In an effort to make its fraud protection program more effective, online-funds management giant PayPal promises frustrated customers a massive overhaul of its policies.
For years, PayPal's fraud filters, which strive to prove cash flow is legitimate, have ticked off users. Even repeat users and businesses have had a hard time proving they weren't trying to game the system. The complex security protocols routinely called out legitimate businesses and charities.
PayPal often freezes accounts for 21 days if a fraud risk is detected. The site's user terms and conditions allow accounts to be frozen for as long as 180 days.
The Ebay-owned company says it's finally in a position to deal with the issue head on, promising a complete redesign of its anti-scam systems in the upcoming months.
"These are not minor — these are aggressive changes," Anuj Nayar, a PayPal communications director, told CNN Money
. "This is a fundamental shift in our business operations."
Users still have to send in paper records on sales and transactions to PayPal representatives to prove they're legal, which can be difficult, because many users and businesses often don't save months of sales records.
“At a minimum, the fact that someone needs to mail in something to an online payments company is a problem," Nayar said.
CNN called PayPal's current process "Kafkaesque," because of its guilty-until-proven-innocent policies.
"We want to be clear about how people can get out of the [frozen funds] situation," Nayar said. "We need to get better about helping people, or explaining why actions are being taken. 2013 is going to be the year that we fix a lot of those pain points.”
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