Website owners blast Paypal
THE owners of a new internet auction site have lambasted payment giant Paypal, blaming it for crippling the business in its first few critical weeks.
The directors of BidsnBobs.com, which holds timed auctions for products where users buy bids from the site and then use them to compete for products such as new ipods, say they have since moved to a new payment provider and the site is now running smoothly.
But within the first two weeks of launching the company found its pre-approved Paypal account had been frozen without warning, and it was unable to access any of the funds the company held in the Paypal account.
The day after the site launched in June, Paypal contacted the company to say BidsnBobs had to change delivery terms in the terms and conditions, which it did.
Then Paypal said it needed personal and passport details of a director, followed by another issue with delivery terms, then the privacy policy, all of which BidsnBobs responded to, according to directors Tom Beckett, Jon Bowler and Dave Bateson.
Despite this, yet another email followed from Paypal, this time to say it had terminated the company’s account because it was in breach of the terms and conditions which stipulate that sites offering gambling and games of skill cannot use Paypal.
Mr Beckett said: “We sent a complaint, pointing out that you can use Paypal on 888.com and William Hill, Ebay and all our competitor sites, but then they changed the reason, saying it was to do with our inability to supply information, but we did all that.”
At a loss to understand why Paypal rejected the site, and with no reasonable explanation, the directors are taking legal advise.
They say it is now a question of damage limitation for the young company and warn that the episode meant losing the trust of its subscribers, and could have meant having to close the site altogether.
“This whole thing has put us about a month behind and we are effectively having to relaunch,” said Mr Beckett.
“We have suffered incalculable losses – the money we spent on PR to launch the site, and we had to take the site off line until we had set up with a reputable merchant. All that momentum we built up, and now we are having to start again.”
Although the company’s new payment provider – Allied Wallet – is industry regulated, it is not well-known by consumers – another hurdle for them to overcome.
“It’s a trust issue – someone sees a new website and then it goes down, we are going to have to get brand new users and rebuild that trust.”
When contacted by TheBusinessDesk about this specific case a spokesperson for Paypal said: “Under the terms of its Acceptable Use Policy PayPal reserves the right to restrict and close accounts where deemed appropriate.
“PayPal takes all customer issues seriously and has communicated its decision in this case directly to Mr Bateson. We’re sorry that we’re unable to comment further.”
