We try to find out who regulates PayPal and what they do with the complaints they receive.
I have to start by saying that I don’t think I’ve found a company with as many serious allegations againt it as PayPal. Here are just a tiny, tiny fraction. Take a moment to look at some of those complaints. Or these. Or this view.
Then ask yourself: “what would I do if this was my business they were talking about”?
I spent a couple of hours today trying to find out where these desperately unhappy and furiously angry people go, since it’s clear from what they say that PayPal isn’t listening to them. I want to know who or what – if anything – regulates PayPal.
Wikipedia has this to say:
“In Europe, PayPal is registered as a bank in Luxembourg under the legal name PayPal (Europe) Sarl et Cie SCA, a company regulated centrally by the Luxembourg bank authority, the Commission de Surveillance du Secteur Financier (CSSF)
PayPal had been registered in the UK as Paypal (Europe) Ltd, an entity which was licensed as an Electronic Money Issuer with the UK’s Financial Services Authority (FSA) from 2004.
This ceased in 2007, when the company moved to Luxembourg, however the Luxembourg entity is still regulated by the FSA, as it is an entity from the European Economic Area which conducts regulated activities in the UK. “
So it seems that the Financial Services Authority is a place to turn to. And here’s some extra advice from a disgruntled PayPal customer:
“BE SURE TO KEEP COMPLAINTS FACTUAL AND INCLUDE THIS – PayPal FSA Register Number: 226056. The FSA will not look into individual complaints but if they get enough people complain about Paypal then they will look into their business practices. Individual complaints should be directed to the Financial Ombudsman as they will deal with individual issues when Paypal steal your money!”
That’s useful information.
Next step will be to try to contact those bodies to find out how they handle complaints about a company like PayPal. That should be interesting.
I did that, and posted this step by step guide to complaining about PayPal in the UK.
Update: 8/01/10
You know, what’s probably most telling about PayPal’s lack of accountability and effective regulation is that if you do a Google search for “who regulates paypal” you don’t go to a page on PayPal’s site where they lay out clearly to their customers how they’re regulated. Or a Financial Ombudsman page. Or a UK Government consumer advice page or… or..
No. You just get my post.
Just take a moment to think about what that actually means. Astonishing.
Very interesting to see that there are many, many more people out there that feel cheated and unsatisfied by PayPal’s services. Does anyone have any tips on starting an online petition? So the FSA can be contacted collectively or better still collectively contact BBC’s Watchdog.
Having been cheated by a chargeback fraud on eBay last year, I found out first hand how easy it is to be done over and believe me when I say I’m very savvy.
The essential point to remember is that everything PayPal say about your money’s safety is marketing hype. They don’t value their customers in the slightest will screw you over without hesitation. They have absolutely no regard for customer service. Don’t believe me? Try giving them a call, bet you can’t easily find a number for them and if you do, the closest one will be in the ROI.
If they side with anyone, it will be with the buyer and leave the seller out of pocket. They have a phonomenal amount of wealth, have a worldwide monopoly and very little regulation. Does that sound condusive to being responsible to you?
Onto more practical matters, if you have a complaint, write to them RECORDED DELIVERY in Luxemburg and keep proof of postage. They cannot ignore you then and as the reporter above recommends, keep it factual. Exhaust PayPal’s complaint procedure, which will take a while but they can’t chase you with bailif letters while that happens (http://www.thisismoney.co.uk/bargains-and-rip-offs/article.html?in_article_id=408585&in_page_id=5). After that, you can go to the UK Financial Ombudsman but they can only help effectively if you’ve exhausted the complaints procedure.
They best way to deal with them is not not deal with them and break the eBay/PayPal monopoly, as I’m now doing. It really is a false economy.
Frank, great comment – thanks. I have to agree with you; the only way to ‘vote’ on this is with your feet, but I’m not confident that enough people will get stung to seriously affect these peoples’ appalling lack of accountability.
It seems the online era has shifted customer service to a place where operators like PayPal do two flavours of it: invisible (i.e. nothing goes wrong) and fucking awful (when things do go wrong).
What does worry me is the degree of autonomy they (and, let’s face it, pretty much every other online operator from the ‘home worker’ through ‘affiliate marketer’ through outright ’scammer’) have. When you pick under the surface, it’s practically lawless and uncontrollable. Oddly, everyone seems to secretly like it that way, until the individual gets stung then they can’t believe there’s actually no body with any power to intervene…anywhere.
Good comment, good advice. Thanks
I Joined paypal in late November.buy the start of December,I had my account frozen for reasons that changed throught my subsequent communications with them.I went through the verification procedures they asked for,started primarily as a buyer,hoping to make a small profit on items I purcased.Naively thinking they were a safe company who I could trust with my transactions,they ended up virtualy backrupting me.I bought items which in total I from careful selection,could have nearly doubled my money on,or at least made a good profit.As soon as I had brought thse items,items,I had no use of for myself,I was closed down.I warn people from having anything to do with these crooks.They have taken up weeks of my time,calling,writing,ringing,getting fals hope that things would be resolved,having all the bad news sent to me at night,so I woke up to another awful,impersonal,non progressive,non explanitory message.And to top it off,they accused me of being fraudulant and were suspicious of me for money laundering,opening multiple accounts,then had the cheek to call me high risk.These people are evil,and they destroy lives and buisinesses for no reason. Ian Teather
Over eighteen months ago I had been ruminating on many of PayPals bad, if not illegal,practices.
There are many examples, but I wont digress at this stage to go into them.
I decided to contact the FSA who were at the time clearly responsible for PayPal.
When I complained about some of the practices that were taking place the guy on the other end of the phone said “Well they seem to be successful!”. I asked him what he meant by that, to which he replied.”they are making lots of money”.
I asked if this was the correct criteria for a regulating body to use to assess if a company was
operating in a proper manner. I dont remember the exact details of the rest of the conversation,but suffice it to say that it was the usual “dog with no teeth bullshit and waffle” that these people have great pleasure in using!!
PayPal are a rogue bank and I don’t think many users are aware that their money is not covered as with a normal bank!!
I really wish one of the daily rags would set into them!!!
Hi have just had a run in with PayPal, for the second time in a few days my account has been passed for a review, it was restricted without a good reason, i was asked for invoices and proof of business, tracking numbers because i had 4 or 5 item not received but i have issues tracking numbers for them and not all of them were about delivery but asking for a date! so customer using wrong button on ebay. PayPal told me they do not use ebay to review the sellers account! obviously they do for this to effect my account
My account was also restricted and now shut down ans money is held for 180 days! I have no money to survive on or feed my kids as i had planned to use that money to pay bills rent and buy food with.
Ive been a seller on ebay for 6 months selling bareley 5 items a month from home which belong to me and are all personal items.. they said was high risk and no other explanation.
Numerous phone calls, emails, sleepless nights, they still refuse to give me a reason.
I would like people to join me or start a petition to get these people dealt with and sued and to compensate the innocent victims who’s lives have been ruined. please email me on hiteshv78@yahoo.co.uk and start a page on facebook for people who want to take them to court.
I have complained to financial ombudsmam and will contact FSA as well as they cannot continue these foul practices and get away with it. with enoough support we can do this and bring them down! it is onlu because not enough people go all the way in taking the complaints far enough or all the way that they can get away with this.