PayPal glitch sparks customer anger

Company battles to fix problem that has led to duplicate withdrawals from and credits to online payment accounts.

Online payments company PayPal is working to fix a glitch that has been causing duplicate debit card withdrawals and deposits on some customer accounts since the beginning of September.

The problem first surfaced on Sept. 6, when some PayPal customers noticed duplicate withdrawals from their debit cards that sent their accounts into the red. Two weeks later, more PayPal customers also reported duplicate withdrawals and deposits into their accounts.

PayPal is blaming the duplicate withdrawals on a third-party processing error with some PIN-based transactions.

A statement from PayPal's parent company, eBay, posted on one of its discussion forums on Sept. 19, apologized for the inconvenience and said: "Although we initially believed this irregularity was corrected last week, it appears that some transactions are still being affected. We are working to resolve this issue as quickly as possible."

Discussion forums on eBay have been inundated with complaints from angry customers who are unable to tell what their actual PayPal account balance should be. They are claiming that they can't access their funds because their accounts are now in debt.

One seller wrote in a posting: "I'm trying hard to make sense of the 20+ erroneous withdrawals/corrections. After one hour on phone-hold, I was told if something is wrong, I have to file a formal chargeback request for each incident. I'm quite exhausted from this silliness."

A PayPal representative was not immediately available for comment, though the company said the problem is confined to U.S. customers.

Andy McCue of Silicon.com reported from London.