Paypal Banned For Life – Seriously Thats What They Said
They say your past will come back to haunt you and I can tell you in dealing with Paypal this is 100% true because it’s happened to me twice.
I made one small mistake in 2006 that I swear I didn’t know I was making at the time that has come back twice now to haunt me.
This is a fairly long tale and I’m only posting it in hopes that you might learn from my mistakes and not get permanently banned from any online payment processor, not just Paypal.
A little history to fill you in on what happened.
I had never really been too serious about online marketing or affiliate marketing up until 2006. Before that what products I did sell as an affiliate were all the traditional old world kind that sent you a physical check for commissions.
I dabbled some in eBay and in 2001 I hit a really hot streak with prepaid long distance cards, which were really popular back in the day. So being that I had finally struck gold with a product on eBay I registered a Paypal account to make payment transactions easier and quicker.
Everything was hunky-dory for a year or two until the cell phone carriers started offering free long distance and essentially killed my eBay sales.
No biggie, online marketing was not something I was relying on for an income at the time. So I went back to the regular affiliate marketing through Amazon, Clickbank, Commission Junction and other affiliate programs like them, again waiting on monthly or semi-monthly commission checks.
It was in 2004 I lost my real world job paying 50k/year to an outsourcing team in India (yeah folks that what all this outsourcing does is kill real world jobs that people depend on).
I had some money put aside luckily and for about a year I managed to scrape by and make ends meet this time affiliate marketing being a huge chunk of my income.
I managed to finally land another network administration job in 2005, which is extremely hard to do in my home town because guess what… everyone outsources!
However it was a small company and the salary was roughly 1/3 of what I was making at my previous network admin job in 2004 so once again affiliate marketing was still a necessity to make ends meet.
Okay, I know you’re wondering what this mistake I made in 2006 was so now that my little backstory/history of my affiliate marketing career is out I’ll tell you.
As I said the new job was not paying anywhere near enough for me to live on so I made the decision in 2006 to ramp up my online endeavors and see if I could just replace this low paying job.
It was at this time I got my first “mentoring” for online success through a program called MPAM (some of you may remember MPAM fellow warrior Steven Wagenheim was promoting it back then, in fact he was my upline sponsor).
Well a huge chunk of the training in MPAM was on traffic generation and list building. The traffic generation part was primarily through the use of traffic exchanges and building a downline referral so you would get free clicks and not have to work for them.
Btw… If you are totally new traffic exchanges are sites that allow you to enter a website of your own and get traffic to it in exchange for you visiting the other members of the exchange’s websites. It takes hours out of your day to acquire any decent amount of credits to apply to your website for traffic.
Anyway as I said the main traffic generation method was through traffic exchanges and the daily routine was to “surf” (earn credits) at each exchange which I think was like 14 different exchanges.
Now if you have ever tried traffic exchanges for traffic generation you know that during this surfing time you get exposed to 100s of programs and systems. Being that I was so desperate to make an online income a lot of them really caught my attention.
One in particular really appealed to me because it was one of the first programs that offered “direct member to member payments” through Paypal. These are the norm these days but back in 2006 this was extremely rare.
I never really made any significant amount of money with it though, a referral here and there was about it. If I remember correctly I’m sure I made less than $100 from the program.
Little did I know that back then direct member to member payments was against Paypal’s terms of service and their acceptable use policy.
Being a program hopper back in those days I had long since given up on the program since I had made so little with it and took my online career in a different direction.
In 2007 I got into resell rights and was buying up products I could acquire rights to sell and was making a good income from it. However it soon turned into a drudgery of always having to source out the latest hot trends and not to mention the “gas wars” of pricing that was and still plaques in the resell rights model.
Late 2007 I met Kevin Riley and Lee McIntyre through an online forum membership that Lee had just started call Standing Start Profits. It was after meeting, working with and being inspired by these two I became involved in short report creation and started developing my own products.
By 2008 I had 100s of sales pages online selling my quicky 7 – 20 page short reports and resell rights products.
I was in high cotten – I was finally making a decent and somewhat dependable amount of money online. I was so proud of myself and even my wife finally admitted that maybe there was something to this Internet Marketing thing that took up so much of my time.
Around mid to late 2008 disaster struck…
…I got the infamous email “Your Account Has Been Limited” from Paypal.
I couldn’t believe it, in fact I thought it was fake at the time. Back then you had to call Paypal and discuss account limitations with them or there was no way to get the limitation lifted.
When I spoke to the Paypal rep I told him I had no idea why this had happened and that I had always been honest and straightforward with my account.
I had had the account since 2001 and could count on one hand how many refunds I had ever had to issue to customers.
The rep pulled up my case file and after about 2 minutes of silence he said, “Oh, I see here is what got your account flagged for limitation – in 2006 you were a customer or member of XXX program that allowed direct member to member payments. That was against our AUP and TOS back then.”
He went on to say, “We are in the process of flagging all Paypal accounts that were in any way associated to this program, not just yours but everyone’s accounts.” He then said, “Don’t worry your account is just temporarily limited and under review. You will get a final decision in the next day or two.”
Needless to say I was panicked. All of my sales pages online were effectively dead in the water. I was getting a couple of emails per hour from prospective customers asking why they couldn’t purchase because the payment link was saying my account wasn’t accepting payments at this time.
Still I waited on Paypal for the final review decision to come.
The next day I got the email that my case had been resolved, but unfavorably. My account had been permanently limited, all funds frozen and I was to remove all images and mentions of Paypal from my websites.
Oh, and they had to throw in as a stinger “There is no appealing this decision”
Now I had at the time been working on my first ever membership site and was working on a JV with another marketer to launch it. We had decided to open a separate Paypal account for this membership so we could keep our other business interests and personal accounts separated from this JV.
The JV deal never took off so I launched the membership site on my own.
Well after my other Paypal account had been permanently limited I made the decision to just start using the Paypal account that I had setup for the now on its own membership site.
Now I want to add here that in my discussions with the Paypal rep on the limited account it was never made known to me that I could never use Paypal again under any circumstances even for a totally separate business venture.
It took a long while to find and edit all of the sales pages I had online and switch them over to the secondary account I had with Paypal but I eventually got them all migrated over.
Again I want to reiterate I was never told that I couldn’t have another Paypal account ever.
Things have been great and back to normal for all of this time until this past weekend.
Saturday May the 12th I got another email from Paypal just out of the blue that again my account has been limited permanently. Again with no right to appeal.
I called the Paypal office again and asked them why this account had been limited and the rep even said on the phone “Well I don’t know theres nothing obvious and actually your account looks squeeky clean (exactly how he said it), but let me put you on hold and I’ll check into it.”
He came back to the phone about a minute later and said that their investigation showed that I had had a previous account that has been permanently limited and according to their current TOS I was banned for life from ever having another Paypal account because of this.
Seriously he said “Banned for life”.
Now to add insult to injury my wife gets an email Monday from Paypal that her account which she setup years ago for accepting credit card payments in her cleaning business is also permanently limited. She rarely used the account so it really wasn’t a big thing for her.
This time however her account was flagged because her physical street address matched mine for my accounts. My guess is they figured since I had switched to another account after my first account was disabled that I might start using hers too.
So you might be wondering why I posted this long drawn out story of my misadventures with Paypal. The reason is I want everyone to know that you have to be extremely careful with not only selling something online but also with purchasing anything online with Paypal.
They can and will at their digression decide they don’t like how you’ve used your account and will arbitrarily just cut you off with no hope of appeal.
And as you can see your history can come back to haunt you. It was nearly two and 1/2 years after I moved on from the program back in 2006 they deemed as suspicious that they came back on me and started this whole mess.
So here is my advice to both consumers and vendors as far as Paypal is concerned.
Vendors:
1) Be extremely cautious about how you use Paypal for accepting payments. Be absolutely sure that you have all of the required terms, disclaimers and most of all support links available
on your websites.
2) Take a look at your sales pages from a 3rd person perspective and determine if your copy is bordering on what the FTC calls “unsubstantiated false claims” or results or income potentials.
3) Make sure if you are going to enable direct member to member payments that your sales system meets Paypal’s approval. I can tell you right now if you enable this and don’t have Paypal’s seal of approval it will probably come back to haunt you later.
4) But my best advice is to just not use Paypal at all directly. There are way too many other options available such as Clickbank, 1ShoppingCart, Nanacast just to name a few that will not put your Paypal account in the direct line of fire.
And finally for consumers:
I really have only two pieces of advice for you.
1) If you happen across a program or system that using something new such as I did with the direct member to member payments in 2006 and they are using Paypal as the payment processor – stay away from it. I wish that I had done this and I wouldn’t be in this situation right now.
2) This is more of a request than advice. If you feel like you’ve bought something that isn’t right for you or for whatever reason you want a refund. Please try and contact the vendor first instead of just logging into Paypal and filing a claim. Most respectable vendors have support links/helpdesks where you can request a refund. If nothing else reply to the email address on the Paypal receipt.
Give it a minimum of 48 – 72 hours for a response before you take it to Paypal to intervene for you in getting a refund. In my whole career of selling products online since 2007 I’ve had 6 claims filed against me and not a one of them would ever have been a claim in the first place had the customer of just sent an email to me first.
Did you know that filing a claim actually delays getting a refund? It sure does – because with a claim Paypal has to open an investigation that could take up to 10 days to process.
Anyway thats the whole story and it’s all the truth. Yes, I admit I made mistakes. I don’t think I have ever been dishonest in anything and feel that being “banned for life” is a harsh punishment on Paypal’s behalf. But theres nothing I can do about it.
I’m at this point going to take my own advice (#4 under the vendors section) and pickup the pieces and move on. I can say out of all of this I have learned a valuable lesson.
I hope you have learned something too.
Take care and be blessed!
–Rick Roberts
