Thursday, November 6, 2014

PayPal Isn't Ready for Prime Time as the Premier Mobile Credit Payment System

I just spent about six hours on the phone with PayPal and PayPal Credit.  They ARE the same company, but they don't act like it (different operations centers, and they apparently don't share any information).  Let me set the record straight. I have a PayPal account.  I have had it for years. I do NOT have a PayPal Credit Card, nor have I ever applied for one. I have always found it mildly annoying that they default to my bank account for an EFT transaction for payments instead of the Credit Card I have on file with them, but that is not the issue here, and I think the issue with that is obvious.

Today we received a letter from Comenity Capital Bank c/o Pay Pal Credit out of Timonium, MD.  We were informed:

"This letter is in response to your recent request to open a PayPal Credit account.  Our records show that you requested a PayPal Credit account on 10/21/2014 in connection with a purchase of $16.63 at eBay-Turbo Checkout.
We regret that we are unable to approve you for the service at this time for the following reason:
There was limited recent credit history in the credit file provided to us.
Our credit decision was based in whole or in part on information obtained in a report from the consumer-reporting agency listed below.  You have  a right under the Fair Credit Reporting Act to know the information contained in your file at the consumer reporting agency.  The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you.
You also have the right to a free copy of your report from the reporting agency if you request it no later than 60 days after you receive this notice.  In addition , if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency.
Trans Union
2 Baldwin Place
PO Box 1000
Chester,PA 19022
(800) 888-4213"

Now, I think it would be fair to assume that the most likely scenario is that someone was trying to commit identity theft and/or credit card fraud using my name, especially since we have an excellent credit history.

I called PayPal.  After an incredibly long wait on hold I was told, after explaining the situation, that I was going to have to speak with the PayPal Credit Department.  I was transferred and waited on hold for another half hour.  I spoke with the PayPal Credit Card Department and they really didn't want to deal with me because I did not have a PayPal Credit Card.  I asked to speak to their Fraud department. I was given the run around (I don't think they have a Fraud department).  After 5 calls back to them over the course of the day, They said that it was not clear what happened.  They have no record that I, or anyone posing as me, had applied for a PayPal Credit Card. 

So, then I wanted to make sure that there was no damage done to my credit report as a result of their denial of credit.   I called Trans Union about the matter.  They assured me that for neither me nor my wife was there a credit inquiry by anyone anywhere near the dates that Comenity Bank claimed to have made the inquiry.  Further, there was no inquiry by either Comenity Bank or PayPal Credit at any time in the past in our files.

I think it was reasonable for me to take the letter at face value and make sure that there was no identity theft in progress. Little did I suspect that PayPal had fabricated the transaction and allegations out of thin air.  What I think is reprehensible is that they put me through about six hours of work for absolutely nothing, AND in the process in response to any of my questions alway answering with hypothetical reasons as to what could have been the reasons as to what really happened.  No one at PayPal could offer any concrete explanation for why they sent me the letter or any facts to even affirm that they really sent the letter.

What a bunch of turkeys.  I sure am glad that Apple Pay is out there providing a real service for mobile payments.