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.  


  1. Thank you for this. I received a similar letter yesterday, except mine says "Our records show that your requested to open an account or make a purchase using the Paypal Credit payment method on 03/27/2015." I definitely did not - I hadn't even logged into my Paypal account since February, so my first thought was that someone had hacked my account.

    The letter went on to say that they were sorry not to be able to approve me because "Certain elements of the transaction vary significantly from typical customer purchase behaviors due to the risk associated with this type of transaction, as well as the time of day of the transaction."

    So now I'm certain that someone tried to hijack my identity or Paypal account! I start skimming the letter to find out what to do next, but no worry, Paypal is on top of it:

    "You do not need to respond to this letter. If, however, you have any questions about this service, please contact Paypal Credit at the above address."

    So I'm certain that someone is trying to steal my identity and Paypal tells me I don't need to do anything, but if I do have a question, WRITE THEM at the address at the top of the letter. There is no other contact information on the letter for Paypal Credit or Comenity Capital Bank!!


  2. I have received exactly the same letter with dates and possible charge amount differing. Actually, I received it as POA for my elderly cousin who is in long term care, paid for by his SSI, and who is incapable of managing anything himself. He has never had anything to do with online buying and/or PayPal and certainly did not start at age 88. Calls to Comenity Bank and PayPal show they have no record of this. There are no inquiries in his credit report and besides he no longer has any money left to access by anyone. I can't imagine who actually sent these letters out or why. But I can safely ignore it.

  3. I just got this same letter but with someone else's name. However, it's to my address and my house is brand new. I'm the only person who has ever lived in it and there is nobody nearby with this name. (I am sure of it.)

  4. I got two of these letters in the last few weeks, as did two other members of the household who do not have paypal accounts.

  5. I recieved 4 letters stating the same thing!