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  1. #1
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    PayPal security and rejection of valid CC
    I just had a very strange PayPal experience.

    This evening, I was paying for an eBay auction item, and I attempted to pay with my credit card "directly," without logging into my PayPal account. The PayPal system rejected my valid information several dozen times, before finally accepting the payment information (unchanged). This wasn't a surprise, since my wife had the same experience this week, and we assumed it was a ploy by PayPal to encourage us to log in and use our accounts instead of doing the "direct credit card" payment method.

    What WAS a surprise was the discovery that my transaction WAS processed through my PayPal account, even though I did not log in. In other words, PayPal did NOT process the transaction as a "direct credit card payment," but instead it processed the transaction WITHIN my PayPal account -- as if I were logged in. (It still charged the same credit card.)

    I'm still on the phone with a PayPal "resolution specialist" (second-tier technical support), who is just as baffled as I am by this -- he agrees that since he verified that I did not log in, there should not be any transactions posted through my PayPal account, and yet the transaction WAS posted through my PayPal account.

    Note that this is NOT an issue of an improper charge -- the correct credit card was charged for the correct amount. However, the transaction was posted through a PayPal account even though I had not logged in, and PayPal's own system confirms that I had not logged in. This is a "dead canary in the mine" issue -- not a problem by itself, but a signal that something may be wrong with PayPal's internal transaction-processing security.

    Initially, my wife and I were just annoyed that PayPal would reject valid credit-card payments multiple times and then accept the same information and process a transaction -- this is a huge annoyance for customers, and is likely to lead consumers to avoid PayPal as a transaction-payment service (and to cease bidding on auctions where PayPal is the only payment option).

    But now, I've moved far past "annoyance" to "alarm" because it appears that there is a security problem at PayPal, and if there is one such problem (even if it didn't result in any improper transactions), it seems likely that other problems may exist with that system, which could result in financial losses.

    I've now logged into my PayPal account and directed that all funds on deposit there be transferred to my bank account; when that transfer is complete, I will be closing my PayPal account permanently.

  2. #2
    Beachy Bill's Avatar
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    November 20th, 2005
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    Interesting, indeed. Two weeks ago I had a vaguely related PayPal incident. On 8/22 I purchased a 4-figure domain from Sedo and wanted to expedite payment. So I used a Credit Card, which they direct through Paypal services. I completed the transaction OK via credit card and I had declined to use "my" PayPal account for the purchase. It is easier for me to keep track of my accounting if I do not "split" the funding - part PayPal and the balance Credit Card.

    About 20 minutes after I completed the online transaction I received a phone call from a PayPal rep asking if I really intended to open a new account. Huh? I had declined the use of my account. She told me she could see that, but an account was opened on my behalf by the seller - something which Sedo had never done before. She canceled the "new" account and authorized the payment to go through. I have done about a half dozen of these types of transactions with Sedo and PayPal over the last couple of years and this is the first time a "glitch" occurred.

    So, maybe you are onto something brewing with their security measures. I was originally reassured with a call from their "security team" - but now it is making me wonder a bit. I certainly hope their whole security system isn't about to implode and make news headlines.
    Bill / Marketing Blog @ 12PM - Current project: Resurrecting my "baby" at South Baltimore..
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  3. #3
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    Update: I've just been disconnected from PayPal customer support (long-distance to Nebraska) for the second time this evening, both times after 15-20 minutes getting transferred to a "resolution specialist" and having the "specialist" express great concern over the problem, then putting me on hold so that they can escalate the issue. I suppose it could be a coincidence (but we all know I'm a cynic, so I'm just going to "let it go" and just close my PayPal account).

  4. #4
    ABW Ambassador simcat's Avatar
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    Quote Originally Posted by markwelch
    and just close my PayPal account).
    I'm curious, if you indeed close it, can you report on how easy (or hard) that process was?

    I'm just asking because of some of the stuff I've seen posted on the web about them...

  5. #5
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    I know that my most recent effort to close my PayPal account was not successful, because they impose a series of steps and delays intended to leave the process "incomplete," for all but the most persistent users. Basically, you must first clean the account of funds, which automatically triggers a 5-10 day delay for that transfer to "clear," and then you must log in again and submit the cancellation request; I think another 'confirmation' step may be required after that.

    FYI, neither of the "resolution specialists" who expressed concern and said they were escalating the issue (nor anyone else from PayPal) has followed up on this issue. I'm cynical enough to assume that the issue is being "buried."

  6. #6
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    Last night, I wrote:
    Quote Originally Posted by markwelch
    Update: I've just been disconnected from PayPal customer support (long-distance to Nebraska) for the second time this evening, both times after 15-20 minutes getting transferred to a "resolution specialist" and having the "specialist" express great concern over the problem, then putting me on hold so that they can escalate the issue. I suppose it could be a coincidence (but we all know I'm a cynic, so I'm just going to "let it go" and just close my PayPal account).
    I'd like to clarify that this morning, I confirmed that the disconnections were the fault of T-Mobile, not PayPal. We just purchased new T-Mobile service and phones that were supposed to work with WiFi; today, T-Mobile acknowledged that its implementation of WiFi is non-standard and proprietary, and does not work reliably with WiFi signals from routers that have not been specifically designed for its proprietary standards. We'll be returning the phones and moving service back to AT&T, which provides dismal customer service but doesn't drop every call we make.

    To my knowledge, PayPal has made no effort to follow up on my two dropped "escalated" security calls.

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