PayPal Stops A Payment Just Because The Payee's Memo Included The Word 'Cuba'

from the read-the-news-lately? dept

Thu, Aug 18th 2016 11:47am — Timothy Geigner

Earlier this year, we discussed how a Treasury Department watchlist under the purview of the Office of Foreign Assets Control was mucking up all kinds of legitimate business because some partakers in said business had scary sounding (read: Islamic) names. Everyone began referring to this watchlist as a "terrorist watchlist", as most of the stories concerned people, including American citizens, who either have names that are close to the names of terrorist suspects worldwide or because certain banks can't tell when someone is writing the name of their dog in the memo section, mistaking that name for the name of an Islamic terror group, because why not?

But as it turns out, this hilariously frustrating example of bureaucratic ineptitude isn't limited to global terrorism. It also apparently applies to decades old embargo rivalries, too. Mark Frauenfelder details a wonderful story about how his wife, a book editor, used PayPal to pay for a book review about Cuba, only to have the payment suspended and the notices from PayPal begin to fly.

Carla included a message to Ben in the Paypal transaction, which read, "Hi Ben - Your Castro's Cuba review is up! Thanks so much! Carla."

As soon as she pressed the send button, she got a pop-up message on the PayPal site that informed her that the payment was being held for review. This had never happened before and she had no idea why PayPal was holding up the transaction. Last night, an email arrived from PayPal. It turns out, the problem arose because Carla's message included the forbidden word "Cuba" (and/or possibly "Castro").

Mark embedded the entire email PayPal sent in his post, but you're not going to find much useful within it. It basically just says that using words like "Cuba", which is a country oft discussed in the United States, and "Castro", which is a crazy common last name, triggered the company's compliance controls to meet OFAC requirements. As such, PayPal is asking Carla to write an essay for the class explaining why she would dare write those words in a payment for a book review.

To ensure that activity and transactions comply with current regulations, PayPal is requesting that you provide the following information via email to compliancetransactions@paypal.com:

1. Purpose of payment 0B463347YT949791N attempted on August 16, 2016 in the amount of $30.00USD, including a complete and detailed explanation of the goods or services you intended to purchase. Please also explain the transaction message: "Hi Ben - Your Castro's Cuba review is up! Thanks so much! Carla."

Read that part of PayPal's email. Now read it again. This is bureaucracy at its finest, with a $30 payment triggering all kinds of alarms because of a friendly message about a review. Two things stand out to me. First, exactly what kind of nefarious deeds are both carried out for thirty dollars and then signed off with a friendly memo in the payment section like this? Second, if PayPal is really concerned here, exactly what are they expecting to learn from the "complete and detailed explanation" they are requesting from Carla? Would a Cuban operative using their system do anything other than lie in this explanation? Is the OFAC so strict that it requires these checks, but so lax that the checks amount to the honor system?

Or is it possible that government oversight has reached a level at which it does no good other than to serve as a useful reminder of what a pain in the ass it is?

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Filed Under: castro, cuba, ofac, payments
Companies: paypal

55 Comments

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Anonymous Coward, 18 Aug 2016 @ 11:51am

Cuba Gooding Jr. must HATE PayPal.

I mean, way more than the average person does.
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- Danny (profile), 18 Aug 2016 @ 3:46pm
  
  Re: Cuba
  I have a son named Cuba. Complications for him is the first thing I thought of.
  [ link to this | view in chronology ]
- Danny (profile), 18 Aug 2016 @ 3:46pm
  
  Re: Cuba
  I have a son named Cuba. Complications for him is the first thing I thought of.
  [ link to this | view in chronology ]
  - David, 19 Aug 2016 @ 12:22am
    
    Re: Re: Cuba
    Apparently also the second.
    [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 12:03pm

This has actually caused a whole shitload of grief for my mother who owns a Scuba business with "Scuba" in the name. Paypal flags her payments CONSTANTLY to the point of detriment to the business. She's had to close down her Paypal account as a result. She has been on and off the phone and email with them and they refuse to do anything about it.
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- art guerrilla (profile), 18 Aug 2016 @ 1:29pm
  
  Re:
  a SCUBA bidness with SCUBA right there in the name for everybody -including tourists, for dog's sake!!- to read it ???
  what kind of terro-symp commie quisling IS yo mama ? ? ?
  
  secondarily, if i am remembering correctly, these are some crunchy lefty activist types, so it could very well be *they* are being targeted by Big Bother; the trigger word bullshit may just be cover for explicitly targeting them...
  [ link to this | view in chronology ]
- David, 19 Aug 2016 @ 12:24am
  
  Re:
  Should have renamed this to Scooba. But then probably the estate of Scoobie Doo would be hot on her heels.
  [ link to this | view in chronology ]
  - John Fenderson (profile), 19 Aug 2016 @ 8:06am
    
    Re: Re:
    It would be more likely that iRobot would sue, since "Scooba" is what they call their floor-mopping robots.
    [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 12:08pm

Government monitoring, not corp bureaucracy to blame
Or is it possible that government oversight has reached a level at which it does no good other than to serve as a useful reminder of what a pain in the ass it is?

This is clearly due to government overreach in every aspect of our life. What is PayPal to do, miss a "suspicious" payment and risk heavy fines or even jail time from the government?
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- Anonymous Coward, 18 Aug 2016 @ 12:46pm
  
  Re: Government monitoring, not corp bureaucracy to blame
  Paypal is positioned such that they know, or reasonably should know, that this system is stupid and broken. They may be legally required to implement the current system for now, but it would be in their own interest to lobby for the regulations to suck less and for them to implement the restriction in the least obnoxious way legally permitted. There is no sign that they are doing either of those. Thus, they are guilty by association.
  [ link to this | view in chronology ]
  - Anonymous Coward, 18 Aug 2016 @ 12:50pm
    
    Re: Re: Government monitoring, not corp bureaucracy to blame
    and for them to implement the restriction in the least obnoxious way legally permitted
    
    Instead they went for the simplest means possible, and with no way to tune out obvious errors like Scuba.
    [ link to this | view in chronology ]
TKnarr (profile), 18 Aug 2016 @ 12:09pm

Unfortunately Paypal may not have any alternatives. They're required by law to check against the government's OFAC lists, and if the query returns a match they're required to red-flag the transaction. OFAC controls the algorithm used to match names against the list, and you aren't allowed to ignore a "match" result regardless of why you think it matched. OFAC's lists are of course murky at best, typically out-of-date because of lag updating data, and prone to false matches, but the payment agency's not permitted to take that into account and OFAC doesn't care because they aren't held responsible or liable for the errors. (Yes, I've had to write code to handle OFAC queries per regulations. No, it's not as bad as you think. It's worse.)

The only way that'll change is if consumers start lighting fires under the politicians over the issue of rules that do more harm than good but are defended by ignoring the harm done.
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- art guerrilla (profile), 18 Aug 2016 @ 2:33pm
  
  Re:
  "(Yes, I've had to write code to handle OFAC queries per regulations. No, it's not as bad as you think. It's worse.)"
  
  you mean -*gasp*- its written in javascript ? ? ?
  [ link to this | view in chronology ]
  - TKnarr (profile), 18 Aug 2016 @ 3:48pm
    
    Re: Re:
    Oh gods, if only. No, but it does include things like "The text can be in any character set, in fact different sections of text can be in different character sets. There is no place in the data to indicate which character set.".
    [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 12:13pm

The only way that'll change is if consumers start lighting fires under the politicians over the issue of rules that do more harm than good

Unfortunately, the opposite is happening. A large portion of the population wants to hand the government more money and more power so don't expect things to improve.
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Anonymous Coward, 18 Aug 2016 @ 12:15pm

America the land of the free...to do and think what your masters tell you.
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Anonymous Coward, 18 Aug 2016 @ 12:17pm

Next time write "Uv Ora - Lbhe Pnfgeb'f Phon erivrj vf hc! Gunaxf fb zhpu! Pneyn."
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- Anonymous Coward, 19 Aug 2016 @ 12:27am
  
  Re:
  And get flagged as an actual terrorist for encrypting your message? Are you mad?
  [ link to this | view in chronology ]
  - Anonymous Coward, 19 Aug 2016 @ 9:54am
    
    Re: Re:
    As a hatter.
    [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 12:22pm

This is exactly what happened to me and I spent a MONTH trying to get Paypal to fix the issue. I had to constantly restate everything to multiple people who always claimed they were taking notes but then the next person would ask me the same questions. Then for no reason, Paypal restricted my business account. This happened without warned while I was trying to conduct a sale. They never would explain exactly why, just gave me generic possible reasons - none of which applied. Then they wanted all kinds of proof and information - some already provided and some none of their business (they don't need to know my inventory levels). At the end of the day I closed the account. But not after having to give them some info so they would just lift the restriction so I could close the account.
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- Anonymous Coward, 18 Aug 2016 @ 1:14pm
  
  Re:
  I hope you reported Paypal to the BBB.
  [ link to this | view in chronology ]
  - audiomagi (profile), 18 Aug 2016 @ 2:45pm
    
    Re: Re:
    I hope you reported Paypal to the BBB.
    
    This is either a (poor) attempt at humor, or you must be new here. It has been well-documented at this site that the BBB is a toothless waste of time.
    [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 12:26pm

Am I the only one that wants to see the shitstorm that would result if the Mayor of San Antonio, Julian Castro, sent Cuba Gooding Jr $30 through paypal?
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Anonymous Coward, 18 Aug 2016 @ 12:57pm

Paypal is a shitty company period.
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UniKyrn, 18 Aug 2016 @ 1:11pm

In related news, people reading online news stories see the word PayPal and assume it's yet another story of how screwed up that company is.

Yep, like I needed more confirmation.
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Padpaw (profile), 18 Aug 2016 @ 1:21pm

win the people's hearts and minds by forcing them to change how they think and react.
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Anonymous Coward, 18 Aug 2016 @ 1:26pm

Buncha Scunthorpes over there at PayPal.
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Anonymous Coward, 18 Aug 2016 @ 1:29pm

If you are still using PayPal...
Let me tell you that you deserve the trouble you get from it.

It's like feeling sorry for a drug dealer double crossed by a drug dealer!
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- Designerfx (profile), 18 Aug 2016 @ 1:52pm
  
  Re: If you are still using PayPal...
  Paypal is someone who nobody should be doing business with. I'm amazed how many people somehow go the other direction and bet their livings on paypal, who at their discretion can basically bankrupt someone.
  [ link to this | view in chronology ]
- James Burkhardt (profile), 18 Aug 2016 @ 4:26pm
  
  Re: If you are still using PayPal...
  As a consumer the only way I can deal with some businesses is Paypal.
  [ link to this | view in chronology ]
  - Tanner Andrews (profile), 22 Aug 2016 @ 7:16am
    
    Re: Re: If you are still using PayPal...
    As a consumer the only way I can deal with some businesses is Paypal.
    That's why there are other businesses.
    [ link to this | view in chronology ]
- art guerrilla (profile), 19 Aug 2016 @ 3:36am
  
  Re: If you are still using PayPal...
  now that is a low blow, drug dealers generally have things called ethics and morals, sadly missing in the 'real' bidness world...
  [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 1:52pm

first amendment speech
Simple reply

"Hi Ben - Your Castro's Cuba review is up! Thanks so much! Carla."
This is first amendment speech.
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bobmorning (profile), 18 Aug 2016 @ 1:59pm

Let's fuck with Paypal
Send a $1 paypal payment to someone. Put cuba and castro in the memo.

We could bury them in OFAC reporting hell.
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- bobmorning (profile), 18 Aug 2016 @ 2:03pm
  
  Re: Let's fuck with Paypal
  Just sent a 1 to my wife. Got this in return:
  
  Your payment is being reviewed because of regulations. We'll send an email when it's complete or if we need more information.
  
  Idiots.
  [ link to this | view in chronology ]
David, 18 Aug 2016 @ 2:40pm

This could mess up Ebay, too.
Since you're pretty much forced to use Paypal, every time you win an auction on Ebay, just add "Castro lives in Cuba" when you pay for it. Maybe then they will take notice.
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- Anonymous Coward, 18 Aug 2016 @ 3:39pm
  
  Re: This could mess up Ebay, too.
  " every time you win an auction on Ebay, just add "Castro lives in Cuba" when you pay for it."
  
  Beat me to it, though I thought of putting "This payment is not going to Castro, nor to Cuba"
  [ link to this | view in chronology ]
  - amorfus hog, 18 Aug 2016 @ 4:01pm
    
    Re: Re: This could mess up Ebay, too.
    This won't work ebay asks you to complete the transaction before the payment is released ie pay for shipping loose your item etc, if you don't people do disputes and then paypal holds it even longer
    [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 4:06pm

Thirty pieces of silver
"what kind of nefarious deeds are ... carried out for thirty dollars ?"

Ask Judas. It's a middle-Eastern sounding name.
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David (profile), 18 Aug 2016 @ 4:26pm

Welcome to Minecraft
I used paypal for a little while. But stopped when they withheld $300k from Notch because nobody could make a game, publish on the internet, advertise it by word of mouth and game press then accept payment by paypal. How unbelievable was that? So they kept the money.

Notch finally got paid, but it looks like let's make a little cash on the side scam by paypal - to me.

To make it even more bizarre remember that Minecraft was coded in Java.
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Anonymous Coward, 18 Aug 2016 @ 5:48pm

Tell me again who is winning this war on terror. Sounds like the thieves at paypal are. You use their service it serves you right.
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Rapnel (profile), 18 Aug 2016 @ 6:16pm

I have simple rules
paypal == no sale
disqus == no comment
drm == yeah, ok, whatever

can get any needed things elsewhere
can give 2cents elsewhere
can enjoy whatever wherever whenever

but paypal, in particular, is a dirty little street whore that will fuck anything.
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- David, 19 Aug 2016 @ 4:06am
  
  Re: I have simple rules
  but paypal, in particular, is a dirty little street whore that will fuck anything.
  
  That's between consenting adults. Leaving with your wallet isn't.
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Julian Perry, 18 Aug 2016 @ 9:58pm

Actually PayPal can get really creepy.
I've been full-time VPN since Australia's Orwellian Data Retention act was enacted last year.

I had the temerity to buy a Music CD on Paypal last year whilst using the VPN, triggering an account lock. I then received the following (edited for privacy/brevity) email from Paypal. (My name has been changed to "Nastyperson")
It wasn't a phish, I did verify it's bon fides directly, and spoke with PP several times on the matter.
----

Dear Mr. Nastyperson.

As part of our security measures, we regularly screen activity in the PayPal system. During a recent screening, we noticed an issue regarding your account.

To meet financial service industry regulations, we need more information to help confirm your identity. To provide this information, please go to the PayPal Resolution Centre.

To find the Resolution Centre, log in to your account and click the Resolution Centre subtab. Click Resolve under the Action column and follow the instructions.

• Please answer the following questions (which can also be answered fromthe Resolution Centre by logging in to your PayPal account):

1. Do you hold a position of public trust or political office?
2. Are you associated with or related to someone in the public trust or political office?

If you answer YES to either of the above listed questions, please provide:

1. Details as to who the individual is; and
2. This person's political or public trust position; and
3. How you are related or affiliated with this person.
* One document to confirm name and date of birth for Mr Nastyperson.
-----

Yes - Paypal locked my account because I used a VPN to access it - and confirmed that this would likely happen again if I used a VPN.
and Yes, the would not unlock my account unless I revealed any association with anybody I knew in public office.

It came as no surprise that the operator I spoke with did not even know what the term "Orwellian" even meant.

terrifying.
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- David, 19 Aug 2016 @ 4:10am
  
  Re: Actually PayPal can get really creepy.
  It came as no surprise that the operator I spoke with did not even know what the term "Orwellian" even meant.
  
  The Paypal Terms of Service were a dystopian novel, not an instruction manual.
  
  Wait... Could have fooled me.
  [ link to this | view in chronology ]
Angel (profile), 18 Aug 2016 @ 10:47pm

This is where something like bitcoin to soar. At least with that you can make online transactions without worrying about a third party locking up your account.

I know a lot of people roll their eyes at bitcoin, but honestly is it not better than dealing with PayPal?
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- John Fenderson (profile), 19 Aug 2016 @ 8:09am
  
  Re:
  I'm certain not against Bitcoin at all, but PayPal does have at least one advantage over it: if something goes wrong, you can theoretically sue PayPal.
  [ link to this | view in chronology ]
Anonymous Coward, 18 Aug 2016 @ 11:15pm

When are people going to learn to not put a damn thing in the memo area when sending money or making any kind of transaction through Paypal, send the person an email or something later but for the love of god do not do it on Paypal. They are notorious for doing incredibly stupid and ridiculous things like this which only creates a huge hassle for the people sending and receiving the money.
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David, 19 Aug 2016 @ 1:10am

What's up with Cuba anyway?
I thought the U.S. were unfreezing relations. Now I know this won't help the North Korean "relations" or anything, but why are they still meddling with Cuba?

I mean, they are even trying to overtake Cuba on its core embargo trigger, civil asset forfeiture (granted, Cuba robbed the business rather than the middle class, but the principal offense is pretty much the same).
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- Ninja (profile), 19 Aug 2016 @ 10:57am
  
  Re: What's up with Cuba anyway?
  Remember, the Govt works in geological timing. I believe this will be solved sometime in the near future (around 2216). I predict Cuba will be underwater due to climate changes before the US removes them from the watch list.
  [ link to this | view in chronology ]
John85851 (profile), 19 Aug 2016 @ 2:53pm

Just don't put anything in the comments
I know PayPal takes it's instructions from OFAC, but come on. Do they really honestly think the following scenario will happen:
Note for payment: Thanks for your review of Castro's Cuba.
PayPal: Your comment includes flagged words. Although you have no history of sending money to Cuba in the past 10 years of doing business with PayPal, please write an essay about why this transaction should be allowed.
Sender: You got me. I'm actually a Cuban sympathizer looking to overthrow the Castro regime and return Cuba to a democracy. And I would have gotten away with it if it weren't for that meddling comment!

So, like other posters are saying: let this be a lesson to everyone to NEVER including a comment when sending a payment- simply send the recipient a separate e-mail saying the payment was sent. Or if you must include a comment, make it generic like "Payment for services".
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MatsSvensson (profile), 19 Aug 2016 @ 4:05pm

Q:
Please also explain the transaction message: "Hi Ben - Your Castro's Cuba review is up! Thanks so much! Carla."

A:
review = ICBM
Carla = Putin
Hi = heil
Thanks so much = proceed to bunker
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Ola, 4 Oct 2017 @ 8:30am

Purchase Pending
I have tried to purchase the same product from two companies. After reading this forum, I think I understand why they are pending. The product I am buying is Essations Naked Sensitive Scalp Relaxer. I believe it is the word "Naked".
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Seb, 8 Nov 2018 @ 4:41pm

I can´t even delete my account in protest.
As part of our security measures, we regularly screen activity in the PayPal system. During a recent screening, we noticed an issue regarding a recent transaction.

In connection with the issue, PayPal's Compliance Department has reviewed your account and identified activity that we have a couple questions about.

To resolve the compliance inquiry in a timely fashion, PayPal is requesting that you provide the following information via email to compliancetransactions@paypal.com:

On November 05, 2018, you sent a payment (2T711731JD8974915) for the amount of $55 for, "Cuba Debt." We're trying to understand

- Please provide a sales receipt or other documentation pertaining to this transaction.

Please go to the Resolution Center to provide this information. To access the Resolution Center, log in to your account and click "Help" at the top of any page then, click "Resolution Center."

In order to prevent risk for us and our customers, we have limited what you can do with your account until the issue is resolved. Please note that we reserve our right to terminate our account relationship and close your PayPal account if we are unable to resolve this issue.

We thank you for your prompt attention to this matter. We apologize for any inconvenience.

Sincerely,

PayPal Compliance Department
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Anonymous Coward, 10 Jul 2019 @ 8:20pm

My payment is pending too.

I bought "gunmetal" colored earphones.
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