September 23, 2005 10:34 AM PDT

PayPal glitch sparks customer anger

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Online payments company PayPal is working to fix a glitch that has been causing duplicate debit card withdrawals and deposits on some customer accounts since the beginning of September.

The problem first surfaced on Sept. 6, when some PayPal customers noticed duplicate withdrawals from their debit cards that sent their accounts into the red. Two weeks later, more PayPal customers also reported duplicate withdrawals and deposits into their accounts.

PayPal is blaming the duplicate withdrawals on a third-party processing error with some PIN-based transactions.

A statement from PayPal's parent company, eBay, posted on one of its discussion forums on Sept. 19, apologized for the inconvenience and said: "Although we initially believed this irregularity was corrected last week, it appears that some transactions are still being affected. We are working to resolve this issue as quickly as possible."

Discussion forums on eBay have been inundated with complaints from angry customers who are unable to tell what their actual PayPal account balance should be. They are claiming that they can't access their funds because their accounts are now in debt.

One seller wrote in a posting: "I'm trying hard to make sense of the 20+ erroneous withdrawals/corrections. After one hour on phone-hold, I was told if something is wrong, I have to file a formal chargeback request for each incident. I'm quite exhausted from this silliness."

A PayPal representative was not immediately available for comment, though the company said the problem is confined to U.S. customers.

Andy McCue of Silicon.com reported from London.

6 comments

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PayPal Needs Fixing
There's a LOT of other things that need to be fixed at PayPal. Their online performance has been sub-par this summer.
Posted by (2 comments )
Reply Link Flag
PayPal was okay....
... before Ebay bought them out. Since then, I'm afraid that PayPal
has sunk to the Ebay level of customer satisfaction. I think that I'll
add PayPal to my list of untrustworthy web sites to be avoided at all
costs.

No big deal, really, I didn't use PayPal that much before, and I'm not
going to miss it now.
Posted by Earl Benser (4310 comments )
Reply Link Flag
The horror of modern computing...
The burden of proof is on you. Their technological screw-ups will always be treated as "rare cases" and you are left to deal with low-level support...if you can get ahold of them.
Posted by ordaj (338 comments )
Reply Link Flag
The horror of modern computing...
The burden of proof is on you. Their technological screw-ups will always be treated as "rare cases" and you are left to deal with low-level support...if you can get ahold of them.
Posted by ordaj (338 comments )
Reply Link Flag
You have no idea!
A high up at one of the major credit companies told me once that on-line activity makes up less then 5% of their total sales but accounts for more then 50% of their contested transactions. This was a couple of years ago. Ouch!
Posted by Mister C (423 comments )
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Contacting Paypal's Customer Service
since the long awaited replys from the customer emails never came, the best way to get in touch with paypal to resolve this incident is to view the listing online, with phone numbers and extensions:

<a class="jive-link-external" href="http://www.paypaltruth.org/exec.php" target="_newWindow">http://www.paypaltruth.org/exec.php</a>

<a class="jive-link-external" href="http://www.paypaltruth.org" target="_newWindow">http://www.paypaltruth.org</a> lists all employees direct phone numbers
Posted by (1 comment )
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