Something Awful Happens to Something Awful

By David Johnston
Contributing Writer, RealTechNews

Chances are that most people who use the internet to buy and sell services have at some point either used or thought about using PayPal as a method of payment. I myself have a PayPal account which I’ve used to pay for eBay auctions and server rentals, however the service has disappointed me personally so I’ve cut back on my usage of it. Unfortunately, the website Something Awful found out the hard way that PayPal can be a downright scam sometimes.

The basic gist of what happened is that Something Awful’s owner decided to help the victims of Hurricane Katrina by taking donations from his website. These donations all went to a PayPal account that he had set up and planned on using to donate the money directly to the Red Cross. The reason he took donations into his intermediary account, he says, is that “[he] could collect the names and addresses of each donor and send them some free Something Awful merchandise for their contributions.” Since Something Awful is a very popular website, the donations started pouring in and topped $30,000 in the first 9 hours. After that, PayPal caught on to the huge amounts of money flooding into the donation account and decided to freeze it. This locked the owner from using the account to either send the money to the Red Cross or accept any more donations. His plan was literally dead in the water.

The owner of Something Awful recognized that $30,000 flowing into an account in such a short time probably looks suspicious so this alone was not entirely uncalled for in his opinion (though PayPal didn’t warn him before freezing the account). The part where this story turns from unfortunate to ridiculous comes next when he tries to unfreeze the account and get the money to the Red Cross and the people suffering in the wake of Katrina. “I attempted to unfreeze my Paypal account by following their “six easy steps,” which included me faxing in photos of my driver’s license, recent bank statements, recent credit card statements, and a letter explaining I’m not a thief. I consider myself fortunate they did not ask for DNA samples, because the last time my wife caught me masturbating near the computer she almost divorced me. Unfortunately, the next step required made it literally impossible for me to unfreeze the $27,695.41 of donations so they could actually go to where people need them. Paypal was asking me to provide tracking numbers for DONATIONS. What am I supposed to send out? When did I ever say I was sending anything? How am I supposed to send it on Sunday? Where am I supposed to send it to? How exactly does Paypal’s “donation” system, which is the option I chose for SA’s Red Cross Relief Fund, work?”

The story doesn’t end there. Obviously the owner of Something Awful couldn’t send any proof of mailing any merchandise to the people who donated because there was nothing to send. He tried in vain to get in touch with an actual person at PayPal, but ended up having to find the number for their help line on the website PayPal Sucks since he couldn’t find it on PayPal’s official website. Unfortunately, it was a Sunday and after business hours so he had to fax this information to them. In the end, he did actually get a call back from the PayPal help center: “I was mad. The donators were mad. Some Internet news sites picked up the fact that Paypal was generally screwing over not only contributors, but the people in New Orleans who needed the relief funds. All the negative publicity caused Paypal to cave in and physically force one of their employees to actually pick up a phone and contact me.”

The person from PayPal explained about the suspected criminal behavior, but was generally unhelpful beyond the reason for the account being frozen in the first place. “I told the customer service representative that if they’re so paranoid about me being a criminal, they could directly take the money from my Paypal account, completely lock me out of it, and donate it themselves to the Red Cross. Unfortunately, this too was impossible! You see, Paypal has no direct affiliation with the Red Cross, which somehow means they can’t send money to them. Don’t ask me how that works; last time I checked, the Red Cross accepted money from anybody anywhere.” PayPal said they could only donate the money to the United Way which was unacceptable to the owner of Something Awful because of the large numbers of complaints about the United Way’s administrative costs and other blunders in the charity’s history.

Finally, he gave up on the charity idea and had PayPal refund everyone’s money. Luckily, they did agree to do this…for everyone who donated in US dollars. Apparently, everyone who donated money with something other than US currency could not have it refunded because of “conversion fees”. That sounds awfully fishy to me since I doubt that the conversion fees anywhere are 100% of the money you want to convert. Instead, all foreign money has now become property of PayPal, Inc.

There is an upside to this story, however. Another donation drive is planned after all of the refunds have been received, only this time the money won’t go through PayPal.

Read the entire story at Something Awful.