New Paypal Discussion: (Bank - Overdraft Protection - ACH Debit) Clarifications

[BronzeBruce13]

Reference the below thread. The conversation shifted to "Paypal" near the bottom of Page 1 and new issues were brought to light and discussed...

 

Oh Come on Ebay, DO SOMETHING ALREADY!

 

Below is a repeat of the last couple of posts. I think many may miss the important Paypal discussions in that thread simply because of the thread's title. All Paypal users should be aware of the new details that have been discussed. I thought I had all the bases covered but there was something I wasn't aware of that Lighthouse and others brought up...

 

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BB13:

 

The hope is that regulation will arrive in time...

 

Just like Vegas had to clean up its act to keep getting those happy family dollars, the hope is that eBay-PayPal will be forced to conform to more sensible rules.

 

The number of lawsuits pending is ridiculous... we just have to hope that they result in a "kindler, gentler" PayPal...

 

And as a reminder... I still use PayPal... in fact it's the only method I am accepting in my current listings in the marketplace forums. And I have already taken payments from folks I could not recover any money from (since their Canadian addresses aren't verified)... But I will participate in every one of these threads if it helps even a couple people avoid getting screwed by PayPal...

 

 

Me too... I'll keep beating the drum to cover your arse. You seemed to be doing fine without me on the last thread you provided a link to, but I'm with you... people need to know how to cover themselves.

 

Protecting yourself and making the funds unavailable for the "Paypal Grab" is how you screw over Paypal. The other way is mostly done by fraudulent buyer scams like was mentioned in this thread. If CMK did not have any monies available.. Paypal would have taken it up the arse and lost on the buyer's scam... which is why there probably was that "gray zone grab". I'm sure it happens much more when they are the ones about to kiss $$$ goodbye.

 

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Fantastic Four:

 

What about this overdraft bullcrap? Can they really do that? If so, there's NOTHING you can do except never get a premium account.

 

Do they really not do chargebacks on personal accounts?

 

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BB13:

 

This paypal situation is getting scarier each month

 

So if I understand correctly ;

 

- You have a premium account linked to a bankaccount... paypal can take the money from your account

 

- You have a premium account linked to a bank-account which you keep at a minimum, you're still screwed as paypal uses your overdraft and drives into debt with your bank

 

- You have a premium account linked to a bank-account which you keep at a minimum with no overdraft, well you're still screwed as paypal will use your credit card to make a charge-back

 

- You have a premium account not linked to a bank-account, screwed again as paypal will use your credit card to make a charge-back

 

- You have a personal account (free) paypal can't charge back any money, but you're still screwed as you can't accept credit card payments...

help.....

 

 

a "premiere account" or "business account"

 

Yes.. they have all those options if you signed up after Oct 11, 2001. However, I think you missed some of it. Check your account and make sure you don't have this "Overdraft Protection". I don't believe I do, but I'll be checking Saturday.

 

Also... if they do charge your CC... I believe you can reverse that with a chargeback against PP. That sounds like a move PP'll do because a percentage won't realize they can chargeback a "paypal grab" against their credit card.. and will accept/pay it. Your CC works for you, not PP... or PP would not be taking these steps in the first place.

 

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Lighthouse:

 

What about this overdraft bullcrap? Can they really do that? If so, there's NOTHING you can do except never get a premium account.

 

 

The way the procedure goes is this...

 

PayPal decides they want your money.

They send an ACH debit through to your bank account.

It's up to your bank whether they pay it, the same as it is if you write a check for more money than you have.

If you are a good customer at the bank (even if you don't have overdraft protection set up), the bank probably pays it and leaves you with a negative balance.

 

Thank you... and drive through...

 

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BB13:

 

What about this overdraft bullcrap? Can they really do that? If so, there's NOTHING you can do except never get a premium account.

 

Do they really not do chargebacks on personal accounts?

 

I'm going to look into this tomorrow. I think that's only an option IF you have that feature (overdraft protection) connected with your account. I don't think that's a given for every account.

 

As far as a personal account... they can't do a chargeback, because that implies a CC charge reversal. They CAN grab Paypal Balance or Bank Funds if they decide you are responsible, and rule in favor of a buyer asking for a reversal for an accepted reason. BUT if you have no cash in PP balance, or in the PP connected bank account... methinks they get back to the buyer and say "sorry, we've ruled in the sellers favor" or "we can't get your $$$". This is an assumption on my part based on what I do know.. .I've never run into this specific scenario.

 

Point is.. "move the shell" and never give them access to the cash and let's see how they handle the problem (if you did what you were supposed to). If you did not follow the guidelines, then you may be in for more of a fight.

 

Even with your CC, to do a chargeback, you do have to show/prove that you took the necessary precautions, your CC won't chargeback for any old reason.

 

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Nesta:

 

I recently signed up for paypal so I'm much lower on the knowledge curve than most of you, but there is a tedious method for those of you who do low volume, high $ transactions... Don't give any bank account # and withdraw your funds via check. There is a long lag time, and $1.50 fee.... but I would rather deal with that than having to worry about a completely unresponsive company raiding my checking account at any moment with no recourse. Given these stories and others, I will never allow them to have access to my bank account #'s.

 

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BB13:

 

What about this overdraft bullcrap? Can they really do that? If so, there's NOTHING you can do except never get a premium account.

 

The way the procedure goes is this...

 

PayPal decides they want your money.

They send an ACH debit through to your bank account.

It's up to your bank whether they pay it, the same as it is if you write a check for more money than you have.

If you are a good customer at the bank (even if you don't have overdraft protection set up), the bank probably pays it and leaves you with a negative balance.

 

Thank you... and drive through...

 

If this is the case, (and I am a good customer with several accounts that can cover most anything I'd encounter).. I'll specifically ask that there be "NO Overdraft Consideration" and specifically warn my bank NOT to honor any Paypal requests for funds if there is no money in the account. I'll take my lumps with a potential bounce... which you can politely get most banks to waive several times a year anyway, if you have enough cash in the bank.

 

BTW: I used this technique with my Wife before I knew better, when she bounced a check or two... (having money in the bank is all the leverage you really need, to have insufficient fund fees waived. Not every bank will allow one account to directly cover another, so you point out you have plenty of cash in the bank... "please waive it". )

 

... Anyway... She'd call the bank saying her husband was angry as hell and talking about taking all our money out of the bank (while I curse in the background and bang pots and pans ... worked ever time before I just used the above. I think the customer service reps were fearful I'd "brain" my wife if they didn't waive the fees.

 

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Lighthouse:

 

I'm going to look into this tomorrow. I think that's only an option IF you have that feature (overdraft protection) connected with your account. I don't think that's a given for every account.

 

 

Bruce, I realize you probably don't have much experience with overdrawn checking accounts, but I have a store full of teenaged employees and can relate more than an anecdote or two.

 

"Overdraft Protection" isn't about making sure your checks get paid. It's about you not getting charged $25 per check for them to do so. Any bank in the country will overdraw your account and pay your check as a matter of course. They'll do it a dozen times for poor college students and they'll be even happier to do it for you (because they know you're good for it and they make the $25 fee for nothing).

 

Trust me... Anyone here can go write a check right now for $50 more than what's in their account and their bank will pay the check without question. You'll get a notice in the mail, and you'll owe them a $25 fee. But they will absolutely pay the check.

 

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BB13:

 

I'll have to look into this 'house... is there a limit to how far they'll go? I have to wonder if my bank would do it anyway, seeing how I had every attempt to charge my accounts an overdraft fee waived (one way or another) . I'm going to find out if I can make a specific request for them not to do this with my Paypal linked account. I'm glad you guys brought this up. As safe as I thought I was, with all the research and angles i thought I had covered.. I may have had my arse vulnerable anyway.

 

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Nesta:

 

All you need is a credit card to open a personal account. You won't be able to accept credit card transfers with a personal account. To my knowledge, the only time you need to give your bank account # is if you want to have a certified account or if you want to link the 2 so that you can move funds out of your paypal easily.

 

It can be done because I have done it in the past couple of weeks. Check out the paypal website.

 

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Fantastic Four:

 

Can the account you hook up to PayPal be a savings account? If so, banks don't do overdrafts on those, do they?

 

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Nesta:

 

I think FF is onto something there but I think it was stated earlier in the thread that it has to be checking due to ACH blah blah blah.

 

I guess a no fee checking account soley for the purpose of paypal makes sense. It would reomve my fear. Can't beleive I didn't think of it until I saw FF's post.

 

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BB13:

 

Can the account you hook up to PayPal be a savings account? If so, banks don't do overdrafts on those, do they?

 

Good point.. a Premiere acct. has to be a checking acct... now we know why.

a Personal acct. can be a savings (or just a CC as Nesta discovered)... now we know why.

 

[BronzeBruce13]

...'house, just got back from the bank (Commerce Bank in NJ) and learned more.

 

As I understood my bank representative... some banks offer "Overdraft Protection" on checking accounts (which means they will honor checks for more than what your account can cover)... to a point, and that can be a judgment call or a defined policy.

 

Others, like my bank, do not offer "Overdraft Protection" officially, but have a different service which basically is an "Advance Loan Agreement" to automatically borrow from them if your account is overdrawn. Luckily, my bank offers this alternative even though I never signed up for it and won't allow for my checking account to go negative by much. It used to be the one thing I didn't like about my bank simply because when my wife had lost track of the available balance and bounced a check or two, we were charged the overdraft fee (well, they tried to as explained above) when we had other accounts with the same bank that could have covered the overdrawn amount. Now, it turns out that this is a good thing... with Paypal as a consideration. My bank will call when an significant overdraft situation develops and will ask its customers to put more funds in the bank to cover the request (and sometimes avoid their fees too). Even though they don't officially offer overdraft protection, they'll still cover the smaller problems for good customers even if you never sign up for the Advance Loan Agreement, but they will issue you the $32 fee. You can accept the fee or have it waived with a little effort as described earlier. If its a larger (unspecified) amount... they call as explained.

 

Anyway, everyone needs to know exactly what their banks policy is in this regard. Since my bank does not offer "Overdraft Protection", I don't know exactly what the ramifications/options are if Paypal grabs the funds. You may, or may not have reverse options with this service. I'm also not sure if this is a service one can decline on all, or some of their accounts?

 

As to a "ACH Debit" Automatic Clearing House Debit... banks may have varying policies. My bank ONLY allows for a negative (-$100 ACH request) on a Checking Account before it is automatically denied. Anything above is always denied. I have a $100 min. balance on my Checking Account, so my immediate liability to a Paypal attempt at using a ACH Debit is only $200 since I immediately funnel money out of my "Paypal Linked" Account and to a "Non-Paypal Linked" Account in the same bank. I can easily/instantly do the transfers online.

 

HOWEVER... an ACH Debit can be REVERSED against Paypal with little effort (at least with my bank)... although it would probably lead to the demise of your PP account . If I tell my bank it was an unauthorized debit, they will reverse it for me. It does not matter if I agreed to the Paypal user agreement or not, and surprisingly, I don't have to prove my case by demonstrating proof of delivery/signature confirmation, etc. My bank will simply accept my word they say, and take the money back from Paypal. My bank claims to have control of that situation, not Paypal... so recovery/reversal is 100%.

 

What's interesting is that Paypal can initiate a ACH Debit against a Savings Account as well, BUT Savings Accounts are not permitted to go into negative balances so they can only go after existing balance. If nothing's there... S.O.L. PP . I was told that an ACH against a Savings Acct. is more difficult. Either way, its REVERSIBLE with the Savings account too.. so no worries I'm told if you know the deal and all your options.

 

I think everyone that has Paypal and uses it frequently (especially with decent size transactions)... should investigate these concerns with their banks immediately and clarify the details. If the bank in question is not willing to protect you, see what other banks will do... or open accounts with my bank... Commerce, (if there is no downside to opening an account out of state).

 

It seems like my original Paypal Strategies (keeping the funds away) will keep your "real time/actual" cash flow protected. If your bank is like mine and offers the same services, you will also be protected from electronic attempts to take your money too. They might get it short term, but you can slap their hand and yank it back!

 

It may be that there are similar options available from the banks that offer "Overdraft Protection". Someone with that type of bank needs to investigate that for us.

 

Print this out for referece and go to your bank... Don't delay

 

 

[Bonds25]

Can I get the abridged version please?

[BronzeBruce13]

Sorry... I didn't spend the time posting this just for my health Matt. I wanted fellow Paypal users to know what the deal is and not get stuck losing serious money... sometimes it can't be explained in 3 sentences... at least I can't.

 

Its either be thorough the first time... or spend just as much time, or more with follow ups.

 

[fazman]

I'm Canadian. All I gave Paypal was a CC # & a Bank Acct # for transferring money into my Canadian Bank Acct. As I understand from my bank Paypal would not be able to take funds from my acct , but unfortunalty they can always take money out from my CC.

I really believe that there must be some regulations established to safegaurd our $$$$ , but,how this would affect us north of the border would depend all rules that cover Canadian Bank policy.

Any bankers out there ??

 

Krap & Corruption !!

 

[Ares]

I'm Canadian. All I gave Paypal was a CC # & a Bank Acct # for transferring money into my Canadian Bank Acct. As I understand from my bank Paypal would not be able to take funds from my acct , but unfortunalty they can always take money out from my CC.

I really believe that there must be some regulations established to safegaurd our $$$$ , but,how this would affect us north of the border would depend all rules that cover Canadian Bank policy.

Any bankers out there ??

 

Krap & Corruption !!

 

 

Paypal can do direct deposit in Canada?

What info do they need?

 

If someone pays in US funds and Paypal deposits into a Canadian account does the money automatically get converted?

[fazman]

All they need is my Bank info . A saving or checking acct # . And yes they convert USD To CDN.( usually a few points under current exchange rates.)

 

[murph0]

If you have to add a savings/checking acc #, I suggest doing what I did.. I went and opened up a diff account w/ my bank.. registered it, waited for the deposit, confirmed it with Paypal.. and then closed the bank account. Best of luck to Paypal if they ever try to get out of the account that doesn't exist

 

Brian

[BachelorOfComix]

If you have to add a savings/checking acc #, I suggest doing what I did.. I went and opened up a diff account w/ my bank.. registered it, waited for the deposit, confirmed it with Paypal.. and then closed the bank account. Best of luck to Paypal if they ever try to get out of the account that doesn't exist

 

Brian

So if someone sends you money through Paypal, it sits in your Paypal account until you use it?

[murph0]

no, you can have them send you a money order..

 

Brian

[BachelorOfComix]

no, you can have them send you a money order..

 

Brian

I did not know they sent money orders, but now you got me thinking....

[hobbes]

Thanks bb13. I use paypal and have been tracking the forum members thoughts and experiences thru different threads. This collection of info is greatly appreciated.

[BronzeBruce13]

If you have to add a savings/checking acc #, I suggest doing what I did.. I went and opened up a diff account w/ my bank.. registered it, waited for the deposit, confirmed it with Paypal.. and then closed the bank account. Best of luck to Paypal if they ever try to get out of the account that doesn't exist

 

Brian

 

This is actually quite an awesome idea Brian. I wondered what would happen if you canceled an account, but figured they would somehow know. I guess if you are never withdrawing to a bank account... they would not know. You have a good solution for some scenarios providing you are OK with the limitations. You withdraw with MO's only, which is slow and there is a fee, but you are not vulnerable to a ACH Debit. Thanks

[BronzeBruce13]

Thanks bb13. I use paypal and have been tracking the forum members thoughts and experiences thru different threads. This collection of info is greatly appreciated.

 

 

My pleasure.

[fantastic_four]

no, you can have them send you a money order..

 

Disadvantage: looks like they charge $1.50 for mailing one out.

[murph0]

Yep, but it beats out them stealing your money

 

What's ACH Debit? They can't billback my CC b/c I've contacted my CC to disallow any transactions to or from them unless I call them first.

 

Brian

[BronzeBruce13]

Yep, but it beats out them stealing your money

 

What's ACH Debit? They can't billback my CC b/c I've contacted my CC to disallow any transactions to or from them unless I call them first.

 

Brian

 

 

Hey Brian,

 

Clarify this for me... you mentioned you opened a (premiere?) account with a checking account and then canceled the account... BUT you also linked a Credit Card to buy with. Do you also have a personal account?... to receive PP Balance or Bank Transfers without fees? If so, what manuevers did you use on the personal account?

 

You also bring up another interesting solution... insisting on a "confirmation only status" with your CC company before a Paypal charge can be made from, or charged against your card... very shrewed thinking. I think though, if Paypal did charge your card, you'd have no trouble at all chraging it back against them anyway... your CC works for you, not them.

 

Innovative precautionary measures Murph... thanks for sharing. Good info

 

Looks like there's many ways to limit your vulnerability.

[murph0]

No I don't let them transfer the fees to a bank account, I want them to have absolutely no way to touch any of MY money. If I ever get a paypal payment, I "splurge" and spend the whole 1.50 to get a money order from them

 

Brian

[BronzeBruce13]

You really didn't answer all my questions though... can you re-read my post and get specific. I think your approach is unique and innovative and I want to understand exactly what you're doing and if you have 2 accounts or just one?

[murph0]

I don't follow the Paypal terms very closely so I guess I didn't know what you're asking..?

I only have one account, it's whatever the one is that you can accept C.C. payments..

 

Brian