Sue Paypal In Thailand

[dave111223]

We have a sporting goods company in Thailand, and have been in business for about 5 years with Paypal as the primary payment processor.

We do any where from $10,000 - $40,000 USD per month through them, probably averages about $20K. We even have a Paypal Thai sales rep. that calls us from time to time and says how happy they are to be in business with us, and how can they "help us grow" etc..

Then out of the blue we get a 1 page form letter email that basically says "Your account is closed, your money is frozen, remove any reference to Paypal from your website". The account had about $5000 in it at the time of freeze (luckily is wasn't more as we have been foolish enough to leave up to $15K stilling in there sometimes).

We finally manage to get a hold of our Thai rep. person and they tell us the account is closed, because "they [Paypal reviews department in China] think the products are fake" and their reason for this assumption is "Your prices seem too cheap"! That's is, they did no other research, they did not contact the brand in question to validate their assumption, and certainly didn't contact us with their concerns.

We have now sent them purchase invoices showing that the products were purchased from t6he officially licensed distibutor in Thailand (absolutely showing they are not fake)...and they are "reviewing the account".

Whether the account is unfrozen or not I'm exploring the options of taken legal account against them. To recover frozen funds, lost sales, damaged business image etc...

Is it even possible to sue an international company from within Thailand?

I'd be interested to know if anyone can suggest a lawyer in Thailand that might handle these kind of claims. And what the costs involved might be.

It's easy to find lots of information about sueing Paypal in the US, but nothing when it comes to Thailand.

I think it's worth considering as this is not a small dispute; with the frozen money, lost sales etc...it could easily justify a claim of over 1Miilion THB

Sure they have a "Policy" which basically says "We can kill you, burn you, and then piss on your corpse if we want", but I've read a lot of cases of people (all be it in the US) having legal success against Paypal.

[MANICMINER]

This has happened to loads of people. all you had to do was google paypal before you started your business, and you would have realised that paypal is not an option for serious businesses - you should have gone with a merchant account to process credit card payments. A small number have sued paypal, but most have gotten nowhere because paypal basically states in their user agreement they can close your account for whatever reason they want. Even if you are successful, the process is so drawn out, that your business is probably down the tubes. What you should do is immediately find another payment processor. Go through all the hoops that paypal want you to jump though, and after 6 months, you may get the funds in your account back.

[dave111223]

This has happened to loads of people. all you had to do was google paypal before you started your business, and you would have realised that paypal is not an option for serious businesses - you should have gone with a merchant account to process credit card payments. A small number have sued paypal, but most have gotten nowhere because paypal basically states in their user agreement they can close your account for whatever reason they want. Even if you are successful, the process is so drawn out, that your business is probably down the tubes. What you should do is immediately find another payment processor. Go through all the hoops that paypal want you to jump though, and after 6 months, you may get the funds in your account back.

I'm in the process of sending the documents for Paysbuy and Thaiepay accounts, but these seem to be pretty much the same as Paypal. Hopefully they treat customers better?

Which payment processor would you suggest?

[MANICMINER]

This has happened to loads of people. all you had to do was google paypal before you started your business, and you would have realised that paypal is not an option for serious businesses - you should have gone with a merchant account to process credit card payments. A small number have sued paypal, but most have gotten nowhere because paypal basically states in their user agreement they can close your account for whatever reason they want. Even if you are successful, the process is so drawn out, that your business is probably down the tubes. What you should do is immediately find another payment processor. Go through all the hoops that paypal want you to jump though, and after 6 months, you may get the funds in your account back.

I'm in the process of sending the documents for Paysbuy and Thaiepay accounts, but these seem to be pretty much the same as Paypal. Hopefully they treat customers better?

Which payment processor would you suggest?

I have heard good things about paysbuy, but have not personally use them. Both options will not treat you in the same manner as paypal. Also, i don't know what brands you sell or to what markets, but just because your goods are originals, does not mean they are fully legit: there have been numerous cases where brand names have sued successfully retailers for sourcing goods from distributors outside their zone. Whilst in the uk, a designer brand - i believe it was Calvin Klein - sued Tescos supermarket for selling their products, which were sourced from Asian distrbutors. In cases like this, paypal just shut accounts down to cover their back sides.

[rixalex]

I really know nothing about this but from an outsider's ignorant point of view, if they want to close your account then fine, but why not transfer your money out of paypal and into your own account first. To simply say they are freezing your money surely amounts to saying they are going to steal your money. Outrageous. Good luck with fighting the bar stewards.

[impulse]

I'm not sticking up for Paypal at all here. They have some truly abysmal business practices.

But there is some rationale to referring to your products as "fake" if you are importing them outside of the various companies' authorized distribution channels. (I'm not saying that's what you're doing but IF...) This can be true even if they are genuine XYZ products.

Rather than do a poor job of explaining it, here's a Wikipedia article that does a passable job:

http://en.wikipedia....iki/Grey_market

Google gray (or grey) market and you'll find hundreds of horror stories.

Agree with it, or disagree with it- manufacturers have the right to decide how to go to various countries' markets with their goods. Decisions like distribution channels, pricing, markup (and even the design and quality of their product for specific countries). Go outside the authorized channels and you risk the consequences.

My guess is that the authorized Thai reps for your products ratted you out to the manufacturer(s) to protect their turf. But that's just a guess.

Post back how you made out with Paypal.

[rixalex]

I'm not sticking up for Paypal at all here. They have some truly abysmal business practices.

But there is some rationale to referring to your products as "fake" if you are importing them outside of the various companies' authorized distribution channels. (I'm not saying that's what you're doing but IF...) This can be true even if they are genuine XYZ products.

Rather than do a poor job of explaining it, here's a Wikipedia article that does a passable job:

http://en.wikipedia....iki/Grey_market

Google gray (or grey) market and you'll find hundreds of horror stories.

Agree with it, or disagree with it- manufacturers have the right to decide how to go to various countries' markets with their goods. Decisions like distribution channels, pricing, markup (and even the design and quality of their product for specific countries). Go outside the authorized channels and you risk the consequences.

My guess is that the authorized Thai reps for your products ratted you out to the manufacturer(s) to protect their turf. But that's just a guess.

Post back how you made out with Paypal.

Whether or not the product or the business practice is iffy, what right does paypal have to keep the money? That's what i don't get. Why don't they return the money and then say sorry, we are closing your account... both parties can go their separate ways.

[tombkk]

If you qualify for a bonafide credit card vendor account, offer this payment method to your customers. If you don't qualify, ask yourself why you don't qualify.

I have no experience with Paypal, and reading this report, I see no reason why I should try (as a vendor or a buyer).

[necronx99]

Depending on your market, you could try money bookers and neteller. Also dependent on your market schemes like ucash or Paysafe card all of which are simple to deal with and won't involve themselves in your business.

Getting your own credit card merchant account is a good option but adds a level of complexity and risk to your business that you are probably not big enough to cope with.

Sent from my iPad using ThaiVisa app

[impulse]

I'm not sticking up for Paypal at all here. They have some truly abysmal business practices.

...

Whether or not the product or the business practice is iffy, what right does paypal have to keep the money? That's what i don't get. Why don't they return the money and then say sorry, we are closing your account... both parties can go their separate ways.

I'm not disagreeing with that- I consider what's happening to you one of their abysmal business practices. I'm not defending them as much as offering up some possible rationale for why it's happening to you.

With their "buyer protection" schemes in place, they are (arguably, according to a lot of blog posts) on the hook for various abuses by the vendors they host. They may and may not have to pay out for shady dealings run through their site. It may take them some time to determine whether they have any liability for anything you may have done. They may feel justified to hold onto your money until they have done their diligence on your situation. And yes, that stinks. But it's probably buried in page 42 of the fine print of their user agreement.

I used to love EBay and Paypal. I started using EBay when they were the #2 auction site behind Onsale.com. I could look at just about every item in all categories in an hour (minus the auctions for Beanie Babies which really launched EBay). You could actually razz the people you were bidding against and it was fun. I've bought and sold tens of thousands of dollars over the years- always in small quantities of mostly unused personal stuff and a little testing the market for stuff I was considering importing.

But they've gotten so big and unwieldy that it's no longer fun and the deals are no better than I can find through any number of other sites. So I still peruse EBay occasionally, but I haven't bought or sold anything for years.

Once again, please post back if and when you get a resolution, and more importantly- post back if they don't make you whole.

[rixalex]

I'm not sticking up for Paypal at all here. They have some truly abysmal business practices.

...

Whether or not the product or the business practice is iffy, what right does paypal have to keep the money? That's what i don't get. Why don't they return the money and then say sorry, we are closing your account... both parties can go their separate ways.

I'm not disagreeing with that- I consider what's happening to you one of their abysmal business practices. I'm not defending them as much as offering up some possible rationale for why it's happening to you.

With their "buyer protection" schemes in place, they are (arguably, according to a lot of blog posts) on the hook for various abuses by the vendors they host. They may and may not have to pay out for shady dealings run through their site. It may take them some time to determine whether they have any liability for anything you may have done. They may feel justified to hold onto your money until they have done their diligence on your situation. And yes, that stinks. But it's probably buried in page 42 of the fine print of their user agreement.

I used to love EBay and Paypal. I started using EBay when they were the #2 auction site behind Onsale.com. I could look at just about every item in all categories in an hour (minus the auctions for Beanie Babies which really launched EBay). You could actually razz the people you were bidding against and it was fun. I've bought and sold tens of thousands of dollars over the years- always in small quantities of mostly unused personal stuff and a little testing the market for stuff I was considering importing.

But they've gotten so big and unwieldy that it's no longer fun and the deals are no better than I can find through any number of other sites. So I still peruse EBay occasionally, but I haven't bought or sold anything for years.

Once again, please post back if and when you get a resolution, and more importantly- post back if they don't make you whole.

It's a good post although should be directed at dave, not me, as he is the one with the problem. I was just sympathising with him.

[dave111223]

Thanks for the replies. In typical Paypal fashion they shut the account on Friday, then closed for the weekend, and "might be able to get to it on Tuesday"...cheers for the rush, so no news yet.

With regards to the grey market comments, yes this could be the case. But we sell about 10 different brands of products, only 1 brand is "international" (the rest are just Thai brands).

Notes with regards to the "International" brand:

• There are no customs restrictions on the brand; for example Nike and Adidas have customs restrictions, so that you can't even send genuine Nike products to another country without an accompanying authorization letter from Nike. But the brand we sell has no such registered restriction.
  
• No where on the products/invoices/receipts/labels etc... is there any notice such as "Only for sale in Thailand"
  
• We do not have any agreement or contract with the brand telling us where we can sell the products
  
• We do buy "wholesale" (ie get wholesale discount prices, under the assumption that we are going to resell the products)
  
• And as previously stated, the products are irrefutably genuine.
  

So even if, give all these factors, Paypal had called and said "No this is too grey for us" we could have easily stopped the sale of this brand, as we sell many other items, this brand is not a major % of our sales. And discussed the matter further while continuing our business; that would have seemed the normal thing for any reasonable company to do?

Thank you for the other suggestions on payment processors. I'm most interested in Moneybookers, which should integrated fairly easily with our cart. Neteller is bit too Seller-sided (not sure that too many customers would go for it). But i've learned my lesson and I think it's time to diversity and have a few merchant accounts (ie Moneybookers, Paysbuy, Thaiepay etc..).

[phl]

Not in so many words but you are screwed. Yes you can sue Paypal, however you will not win. THey have so many little clause in their terms and conditions that it is impossible NOT to break some.

Now the good news, they keep the account frozen for 6 months and if no legal actions are taken against them for goods you sold, they MUST release the money, as they have no right to keep it.

Now the hard part. They always try to keep this money and in many cases, people simply give up or forget.

Here are some of the things you should/can do.

1. Contact Paypal in USA., your thai rep is nothing but a puppet with no strings to pull at all

2. Demand to speak with a manager and continue calling until you get one on the phone.

3. Explain your situation and offer to provide proof/evidence

4. Should he/she be rather unhelpful, do advise him/her that you would be expecting for money to be released after 6 months and should they fail you will take legal action. At this stage, after 6 months, they have no right to hold the money, so if you show you know the law/rules/etc they will not dare to hold it, because then they have no chance in hell to win.

Try to stay calm, the hardest part is getting the manager/supervisor on the phone, because basically how they operate is, they have 1 person handling this kind of things. So if she/he thinks your account is a threat they will basically shut it down.

That person is the only one, who can lift the restriction.

When you send through the evidence, it does not get to that person, but either gets lost or simply thrown out for a very simple reason-PAYPAL MAKES MONEY OF YOUR MONEY, it is actually their company policy to shut down xxx number of accounts per month.

However if you manage to get through to the manager, they will forward your paperwork to the correct person who can/will lift the restriction.

How i know all this? I use to trade online for over 10 years and have hit the very same wall at least 10 times.

First few times, i just left it and opened new accounts. Though after a while i started to get pissed off,so not only consulted lawyers but did loads of research.

Most of my experience though was with Paypal Australia, where i found the easiest way to deal with them.

They must follow all Oz banking regulations, should they break any, one can file a complaint with banking ombudsman and its a free service for you.

The trick which i always used and it always worked(once i learned it) was as follows

1. Agree that they can close your account

2. Demand to see police report or court order allowing Paypal to hold the money

3. Demand to see police report or court order stating that the goods sold are fake/stolen or whatever Paypal claims

Bottom line is, yes they can close your account, however they can not withhold the money without a court order or other claims either by the company whose "fake" goods you supposedly selling or a company from whom you allegedly "stole" the goods.

[phl]

But i've learned my lesson and I think it's time to diversity and have a few merchant accounts (ie Moneybookers, Paysbuy, Thaiepay etc..).

depends where you are from originally, but there are a number of company's who offer merchant facility's at a pretty cheap cost

The reason why i say "depends where you are from originally" because using some of them you can only withdraw money in certain countries, ie must have USA bank account or OZ etc

Another one to consider is Paymate, but can only withdraw in Oz or USA

Moneybookers are no longer what they use to be, do some research and you will find they have been doing the "paypal thing" closing accounts and holding the money

For thai merchant accounts, you are required to provide a tonne of paperwork

[samsiam]

Getting your own credit card merchant account is a good option but adds a level of complexity and risk to your business that you are probably not big enough to cope with.

By this do you mean direct with your bank ?? No 3rd party processor ??

I have heard this is very difficult and why most people go with the 3rd party.

you would have realised that paypal is not an option for serious businesses - you should have gone with a merchant account to process credit card payments.

Should have...but not possible for all....if you have any info to make this possible, please advise.

[marstons]

Happened to me many times, i emailed CEO of paypal and escalations team sorted it, blamed it on my using a proxy server which i was not using. any way was unlocked as were funds, now i just contact escaltions team in Singapore if i have problems. Maybe worth offering Alert Pay as an option, far more easy going. But google ceo e mail address and give it a shot

[LordPoona]

dont waste your time with a law suit..lawers will cost you more..

the account is frozen for 6 months ..it will be limited after 6 months is up but you can then withdraw the 5K to the linked account...

Use backup providers such as 2co,alertpay,moneybookers and also open another paypal account just in case..

this is part of doing alot of business with a beast like paypal..

just dont overexpose yourself with a large paypal balance..

[dave111223]

Well here's the status.

PayPal still "reviewing the case"...."need more time"..."it's complicated"...

In the meanwhile I've been going crazy applying for just about every payment processor I could find, and hopefully my experience can help others:

Moneybookers (Skrill):

Signed up for a merchant account took a week for approval and was promising at first, especially as their payment module for osCommerce allows credits to be entered directly on your site (via iframe), and there checkout is no nonsense (just key in your credit card info)....but then it all goes downhill...customers have to key in a password and a moneybookers account is created for them whether they want it or not.

At this point they are locked into moneybookers, if they screwed up the info they entered (such as a mistake in the billing address) they are f***ed and can't use that card anymore) I also had a problem with cards getting declined etc...

I contacted support about it, they have yet to respond for several days...not very hopeful.

The more I read on their website the more I think it's not right for us (hold your account after $1200 in sales to review it etc..)

Paysbuy

Required a lot of documents to get the account upgraded to merchant level (ID cards, bank passbooks, application, utility bills, rent agreement etc..all sent in by mail). But after they received the documents they were very quick to approve the account (1 day).

I started testing their system but was not able to process my credit card; call them and they needed to upgrade our account to accept non-Vbv(?) cards. Ok, went back for more testing...card still not working (different error). Now they tell us that this card is a "business credit card" and they don't accept "business cards"...ok...<deleted>?

I don't really want to receive emails all day from customers "my card won't work"...

I'll keep the account as a backup anyways...but in general Paysbuy seems a bit amateurish, for example they sent full credit card numbers through email to me when I was asking them about the problems (hmm...security?).

Alertpay

Signed up, would not process my credit card to "get verified", then I realized you can't add a Thai bank account to withdraw to...and our application was denied anyways.

Absolutely no good for a Thai business.

Thaiepay

I signed up but never received any emails, and got no login info etc...their website says I'm supposed to send similar documents as with Paysbuy, but they don't answer the phone at their support number, and I can't be bothered to go through the sign up process only to find out they can't process most cards like Paysbuy.

Netnel

Signed up but then realized it is very tricky for customers to pay (customers have to jump from lots of hoops, sign up for accounts, deposit money etc..) good for gambling sites, or if you are doing something pretty dodgy, but not for a regular online retailer.

2Checkout

Required $11 for non-refundable application fee, and $11 per month for account...but I paid the money and applied. Quite a bit of information required to sign up, but no actual documents. The approve process was very quick (same day) and their support system seems pretty quick too. The rates aren't great (4%) and you can only do weekly wire transfer as opposed to withdraw whenever directly to your bank, but their payment system seems pretty easy for customers to use, and I had no problem paying with the same card that Paysbuy had refused.

So as it stands we updated our store to process all orders via 2Checkout and we'll see how it goes. Hopefully once we've done a few months of orders we can negotiate the rates down a bit based on volume.

Sagepay

If 2Checkout goes bad this is my next plan. But Sagepay requires lot of documents (full business accounts etc..) and length application process, plus a lot of costs involved as this is more of a "proper" merchant account; so i don't want to go through all that if I don't have to.

There are a few other payment processors i tried with (worldspay, charge.com, google checkout, etc...) but they don't accept Thai merchants so they were no-starters.

[samsiam]

Wow...thanks for the info.....not good news and I am not looking forward to setting this up myself.

[samsiam]

So how do you go about setting up your own merchant account with your bank ??

Is it possible with an e-commerce business ?? ...I know it is possible, but is it practical and possible for small business of reasonable size.

I used to have merchant accounts in previous businesses....first one was the old slider machine...then the electronic gizmo....but never had an online biz yet.

[necronx99]

So how do you go about setting up your own merchant account with your bank ??

Is it possible with an e-commerce business ?? ...I know it is possible, but is it practical and possible for small business of reasonable size.

I used to have merchant accounts in previous businesses....first one was the old slider machine...then the electronic gizmo....but never had an online biz yet.

Similar process.

Apply at your bank and jump through whatever hoops they put up.

Then you need to find a payment service provider who can integrate with your bank. Your bank may or may not offer an API for direct integration. Integrate your website to the API and you are away.

Then you need to figure out how to run your business with a stack of capital wrapped up in your rolling reserve.

Then you need to figure out how to control card fraud online.

Then, if your big enough you hire me to stop your business from going broke due to the card scammers.

For a Small enterprise you really need to use a third party provider and put up with the restrictions they apply.

Sent from my iPad using ThaiVisa app

[samsiam]

For a Small enterprise you really need to use a third party provider and put up with the restrictions they apply.

Which ones but ??

[necronx99]

For a Small enterprise you really need to use a third party provider and put up with the restrictions they apply.

Which ones but ??

Depends on what you are selling and who you are selling it to.

Lots of market specialists by both model and geography.

Sent from my iPad using ThaiVisa app

[samsiam]

How do you find these elusive creatures ??

[necronx99]

How do you find these elusive creatures ??

Look on ecommerce forums. Go to trade shows. Google. Look at who your biggest competitors use.

Sent from my iPad using ThaiVisa app

[mommysboy]

I have Paypal accounts for years in both mine and my wife's name and did once get a similar warning on one account, and indeed I was selling a 'people's brand name'.

Sorry to hear about what happened, and I'm sure you will get your money back. Last time I checked it was fairly easy to open a pPaypal account.

As to the problem, I suppose you have to ask, is it a fake? if not, then this is outrageous. If it is, then sorry but you know you had a good run it seems.

[samsiam]

I had this short list of processing companies to look further into.....others not listed seemed to have issues etc.

global.alipay

asiapay.

chinapaymentservices

verisign.

paypoint.

gtbill.com

worldpay.

secpay

and paypal.

[phl]

I had this short list of processing companies to look further into.....others not listed seemed to have issues etc.

global.alipay

asiapay.

chinapaymentservices

verisign.

paypoint.

gtbill.com

worldpay.

secpay

and paypal.

again there are hundreds of different online processing company's BUT you are limited to which country you can withdraw the money, ie

some only for US banks, some only for AU banks, some for Europe etc.

Which also creates another problem, if you sell from Thailand but money goes into USA,1. how do you explain it to IRS , 2. you would be hit with tax there

One other option is to open business account in Thailand and get a credit card machine.

Build an online processor(secured) and charge cards manually.

The only problem with that is, OP would be open to fraud, BUT the rate bank charges is only something like 2%-3% per transaction so the money OP may loose could be covered by the difference in processing fees

[dave111223]

Which also creates another problem, if you sell from Thailand but money goes into USA,1. how do you explain it to IRS , 2. you would be hit with tax there

Note really a problem as it appears most processors just get you to fill out a "W-8Ben" form and this appears to take care of the IRS problem.

One other option is to open business account in Thailand and get a credit card machine.

Build an online processor(secured) and charge cards manually.

The only problem with that is, OP would be open to fraud, BUT the rate bank charges is only something like 2%-3% per transaction so the money OP may loose could be covered by the difference in processing fees

This would be an interesting option, but don't those machine require that you actually have the physically card to swipe? And I'm assuming that when you get this machine you probably have to sign an agreement with the bank that you will only use it for "physical card present" sales (plus signature required)...?

[bitterbatter]

I would be most critical of your rep. She knows what an important customer you are and needs to figure out who is in charge of calling a business a fraud then sheneeds to take that person and visit your company to look at your goods personally. Make sure that she knows that if she doesn't then you will take action and her job is on the line.

As far as a legal lawsuit, most international business law follows the US model and international cases are tried in Special US courts. But I would suggest fixing the problem will be much easier than a legal battle. I have some friends at Paypal and see if I can get you the person to contact directly. I will message you thedetails later tonight.