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[personal|cancer] Yesterday’s PayPal kerfuffle

Last night, I felt like a business school case study. Or possibly a character in the kind of folk song sung around digital campfires. In short, PayPal did something unfortunate to cripple part of the Acts of Whimsy fundraiser for my genetic testing and general health expenses. I mentioned this on Twitter. A classic social media backlash ensued, which eventually flowed up to the president of PayPal. All ended well about two hours later, with PayPal restoring my account, apologizing publicly, and making a donation to the fundraiser as a gesture of goodwill. See news story for the official details, including comments from PayPal Senior Communications Director Anuj Nayar.

PayPal made a mistake, and then they made it right. Credit where credit is due. My profound thanks to Mary Robinette Kowal, Tee Tate, and the legion of Twitter and Facebook denizens who spoke up, placing the public pressure on PayPal that caused them to escalate the problem to swift resolution. Likewise my thanks to both the company and to Anuj Nayar, as well as the PayPal social media manager who contacted me directly.

In long…

There have been two fundraisers in the wind for a while. One is the Acts of Whimsy fundraiser for my genetic testing and general health expenses, which was intended to fund the approximately $15,000 to $18,000 I’ll need for whole genome sequencing of my intractable Stage IV metastatic colon cancer. The other is the Lakeside Kickstarter for continued funding of the documentary about me, [info]the_child, and our experiences with parenting and cancer. Though related in obvious and important ways, these two fundraisers were being planned on separate tracks. Catherine Shaffer and Mary Robinette Kowal were working on the Acts of Whimsy, which is timed to my forthcoming liver resection on January 22nd. (My third liver resection, and fifth major surgery for cancer.) Waterloo Productions and Donnie Reynolds were working on the Lakeside Kickstarter, as production costs had ballooned due to the increasing complications and direness of my cancer course. I was directly involved in neither of these efforts, though good friends were working very hard in my name and consulting with me along the way.

The Lakeside Kickstarter dropped just ahead of the planned start date of the Acts of Whimsy fundraiser. At the same time, Fred Kiesche launched an impromptu medical expenses fundraiser for me. The timing of this was not deliberate, but both Donnie and Fred quickly got sorted out with Mary Robinette and Catherine, and in the end it worked out quite well. The Kickstarter hit 100% funding in thirty-three hours. A day after the Kickstarter launched, Acts of Whimsy launched and hit 100% funding in less than five hours.

I was, to put it mildly, amazed.

The two fundraisers worked in synergy. My own long-standing and fairly wide social media footprint was obviously a big part of this, but also the well-designed nature of both appeals, which didn’t really cross over each other except in the grossly obvious linkage of me and cancer. I suspect there’s more than one business school paper to be had in analyzing the design of both campaigns, the social media footprint of the various people involved, and how all these factors complemented one another. Basically, some really clever people worked together to benefit both me and the fight against cancer in general. Then a whole bunch of really generous people gave to both campaigns.

Again, color me amazed. We raised almost $50,000 in my name in the course of two days. The engagement of the writing community has been astonishing yet ultimately unsurprising given the kind of people we are. On the morning of Friday the 11th of January, I posted a response on my blog here: [ jlake.com | LiveJournal ].

Then Friday afternoon, PayPal froze my account with them.

I have held my PayPal account as a Premier member with related verified bank accounts for many years. I’ve never used it for business purposes, other than accepting the odd publication payment — I vastly prefer paper checks where possible for accounting purposes. My blog tip jar is linked to my PayPal account, and people occasionally send me donations. I also use it to make donations to various people and causes myself, as well as casual transfers of funds between friends, and the odd online purchase where for some reason I don’t want to or cannot use my debit card. In other words, a pretty typical low profile user. I don’t think my account has ever had more than a few hundred dollars in it at any one time in my entire history as a PayPal user.

Then in the course of two days, over $35,000 hit my account in the form of over 1,000 donations ranging in size from one dollar to many hundreds of dollars. This triggered an automated fraud detection process at PayPal which proactively froze my account.

So far, so good. In my Day Jobbe, I work from time to time with credit card fraud prevention processes. I understand the importance of such monitoring, and the reasons it gets done. Hooray for PayPal for being smart about it. The account being frozen wasn’t really a problem — it was the equivalent of my credit card company calling me to find out if I’d really just purchased $5,000 worth of electronics on a card only ever used to buy gas and groceries in my neighborhood.

The problem was the verification process to unfreeze the account.

Remember, this was about 4:00 pm Pacific time on a Friday afternoon. Not a lot of time left in the working day to reach anyone. I tried the online self-resolution center, but the account freeze was from PayPal’s merchant division, and they required a great deal of paperwork that doesn’t exist in order to process the request to unfreeze my account. For example, my sales transaction and product shipping records.

Since I wasn’t selling anything, nor shipping anything, these records don’t exist. The design of the self-resolution center doesn’t contemplate the possibility that they have erroneously flagged a non-merchant account. There’s no “Other” or “Does Not Apply to This Case” option. Speaking as someone who has worked functionally as a business and software process consultant for most of the last two decades, this is lousy process flow design. It trapped me into an unresolvable problem. How do I prove I’m not selling something? I can’t send in non-existent transaction records after all.

The PayPal fraud system is locked in to a “guilty until proven innocent” model, with the entire onus of proof and appeal on the part of the user.

So I called their customer service number. There was actually an email in my inbox with a number for PayPal merchant services, but I hadn’t seen it, as I’d discovered the account freeze pretty much the moment it happened by being logged into PayPal’s Web site attempting to transfer funds to my bank account. The gentleman I spoke to at their customer service number was sympathetic, but had no authority to unfreeze me. He tried to transfer me to merchant services, but was unsuccessful. I was informed it would take at least 24 to 72 hours to resolve this issue.

I then discovered the merchant services email, so tried that number, but hit voicemail. By then it was about 4:00 pm Pacific, which meant pretty much nothing was going to happen, including the processing ‘clock’ getting going, until Monday.

So the problem wasn’t that they froze my account — that’s responsible fraud prevention. The problem was that the unfreezing process is onerous to the point of abusive to people in my position. Contrast this with a credit card company’s fraud call, which can be resolved in a minute or two with some identity verification and a quick explanation.

Right about 4:00 pm Friday, I made the following tweet:

@PayPal has limited the account associated with my cancer fundraiser. I have no access to the funds. Appealing takes days. Thanks, guys.

That tweet went viral within the online SF community. Within half an hour, there were scores, possibly hundreds of responses on both Twitter and Facebook. The original Tweet alone got seventy-five retweets. Signal boost of all sorts. A lot of people were very angry on my behalf. Mary Robinette Kowal began working her way up the PayPal management chain by telephone, while Tee Tate actually ran down PayPal’s president, I believe over Twitter. Other friends with executive contacts at PayPal also reached out and suggested a swift resolution might be in everybody’s best interests.

At 5:38 pm Pacific, an exquisitely polite gentleman from PayPal’s social media group called me to express the company’s support and concern, and comment on the dedication of my friends and fans. I handle CorpSpeak pretty well — this was a very nice way of saying, “We’re sorry, we’re fixing it, and would you mind calling off the Twitter shitstorm please?” Well, sure. They were doing the right thing, I’ll do the right thing.

So at 5:50 pm Pacific, I tweeted:

@AskPayPal just called me. Very courteous conversation. They are working to resolve the issue this evening. Let’s see what happens.

At 5:57, the social media operative called back to tell me my account had been unfrozen. At 6:02, I tweeted:

@AskPayPal just called. Account has been unfrozen. Sadly, cell phone dumped the call before we were done talking. Thank you, everyone!

In the course of two hours, thanks to social media, this problem went from “too bad for Jay” all the way up to the personal attention of PayPal’s senior executives, and a resolution. PayPal also made a generous corporate donation to the Acta of Whimsy fundraiser for me by way of apology. Likewise, PayPal Senior Communications Director Anuj Nayar made a generous personal donation. In the interview with TechCrunch, they said:

“We’re going to do a lot more communicating before making some pretty aggressive changes to our system to make sure that this stuff doesn’t happen,” he said. “At the same time, when we find out we’ve made mistakes, we’re committing to get it fixed and apologize.”

It’s an interesting situation. PayPal is well-known for troublesome fraud management, famously with Regretsy and Diaspora. Less famously, a good friend of mine who ran a similar fundraiser last year got caught in a similar trap. It took them weeks of paperwork to get the funds even partially unfrozen, and to this day they’ve never been able to get all the funds out of PayPal. In fact, they have abandoned their PayPal account with the funds still embedded.

The “guilty until proven innocent” approach, combined with Byzantine proof requirements, is apparently a long-term behavior of PayPal’s. I have to say that the company lived up to Anuj Nayar’s words in dealing with me. Again, credit where credit is due, both to all the people who spoke up and acted on my behalf, and to the company for responding.

Yet I cannot help wondering how this would have gone without my own social media footprint and widespread network of friends and fans. Would I be looking at weeks of paperwork and a continually frozen account, as my friend has experienced? Fame, even as modest as my own ration, is itself a significant form of privilege. That privilege was exercised in spades late yesterday afternoon. The same question applies to the fundraisers themselves. Would the Acts of Whimsy fundraiser be closing in on 200% of goal if I were just some guy down the street with cancer?

Second-guessing myself will simply give me a bad case of the crazies. I choose instead to honor the generosity of everyone who was contributed time, effort and money to this fundraiser as well as the Lakeside Kickstarter for the documentary about me, [info]the_child, and cancer. Including, quite specifically, PayPal and Anuj Nayar for making things right. Thank you all.

I just hope this experience makes things better for the next fundraiser who works through PayPal. Then the lessons learned will count.

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