Grabbed from wordpressboy.com
[UPDATE: Paypal has apologized.]
Yesterday, TXTPower turned over to the Philippine National Red Cross a fourth check (P493,047.20) containing donations sent in by folks worldwide who answered TXTPower’s call for donations for victims of typhoon Ondoy in the Philippines.
We did this project with one simple cause in mind: Provide people across the world a way to safely and securely make a donation for typhoon victims in our country. And we are glad and heartened by the trust given by nearly 1,000 donors from 37 countries who pitched in a total of P1,678,437.63 in donations already in the hands of the Red Cross.
But unknown to many, Paypal intervened last week, froze the account we used for accepting donations, and ruined our fundraising campaign as well as that of another group, PhilippineAid.com. In fact, the following interventions are the key reasons why TXTPower formally stopped its campaign late last week despite the continuing pleas for relief aid.
Typhoon Paypal rains on TXTPower’s fundraising efforts for Ondoy victims
Paypal’s Account Review Department said in an email on Sept. 30 that:
As part of our security measures, we regularly screen activity in the PayPal system. We recently noticed an issue with your account: PayPal requires accounts within the charity / non-profit category to provide us with some additional information regarding their organization. Your account was identified as falling within this classification upon a recent review. If we do not receive a response, we may have to place limitations on the ability to access your account.
PayPal requires accounts within the charity / non-profit category to provide us with some additional information regarding their organization. Your account was identified as falling within this classification upon a recent review. If we do not receive a response, we may have to place limitations on the ability to access your account.
[I was not surprised. Mike Villar of PhilippineAid.com called me up the day before and told me that Paypal has frozen their account for the same reason. Mike immediately filed an appeal and even went to call Paypal's customer service to drive home our common compelling point, which is the urgent need for funds for typhoon victims. Paypal turned down their appeal. PhilippineAid.com thereafter redirected its ChipIn traffic to TXTPower's Paypal donation widget and link.]
In reply to their “request for information”, I submitted to Paypal an explanation and supporting documents (from the Securities and Exchange Commission and the Bureau of Internal Revenue) that prove: that I am president of TXTPower; that TXTPower is a non-profit duly-registered with the government; that the ongoing TXTPower drive is a very public and transparent exercise; and that the Philippine National Red Cross knows about this fundraising drive. I also included links to media articles which mentioned or featured our campaign.
We thought that was it.
Paypal acts like typhoon Pepeng
But Paypal denied the appeal. Moreover, instead of saying that the explanation and documents I submitted were insufficient, Paypal changed its tune and used an insurmountable and grossly unfair justification.
In an email (Oct. 1) , Paypal’s Compliance Department said:
Due to legal and regulatory constraints, PayPal Private Limited is no longer able to process payments for Charities, Political Party/Organization Donations, Non-Profit Organizations (NPOs), Religious Institutions, etc in those countries under its jurisdiction.
Upon receipt, I emailed another appeal. Paypal’s reply:
[...] sorry that at this time, as you are unable to complete the appeals process for your PayPal account(s), then access to the account(s) will remain limited. In accordance with our User Agreement, the funds in your PayPal account balance will be held for 180 days from the date the limitation was originally placed on your account. The balance is held to cover any disputes that may be filed against the account. And your balance can be handled in one of two ways:
1. Your remaining account balance can be used to provide refunds to your buyers (if applicable).
OR
2. Your remaining account balance will be held in your PayPal account for 180 days from the date your account was limited. After 180 days, you will be notified via email with information on how to receive your remaining funds.
Paypal was, by this time, acting like a typhoon worse than Pepeng. First, they asked for documents (we gave them all they need). Then, they said it was impossible for them to service Charities and Non-Profits. This time around, they insist that we have not passed the evaluation process — and asked that we refund donors or wait for six months before we get the money. Elsewhere in the Philippines and across the region, more and more people cry for relief aid and here we are being harassed by Paypal.
I emailed another appeal and asked if it was possible for us to just make a donation to the Red Cross’ official Paypal account which they set up two days before. I told them the can shut down my account permanently as long as we get the money immediately to the Red Cross.
The reply from Paypal? Another rejection. In an email (Oct. 2), Paypal said that:
Per PayPal policy, you could only choose to refund to the buyer of each payment.
By that time, I already gave up sending appeal to Paypal’s Compliance Department.
After some time spent on intense research to get contact information of Paypal’s top executives, I found the name and email of Paypal’s head for Global Communications and several assistants. I promptly emailed them, asking for their help regarding what happened to our account and wondered to them why this harassment was being done despite satisfying their “requests for information”.
I also sounded off TXTPower’s friends in the mobile and online activist communities abroad, discreetly telling them what happened and asking for their help to impress upon Paypal the huge public-relations disaster that is waiting to blow on their faces — the world would know how they are harassing Paypal users in Philippines amid the humanitarian crisis.
One-time exception
On Oct. 6 (imagine the time wasted by Paypal’s obnoxious behavior), Paypal emailed to explain that “your desire to take donations through PayPal for your worthy charitable cause is one case that causes issues for PayPal because PayPal Pte Ltd, the Singaporean company you contracted with for your PayPal account, is unable to process donation transactions”.
Paypal said that:
Our regulatory approval in Singapore only permits PayPal Pte Ltd. to process payments for goods and services. Under Singapore law, which governs your relationship with PayPal, PayPal Pte is restricted to [be] used for processing donations. This policy and approach applies to all customers in all countries which contract online with PayPal Pte Ltd. It is not specific to you, your organization, or your country.
As a consolation, Paypal said that “in light of the dire situation with the typhoon victims in the Philippines, our Legal and Compliance Department has reviewed your appeal and agreed to provide a one time exception to lift your account restriction if you are able to provide us with a written assurance that the collected funds you have accumulated in your PayPal account will go to the Philippine National Red Cross for the stated purpose”.
Within minutes from firing off an email giving them this assurance, and another email that contained a scanned copy of an authorization from Red Cross secretary-general Gwendolyn Pang, Paypal informed me in an email (Oct. 6) that they are unfreezing my account.
Mike of PhilippineAid.com, to whom I shared the name and email of Paypal’s Global Communications chief, also had their account restored and the donations they received quickly withdrawn from Paypal.
Paypal denies service to a relief agency
Yesterday (Oct. 9), Paypal rejected an application for a business account made by the Citizens Disaster Response Center, a Quezon City-based relief agency registered with the Securities and Exchange Commission, and licensed and accredited by DSWD to implement relief, rehabilitation, preparedness and mitigation programs.
Founded in 1984, CDRC is a founding member and chair of the Global Forum of NGOs for Disaster Reduction (GFNDR). It is the pioneer in “community-based disaster management” in the Philippines. It has served at least three million people through its programs since 1984. CDRC is SEC-registered as a non-profit, non-stock social development agency.
An important issue to the Philippines and the region
Take note that Paypal Pte in Singapore oversees company operations across the Asia Pacific. Paypal’s acts against TXTPower and PhilippineAid.com, and its conflicting and incredible statements are terrible and horrible news to charities, non-profits and individual initiatives who are now officially denied the use of Paypal.
This is unfair to us Filipinos and other living in our region, considering that Paypal in other regions actually highlight its use for donations and fundraising. Check out Paypal’s Non-Profit Resources in the US, for example.
Paypal should review this situation, considering the fact that the Asia Pacific is one big market, an area prone to disasters, a region with many charities and non-profits as well. They would lose business and, more importantly, they would lose the chance to make their payment system work for noble causes.
This Paypal policy is itself another disaster for our region that has recently been battered, shaken and drenched by typhoons and earthquakes. If Paypal is truly interested, the company should perhaps consider setting up a sub-office outside of Singapore to be able to provide donation and fundraising options for Asia Pacific. It could also ask the Singaporean government to expand its license in the name of the region’s charities and non-profits we hope Paypal also wishes to serve.
Better yet, this is an opening where Paypal competitors should come in. Xoom.com, Amazon Payments, Google Checkout, Ikobo and other alternatives.
What we can do now is to discuss this issue in the blogosphere and the online community, as well as with charities and non-profits affected by this unfair and inhumane policy.
Tags: donations, fundraising, ketsana, ondoy, parma, paypal, pepeng, philippines, red cross, txtpower
I think this is the right time for Google to offer Google Checkout in the Philippines. We’ve waited long enough for Paypal to be available again here, and now this? Tsk tsk tsk…
OMG I’m so disappointed with Paypal! We bloggers should really do something about this! Online “netrepeneurs” should also be aware of this as well
This is incredible. I can’t believe there are issues like that. This should really be a wake-up call for PayPal. Thanks for sharing.
We waited with bated breath until Paypal unfroze the account and when all the donations have been released for withdrawal here in the Philippines, it was only then that I spoke out with this blog post.
The latest check we sent to Paypal yesterday should have been with the PNRC as early as maybe Friday last week. Imagine how those donations could have helped in relief aid efforts.
I also consulted some bloggers in last night’s PBA awards night before making public our story.
For one, PayPal is based in Singapore, one of the states most paranoid and abhorrent to charities and religious organizations. Second, PayPal is a just a fiasco with the sole purpose of getting profit. So what do you expect? You should pioneer a Boycott Paypal campaign and instead channel your efforts to bank-to-bank means.
Red, that’s one idea that popped in our heads. But Paypal can actually remedy the situation by providing the same service they give non-profits and charities in North America, for instance. The community would have to weigh in, for now and tell Paypal what we each think and feel about the situation.
Meanwhile, bank-to-bank transfers are really very expensive and inconvenient, IMHO. Xoom.com is a good alternative though. They suspended the charging of fees for donations made for Ondoy victims.
this is not good news to those who want to solicit funds for legitimate causes. paypal should review its stand regarding this and should give public apology and some form of compensation for the time lost to those concerned. cheers to all those who fought for the rights!
this fkd up! i’m terribly disappointed! i sent my 1st remittance via PNB Remittance in Los Angeles. Although to this day, the Philippine National Red Cross has not sent me their confirmation.
We did very well with our very own fund raising campaign that in less than 24 hours, we would be able to remit our 1st of 3 remittances. The last two I sent using Paypal to Red Cross and then we stopped our fund raising campaign.
I’m just totally ugh! EEEEEEE! Grrrrr! Hmpt!
TXTPower may have made a mistake by choosing PayPal. I can only imagine an algorithm raising a red flag when donations start to trickle every minute, and in your case, pooled PHP1.6 million in a matter of days!That’s suspicious behavior for Paypal.
A quick search on Google reveals that TXTPower is not the first to face Paypal’s arbitrariness and whim. In 2005, during hurricane Katrina’s wake, a similar fund-raising set up to take donations for the Red Cross was suspended by Paypal. Click this link for details: http://bit.ly/ztmw0.
If TXTPower bought Paypal’s suggestion to let the funds sit there for 180 days, they could have earned interest and milk from donations that would have saved lives of dying victims of Typhoon Ketsana. Talk about coroprate social responsiblity. How awful is that?
You said it well that Paypal should revisit its security measures, especially that its Asian regional hub is based in Singapore, a country known for its draconian laws (and usually isolated from the dangers of natural disasters, hence, its rulers might be far detached for what it means to be in a life or death situation).
My feeling is that in the absence of a reasonable explanation and apology from Paypal, such process will be repeated over and over again. I appreciate their security measures and recognize their legal rights to suspend service to erring members, but it has a moral obligation to explain their process to aggrieved parties. Or maybe, Paypal is just a ticking bomb waiting to explode.
hi. you can also use moneybookers.com. it also works like paypal. you just have to have an account with gmail.
Xoom.com has been reliable for our high school alumni donations (US to Rp). They remit quickly, you just have to have someone you trust to send the funds to. I believe they did not charge fees for donations for Typhoon Ondoy.
You need PayPal because most everyone has an acoount with them.
You might register for official status as an online charity.
i sure do hope PayPal does something to rectify the situation.
Yeah, these paypal folks are annoying. We were quite surprised when Mike told us the PhilippineAid.com account what frozen. They had a unique opportunity for some GOODWILL marketing and blew it. Pffft.
Also the delay could be of greater use, since most donations happen in the immediate aftermath and they soon forget that people who lost livelihoods will still need donations 50-100days from now. You can easily wait out that 180 days.
This isn’t the first time a charity or charitable intentions were derailed. Part of the responsibility of having a charity.
Shame on you, Paypal.
Sounds perfectly legal to me. Paypal are just following their legal obligations.
Yup, happened to me too. I don’t even know what to do or how to either get the money in that account or just give it back to the donors. I don’t even know what to feel or what to tell my friends I’ve promised the help to.
I am glad that the fund is finally released so that all that donation can go to the people affected by Typhoon Ondoy. In situation like this where time was a critical factor, I couldn’t help but felt deep disgust with the action of Paypal. Though I can understand their concerns, I believe something could have been worked out on a case by case basis. In anyway, I am just glad that the money can finally reach the people affected. God bless!
shame on you paypal!
There are other alternatives.
Contact one of my friends in the business – Paymanila.com, he may be able to help.
The Philippines is still receiving bad rap because of the all the scammers/fraudulent activity originating from our country too.
Thanks for the info.
I agree with ODessa… Moneybookers.com, also ccnow.com
and the one I see internet marketers using a alot is 1shoppingcart.com
Sad to hear this news. Good thing an exception was made to get the funds out though it would really be nice if Paypal changes their stance on non-profit and charity orgs.
Contact Tedjie Herbosa of http://www.rushremit.com. He may be able to help you.
Grabe naman yan… Shame on you PayPal! Cut the red tape!
Just close all your paypal accounts and lead the boycott. Lets patronize local companies like Iremit and others. All these americans and stupid singaporean dogs think we kowtow to them and their discrimination. I believe that the billions of dollars ofws remit and the growing internet transaction of Filipinos should be kept out of the hands of greedy westerners and their asian lackeys. boycott na yan lahat at bumagsak sana sila, I personally will not do another Pay Pal transaction from this time on.
Much as it has caused chilling nerves to others, paypal has also been a BIg Buddy to many Filipino merchants, businesses, and entrepreneurs. If it fails to serve one area, it does successfully to another. Just fully understand the whole picture before getting the plunge. I kind of buy a bit online, and paypal makes it convenient.
Nevertheless, this is one profound exercise of genuine Filipino vigilance. Raising the issue at one point -for the sake of respect and humane issue, really makes sense. Go for it!
We just hope that Paypal could re visit their TOS and give exception in event like this
You handled this very ethically. Paypal must adhere to Singapore’s business regulations but given the urgency of raising funds for Ondoy’s victims, Paypal should have responded internally with dispatch.
It is during huge crisis like Ondoy that a lot of scammers out there are trying to fool people into donating money.
Paypal’s system always favors the one who gives the money, not the one who receives it.
As a donor, I want Paypal to safeguard money that I send and investigate entities such as TxtPower to make sure they are not scammers.
David, you missed the point.
The issue here is not TXTPower or any charity. It is Paypal.
What is bad in this case is that Paypal said that even if we or anyone else can prove that received donations are for actual causes, they would have none of it. According to them, all charities and nonprofits in Asia Pacific are not allowed to use Paypal for fundraising, period.
If you want to lawyer for Paypal, go ahead because we won’t stop you. But don’t ever imply that TXTPower is a scam.
Hate to point this out to you but you guys, simply, DID NOT do your homework. The upside: cutting corners got your fundraisers up and running right away. The downside: it gets taken down just as quickly. Think about it, maybe that’s why PNRC didn’t have a paypal account from the get-go — they had to navigate legal and compliance regulations, which you conveniently bypassed.
So is Southeast Asia shit-out-of-luck from foreign donations? Of course not. If you had gone beyond your mobile/online circle of friends and used your journalistic skill and called up a legitimate charity you would have found out that there are already existing ways to channel donations from abroad. Ayala Foundation USA, for example, is only one of several US-based Philippine charities who are already 501(c)(3) compliant. They accept donations not only for themselves but also for other Philippine charities, which, lo and behold, includes the PNRC.
So seriously, take a deep breath, count to 10 and muster all your OBJECTIVE journalistic sense and figure out exactly what YOU should have done RIGHT at your end before laying all the blame at Paypal’s doorstep.
Keyser, as per request of Paypal, we submitted to them all the possible documentary requirements available. Unfortunately, Paypal changed its tone after we made our submission and changed gears, invoking Singaporean law to claim that they can only accept payments for good and services from their users in the Asia Pacific jurisdiction.
Take a second look at the examples you cited: Ayala Foundation USA and the PNRC itself.
Paypal Southeast Asia policies obviously do not apply to Ayala Foundation USA because the foundation is domiciled in the US. They also appear to have arrangements with US financial institutions. Had you Googled about it, you would have found out that Ayala Foundation Inc. in the Philippines does not use Paypal to gather donations. They make use of their own myAyala.com payment gateway.
As to the PNRC’s own Paypal account, again, had you studied it and used Google, you would have found out that they subcontracted the setting up and handling of their Paypal to a foreign, non-Philippine company. The PNRC’s Paypal came to be several days after typhoon Ketsana hit the Philippines.
While we understand that it is always easier and convenient to believe and echo the reasons of big companies such as Paypal, we also hope that we also take pains looking at what actually happened. And what happened is that Paypal disrupted and ruined this fundraising operation, and has in fact banned legitimate relief organizations in the Philippines from using Paypal to solicit donations.
Hi. I’m a Pinay in the States that works with many non-profits. This sounds like a nightmare situation. There are other organizations out there that specifically collect for charitable giving — check out http://www.universalgiving.com. They’re a company based in San Francisco that knows what they’re doing. – Arabella
Take this from their viewpoint.
Here’s an organization who’s just setup a paypal account, and started accepting payments from users all over the world and able to rack up a big sum within a few days. The organization is based in the Philippines, the home of one of the internationally known terrorist groups (Abu Sayyaf) that have links to Al Kaeda. Then after a few days of raising the funds, the account wants to withdraw all the money raised. I think it’s very clear that this is a big red flag for their fraud department.
Let’s take it that it’s been claimed that its a fund raiser for the calamity victims of the typhoon Ondoy, I’d say the more reason for PayPal to be more careful. Why? Because it’s a good time for money launderers and terrorist financers to setup so called “fund raisers” to rail in money without much question.
So by doing this, believe me that they are doing a lot more in making sure that the world we live in is a safer place. Think about what happens if this is done by another organization disguising themselves as a charitable group doing a “fund raiser”.
Besides, the raised funds was still released, and only a few days late. Your organization is not alone in experiencing this. But things have to go through a certain processes, to ensure legitimacy of the sources and destination of funds. To the entity (PayPal), it’s still just money that needs to be screened and checked, typhoon or no typhoon. If the origin and destination are legitimate, it will get released.
Jaydee: Read up some more. TXTPower provided all the required documents to Paypal, which then changed its tone and “policy”, effectively stating that legit fund-raising activities cannot use Paypal South East Asia.
The funds were released not because of “delays” but only *after* Paypal gave a one-time exception. The fact remains that Paypal only permits payments for goods and services, NOT for donations.
We wish all the killer raging floods upon Paypal – I think these “pal” – henceforth, they are now Pay-enemies – and enemies are to be tied to the gates of all existing dams
@Ian
Still, my point stands.
republished this on my blog. got same experience with them for a long time. now your my hero. go for it!
Im not surprised by Paypal actions. They have a habit of freezing accounts unmindful of how badly you need that money. Paypal is not good to use in Fund raising camapaigns for charity.
Hi there, can I share this post in my blog? I would redirect my blog’s readers to this article as a sort of making them aware of PayPal’s company policy in reference to making financial donations by using their service. You may leave me a message in my shoutbox found on my blog. Thanks!
That’s what happened to me twice already. Before you can have a full access on your PAYPAL-SUCKS account, you need to establish the legitimacy or the organization. They will prompt you to send legal documents for them to verify. Now here comes the donation, they wanted all the papers again to delay it? What a business tactics, again giving you 180 days that account to be frozen? What are they gonna do with the money? Makipagsapalaran sa stock market to gain from that donations? CRAP! Then apparently from TYPHOON ONDOY, here comes TYPHOON PAYPAL… its not about the legality of the organization who initiate donations, its their gay policy after complying, another shitty procedures you need to do and they will leave you to the point of no return.
Grabe naman sila. I thought all the while that Paypal supported the use of its services by non-profit and charity organizations. It was good that there was a temporary resolution, but I agree that there should be further discussion on this so that issues like this don’t happen again.
this is one of those instances where technology becomes more of a hassle than a means to make things easier. i am pretty sure that this will be resolved soon. considering how big paypal is, i assume a lot of heads are figuring how to improve the process. i hope it becomes better in the future. my two cents; they are simply looking from a security perspective, like all other financial institutions.
This is very unfair on the part of Paypal. I think we Filipinos have projected a “scam” reputation to Paypal.
Its not really our fault. Read the post again.
Hindi kasi nagbasa muna eh ^
Kaya pala, di ka na gumamit ng Paypal kuya