PayPal freezes "charity" account, rage ensues

A popular blog, Regretsy, got themselves into a dispute with PayPal recently after the online payment company froze their account. The site was organizing a gift exchange to provide toys for children in need.

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PayPal didn't seem to feel that Regretsy was using the "donate" button appropriately and because of that, they froze the blog's account. Regretsy says they raised so much money through the gift drive that they were able not only to send toys but also money to needy families.

The actual dispute over the appropriate use of PayPal's "donate" button isn't really the most interesting part of this spat. Regretsy fought back against PayPal the best way they knew how, with a blog post. The first post was entitled "F**k You, PayPal." The follow up post by Helen Killer included transcripts of the conversation she had over the account freezing with a PayPal representative.

A snippet from that conversation is below:

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"PAYPAL: Only a nonprofit can use the Donate button.
ME: That’s false. It says right in the PDF of instructions for the Donate button that it can be used for “worthy causes.”
PAYPAL: I haven’t seen that PDF. And what you’re doing is not a worthy cause, it’s charity.
ME: What’s the difference?
PAYPAL: You can use the donate button to raise money for a sick cat, but not poor people."

Emphasis added by us. That follow up post resulted in over 1,200 posts bashing the online payment service. PayPal also got hundreds of posts on its Facebook page about the incident.

Paypal issued an apology on Tuesday morning via the corporate blog. They followed up with a post on the Facebook page saying, “We have released funds back to Regretsy and will be making a donation. We are very sorry this occurred."

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While it’s good that PayPal fixed the problem in short order, people haven’t forgotten the incident after the apology. Many have closed their PayPal accounts and continued to post comments. One user on Facebook posted, “Too little, too late. My account is deleted, and I’ll be using ANYTHING other than PayPal in the future. Good riddance to bad garbage.”

Did any of you close out your PayPal accounts after this incident? What do you think about the ridiculous interaction between Killer and the representative? Sound off in the comments.

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