PayPal employee answers: Faster money back? Why work for evil?

Background:

In order to earn miles & points, many people “manufacture spend”.  That is, people find ways to increase credit card spend (to get rewards) while getting their money back.  There are many techniques for doing this, and PayPal is a component of some of them.  Unfortunately, while these techniques are perfectly legal, they are often also used for money laundering and other illegal activities.  As a result, PayPal frequently freezes accounts of those who manufacture spend because they appear to be doing something illegal.

In response to a recent post about PayPal freezing accounts, an anonymous PayPal employee stepped forward and offered to answer our questions.  In this post, I’ve summarized answers to three such questions.  Many more questions will be answered in future posts.

PayPal employee anonymousQuestion: Once an account is frozen, is there a good way to get access to frozen funds in less than the stated 6 months? 

Funds are held for 6 months to prevent overdrafts in case charge backs are received. This is legal. That said, while Customer Service agents can’t release limitations on your account, they do have the ability to release funds.

Recommendation: Call to let PayPal know what you were doing that led to the frozen account and ask politely for a check to be mailed, or to be granted access to a portion of the funds.  This may require several calls (wait a few weeks each time).  It’s essential to be nice to the person you speak with.

Question: I’ve heard of people who have had their PayPal money tied up for years. Is that legal?

I believe this to be a misunderstanding of what has happened.  Accounts that are no longer being used eventually go into escheatment.

Editor’s note: Google says “Escheatment is the process of identifying customer’s deposit (checking, savings, etc.) and time deposit (CD) accounts that are considered abandoned and remitting the funds to the appropriate state if the customer cannot be contacted to re-activate the account.”

Laws regarding escheatment vary by state.  Generally, after 2 to 5 years, the money from those accounts goes to an unclaimed funds account in the state in which the account was registered.

Funds may also be tied up longer when law enforcement is involved.

Bonus question: Why do you work for such an evil company?

I like working for PayPal.  It’s a good job and I enjoy the work I do.

I don’t believe that PayPal is evil.  They’re constantly improving.  When PayPal started, there were no other businesses like it.  It is sort of a half bank and half money services business.  As a result, PayPal is expected to follow rules and regulations designed for both businesses.  It’s an overwhelming set of responsibilities and PayPal is doing its best to meet those requirements and serve its customers.

Further, the work PayPal does to prevent money laundering is important. True money laundering is done by true criminals including those involved in drug dealing, prostitution, tax evasion, child pornography, terrorist financing, etc.  I see it as a very good thing that PayPal takes active steps to prevent money laundering.

Previous Answers

Please see:

Much more to come

Anonymous (AKA MSnowden) has many more answers for us.  As I receive the answers (based on questions asked by readers in response to the original post), I’ll do my best to summarize those answers and alter phrases to protect Anonymous’ identity.  Stay tuned.

Other questions?

If you have other questions for Anonymous/MSnowden, please head over to the original post and add your question to the comments section (if no one has already asked the question).  Here’s the original post:  Anonymous PayPal employee to answer manufactured spend questions.  Don’t forget to press the “Previous Comments” button to see older comments that have fallen off the front page.

Last updated on March 31st, 2019

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

More articles by Greg The Frequent Miler »

Regarding comments: Comments posted at the bottom of Frequent Miler pages and posts are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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Brenton
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Brenton

I live in Omaha where PayPal has a very large campus, and encounter PayPal employees on a daily basis. It’s funny to me that someone would accuse them of being evil just because what, they’re smarter than most other banks and aren’t willing to let you screw them?

Eric
Guest
Eric

That’s exactly right. I noticed the OP of that quote never responded to anyone asking for clarification.

abby
Guest
abby

you really need to stop this series. it makes you look stupid and the ‘insider’ sounds like a paypal mole using you as their PR of the things they think they can do as ‘legal’. chargebacks?!?!? kinda hard for there to be 6 month chargebacks in 2015 on an account that does not have a debit card that has never done a paypal transaction over $10!!!

‘be very nice to the person you talk to’- OH STFU. you advertise mycash cards, send me email inviting me to buy them, then freeze my money for buying them and treat me like a criminal- big f-ing surprise the customer is pissed when the snotty ppal rep treats them like a criminal on the phone. but, yeah, say pretty please with gum drops- give me my fucking money back.

Greg, i realize you REALLY like using the anonymous gif and making snowden references to get clicks, but this is embarrassing.

Carrie
Guest

I disagree.
I think Greg is a journalist writing a post that requires him to research, interview, ask questions from people directly in the industry instead of the echo chamber that niche forums can become. And do so almost without bias. …except for that last hilarious question. 🙂

Nice work Greg. Journalism does require you to reach out to all sorts. Why not interview a paypal employee? Seems like a great idea to me.

Carrie
Guest

(Though I realize in this scenario, the source reached out to you.)

Dave
Guest
Dave

Lol at Greg being a journalist…no offense Greg. There’s a big difference between journalism and blogging. You need to learn this. The thought of a bunch points bloggers calling each other journalists make me throw up in my mouth a little bit.

Eric
Guest
Eric

To be fair he wasn’t the one that called himself a journalist.

abby
Guest
abby

lol @ Carrie the journalist. gmafb. you’re a travel blogger. a REAL journalist would agree with me given that Greg is allowing himself to be paypal’s PR.

btw, Carrie, journalist, you might want to include the cost of all the MS you guys do in your ‘real’ accounting of expenses. ‘travel is free’? really? anyone who actually does what you do, but better, doesn’t have the nee to mislead the lemmings by pretending MS points have no cost.

Drew writes some good content- but also writes filler he knows nothing about (reviews of the ‘best category ___ hotels at ___” where he has never stayed @ the hotels is pretty hack. you’re credit card pimps, not journalists. get over yourselves…

Joe
Guest
Joe

Agree that FM is not a journalist. Not even close. But, I don’t think FM is pretending to be one, so let’s move on.

Eric
Guest
Eric

Who is Drew?

Carrie
Guest

Just to clarify, I know that I’m not a journalist and never meant to imply I was one by calling SOMEONE ELSE a journalist.

Sorry about the confusion there.

calwatch
Guest
calwatch

Drew is Carrie’s husband. And no travel is not free, when you don’t account for where the points came from (credit card apps, MS, etc.) Drew has stated that he MS’s like crazy when he is back in the US, but the costs for MS when back in the States are not on Carrie’s log. On the other hand, is that an order of magnitude more transparency than virtually every other blogger out there? Probably.

JustSaying
Guest
JustSaying

I’ll be deleting all your future posts with PayPal in the headlines. It serves no purpose to give this clue fascist a platform

glen
Guest
glen

I don’t know why Paypal even sells the MyCash cards. Seems the second you use one, your account is flagged for eventual shutdown.

calwatch
Guest
calwatch

I use Paypal MyCash sparingly but regularly for special purposes. I have more of a problem buying MyCash cards at gas stations, which are the most lucrative uses for them, since drug stores have better options for redemption. Like AGC, it’s best used as a tool for shifting spending into better categories or better time periods (to meet minimum spend qualifications) than it is for MS.

wise2u
Guest
wise2u

You could sum up all your PayPal related posts with the one fact most everyone already knows: PayPal sucks.
They can freeze your access to your money at any time for any reason, not worth it for an overpriced middleman on CC transactions…now that we have many alternative means to pay someone online (including prepaid cards) their overpriced service is not needed. Any service that can legally freeze funds you deposit with them for 6 months, for any reason they want, is evil, and people who do business with them knowing this can happen are stupid.

Brad Meyer
Guest
Brad Meyer

You people are so negative. 🙁 I find these articles intriguing. Doesn’t mean I agree, but I like reading them.

Ollie
Guest
Ollie

+1

Dave
Guest
Dave

I gotta say…this is more interesting than most of the stuff I read here.

Peter
Guest
Peter

I am somewhat disappointed with the lack of specificity in these answers (i.e. there isn’t any cold hard fact that we didn’t know last year from here or on flyertalk), but assuming Anonymous is who he claim he is, I am glad to see that some insider insights confirm what we have speculated. I’d much rather trust this info from a PP employee, than from a former PP user who has not even touched the service in two years. Bravos for this series and, like FrequentMiler pointed out, if you don’t find these posts useful just move on to somewhere else.

Milly
Guest
Milly

No useful information whatsoever from Anonymous. If one calls to Paypal customer service, one probably finds out more useful info. “Anonymous has taken on real risk.” Really, what risk? Was something said by Anonymous that Paypal wouldn’t want us to know? Looks like a corporate fluff piece.

El Ingeniero
Guest
El Ingeniero

Whoever they are, they could be fire for talking to the press. Most corporate jobs have this policy where you have to be authorized to talk to journos and bloggers.

Joe
Guest
Joe

“True money laundering is done by true criminals including those involved in drug dealing, prostitution, tax evasion, child pornography, terrorist financing, child pornography, etc.” -PayPal Anonymous

It’s obvious that this PayPal person knows nothing about money laundering. “True money laundering is done by true criminals”? What?!?!?! Terrorist financing? Child pornography X 2? Huh?

El Ingeniero
Guest
El Ingeniero

“True money laundering is done by true criminals” is exactly correct. It’s not money laundering unless the gains from criminal activities are involved.

Drug dealers, pimps, purveyors of kiddie porn, tax evaders and terrorists all need to hide the origin of the cash they are working with. I can imagine that PP is pretty popular with the kiddie porn crowd.

If government regulation of PP is anything like the bank where I work, I can promise you that they have serious regulatory risk and they bend over backwards to show they aren’t facilitating money laundering.

TelulaBlue
Guest
TelulaBlue

Google paypal and terrorist financing and the first article that pops up is:

http://www.latimes.com/nation/la-na-terror-arrest-20150208-story.html

Thats a recent article from this year, so obviously people are using PayPal for nefarious actions. I am guessing this MSnowden guy knows something….
I was too afraid to search for paypal and child pornography…so I will just take their word for it.

al613
Guest
al613

Greg, thank you very much for these articles. “Paypal Snowden” thank you very much to you too! Obviously, if you deposit $10k in you bank and then write $1k “suspicious” check and your bank closes your account and holds your money for 6 month you will be very angry even its legal. But how many banks you have in your city? Paypal is unique and has a certain monopoly. They do a lot of good, thats why we use them. They also are abusing some of their customers because this is the only game in town and they can decide whose business they want. The only solution would be competition in this field. For some reason it does not exist, so any tips on how to deal with Paypal are helpful. BTW, Paypal does not need PR in MS community, so I doubt they benefit from this.

Graydon
Guest
Graydon

Thanks for the posts Greg and thanks to Anonymous for the info. Long time PayPal user but for legit sales on eBay (just junk not trying to earn a living or MS) and I appreciate the info. I have never considered PayPal for MS but I don’t really MS considering my brick and mortar full time business spends a hefty 6 figures a year on my credit cards. Keep it up, ignore the complaints and thanks again.

Ak
Guest
Ak

I tried the CSR route that anonymous has suggested without any result. After multiple tries with CSR; the only way I could get my money back was by writing an email to 86 paypal emails I found on the internet. It turnout that few of them were very hire up in the chain. Within 3 days, I received a call from paypal executive office area code 402-952-xxxx. The follow-up emails were via executiveoffice@paypal.com. They immediately released fund hold. I could withdrew fund to my bank account.
I do agree with most of your readers. There is nothing new that anonymous is sharing.But, continue your good work. Hopefully, one day we may find something interesting.

Andy
Guest
Andy

I appreciate hearing from the PayPal employee and the work you do to provide information to your readers. (I would like PayPal employee to offer more juicy/useful tidbits.)

michael
Guest
michael

This post was OK. I honestly don’t get why it has attracted SO MANY trolls in the comments section. Greg is just trying to add some insight, albeit limited, but I don’t think that is really his fault. People need to relax!

GordonBombay
Guest
GordonBombay

Wow, I can’t believe some of the feedback this post is generating. You guys realize this blog is provided for free and that you don’t actually have to read everything, right?

FWIW, I find the info in here really interesting and valuable. Thanks.

JustSaying
Guest
JustSaying

Jim Cramer just announced Apple will be targeting PayPal in new product next year. It would be a great time to short PayPal stock

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[…] PayPal employee answers: Faster money back? Why work for evil? – More answers to your questions about PayPal and manufactured spend from an anonymous employee. […]

Adam
Guest

hey Ak, what exactly did you say in your emails to PP Exec folks? also is your acct still limited? I ask cause I still have a few MyCash cards with no way to load or get em refunded since the PPMC site errors out when I try to login — my guess because my PP acct is limited.

there doesnt seem to be a solution to this. but I’m willing to try any new avenues to get my frozen funds as well as unused MC funds back.

Ak
Guest
Ak

You should receive an email from paypal if your account is limited.

If you have received an email then:
Directly write to executiveoffice@paypal.com without any apology and ask them to release fund within one week. Let them know that you are ready to file a complaint to Consumer Financial Protection Bureau, your State Attorney General, Federal Reserve and BBB.

Consumer Financial Protection Bureau
http://www.consumerfinance.gov/complaint/

The United States Federal Reserve
https://www.federalreserveconsumerhe…mcomplaint.cfm

Provide your phone number and email address. Executive Escalations team will respond by phone call from area code 402 within few days. They will ask you few questions on funding and withdrawals. They will enable your PayPal account for bank withdrawal.

Do not waste your time with those nice customer service representative who will do nothing.

JustSaying
Guest
JustSaying

I just added 3 claims to the Cepeda vs PayPal Settlement. Some good soul took these fascists to court and there will be a settlement for those who had their accounts frozen. I may even take a day off from work and go to the court date in Oakland US District Court for the Northern District of California Case No. 10-CV-02500 SBA. I am curious to get a close up look at a modern day fascist. Kindred spirits should come and we’ll have drinks downtown Oakland after the gavel comes down.