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PayPal Withholding Indie Game Dev's €600,000 Account 775

Posted by Soulskill
from the money-for-nothin' dept.
epee1221 writes "Markus Persson, a.k.a. Notch, the developer of Minecraft, posted on his development blog today that PayPal limited his account with unspecified cause on August 25th. Since then, payments for the alpha version of Minecraft have continued accumulating while Notch has been unable to withdraw them, and the account now contains over €600,000. PayPal recently told him it may take up to two more weeks for things to get sorted out and that if they conclude that there is funny business involved, they will keep the money." This unfortunate news followed an announcement a few days ago that he and a friend would be starting a studio of their own to continue development on Minecraft and start working on a new project.
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PayPal Withholding Indie Game Dev's €600,000 Account

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  • by mark99 (459508) on Friday September 10, 2010 @12:49PM (#33536176) Journal

    They blocked my account for reasons that were not clear to me, but had to do with being an American living in Germany using a German bank. There was a way to get it unblocked, but it was complicated and not worth my time. I only ever used it for eBay, so I just stopped using eBay.
    They are just stupid.

  • by Dan667 (564390) on Friday September 10, 2010 @12:49PM (#33536180)
    anyone doing any kind of business that generates real money should get setup with credit card processing or some type of real bank. On top of randomly screwing people, paypal also nickle and dime people to death. Never will use paypal again.
  • Re:Two Words (Score:4, Interesting)

    by gandhi_2 (1108023) on Friday September 10, 2010 @12:53PM (#33536230) Homepage

    To be fair, if you generally have problems with anything Google, you'll be lucky to ever make contact with a human to fix it.

  • Re:Sigh (Score:5, Interesting)

    by Dracos (107777) on Friday September 10, 2010 @12:55PM (#33536254)

    I worked for Western Union for over 6 years, they are subject to many, many banking regulations. Since PayPal is a money transfer service, it should fall under the same regulations.

    It's too bad WU management is deathly afraid of the Internet (well, technology in general), otherwise they could have prevented PayPal from ever existing.

  • by A Friendly Troll (1017492) on Friday September 10, 2010 @12:56PM (#33536274)

    I go to the game's homepage, and I see a video about rollercoasters, and not gameplay.

    I browse around the site, nothing. The only, ONLY description of the game is, I quote, "Minecraft is a game about placing blocks while running from skeletons. Or something like that..", followed by the rollercoaster video, and then "The game is a lot like that, but also has enemies and cave exploring and mining and farming and flowing water and dynamic lighting and a huge (huge) randomly generated world map."

    Yeah, thanks. I've never heard of Minecraft before, and I'd guess that few people have. So what is it - a rollercoaster game with zombies and farming?!

    Anyway...

    The pre-purchase page says "If you pre-purchase now during alpha, you pay just 9.95!"

    If we round it to 10 EUR, 600k is sixty thousand people paying for something that is basically entirely unknown and isn't even described on the website.

    And PayPal freezes the money? Gee, what a surprise.

  • by 0100010001010011 (652467) on Friday September 10, 2010 @12:56PM (#33536278)

    I'm on my 10th-ish PayPal account. I NEVER accept money through it. I send a GoogleCheckout invoice. Even for eBay.

    But on Car forums, certain websites, etc, it seems all they accept is PayPal. So I'll use it with a temporary credit card until they figure out I'm the same person as my other locked accounts and lock another one.

    It all started when I sold something on eBay. Turns out it was with a stolen credit card. So they reversed the payment leaving me with a -$600 balance. Which they said was my fault somehow. Then the second account I sold a laptop and has $400 sitting in it 'locked up' until I pay them the $600 in the first account.

    I'm not a violent man, but I could honestly go vigilante on some middle managers at PayPal with a crow bar.

  • by Kristopeit, M. D. (1892582) on Friday September 10, 2010 @12:59PM (#33536330)
    back in 1997 i ran a similar internet video game... edrugtrader.com... it's still running, but i no longer accept payments to play. paypal froze my account and seized all of the money from the then 100,000+ users. the game is based on drug dealing, and they claimed i was breaking the law because drug dealing is illegal... however there was no actual drug dealing... it's just a market simulation game.

    paypal is evil... don't do business with them.

  • Re:This is why (Score:3, Interesting)

    by TheCRAIGGERS (909877) on Friday September 10, 2010 @01:02PM (#33536358)

    Because the game is lots of fun to play with friends and because this 'alpha' is more stable than some games that are sold in stores?

  • Re:competition? (Score:3, Interesting)

    by Anonymous Coward on Friday September 10, 2010 @01:04PM (#33536400)

    FALSE FALSE FALSE! That would be collusion and illegal. They have been beaten down about this in the past, in other jurisdictions. Please see :

    http://arstechnica.com/old/content/2008/06/australia-calls-shenanigans-on-ebay-paypal-only-policy.ars

    http://www.webpronews.com/topnews/2010/02/26/ebay-paypal-tie-up-draws-complaints-in-germany

  • by bluefoxlucid (723572) on Friday September 10, 2010 @01:04PM (#33536402) Journal
    Why hasn't he called them directly, told them to elevate as high as it can go, preferably (to their own advantage) to someone with a lawyer standing next to him; told the guy to turn on his speaker phone; and handed his phone to HIS lawyer?
  • Re:Two Words (Score:3, Interesting)

    by future assassin (639396) on Friday September 10, 2010 @01:08PM (#33536484) Homepage
    IF you are in the UK and US but forget Canada. I tried signing a few months back and there nowhere did it say as a Canadian I couldn't use checkout until I filled out my info, including my cell number and after submission I got a nice notice of I can't use it because I'm in Canada. So these fucks just got my personal business info and then one they got it they tell me I can't use the service.
  • by Anonymous Coward on Friday September 10, 2010 @01:08PM (#33536486)

    Keep it that way. Their support is useless. Payment transactions often fail due to their badly designed "security" mechanisms. They lock accounts without givin reasons and steal money.

    After getting locked out of my account for the third time (once because an update broke the login, twice for unspecified reasons), I'm fed up with Paypal. Sure, while it worked it was great to buy indie games and music but it's just not worth the trouble Paypal puts you through. Lost 10€ in the locked account but they intentionally make it hard to reopen it.

    Don't use Paypal. They are either crooks or incompetent. Neither is a quality of somebody you should entrust with your money.

  • by lwsimon (724555) <lyndsy@lyndsysimon.com> on Friday September 10, 2010 @01:11PM (#33536542) Homepage Journal
    I don't think they exist - seriously.

    Ask *anyone* who sells frequently on eBay, and you'll hear a story about how they've been screwed by PayPal. It is a cost of doing business, like paying protection money to the mob. If you complain about it too loudly, they lock your account and take it all.
  • by Have Brain Will Rent (1031664) on Friday September 10, 2010 @01:15PM (#33536584)
    Yes. In Canada you can do an Interac email money transfer from most banks for about $1. If the receiver is with one of the major banks they can have the money in their account within minutes of receiving the email from the sender and if they are with one of the institutions not participating in the scheme then they can use a middleman-service and still get the money within IIRC 3 days. There is also HyperWallet which seems favoured by the credit unions and a few of the banks and they provide a similar service... in fact the fastest way to get money into your PayPal account from a Canadian bank is to use HyperWallet.

    I used to use Western Union wire transfers but they have become insanely expensive IMHO.
  • Re:This is why (Score:4, Interesting)

    by atfrase (879806) on Friday September 10, 2010 @01:16PM (#33536606)
    It's EUR10 each, so that's only 60k pre-orders. I wrote a WoW addon that's used by a couple thousand people, and Minecraft is arguably 30x cooler than my addon. The internet is a big place; 60k people is pretty reasonable.
  • by Cederic (9623) on Friday September 10, 2010 @01:20PM (#33536686) Journal

    That's because they don't exist. Even if the statistics back you up (and I'll bet every penny I've ever spent via Paypal they don't) we hear about the illegitimate business practices and not the few successes.

    Last time I tried to use Paypal they took money off my credit card, then refused to route it through to the recipient. As they were acting as a merchant acquirer in the transaction, and I don't have a Paypal account, by holding onto those funds they were effectively stealing money from me.

    So I threatened them with court action, asked my card company to reverse the transaction, and complained to the FSA and to Mastercard.

    I got my money back eventually, and now refuse to do business with anybody that only accepts payment via Paypal. It's inconvenient at times, but not as inconvenient as giving money to a corrupt business and still not receiving the services/goods I've paid for.

  • by oldspewey (1303305) on Friday September 10, 2010 @01:22PM (#33536724)

    Banks routinely monitor accounts for "suspicious activity" and suspend those accounts until they can confirm what's going on. I've had credit cards locked because a fraudster started charging a series of gas station transactions in a city several hundred kilometres from where I live. I got in touch with the bank, straightened the mess out (in this case by having a new card issued), and was on my way. I've has credit cards locked because I myself made a series of unexpected and large transactions overseas. I got in touch with the bank, straightened the mess out (by asking them to please unlock my card), and was on my way.

    This is all done via automated algorithms that scan for patterns of activity that don't match the norm - however it is they choose to define the norm.

    The difference here is that PayPal is holding on to actual cash (rather than suspending a credit card account), and that PayPal is notoriously opaque and difficult to deal with (while my banks were easy to reach and easy to talk to).

  • by MozeeToby (1163751) on Friday September 10, 2010 @01:29PM (#33536846)

    Why someone would trust PayPal, who isn't a bank, with well over half a million dollars is beyond me.

    I don't think they did, the summary makes it sound like they kept the balance low but have been locked out of their account for whatever reason and since they were locked out 600,000 Euros (actually more than 3/4 of a million dollars!) has come into the account. They've had no way to remove it, no way to prevent the money coming in short of shutting down their operation, and no way outside of PayPal's customer service to resolve the situation. Honestly, it's almost criminal (or maybe even is criminal, I don't know).

  • by spun (1352) <loverevolutionary&yahoo,com> on Friday September 10, 2010 @01:35PM (#33536926) Journal

    I was pretty clear that I was speculating. It just seems very odd for that much money to be coming from sales of an alpha release indie game.

  • by Big Smirk (692056) on Friday September 10, 2010 @01:52PM (#33537152)

    If you buy through Paypal and receive the product via a download, there is no guarantee that the product got into the hands of the legal owner of the credit card.

    So with stolen credit cards or Paypal accounts, some people must have been downloading the game (or however its registered). When the rightful owners found out, they had the charges reversed. Leaving Paypal to prove that the money wasn't indeed stolen.

    Paypal offers protection only if you send to 'verified address'. If you send the product to some random address, then you are taking a risk. Likewise with activation codes.

    If Bob.Smith@hotmail.com trys to buy something from you using a Paypal account assigned to Nancy.Smith@google.com, your an idiot if you send the activation code to Bob.Smith@hotmail.com. Activation code should only be sent to Nancy.Smith.

    Bottom line, if he has 600,000 in the account, you can bet Paypal was just hit up by a credit card company to return some of that money. Paypal is just trying to figure out exactly what has to be returned. If its a lot of accounts, Paypal might freeze the account just to see how much money needs to be returned. Eventually, when whatever statute of limitations runs out, he will get the balance (Paypal of course gets the interest over those many months).

    I've had 0 problems with Paypal. I only ship to verified addresses.

  • Re:Merchant accounts (Score:3, Interesting)

    by blair1q (305137) on Friday September 10, 2010 @02:02PM (#33537274) Journal

    The meatspace way to do a merchant account,

    There. I fixed that for you.

    People online don't generally think of doing things the old way when the new way seems so easy.

    We also don't read EULAs. So we don't read account agreements in general. Bank account agreements included. So it's unlikely we'll read the Paypal account agreement and see where it isn't in agreement with any bank account agreement we've ever not read. So our surprise upon finding out they're not a bank and don't have the same regulations as a bank is genuine, if self-inflicted.

    But while they aren't a bank, they may be a fiduciary, so if they're serving their interests instead of ours where our money is concerned, they're asking for a beat-down in court.

  • by Anonymous Coward on Friday September 10, 2010 @02:09PM (#33537382)

    "I only ever used it for eBay, so I just stopped using eBay.
    They are just stupid."

    I use it for more than ebay, but I'm amazed how many times I was going to use Paypal, then found another way.

    My problem is something rather simple, but to me shows the depth of their incompetence. In the past year, my confirmed shipping address went from confirmed to unconfirmed. I had used my home address on PayPal unchanged for nearly a decade without problem, and had it confirmed back in the day when PayPal sent postcards to you, with numbers on them, for you to enter into their system to verify the address.

    Apparently, some idiot at PayPal decided they'd put ALL addresses through a USPS database to see if it matches and advertise this as an additional security measure. They coupled this with a change on ebay as well. So my ebay account was flagged, and I made the suggest change. What was that suggested change, what caused my street address not not match? Where people have things like Drive, I have Hill, and I spell it out because most people are unfamiliar with the abbreviation, and all maps show it spelled out (helps the UPS and FedEx drivers). The USPS abbreviation for Hill is Hl, so that's what PayPal expected.

    Note, it's the same address. I haven't moved. Either Hl or Hil goes to the same place. There is no confusing issue here. Except for PayPal.

    So ebay accepts my change. PayPal also complains, by changing my shipping address to unconfirmed. Fine, whatever, right, I'll just change the shipping address and put it as Hl under my profile. Which I did. PayPal seems to reflect the change; if I check my profile, it shows up as Hl, not the old Hill.

    So I make another purchase. The transaction goes through using the old address and as unconfirmed. This is well over a week having made the change. They won't change it.

    Repeated contacts to PayPal support yields the same crap. They won't fix it. Half the time, they don't bother reading the email in full to understand the issue, they send me the link to the change shipping address on their stupid help pages, something I've already done.

    Now, this isn't a big deal to some sellers. However, a LOT of sellers are sticklers. If the address is unconfirmed, they won't send the item, at all. Or you have to explain what is going on over email, at which point it's still all unconfirmed and they have to take your word for it...which bypasses the point of having a confirmed address system in the first place.

    The result? Besides the bother to me, it's a more insecure system. Sellers become aware of this unconfirmed address situation, and if they do send out packages to unconfirmed address, they become more comfortable with the broken system. Or they don't send the packages out, and PayPal and the seller lose their sale. And people like me, well, I don't like being bothered, so I lose PayPal as a last resort.

    btw, ebay, since they raised fees repeatedly over the years, just isn't cheap compared to other online shopping locations anymore. Self-fulfilling.

  • by compro01 (777531) on Friday September 10, 2010 @02:19PM (#33537550)

    Not when said game got featured on the TF2 developer's blog [teamfortress.com] a couple months ago. It's been spreading like wildfire since then. 60k sales isn't that surprising.

  • by spun (1352) <loverevolutionary&yahoo,com> on Friday September 10, 2010 @02:26PM (#33537654) Journal

    I'm sorry, but no game in the history of the world has made 600,000 euros in monthly sales. That translates to about 10 million dollars a year. Starcraft has made about 11 million in its twelve year publishing history.

  • by AmigaMMC (1103025) on Friday September 10, 2010 @02:46PM (#33537952)
    Theirs is a common tactic, they'll block accounts with lots of money so meanwhile they can earn interest. In California there was a class action on this, but because they settled out of court the lawyers got most of the settlement money, not the people, and they can keep doing it because this involves only California. They tried in Australia but the courts shot them down because, unlike in the U.S., in the rest of the developed world governments protect their people.

    I stopped selling on ebay (ebay owns Paypal) over a year ago and don't touch PayPal anymore because of their lack of honesty.

    PayPal must be considered a bank because that's exactly what it does, and follow regulation.

    If you want to see more complaints check this: http://www.my3cents.com/companyOverview.cgi?code=668 [my3cents.com]

  • by commodore64_love (1445365) on Friday September 10, 2010 @03:01PM (#33538174) Journal

    The best part about credit cards is the 3% (or sometimes even 5%) rebate they give me on food, gasoline, hotels. Oh and books. My amazon card gives me 3% off books.

    That adds-up to around $500 rebate each year. Sometimes more if my employer sends me on lots of business travel.

  • by commodore64_love (1445365) on Friday September 10, 2010 @03:10PM (#33538306) Journal

    Why? Because it's the credit card company's fault for making an insecure system. They should be held liable, and maybe that would encourage them to develop more secure systems that can't be swiped so easily. Example: A few years ago I had the digits stolen off my Discover card, probably by the man at the hotel where I stayed. Either he or someone else racked-up $3500 using a fake card at Walmart. Obviously it's not my fault, but neither is it Walmart's fault.

    I guess you think Walmart should be the one to suffer the 3500 dollar loss, but I completely disagree.

  • by topham (32406) on Friday September 10, 2010 @03:34PM (#33538584) Homepage

    Selling an unfinished product, and having substantially amount of success at it will trigger PayPals fraud department.

    Sad, but true...

  • by node 3 (115640) on Friday September 10, 2010 @04:19PM (#33539126)

    Um, no. Americans would be all over that shit.

    And only in America is saying, "hey, a little bit of socialism ain't so bad" is equated with "DOWN WITH CAPITALISM FASCIST ILLUMINATI!" Things don't have to be so black and white. I promise you, in "socialist" Europe, capitalism is doing just fine. That's also why I put socialism in quotes in my initial post.

    As for your reasoning, no. The very fact that PayPal even exists shows that there is demand for something like this. As does online bill pay (which actually sends paper checks if the recipient isn't part of the bill pay system). And don't for a moment think that there's no demand for the ability to send, electronically, cheaply and quickly, money between individuals.

  • by Lord_Alex (710459) <alex@haxcessSLACKWARE.com minus distro> on Friday September 10, 2010 @06:14PM (#33540638) Homepage

    I wonder why my employer's WebSense filter blocked it as being "tasteless." Any ideas?

    I'm a WebSense admin. Classification of content seems to be random at best. I'm constantly unblocking and reclassifying content. You have no idea how often sites like Google get classed as porn, malicious, social networking, tasteless and so on. WS just rolls a D100 every time it crawls a site. Frustrating as hell. I have so many stories :(

  • by justin12345 (846440) on Friday September 10, 2010 @08:07PM (#33541490)
    Not to mention PCI compliance. If you are handling your customer's credit card info you better have a lot of time and money on you hands to make sure that info is secure. Paypal, Google, Amazon, and a few others take care of all that for you. I recently had to implement a payment option to replace our merchant account. We wanted to go with Google, only to find out that everything we wanted was still in the "experimental" stage (not fully implemented, no customer support, minimal documentation), not even beta. In the end we had to go with Paypal. We've been using Paypal's basic services for 7 years without any real issues, and we found that implementing their more powerful payment services was relatively painless (so far).

    The other thing is: Having had experience with other merchant account providers and payment gateways, it's not like they are any better. I've been involved in lawsuits where the merchant account people "just couldn't get their computer system to deposit the money" (they lost). You see Paypal in the news now and again, but I've seen the shit their competitors pull, and they're no better. That's why we have courts.

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