The writer's life is full of highs and lows.

In the background I have been dealing with one of the lows for some time - Paypal. I hadn't mentioned this problem, but after many weeks where they have ignored me I think it is time to warn others against using Paypal for any business-critical finances. I wish I'd never heard of them. At this point I just want to close my Paypal account (which I opened more than ten years ago!) and never deal with them again.

Paypal aren't a bank, so they're not regulated like a bank is, and their protection systems are confusing and problematic, which may leave you unable to pursue complaints with the Financial Ombudsman Service. Paypal are an American money-transfer organisation originally set up and connected to Ebay. There have been accusations of fraud, and - relevant to this blog post - lots of criticism related to Paypal keeping people's money and blocking their access to it, often leading to court proceedings. "By 2016, ConsumerAffairs had received over 1,200 consumer complaints relating to PayPal policies" (source). It doesn't look good once you start digging. And I'd never have started digging or summarised all that here except - you guessed it - Paypal are refusing me access to my money. The money I need to live off.

Let's take a step back. As I said, I have been a customer of Paypal since 2007 (maybe earlier). For over ten years they have been tracking all my financial transactions. They know my history, my purchases, my payments. It's been pretty boring and regular stuff. I'm not some person who came along in 2017 and set up an account with them and started transferring large sums of money from unspecified sources. Instead I occasionally bought books, or transferred payments to editors and proofreaders, or paid Ebay fees, or sold an unwanted TV series on DVD.

My problems began at one of the high points of my writing career when one of my books reached #1 in the UK horror charts (back in August 2017). I was so excited. It was to be my biggest royalty payment yet, and the first one that almost equated to my salary from back when I was in paid employment! The way royalties work is that it takes three months before you get paid. That's fine. I could wait.

November came and the money was transferred into my account by the e-book distributor Pronoun (owned by Macmillan). Macmillan are one of the big five publishers. We're not talking about some small and shady organisation, but a traditional and established one. All the elements of my royalty payment are standard and traceable, and tied to recorded sales on various platforms.

But because Paypal use automated systems that are prone to false positives (PayPal developed a "fraud monitoring system that used artificial intelligence to detect potentially fraudulent transactions" - source) it means they often flag things up that are normal transactions. And they save money by trying to resolve things with automated processes rather than human intervention. And boy, does it show.

And so my royalty payment went into Paypal in November (Pronoun only pay into Paypal accounts). And suddenly Paypal started sending automated messages with automated routines, telling me I had to send them all sorts of private data, often things that I don't even have. And even if I did have them, I'd be very wary of sending copies of my most vital documentation over the Internet to a company that isn't UK-based or fully regulated like a bank; data that could well end up on US servers and then be subject to US laws which mean it can be spread even further afield. This is data that should never be shared under those circumstances, because it can be used for ID theft and fraud and impersonation. Staff at Paypal would then have access to the data (since their staff access and check it), which also opens it up to anyone they share it with. Official Government ID is for official Government purposes - you show it to police, to border controls, to social security. You do not send scans of it to pseudo-banks in other countries or to any other organisation just because they request it and tell you they are trustworthy. I'm sure the UK Passport office would advise against that, with good reason, because there is no way to control the data once it is out there, and no cast-iron guarantee that you'll be fine and nothing can go wrong. This is how identity theft can occur.

But Paypal don't care about the risks they transfer to their customers, only about minimising Paypal's costs. So they insist on their worrying and incorrect systems rather than assign an actual human to look into it and confirm that there is no fraud taking place and you are who you say you are. In my case, that I am Karl Drinkwater the author, and that the royalty payment was from a reputable company for trackable items sold as part of a normal pattern of behaviour.

No, that would be too helpful for Paypal.

So they told me my account was restricted. "Don't worry, you can still withdraw money."  Good, I needed it to live. (I wish I'd got a screenshot of their message saying that the restrictions wouldn't stop me from withdrawing money, but at this point I didn't know they'd change that.) So I withdrew some to my bank account to pay bills. Paypal delayed it, but then it went through some days later. Fine. Frustrating, but I could live with it.

"As set out in our User Agreement, withdrawal requests may be subject to review by PayPal to help maintain your safe use of the PayPal service. As a result, it may take longer than the estimated processing time for your withdrawal to reach your bank account. Yours sincerely, Your PayPal team" [Email from Paypal, 1st November 2017]
Paypal even encouraged me to keep spending my money and withdrawing it, which implied all was fine:

I contacted them about it anyway on 1st November, pointing out that there was a problem with their system and what it was asking for.

"The UK has no photo ID card. As an aside - the form asks for a street number (in addition to a house number). It's a mandatory field, but there is no such thing as street numbers in the UK. That needs to be an optional field. Thanks."
 Straightforward. Friendly. Helpful.

There was a reply shortly after, and I logged in hoping for a swift resolution, but I was disappointed - it was an automated response (and, in fact, the only one I ever got to my message - still no human response to it after more than five weeks).

Dear Karl Drinkwater,
Thanks for contacting us about your concerns. As a valued customer we want to help you make the most of your PayPal account. We prefer that you don't need to wait for an answer, so we’ve replied with this automatic message.
We hope you’ll find your answer below.
A. How do I access my PayPal account if I forgot my password?
[There followed a long list of "answers" that didn't have the slightest bit of relevance to my message, and I wasted time looking through them with draining hope.]

Notice the horrible spin in their response. If I was really a "valued customer" they'd read my message and respond to it, not fob me off with an automated and irrelevant response which is equivalent to "Fuck off, you're not worth our time". They "hope" I'll find the answer below? They shouldn't have to "hope and pray", they should do something about it. Like read the customer's message and reply, as any reputable organisation - or one that respected their customers - would do. I'm getting angry now.

On the 2nd November I replied to them to say: "This does not answer my question in the slightest."

They never responded to that or my original message. (I should add that these weren't emails that could go missing - they were messages within the Paypal interface; "Secure Messages" as they refer to them.)

November 3rd, Paypal on Twitter (in a private message)
saying my "case" had been "escalated" to a "specialist".
The specialist must have been a black hole,
because nothing ever came out of it.

Two weeks went by. I kept hoping they'd reply to one of my messages eventually. I even hassled their Twitter support account, and kept being promised Paypal would respond eventually. Like a fool, I believed them, and as a result carried on as normal, rather than doing the sensible thing of withdrawing my money and never touching Paypal with a bargepole. I didn't realise I was being misled into waiting so that things would get even worse.

I was a bit short of cash so sold the more powerful of my two computers on Ebay. The older and slower one I kept is still fine for writing novels and short stories. I accepted a lower price because it was all the buyer could afford and I try to be helpful like that. Paypal told me the money had gone into my Paypal account on 15th November 2017.

Then, on the same day (15th November) Paypal sent me an email that said: "As mentioned in our previous email, you're no longer able to send or withdraw money from your PayPal account until you provide us with the required information."

Wait, what? I went back to the email of 1st November. Nope, it didn't say they were soon going to stop me accessing my money; it actually said (amongst a lot of other guff) "you'll still be able to use your PayPal account to send or withdraw money as normal". And that's the same thing that had shown when I logged into Paypal. But now that had all changed because I had the audacity to sell something to make ends meet. Suddenly they'd applied restrictions saying I couldn't have any of my money (though I was welcome to keep paying it into my account for Paypal to hold on to - why the hell would I want to do that, allowing them to profit from holding on to my money?)

If I'd known that was going to happen I'd have taken all my money out while I still could, and just not sold the computer, or maybe sold it via another payment method like bank transfer or cheque.

They hadn't replied to my messages so now I instituted a formal complaint on 15th November.

I contacted Paypal weeks ago and have still not had a reply. Paypal has now blocked me from withdrawing my money, even though it is all from approved and official sources - Ebay and Pronoun. I am told I can only have MY MONEY if I send you all sorts of documentation, some of which does not exist, and some of which is only possessed by a few people. It is impossible for me to do all you ask. (Plus, we are advised by the UK not to send scans of those documents to any third parties anyway, even if I did have them). So my question remains, how do I access my money? Or is Paypal going to keep it forever (which would be theft)?
Please remove the stupid block or provide a solution so that I can withdraw my money. I am the author Karl Drinkwater and most of the money is royalties on book sales. If I knew Paypal tried to seize people's income in this way I would never have opened a Paypal account all those years ago, and would advise others of this danger to their livelihoods if they use Paypal. To then ignore such an urgent issue and not even REPLY after more than two weeks is disgraceful.
Ha, that was only two weeks without a reply, wait until it gets to over five weeks! That's not a delay, it is a total ignoring or deleting of messages from me.

Then other things started to go wrong when payments for utilities that took place through Paypal started to get rejected, as here on 26th Nov:

These are small companies (I prefer to support independents and those with good ethical and environmental policies), and I often know their staff by name. They were being informed that there were suspicious problems with my account or financial situation, leading them to send me concerned communications. I had to explain what was going on; that no, I wasn't involved in fraud; that I could pay; and then I had to set up alternative payment systems before I lost access to the Internet, my website, my email, and other utilities like that, which would have made resolving any of this impossible. You can imagine how stressful that was, on top of everything else.

One of the errors being implementing fraud procedures when there was no fraud

Luckily those companies actually had people who replied and were quick, efficient and helpful, which was a total contrast to my experience with Paypal. But it shows the knock-on repercussions of having mistakenly involved Paypal in my business - that association was now putting my business and livelihood at risk.

Oh, guess what happens if you reply to an email from Paypal?

It is their choice to send out emails and not bother checking the accounts for replies. They could answer emails if they wanted to, and it is dishonest to imply otherwise. If they want to be "quick and efficient as possible" they would read and respond to messages. But of course, that would be too helpful. What I have seen again and again is that Paypal are very good at sending out one-way automated messages, but terrible at engaging in two-way human communication, or listening to what you say. They seem to favour black holes where your messages can be safely ignored.

I heard nothing back from messages sent to Paypal through their "Secure Messaging" systems, so on the 27th November I contacted the UK's Financial Ombudsman to complain about Paypal, and informed Paypal the same day:

Due to the lack of response after a month, I have contacted the UK's Financial Ombudsman with a formal complaint against Paypal. I copied it into the BBC Watchdog service, and to Which? consumer support in case they want to investigate (Paypal was copied in to all those complaints, but an automated response said you wouldn't read the emails, which is rather unhelpful, as usual). I'll provide a summary below.
As you may expect: there has been no reply to that, either.

On 7th December Paypal finally responded to my formal complaint (not my original or later messages). It had taken them three weeks to tell me this:

I regret the delay in responding to you. When you contacted us, you did so through our Formal Complaint process, which has a response time of up to four weeks. If you wish to hear from us sooner please use the “Contact Us” link.
Firstly, that is a lie. When I contacted them on 1st November it was through their "Contact Us" link. As were my later messages, and they ignored all of them. To imply that the delays were because I hadn't done something that I had actually done shows either a complete inability to understand basic facts, or dishonesty.

There then followed reiteration of things they'd already stated. Then it ends with this gem:

I would kindly as if you could provide us with your National ID card, provided it has been government issued.
The UK does not have a "National ID card". And this was a message from Paypal UK, to a UK customer, asking for something that doesn't exist. Something that was publicly destroyed over a decade ago when the 2006 attempt to introduce a UK National ID card was completely annihilated. It shows how little grasp of the real world Paypal has.

I replied on the same day (7th December).

Britain does not have a National ID card, so that option is impossible to provide. Which leaves Paypal holding my money and making it impossible for me to withdraw it.

I'm sure there are other ways for financial institutions to fulfil their obligations, even if it requires a bit more work from the organisation. You only have to be happy that there is no fraud going on. Selling an item on Ebay and receiving royalties from Pronoun (Macmillan publishers) are both verifiable as legitimate transactions. I have full royalty statements. At this point I just want to take out my money and shut my account. This has been frustrating beyond belief and there is no way I would trust Paypal to be involved in any business transactions after this. I've told as much to the UK's financial ombudsman.

I find it hard to believe that there could be a law preventing people from accessing their verifiably-legitimate income with no possible way for them to be able to access it because the requested ID does not exist.

Also, at the start I could withdraw money. Paypal then applied a second restriction and stopped that without warning.

Finally, I only instituted a formal complaint because my normal contacts (of five weeks ago) had been ignored by Paypal, apart from an irrelevant automated response.

As you can imagine, I am incredibly angry about this.
And that's where I am today. Paypal are holding my income/living money hostage following two payments: one payment of royalties, one from selling my PC on Ebay. Nothing in the slightest bit suspicious about either, both via trackable with reputable companies.

Let me restate that:
  • I haven't done anything wrong
  • There has been no suspicious activity
  • I'm a long-standing customer with a perfect track record
  • My account was fully verified by linking it to a bank account that had full identity authorisation many years ago (which is why Paypal insist on that step)
  • and I'm sure Paypal would have to admit all of those points are true - and yet Paypal has instituted processes that make me begin to wonder if I am a criminal! They've blocked access to my money and after nearly two months still not responded satisfactorily to any of my many communications about this (and most of them have been outright ignored).

Ebay have said they'll be taking their cut of my PC sale from my Paypal account (it looks like about 10% of the money I made). Good luck to them with that. They'd be welcome to it if they had more success touching my money than I did. Chances are that will fail and lead to fines from Ebay, which will continue to accrue at whatever interest rate they decree. Another problem Paypal have caused me.

All this shit about confirming my ID is ridiculous. My ID is not in any serious doubt. I couldn't be much more public! An active member of the Horror Writers Association whose work has been in preliminary ballots for the Bram Stoker Awards; an author whose books have nearly topped Amazon's horror and sci-fi charts; interviewed on Popular Science, Lounge Books, and tons of other places with my photo plastered on the sites, and also on radio, whilst being active daily on social media. I don't think there's anything about me that isn't public. (As my followers know, I am pretty open about all aspects of my life.) Likewise all the transactions are easily traceable and confirmable. I'm probably one of the safest and most confirmed category of customer, and there's absolutely no reason to doubt any of that. This is just Paypal being dicks and trying to choose the cheapest and easiest way for them to do things, as we saw when they didn't even read or respond to messages, just have a system send what amounts to their whole FAQ list and then ignore any follow-up.

I've wasted weeks dealing with this, contacting them, tracking it, complaining. It's probably cost me thousands of pounds in stress and wasted time. And at present Paypal completely refuse to allow me to withdraw my money and close my account. Unbelievable. Currently they're holding over £1,500 of mine (a figure that is growing as other royalties trickle in), my living expenses, and even after 5 weeks haven't acknowledged the issue or implied that in any way they'll ever release my money back to me. I may have to wave it goodbye.

At this point I just want to get my money out, close the account, and never hear the word "Paypal" again. To be honest, their cruddy interface and problems with tracking transactions mean my finances will be much simpler to maintain without Paypal. (As an example, bank statements often show figures that don't match up to Paypal transactions, because Paypal actually took some from your bank account, and some from Paypal funds, but only show the total figure when you view your account summary - it can be like a jigsaw matching it all up every month.)  They created a new website years ago, but to get statements you still have to go to the old website – they never bothered to build those functions into the new one.

Paypal's current blue interface, post-Website redesign (screenshot taken 8th Dec 2017)
But when you try and get detailed statement info you find yourself back on the old pre-redesign page with its bewildering options and clunky interface (screenshot taken 8th Dec 2017)
One of many things I reported to Paypal over the years, but which didn't get a response.

Authors and business people – I'd never recommend anyone ever open a Paypal account after all this, especially for business-critical finances. Save yourself the stress and the loss of money. It's not as if my case is a rare one, as the list of criticisms and court cases on Wikipedia showed.

The simple whim of PayPal can destroy your business and your online reputation. The simple whim of PayPal can freeze access to funds that you need to support your family, pay bills, take that dream vacation or replace the busted tires on your car.

Most disturbing of all: PayPal does not need a reason to freeze your funds and limit your account. Remember, PayPal says in its User Agreement (that you agreed to) that it can limit and freeze your funds for "any reason."

Why? Because PayPal CAN. And because you won't do a damn thing about it. [Source]
It is as if no-one in Paypal knows what others do, and automated systems kick in but aren't monitored, and staff ignore messages and official complaints. That's certainly what I've experienced, and it has been one of the most frustrating things I've encountered.

That's over 3,600 words that I'll never get paid for (for perspective - a 20th of a novel). I should have turned it into a short story instead, at least I could have sold it - except you can't make this stuff up!

Update 15th December 2017

No, Paypal haven't been in touch or resolved this. Total silence since I last contacted them pointing out that they still haven't acted. Maybe because the longer they keep quiet, the longer they get to hold on to money which isn't theirs? It sits in their bank accounts earning them interest.

No, this update is to show that I've contacted them lots of times via every mechanism available. Look at this, from Twitter on November 25th:

Every time I am public about the problems with them their "support" account pops up and acts all concerned, implying that they'll act once they know more. The truth is that I've informed them by DM multiple times in response to these false offers of help, and they always just go silent once the conversation ceases to be public. All they care about is trying to look helpful. Look again at the messages above, where they said they'd assist on 25th November if I told them what the problem was (something the same account had been informed of in DMs over three weeks earlier). Now look at this:

Yep, weeks later and they still pop up as if it is the first they'd heard of this problem, asking me to tell them about it in private, then going silent again. The whole history of my messages to them (including my Paypal email address) can be found by going into the messages. They keep asking me for information they've received multiple times and ignored. Just like happens with the main Paypal "secure message" systems.

Just in case you think I'm exaggerating, here's some of the messages between me and that same Paypal Support account on Twitter from November 3rd:

They know all about the issues. They keep popping up in public pretending that they want to help and as soon as they know more they will do so. But they already know everything, having been told it multiple times, and they are as useless as every other part of Paypal I have contacted in my desperation at them locking me out of my income. They like to give the public appearance of giving a shit, but the reality when you contact them with a genuine problem is quite different.

Oh, here's another, from today:

Surreal, isn't it? Either Paypal Support are useless and have no power to do anything, or they just ignore you. I can't think of any other explanation for them continually saying the same things and not following it up. It suggests that Paypal's training policy is "If anyone criticises Paypal, make sure you try to shut them up by asking them to send a DM, then ignore them."

I'm hardly going to shut up until Paypal stop holding on to money which isn't theirs. This is my living expenses we're talking about. Mortgage, bills, food. And they've refused me access to it for nearly two months, all just because I thought I'd done well by selling lots of books back in August, which Paypal's automated systems interpreted as some kind of fraud.

Additional - this is a personal favourite of mine, that just occurred. Paypal told me they hadn't received any private messages from me. So I shared the private message they'd had from me and which they'd replied to weeks ago (but without them resolving anything, as usual).

Update 25th January 2018

No, Paypal haven't fixed it. See here for the latest in the saga: Paypal? PayEnemy, more like.