PayPal exec gets personally involved in account dispute

PayPal has had its share of public black eyes but now has its eye on improving its reputation.

After ordering a violin smashed earlier this year and freezing an account designed to let people donate toys to underprivileged children, the payment processor appears to be trying to put a more human face on its corporate image.

The fresh feeling of good will came from David Marcus, PayPal's newly appointed president, and delivered to a frustrated customer who had tried for months to free $64,000 locked up in a PayPal account. It all started in May, when Andy McMillan, organizer of the Build conference, attempted to have minimum balance requirements removed from his account. The specifics of that effort can be read on McMillan's blog.

The limitations were put in place to cover any refunds resulting from any potential disputes, but McMillan said the revenue from the Build ticket sales had long been removed from the account and that in the four years of running the conference, there had never been a refund dispute case filed.

While attempting to access those funds, he created a new account, which he soon learned had been locked down. He said months of trying to resolve the issue by e-mail and phone calls with Executive Escalations went unaddressed, leading him to turn to Twitter. PayPal's @askpaypal Twitter account took notice, but that only lead to more bad news for McMillan two days ago: "Sorry Mr McMillan, but we will not be releasing any funds to you, and consider the matter closed," he said, paraphrasing a phone call he had with PayPal.

Then yesterday Marcus sent McMillan an e-mail (see below) that assured him that the limitations would be lifted and his funds would be released, adding that he was trying to make fundamental changes to customer service at PayPal.

"Please know that I'm now going to use your story to radically change how we deal with holds, and communicate with our customers," Marcus said in his note. "I'm driving a lot of changes at PayPal (I took over 5 months ago), and I hope that over time we will earn your trust again."

McMillan said the two later spoke on the phone and Marcus apologized for the episode.

"Obviously there's no excusing putting anyone through what I've been through, and it happens all too often, usually with quite devastating consequences," McMillan wrote. "There's a lot of work to be done to gain back trust in the service, but if the concern turns out to be genuine, and David's offer of having me provide input into actually changing their policies and systems in order to make PayPal less of a colossal nightmare to use, it's an offer I'd gratefully accept."

So is PayPal turning a leaf and serious about improving customer relations and communications? We shall see.

CNET contacted PayPal for comment and will update this report when we learn more.