicism. My e-mail asks questions which I think it reasonable to expect answered. If they have nothing to hide, no ulterior motive or secret agenda, then they will be happy to answer them.

timskipper said:

Have you tried phoning them up? You get lovely sounding very polite Irish girls on the phone!

Not on a bloody 0870 number I'm not, no. Are they really that strapped for cash? ETA saynoto0870 gives a UK number as 020 86053000 - if they haven't replied when I get back from hols next week, I'll give them a go.

Don't get me wrong, I'm a perfectly easy-going fellow when I can deal with humans face to face, but arguing with a computer - particularly one belonged to a 'faceless' outfit like PayPal or eBay, is like challenging a centipede to an arse kicking contest.

Edited by Simpo Two on Thursday 4th October 13:05

[paoloh]

I paid nearly £1k thru paypal last week. They took the money but witheld payment to the sellers until I completed 5 steps that take nearly 2 weeks. In that time they've earned interest and the sellers have been moaning like mad at me.

[tinman0]

Simpo Two said:

Has anyone else hit this problem?

Yeah, its not so much a problem. Just follow their instructions.

Once you have it unlocked, cancel the credit card. Job done.

[JustinP1]

Just so people don't think I was blindly 'Paypal bashing' I thought I would give you an update to the way my issue has been dealt with.

After the 24 minutes of managing to fool the automated phone system at Paypal to putting me through to a person and not telling me to look on their website for help I followed the operators instructions as apparantly the fraud team are 'backoffice' and are not telephonable despite my urgent query.

That was now 1 and a half business days although she promises she sent them a message they have not contacted me.

However she did give me two email addresses to contact customer services in writing. The first email address od [e-mail] bounced back my email. I expected this however as this is the email address they email you from and tell you you can't reply to their emails as that address is not monitored for incoming mail.

I have not yet heard a response to the other emial address I sent to. Not even a confirmation.

She also told me to click on the 'contact us' box on their website and I tried this as well, on a PC and a Mac yesterday and today, but the page is crashing and is not working.

So... as the fraud has now developed to the point where Paypal are just about to automate the 'refund' of my money today I thought I would scour the net for a customer service telephone number or email address which doesnt make me try to fool the automated system on the 0870 number to get to speak to someone to wait for 20 minutes to tell me to 'send them an email' to a non-existant address. The Paypal site has emailed me a link to the 'refund' set up and told me that the buyer has told them they have 'returned' the item.

It now shows me that the refund will be issued automatically, but also gives me a button to click to instantly agree to the refund..

Of course there is no 'STOP' button or 'APPEAL' button and no 'WHAT THE F*** ARE YOU DOING WITH MY MONEY' button to press... I open up the customer support box on the homepage, but still not working...

For some reason Paypal choose to not make their Customer Service email public!? On searching google for 'Paypal Contact UK' this brings up nothing to do with customer service, but actually the head of the Paypal PR Department - and a REAL telephone number.

Alas, no answer there though, just a machine. In her message she did give the details of a third email address to try, seemingly 'just in case' I have tried ringing her to try and speak to a real person in customer service.... I guess she has been called in desperation a few times before!!!

Ill keep you posted.

I wonder which of my credit cards will be billed automatically over the weekend...

Edited by JustinP1 on Friday 5th October 18:40

[JustinP1]

Just found this ditty on the Paypal Press website for their publicity purposes.

Firstly their revenue for the last quarter was £454 million - for that you would think they could afford to advertise an email address!

And secondly in the 'jargon buster' section this is in their definition of chargebacks, and what happens when they put the money in your account and take it away...

Paypal said:

Sellers who accept credit card-funded payments run the risk of receiving chargebacks. Most sellers factor potential chargeback losses into the cost of doing business.

Nice eh!? Remember that being defrauded is just another cost of using Paypal to sell your stuff or 'doing business'.

Remember, if you happen to take out what they tell you is your money before the chargeback occurs then in their T&Cs they can charge you credit card for the same amount.

Anyone wanna join the queue to be tricked into supplying your credit card?

Edited by JustinP1 on Friday 5th October 19:14

Edited by JustinP1 on Friday 5th October 19:18

[timskipper]

JustinP1 said:

Paypal said:

Sellers who accept credit card-funded payments run the risk of receiving chargebacks. Most sellers factor potential chargeback losses into the cost of doing business.

Nice eh!? Remember that being defrauded is just another cost of using Paypal to sell your stuff or 'doing business'.

Remember, if you happen to take out what they tell you is your money before the chargeback occurs then in their T&Cs they can charge you credit card for the same amount.

Much the same as every other credit card merchant service you'll find. It appears you want something for free.

[JustinP1]

timskipper said:

JustinP1 said:

Paypal said:

Sellers who accept credit card-funded payments run the risk of receiving chargebacks. Most sellers factor potential chargeback losses into the cost of doing business.

Nice eh!? Remember that being defrauded is just another cost of using Paypal to sell your stuff or 'doing business'.

Remember, if you happen to take out what they tell you is your money before the chargeback occurs then in their T&Cs they can charge you credit card for the same amount.

Much the same as every other credit card merchant service you'll find. It appears you want something for free.

I don't want anything for free apart from the money they put into my account!

It is not the same with every merchant service, as in many cases the card company take the hit from the fraud - indeed that is why the card companies sell the consumer 'fraud protection'. It seems that the consumer has to pay for the fraud protection, the seller has to lose out 100% from the fraud protection whilst the merchant services blame the buyer and seller!

[964Cup]

I fought this for weeks; threatened them with the FSA and Ombudsman (before they moved to Luxembourg to escape anything resembling real regulation). Their interpretation of the regs is nonsense; they provide no other means for customers to prove their identity than bank account details (e.g. sight of documents etc as provided for in KYC regs). I have a sideline in compliance consulting and can talk the talk, but gave up in the end in the face of their intransigence, my shortage of time, and the fact that they had my money rather than the other way around.

They're a bunch of appalling seppo corporatist vermin, but what can you do? They pretty well own the market.