PayPal problem, they want my SSN (1 Viewer)

Guys,I'm not a power-user at all of PayPal, I have been a user for about 6 years. I added money a couple of times and made many eBay purchases and with other vendors without a problem until last night. In my haste to make a purchase, I didn't check how much balance I have left. So I wanted to add money. But they put my account on hold requiring I send in a utility bill. I didn't want to do that and called them. The person I spoke to was very nice and cut to the chase and said they needed my SSN to clear up the problem. They said, not saying it was me, but that they need to prove I am me and not a scammer. I politely declined, and she said she understood, many people are not comfortable to do that.I'm curious if anyone else had issues like this. I am leaning towards closing the account. Which would only be a shame if I want to use eBay. I've read several accounts on the web of unhappy PayPal users. Many probably are legit, some could be disgruntled, some could be scammers. The other thing the PayPal customer service person I spoke to said is that PayPay is a financial institution now and because it's Federally regulated, it's the reason they need the SSN, I never heard of that before until I started looking into this. I asked if they are FDIC insured and she said yes. I hear that's not really true. What do you guys think? I'm feeling like something is wrong and it's time to end it. Thanks!

Paypal has always been a financial institution, I think. The difference now is that they're owned and run by eBay.

I've never heard of this utility bill weirdness. But I usually use a card when making Paypal payments.

Thanks Aaron,I couldn't let it rest and made another call to their customer service last night. I spoke to a much better service rep who much better explained what was going on. He said that it's not PayPal's desire to ask for the SSN, but the Federal Government requires it. They seem to be cracking down on PayPal. So Paypal is slowly going after members bit by bit to meet this requirement.But the big if here, which the first rep didn't explain to me, is that they only need the ID info if you are keeping a balance at PayPal and want to add your own money to it. So if one has a bank checking account linked to Paypal, which I do. Then I can just keep a zero balance at PayPal and just be sure the checking account has money in it. Then what ever purchases are made, PayPal acts like a conduit and draws the money from my checking account to cover the purchase. Doing this or as you do Aaron and link a credit card, then a SSN isn't needed. They just need the SSN if you keep money in an account at PayPal. The crazy thing is if someone sends you money, no need for the SSN. Just when you add money to your own account.One thing I never knew was that if my account at PayPal was too low, it wasn't a problem if I had a linked checking account, PayPal just draws from the linked checking account. So I feel much better now. I think this is all because of the Patriot Act. I'll have to research that a little more.

Since I don't sell stuff, I rarely have funds at Paypal (only if someone sends me money via paypal for odds and ends), I totally use the "link to bank account" method to pay for stuff (just always check and see if that particular account has enough to cover the paypal transaction). And I don't use anything else with that bank account, so Paypal can't draw too much out of it at any given time. No need for paypal to have links into my active checking account, no sir, no thank you!

I was one of those paranoid people who tried to set up a PayPal account years ago. Once they wanted access to my bank account, I bailed, never have used them. Ebay purchases are with money-orders and I have a special low limit credit card for others.

I've thought of opening a separate account just for use with PayPal, but I've gotten along fine without it so far.

I have my Paypal account attached to a debit card - that way if anything happens, it's not going to affect me in a big way. That said, I've had Paypal for many, many years and haven't encountered a single problem. They are always quick on the ball with a refund if an item I ordered hasn't been delivered, etc.

A few years back I had to provide a utility bill with my name on it, but in this day and age, I think its quite right of Paypal to be cracking down on possible fraudsters trying to trick the system.