Paypal requiring me to set up direct debit!

don9999

Paypal are currently pestering me to set up a direct debit with them.

They say that because I have received more than £4,500 through my Paypal account, then to comply with European Anti-Money Laundering regulations they need me to perform certain actions:

• Provide Business Information
• Validate my account information
• Set up a direct debit

I fulfilled the first two, but am resisting the third. I don't believe there is any requirement (under Ant-Money Laundering regulations or otherwise to set up a direct debit). I can see no way how this improved MY security.

However, I suspect that if I DO set up a direct debit, then Paypal would be able to removed funds from my bank account at will. There are numerous examples (on this web-site and others) where sellers have received paypent through Paypal, the credit card used is later found to be fraudulent, and Paypal then receover the funds direct from the Seller.

I've contacted Paypal, and they say that they would never remove funds from a seller's bank account without their authorisation. But surely setting up a direct debit GIVES them this authorisation! Hence why I am resisting!

Any other comments?

Cheers,
Don

don9999

I have received a further response to my queries from Ebay:

"Firstly, the Direct Debit must be set up on this account as you have reached the level of receiving more then £4500.00 into this account since the account was set up on March 17th 2003.

All customers must comply with the steps to continue using the account, due to the European Union Anti-Money Laundering Regulations.

Secondly, if you do not comply with our Seller Protection Policy when you have received fraudulent funds the funds will be debited from your account. Please review our Policy below for further understanding.

...

To be eligible for the Seller Protection Policy, the following policy guidelines must be followed:

Have a Verified Premier or Business account

Post to the address on the Transaction Details page
This address is displayed on the Transaction Details page along with whether or not it is eligible for the Seller Protection Policy
etc..."


MY CONCERNS:-

I STILL don't understand why a direct debit madate is required by European Anti-Money Laundering Regulations!

I think the second point of the Seller Protection Policy is critical. Not only do you have to post to the address on the Transaction Details page, but Seller Protection only applies IF the page states that the transaction is eligible.

PERSONALLY, I suspect that it will only be eligible if the buyer has set up a direct debit mandate with Paypal - that way, if they were to pay with a fraudulent credit card, Paypal have a mandate to recover the funds from some bank account. Of course, if someone is going to use a fraudulent credit card, then they would NOT have set up a Direct Debit mandate themselves, and hence, I suspect, the trasnaction will NOT be eligible for payment protection.

I do NOT think the eligibility of a transaction has anything to do with whether I (as the seller) have set up a direct debit mandate.

Do you agree?

I continue to ask Paypal for further confirmation.

Cheers,
Don

VH

I think the Direct Debit is part of Paypal's conditions to have your account verified. I don't think it has anything to do with Money Laundering.

Like you say a DD is handy for them because they can take funds from you whenever they feel like.

Can you not set up the DD and then cancel it, or would you have to go through the same process over again?

Another solution might be to set up another account with no overdraft on it. You should be able to easily transfer funds in and out of this from your main account.

robowen

I went through this process a while back after paypal contacted me after I reached a limit on my account.

This limit wasnt as much as yours I remember.

anyway....the debit was set up and the account was working ok.

I was logged into online banking, just clearing up finished dd's etc, and I deleted the paypal dd, because I didnt want them to take money without me knowing.
I received an e-mail from paypal, telling me the bank had sent back the dd mandate.

I ignored the e-mail and nothing changed on my account.
I am still a verified member eligible for seller protection. ;D

Willing to bet they could still withdraw funds somehow :-/

robnye

Willing to bet they could still withdraw funds somehow   :-/

i would like to say no, but as someone has mentioned on another thread that this has happened.

someone also said about contacting the bank in writing stating that paypal where not allowed to take any money.