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

(Mis)Uses of Technology

from the read-the-news-lately? dept

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?

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