The PayPal and OpenCamp Resolution
Posted on: 8th July 2010 by John P.
Over the past 72 hours or so there has been quite a bit of attention paid to the issue which I last posted here on the OpenCamp blog.
When the folks at PayPal informed me they were limiting our account due to unspecified “suspicious activity” I told them there was going to be a great deal of attention brought to the matter from the OpenCamp community. Initially the response was, “That’s fine.” But after several hundred tweets, hundreds of Diggs, dozens of blog posts, and some major media attention, I was contacted by a representative from PayPal who wanted to resolve the matter.
Without going into a lot of detail (because the OpenCamp account is tied to me and my other accounts) the team at PayPal has decided to take a more holistic look at the relationship we enjoy as a whole and remove the account access limitations.
Why Did They Bend?
If you’re like me, your natural instinct might be to celebrate the sweet victory that comes from the power of social media! “Yeah! The big monopolistic corporation bows to the will of the community!” But before we jump to that conclusion let me say that I think it’s a combination of two things:
- Obviously the amount of attention brought to bear on the matter elevated it to executives at PayPal who took an interest in making the pain go away. At any business I’ve been part of the marketing and customer care executives would come in, and likely have given directives to staff to investigate the situation and issue an appropriate response.
- In this case, the people looking into the matter obviously found that there was legitimate reason to ease up on the restrictions, and as it was explained to me (and I believe them) the history that I personally have with PayPal was what made the difference in reversing the previous determination. No large company would bend without reason. They don’t have to.
So, What Now?
At this point we’ve been given a direct contact we can reach out to if we have further problems, and our account is back to an acceptable state. But is the matter truly resolved?
Various members of the OpenCamp core team shared similar (mostly less severe) stories about dealing with PayPal once this issue came to light. In addition, we heard from nearly 100 other people in the comments expressing frustration. Clearly this issue hit a very deep nerve.
It has been my experience that the representatives at PayPal suffer from a few common character flaws:
- A clear feeling of anonymity afforded by the fact they only use first names and generic phone numbers / email addresses. These factors discourage employees from really taking “ownership” of a customer’s problem.
- An inability, or lack of desire, to escalate problems to a higher level supervisor or manager. In all the contacts I’ve had with PayPal over the years it is painfully difficult to speak to anyone with actual decision making authority.
- The adversarial tone that only comes from having a near monopoly. PayPal employees exhibit the same attitude as cable company, phone company, electric company and other monopolistic giants. They come across as, “Yes, I’m being polite – but if I’m not, what are you going to do about it?”
So while our individual problem has gone away, I’m in no way convinced that the root causes have been cured. And frankly the only way for those changes to come about are if the leadership at the top of the organization really shifts focus to become a customer-centric company and then implement visionary cultural changes – top down.
The Final Word on the Matter
In the last two days I had multiple offers stream in from alternative payment processing providers. It has caused me to re-examine the value that PayPal actually provides. Do a LOT of people have PayPal accounts? Absolutely. Does it make it easier for them to transact with us? A little. Would we actually miss out on any registrations if we don’t use PayPal? Very, very unlikely.
When it comes right down to it although I appreciate the fact that PayPal finally came through and did the right thing, the amount of pain leading up to that point was far greater than any relief provided in the end. We will be moving our payment processing away from PayPal, and until I see evidence that the company has embarked on a major cultural change, we will not be going back.
Twitter Comments
Article written by John P.
OpenCamp on FaceBook
OpenCamp on Flickr
OpenCamp on LinkedIn
OpenCamp on Meetup.com
OpenCamp on Twitter
OpenCamp on Yelp
John…I applaud your honesty and decision to move from Paypal. I’ve had difficulty over the past few months and the experience I’ve had with them on the phone is the EXACT MENTALITY that you experienced. It’s absolutely mind-boggling that people think that that behavior is GOOD business. It is NOT.
I could only hope that people really reconsider their relationship with Paypal and stop using them. It might give the Administration grounds to really consider what their business practices are…if they have any.
John,
As a business owner who also has used PayPal for a number of years its conferences and events I can honestly say the action PayPal initiated with you is very, very concerning. Obviously, PayPal has made a very poor management decision in how they went about communicating with your personally. To let you know, this issue you have hoisted to the surface has reached my contacts in the legal community who make HUGE recommendation to their clients who probably effect PayPal’s bottomline to the tune of $10′s of millions. I would say the Big Dog could be soon be feeling the sharp tug of the leash from some of their larger clients will put on them for this action, if they have not already.
Not to defend PayPal in anyway for their action, but I hear PayPal has had to eat a lot of refunds to attendees who registered to conferences that walked off with the registration fees they collected. I am sure that caused a pinch to their profitability for a few moments which caused their reaction to OpenCamp. However, the action PayPal took in this matter with OpenCamp backfired on them and we can only hope they back off to reevaluate how they should deal with conferences in the future. To me, if I was managing PayPal, I would see this incident as a sign they need to change and maybe be a sponsor of OpenCamp to make up for the damage they caused to the conference/event community who uses their services the most.
It is Good to see you are ready to move on and create a fun, productive learning experience in North Dallas. Man, we sure can use OpenCamp. Carry on.
It wasn’t really damage, but instead a massive amount of inconvenience. It’s not as if we weren’t ever going to access our funds again, but the freeze affected our ability to pay expenses and redirected our energy away from actually programming a conference to dealing with jerks in their “customer support”. It’s fair of PayPal to want some protection against back-charges, but how they went about pursuing it is disturbing, in my book.
Glad to hear the situation is ‘resolved’ – but, I agree with you that it’s not really resolved – big picture-wise. In the same vein of calling the electric company when there’s an outage, you just can’t get a real person, or a person who has any say-so in things. My mom’s been trying to make her own account simply usable for quite some time now, with hours spent on the phone – and no such luck. For long-distance family members, it sure would make the transfer of money going back and forth so much easier, but, no – Paypal just won’t play nice. Ugh.
Well Done, Cali
Awesome. Keep us updated on this. I am very curious to see where you move to.
This same thing happened to us last year with DrupalCamp Dallas. We used my Paypal account, and I receive a phone call from them, but after I showed them the website, etc., they were very good about it and reactivated the account.
We took 100 registrations through the account without any other issues.
Lee
John,
I help run an annual film festival that for the past two years has accepted online payments via PayPal. Our pattern with PayPal is like that of a conference — once a year, we have a couple of months that bring in five figures, which abruptly stops when the festival starts. And in two years, there hasn’t been a single refund request.
This year, after the festival, Paypal put limitations on our account. They asked for three items – a void cheque or bank statement (for the bank account they’ve already verified), a copy of paperwork demonstrating that we’re registered as a non-profit entity, and a fuzzy request for “information about the nature of your organization and the type of payments you intend to process with PayPal.”
I’ve been a little slow to respond to this, though I DID refuse to discuss the account with one woman who phoned but would not identify herself by anything but her first name. (“Identity theft is rampant,” I said. “I don’t care if you can quote private account info to me; that could be stolen information. I won’t discuss my account with you unless I know who you are.”)
Since it’s another 6 months before we need to start taking payments again, but with your story and the other complaints I’m seeing, I suspect I’ll move to an alternative as well, even if our current situation does get resolved.
Thanks for keeping us all up to date on this story.
PayPal just shot themselves in the arse. Since they are too big to need my business.
I will not be giving it to them. Nor will i recommend them to my hundreds of clients.
Nor will i recommend them to the 2 MAJOR charities that I site build for.
So Mr. Big Britches PayPal, our money will go to an organization that is responsive
and who is appreciative of us making them $$$.
God I Love America. I Love open source. I Love Rock N Roll.
Go to http://www.infowars.com
Open your mind and regain your own personal power. There are more of us than there are of the thems. http://www.prisonplanet.com