July 10, 2010

Paypal Pending Balances

According to the PayPal user agreement:
10.7 Reserves. If you receive Purchase Payments, PayPal, in its sole discretion, may place a Reserve on funds held in your Premier or Business Account when PayPal believes there may be a high level of risk associated with your Account. If PayPal places a Reserve on funds in your Account, they will be shown as “pending” in your PayPal Balance. If your Account is subject to a Reserve, PayPal will provide you with notice specifying the terms of the Reserve. The terms may require that a certain percentage of the amounts received into your Account are held for a certain period of time, or that a certain amount of money is held in reserve, or anything else that PayPal determines is necessary to protect against the risk associated with your Account. PayPal may change the terms of the Reserve at any time by providing you with notice of the new terms. 
 What this doesn't say is that PayPal will also deny you the ability to earn interest on those funds while they are held in reserve.  Because Holden Web is organizing DjangoCon we currently have a substantial balance (which will soon disappear once the outgoing starts). So PayPal have decided that they can place $20,000 on reserve, thereby refusing me the right to earn interest on that money.

Naturally the "notice" I received just said that the funds were being held on reserve until further notice, and when I inquired about this the "explanation" I received didn't explain anything at all: it simply pointed me to the user agreement and suggested that I could find out what information they had used in the decision-making process by taking out a subpoena. Definitely not cool. In terms of customer service PayPal are scoring about 1 out of 10 here.

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