Here’s a sad saga of internet security gone wild relayed via the University High School alumni network (formally the University Laboratory School Alumni Association).
It seems that 1985 UHS grad, Enson Inouye, who has been living in Japan for over 20 years and is a well-regarded professional mixed martial artist and former heavyweight champion, decided to jump in and DO something following the March 11 earthquake and tsunami.
“Something” turned into his own personal aid mission into the heart of the damage zone. News of his effort spread and, before long, donations were pouring in to his PayPal account from friends and supporters, first a generous $14,000, later growing to $27,000.
Inoue described his effort in an interview for the web site MMAFighting.com.
I went by myself because I actually didn’t have anyone who offered to go with me. I had a lot of people telling me not to go though!…I had a Hummer loaded of supplies. I had over 100 pounds of rice, cases of water, curry, ramen, tampons for ladies, diapers for babies, diapers for elderly, a lot of junk food. You know for me, what I would be wanting is potato chips and chocolate. A lot of clothing, a lot of socks, anything I could think of. My Hummer was just filled….
At one place, I was passing out supplies and I asked this guy if he needs anything and he said, ‘Shoes.’ I said, ‘Shoes? You need shoes? I don’t know your size?’ and he just told me that any size is OK. I looked down at his feet and he had these tiny little plastic bathroom slippers. Then I realized that these guys just put whatever on their feet and ran out of their houses and lost everything. It’s stuff like shoes. Things you assume everyone has. It was then that it really hit me and I realized what these people went through. So I went to another town and bought 25 pairs of shoes to give out and they were all gone in like 30 seconds.
There’s also a longer account of another journey into the danger zone (Day 1, and Day 2).
Anyway, you get the picture.
Well, apparently then it got complicated. Here’s the description emailed by Lanning Lee to other UHS alums.
First off, to all of you who contributed to Enson’s PayPal account in support of his mission, mahalo nui loa. Enson reports that the contributions amounted to roughly $14,000. Good news, right?
Well, not really — believe it or not — but you must believe it. So PayPal tells Enson that because he’s not a recognized non-profit agency, they are going to freeze his account until he either proves he actually is a non-profit, or until he refunds the whole $14,000 to the people who sent in the contributions.
For those of you following Enson on Facebook, you know he’s spending all that money for all the right reasons — like buying 31 pairs of shoes to give out today, for instance — but, because he’s a stand-up person, Enson tries to comply with PayPal’s demands by refunding all of the $14,000.
Does this satisfy PayPal? Apparently not. The account we were sending money to is also his actual business sales account. So what does PayPal do? They ask Enson to verify every business sale for the money remaining in his account, just to make sure that none of it is a “donation.”
At this point, Enson throws in the proverbial towel — something I’m guessing he’s never done in his fighting career — and actually refunds all the actual sales revenue he has in his account to all of the people who bought merchandise from him.
Why you may ask, did Enson do this? Well, I think it’s because he is quite busy these days going up north and helping people, and it’s really not a good use of his time to follow up on all of PayPal’s demands.
Yes, you did read that right. Enson refunded money to everyone who bought something from him – not our $14,000 worth of donations. He drove his PayPal account down to zero so he could cancel his account and not have to spend energy on dealing with good old PayPal.
By the way, I cancelled my PayPal account as well, and so have many other folks following Enson’s work.
And so it goes.
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I HATE Paypal; I cancelled my account 8 years ago after repeated phishing attempts on the account, with no help from PP after I complained. Don’t believe sellers who say things MUST be done through PP; there are usually alternatives.
Unlike Enson, there are a lot of scammers out there and the rules vis a vis solicitation of donations make sense (although the application seems to have suffered a bureaucratic SNAFU.)
The current populist howl will focus on the good intentions and efforts but were the story about a solicitation scam that bilked folks of their money, the howls would be about why protections and rules were not in place.
Having good intentions is excellent but charging ahead without thinking through the project is not very bright. Frankly,I’m surprised nobody clued in Enson about PayPal rules. They are not secret and it’s not extreme to require a person soliciting charitable donations to demonstrate they are indeed a properly qualified entity.
For those who feel PP went too far, I tend to agree that a better solution could have been found but once its suspicions were riled, PayPal likely wanted to assure it was not accomplice to a scam.
Richard is right, Enson clearly appears to a do gooder with his heart in the right place. However, Social Media has been used by scammers who have the Paypal payments deposited directly into their personal bank accounts that are used for their personal benefit rather than for the advertised charitable purposes.
Here’s one recent, local example:
http://hawaii.gov/ag/main/press_releases/2011/2011-2.pdf
The advice I give anyone, and which I follow myself, when using Paypal is to NEVER leave your money in the account. Paypal is NOT A BANK. They are not bound by banking regulations and can make up the rules as they feel.
As soon as any money comes into my PayPal account, I immediately transfer it out to a REAL bank account. If they ever freeze my account, they won’t get much.
That’s why I preferred to donate $100 to the American Red Cross via a personal check.
i also had a bad experience with paypal many years ago and haven’t used them since… my account got hacked and money was withdrawn from my bank account. luckily i caught it in time. i was disappointed how paypal provided no answers, no empathy, nothing…
This is hardly the first person or org with good intentions to be messed with by pay pal, but I believe that the rules around c3 type giving are there to protect donors from scammers, and for good reason. It’s all very nice to declare yourself non profit, but pay pal is under no compulsion to observe that unless you can produce an IRS letter with TIN.
If Mr. Inouye had done his homework, he probably could have found a nonprofit willing to channel the donations to him in Japan, while providing the oversight necessary to avoid fraud or malfeasance.