Tuesday, August 2, 2011

UPDATE: iTunes and PayPal Fiasco (Wherein the Little Guy Gets Completely Screwed)

See the first part of this story here

So remember when I said thank goodness PayPal didn't charge all the 17 wrongful iTunes transactions to my bank account and incur overdraft charges? Well guess what happened the next morning while I slept? Thank goodness my hubby was up super early and caught the ridiculousness before I could incur more than 4 overdraft charges. He put in a chunk of change to cover the PayPal transactions as well as the overdraft charges, but we shouldn't have had to do that. That's bill money, not cover PayPal and iTunes' stupid mistakes money. It's not like we've got extra sitting around the house. Not to mention that PayPal clearly states that if you don't have money in your bank account, they take it out of your backup credit card (which is required for your account).

The rest of the morning is spent on the phone with PayPal and my bank. PayPal still says that the refund will take 3-5 business days, and that they're only able to email me a letter saying that the charges were unauthorized. When I questioned them furiously about why the charges were taken out of my bank account instead of my credit card, they explained how their (ridiculous) system works. And this is really important to note, because they don't say any of this anywhere:
They send the request to the bank account for funds. If the bank says there are insufficient funds, PayPal waits three days and then sends the request to the bank again. At this point, if your bank is like mine, they want to cover their clients' ass, so they pay the money to the vendor and then charge me a huge overdraft fee - per transaction (four $35 overdraft charges are bad enough, but can you imagine what it would have been to have all 16 incur $35 overdraft fees? That would be $560 - and each for a $9.99 charge). It takes 3 times of asking the bank before charging the money to the credit card, and most banks won't let it get that far before giving in to the vendor and charging the overdraft fee.
Why doesn't this get said anywhere? I'm sure I'm not the only person who's had this issue, especially considering that PayPal has a specific department for handling overdraft charges. Now what is PayPal going to do about it? Not much, which comes as no surprise considering how "helpful" they've already been about the whole situation. They email me a letter saying that the charges were unauthorized and tell me to give it to my bank.

So now I call my bank, who were very nice. But they can't do anything until the refunds come through, and can only reverse the overdraft charges if the line-by-line charges match line-by-line refunds from PayPal. Now it's a waiting game over the weekend, and apparently Monday doesn't count as a business day for banks because they can't post deposits on Sunday night, so really it's waiting until Tuesday.

Which brings us to today. I check my bank account online expecting the refunds from PayPal, and nothing. WTH? I check my PayPal account. Get this. They've refunded the money into my PayPal balance. What?? So now I have to request the balance get transferred to my bank account from PayPal which takes another 3-4 business days, and also means that the bank won't see any actual refund amount from PayPal, let alone line-by-line matching transactions to the initial charges by which they would have been able to reverse the overdraft charges. This is infuriating.

Another call to PayPal and I'm in the same boat. "Sorry, that's how it works. We can't do anything. We can give you a letter for your bank." "Yeah, thanks for nothing, I already have that."

Another call to my bank, who again are very nice but have their hands tied. They can't reverse the charges over the phone because I can't email or fax anything to them (from the "outside"). So now I have to wait for the refund PayPal balance to be transferred to my bank account, the amount has to match exactly, and I have to go into my bank branch (who have screwed up in the past, pretty majorly), show them the letter from PayPal, and have them reverse the overdraft charges.

Seriously this whole thing is completely infuriating and out of control. It's almost as bad as when I had my identity stolen and a bunch of credit cards opened in my name. But at least that didn't affect my actual money, just credit. This, on the other hand, has completely affected my real bank account money. And if I didn't have a husband to put the cash in to cover the ridiculous charges, I would have been stuck with a negative bank balance and the $4 in my pocket at the time all of this happened, last Wednesday, until potentially this Friday or next Monday. I had no gas in my car, which means that I would have had to find a way to the bank or hoped the fumes in my car got me there, and God forbid any of my bills were due. And PayPal doesn't care one bit.

And the initiator of this entire fiasco, iTunes also doesn't seem to care. Apparently, the issue happened to a bunch of people, and all iTunes did was send out an email saying it had been corrected. And then the next day the customer service rep finally responded to my email with a standardized letter, in which it was clear she had not even read my initial problem.

I wish there was justice for this, but instead I just feel totally victimized. But please take heed of the logistics I've outlined here, so that you really know what you're dealing with in iTunes and PayPal. It just sucks that there's basically no other option for either of these companies (if you have any Apple product), and thus there is no competition to make them improve their customer service or their policies. I can only hope this makes other people aware.

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