As I am no longer affiliated with the association that organized the conference I will not use their name. What I write here is in my name and my name only, neither the aforementioned association nor my current employer. But everything is easily verifiable and largely documented.
I was one of the organizers of a major open source conference in Paris late 2009. It was a full blown 5 day conference with more then a 1000 attendees from all continents. The conference was held multiple times before and PayPal was often used. With no major incidents.
The conference was scheduled for the 1st of september, a month earlier on the 28th of July we received notice that the account has been frozen with 127,000€ on the balance. It would stay frozen for six months unless we immediately agreed to their conditions which entailed they keep half the money for 3 months at least. If we were to agree it would be irrevocable. If we did not agree… well…
Why? It was impossible to get any answers from them except “Risk” decided there was “Risk”. There was no way to get someone “in charge”. It was hard to get them communicate anything in writing. Everything was over the phone with people that do not have last names. Most of the emails I got were copy and pasted and did not answer anything. They asked me over and over for documents I have already provided. Some emails from them “got lost in the mail”, a phenomenon I have never witnessed before. The more “personal” mails were, to say frankly, insulting. But there was no way to tell anyone in charge that their public facing representatives insult their customers.
I have never in my life dealt with a company that was so obnoxious to people who were not only their clients but also their partners.
Personally, I was involved at the time in making an e-commerce solution that had more than 100,000 running sites and which had by default PayPal as a payment provider. Something horribly irrational was happening and there was simply nothing to do.
I lawyered up, and the lawyers told me I had no chance in hell to save the conference through legal means. It would simply take too much time, and their legal structure is so obfuscated that they hardly knew which entity to attack. And even if I got a court order, the time it would take to have it applied here in France would simply mean the conference will have been long over (or would never have happened).
I wrote to everyone I knew. Phoned everyone. And explained to anyone I could find at PayPal again and again, there was no risk. They had no argument except “conferences are risky business”. Mine wasn’t. The only risk was them.
It took me a week to be able to get people to start talking to me, using every industry connection I had. I never had some much trouble contacting anyone. Finally friends of friends, called some friends and I was talking to their general management and yet had often responses of the sort “our hands are bound”. We offered every rational solutions to prove there was no risk. I even proposed a very easy solution for them: reimburse every single participant and let us use another payment provider. Just let us part ways, even if it would have bothered my participants a lot to have to pay again. I offered them to have every single participant sign a legal waver saying they will not reclaim their payment. All of this to no avail.
The sad and amusing thing was that I talked with a lot of good people at PayPal that seemed kind and genuinely willing to help, only “The Machine” would not negotiate, would not reconsider, would not yield once “Risk” has spoken.
At the end, being the underdog, we accepted their conditions (once their general management was involved they did amend them to be a bit, slightly, less drastic. No one was talking about blocking all funds for six months anymore. They would on case by case be willing to liberate some funds once we showed them receipts).
Were able to pull off the conference by paying late some suppliers (with their agreement of course ). I was truly thankful to the great sponsors we had that allowed us to have enough cash to pull it off. Without which we would have been dead. I was even grateful at the end to the managers and employees at PayPal that really seemed to try to resolve this, I felt that some of them truly were uneasy and wished they could help.
I still do use their services from time to time but I would never have any venture of mine rely on them solely.
I think my main beef with them is that they could simply have not taken my business.
They could have big red letters on their web site saying: “Hey, we are extremly risk averse. We consider some activities to be riskier then others. We consider conferences to be a very risky business. But we will not tell you by which criteria. This means, we might without any further explanation keep all your money for a very long time. So please consider this before giving us money. Most importantly please know that we have in the past, multiple times, did do this. Here are some examples, with a link to this very site. “. If someone were to choose to use PayPal then… well it would really be their fault now right?
Submitted by Ori Pekelman