Paypal Permanent Limit and Ebay Gift Card

[gababo]

Hi everyone,
I'm so frustrating with Paypal after a long conversation with Paypal limitation specialist regarding my permanent limitation on my paypal account and ebay gift card attached to it.

Last year, I purchased Ebay gift card from grocery store since my credit card gives me 5% cashback on everyday purchase. So naturally I thought I could buy lots of (but limited to $5000 / 180 days for verified papal account) ebay gift card to buy items on ebay.

So I did it. But during the use of ebay, some seller tried to ripped me off, so whenever I didn't receive the item, I opened the claim against the seller.

During the course of using ebay gift cards, Paypal limited my verified account demanding that I should explain the recent ebay gift card use. So I explained that I purchased ebay gift card from my local grocery store due to 5% cash back, and use it to buy items on ebay. So they said OK, and I continued to use ebay gift card. (as you know, once you used ebay gift card with Paypal, the gift card will attach to a specific paypal account.)

Later, Paypal limit my account again, but this time permanently. I called Paypal several times, but only they said was that I have to find different paypal source because I was too risky to have me as customer due to high use of eBay gift card. I was so shocked. That was 10/22/2010. So I thought I could wait 180 days to get the gift card balance back. Now yesterday was 4/1/2011. I called Paypal about the gift card, but they said gift card is not reimbursable or could not redeem to cash. They said I could withdraw my paypal balance, but ebay gift card attached to my permanently limited paypal account could not be used forever. I said it's $355 worth gift card, and how could Paypal and eBay could do this. I also explained that this limitation was involuntary, and if Paypal could steal gift card balance from customer like this, how could one use ebay gift cards?

They kept saying that gift card can't not be redeem to cash and not refundable. I tried to explain that eBay and Paypal should at least release gift card from being attached to my paypal account so that I or other people could use. But as you know, Paypal kept saying gift card is not refundable. So I demanded to talk to his manager, but he said manager would call me back within 24 hours.

I'm so frustrating about this situation. I'm currently considering to bring eBay and Paypal to a small claim court in the state of Maryland. I wonder if I have a case to win. It's $18 to file and $10 to serve ebay or Paypal. Small claim court says that if I win, filing fees can be reimbursed by dependent.


Is there anyone in similar situation or who know law regarding ebay gift card well? I really appreciate your time. Thank you.

[newjerseymax]

File a claim with the credit card you purchased the gift card. That is my first instinct....

[stillselling]

Gift cards are highly regulated, but it differs by states. File a complaint with your state's Attorney General's office. They should have a consumer protection dept. that can help you or at least advise on the steps you can take. See if your local media has something like "Ask Hank" maybe they would shame PP for you.

PP should be regluated by some Agencies since they're considered a money transferring service and operate a money market fund. Find those and complain. They might not help since gift cards are not money, but hey, more marks against pp.

Law suit should be the last resort. Without checking the pp user agreement, I would guess it has arbitration and jurisdictional clauses. And if they don't have assets or an agent in MD, you'll have to get the CA courts to enforce the judgement, if you win. Even then, they may just ignore you.

On the bright side, if you want to sue them, check with the MD consumer protection act. You could ask for treble damage if you follow the proper procedure. And don't forget to file with the FTC so pp has another mark against them.

I'm not an attorney and I have no knowledge of MD laws, but I have taken a few businesses to court under MA MGL 93A. You can try the CC, but it's past the 60 days.

Let me stree, gift cards are highly regulated by the states, so start there.

[stillselling]

You could also contact/go after the place you bought them from and the issuer of the cards (it's not ebay, it should be something like greendot or fastcard, just check the card).

[avalon6]

This happened to me too. Let me know if you are able to get this resolved with them and how.

[jeffweico]

The best advice I saw above is to contact the Attorney General in your state.

Unless you obtained the gift card by fraud, then it seems to me that they must either let you finish using the balance or refund the money. True, most gift card terms say they cannot be redeemed for cash. But by refusing to allow you to use the balance AND refusing to refund the unused amount, they have rendered the card WORTHLESS and basically stolen your money.

Now, we all know that your average PayPal rep is not exactly a genius. They are trained to deal with the most common situations and they read from scripts. I have to believe that this is an UNUSUAL situation. So the rep may just be parroting the same line about gift cards not being redeemable for cash without really knowing what they are talking about.

PayPal reps are also trained to not allow an angry customer to speak with a manager.

If you contact the Attorney General's office, most likely they will send a letter or make a phone call to PayPal. And that WILL be answered by someone higher up. So, that might solve this for you.

If that doesn't work, then I would imagine you could find an attorney willing to take your case. No, the attorney will not want to get involved for the less than $500 that is owed to you, but if this has happened to a number of others, then they MIGHT have a class action lawsuit where they would be suing on behalf of everyone who has lost money in this way to PayPal. And that could be a LOT of people.

I am not a legal expert, but this is clearly wrong. I don't care WHAT the terms and conditions of the card are, they CANNOT just take your money and then refuse to honor the card and point to a "no refunds" clause. That is called theft, and would most likely be considered a deceptive business practice. Nearly every state has a law dealing with deceptive business practices. There are several names these laws go under, but they all mean the same thing - that you cannot use deception in the normal course of business to cheat people.

[gababo]

Hi everyone,
Just for update, I've never received any phone call from the manager. I expected that they would not call me back. After research, these are what I will do.
1) I'll email as many emails as I can to ebay President, ebay VP, etc. after research. I'll explain what's going on with my gift cards balance attached to my permanently limited account.
2) I also send a certified mail to Paypal legal department to explain that gift card balance is my own money, and Paypal can't take that money away from customer by permanently limit users' accounts simply due to heavy use of ebay gift card.
3) I'll file a complaint on my state AG consumer protection site.
4) If I don't receive any response from eBay/Paypal, or receive their response that simply repeat that ebay gift card balance is not refundable or something like non-sense, I'll file a small claim in my state county court. (I researched and found out that everyone can file a small claim against Paypal in their resident state, not only California since paypal allows users to withdraw their Paypal funds to their bank account which is located in their state. So basically although Paypal claim that they are not a bank, law doesn't see that way, and apply Paypal as a bank institution.)
5) After and before filing a small claim judgement against Paypal, I'll collect all possible evidence such as paypal page printouts, list of ebay gift card number, email conversations, etc.
6) Wait for the small claim court hearing date. I think Paypal won't show up in my state because it will cost too must to send someone from California to Maryland for my ebay gift card balance of $355. If they show up, I'll do my best to explain my circumstance in truth and present my case. The more I think about this, the more I'm pretty sure that I have the right to claim my ebay gift card balance.

I'll update you guys frequently. If anyone who has another suggestions or recommendation, please feel free to reply to this post. Let's make our voice heard. Thank you everyone. !!!!

[stillselling]

1. Print out everything first. You never know when you won't be able to log into PayPal. Find the original receipt and the credit card statements. Print out the eb and pp user agreements that are in force now, in case the terms change. It would also help out your AG complaint if you have proof. Don't expect the AG's office to do too much, they usually don't act on behalf of individuals, but they will point you in the right direction.

2. If you goal is to recover your $350, don't ignore the grocery store for carrying the gift card and FastCard for marketing it. Don't be so focused on pp when it might be easier to get your money else where.

3. Get legal advice, even if it's just in small claims. There are advocacy groups that offer free legal help and state bar referrals usually come with a free 1 hour consultation.

[gababo]

Quick Update!!!
I just got a phone call from a Paypal manager. She seemed to be a very nice lady.
I fully explained what happened to my ebay Gift cards. She looked into my account further, and she said that I had a great history and wonder why Paypal permanently limited my account. After looking into my account, she said that I used too many ebay gift card and back in September (before limitation), I placed a dispute against my seller amounting of $202, which eventually Paypal made a decision in my favor. She said that dispute trigger the limit along with Ebay gift card use. However, after she heard about my genuine truthful story about my transactions and ebay gift cards, she said she gonna send my account to review team so that they might remove limitation. So I told her that I was told that this permanent limitation could not be appealed, but she said there are few exceptions. She said she wrote down all of our conversation and her own opinion about me and my account on my account so that review team could read before making a final decision.
I think Paypal might remove my limitation because of my good history and truthfulness.
It so strange to speak with a sensible Paypal manager with full common sense. When I spoke a representative last Friday, he was horrible.
I just keep my fingers crossed.

[rsot]

Good luck gababo - keep the forum posted. I don't have much faith in pa yp al but I hope it works out for you.

[newjerseymax]

Yes your issue is legit... Common sense has to play a role at some level before heading to court....

[gababo]

Another Update!!!
I just got an email from Paypal saying that my Appeal was denied. Even after all note that Paypal manager left on my account, Paypal doesn't want me to use my account and try to steal my ebay gift card balance.
I won't give up my fight.