Insanity: PayPal Freezes Mailpile's Account, Demands Excessive Info To Get Access
Found on Techdirt on Thursday, 05 September 2013
Their IndieGoGo campaign has been a huge success, going past their $100,000 target, and is currently at around $137,000, which will allow the three person team to focus on it full time.
Except... as the team announced this morning, PayPal, for reasons known only to PayPal, has decided to freeze their funds and won't let Mailpile access the money that people donated.
"Afer 4 phone calls, the last of which I spoke to a supervisor, the understanding I have come to is, unless Mailpile provides PayPal with a detailed budgetary breakdown of how we plan to use the donations from our crowd funding campaign they will not release the block on my account for 1 year until we have shipped a 1.0 version of our product."
Exactly this is why I will never ever recommend Paypal to anybody. Pretending to be the moral police, Paypal tries to keep funds for as long as possible for fishy reasons and floods the legal owners with ridiculous demands just to hold onto the money. The hundreds of thousands (or probably even millions) of dollars would earn some nice interest while the owners are blocked from using their money. Paypal could, like any even just remotely serious bank, verify users before they are allowed to use their accounts; but as long as an email address is all you need the abuse and scamming will not end. Paypal accepts this and uses it as an excuse to freeze accounts in order to profit from those funds; and if the public attention gets too big it suddenly weasels its way out by saying it was just a mistake. However, without that sort of attention, Paypal would never call it a mistake, but business practice.