Buzzfeed: Outrageous Paypal Scam Exposed
Paypal thought they could sweep one more small business owner's money under the rug, but they just made things a lot worse.
After an online store owner upgraded to Paypal's Virtual Terminal Service for telephone orders, he was automatically placed into a “Rolling Reserve System” where 30% of the funds from all incoming transactions are permanently withheld from his bank account for 90 days.
Under Illinois state law where the owner resides, it is illegal for money brokers to withhold transactions from the owner for more than 3 days. To expose this injustice after being ignored by management who refused to remove him from the holds, he created a diagram explaining the fraud which swiftly made it to the front page of reddit.
You can check out the full article at the link below, which includes stories of other small business owners who also have become a victim of this fraudulent loophole. Read the full article.