Morning 23rd (which was Labour Thanksgiving day in Japan, National holiday) I noticed that my PayPal balance had became zero.

I contacted PayPal and they said this was a system error, not unauthorized access. This is what they said in their official statement that came the following day:

This week, you may have noticed that the balance in your PayPal account was temporarily unavailable. Due to a technical issue, a bank withdrawal had been initiated incorrectly, which meant your balance appeared to be transferred out of your PayPal account.

They also said the following

We deeply apologize for any confusion this may have caused. We acted quickly to cancel this bank withdrawal so the balance was not transferred into your bank account.

NHK reported the news. Twitter also responded and Paypal Japan became a trending topic.

I think couple of things to take out of their statement. They said “withdrawal had been initiated incorrectly”. This is bad communication.

Do they mean to say that a bank withdrawal had been made in error? This should be obvious since all users report that they had not themselves initiated the bank withdrawal. Or do they mean that the a bank withdrawal that had been made in error was also somehow incorrectly made.

I actually asked the support if they would just let it go through. But I wasn’t given that option. So this could lead to speculation that not only the withdrawal was made in error it was also initiated incorrectly.

Furthermore the statement said “appeared to be transferred out of your PayPal Account”. Appeared? Transferred to were? So if it only appeared to be the case, it then means that it wasn’t. And out of your PayPal account, is different than saying to users bank account for example.

Not very professional communication to say the least, and I wonder if whoever wrote this is native English speaker. Or..

There is a theory floating around that Japan government is behind this, force testing the automatic withdrawal to Japanese bank accounts. There is actually PayPal notification from May 2021 that says that the accounts that hold large amounts such as those exceeding 1 million yen will be under special scrutiny and maybe automatically forced to withdraw to bank account.

There doesn’t seem to be evidence however that the automatic withdrawal would happen for lesser sums. If Japanese government is to crackdown on some kind of tax avoidance occurring in online banks, it would make sense to target larger sums.

Either way this isn’t good user experience. If this was sincere error, it was a bad one. If this was some kind of covert government move, worse. I was able to get my JPY funds returned, but not the USD which are still floating around somewhere. As of today I have no way of knowing when I will get my money back.

PayPal says they are doing everything they can to make sure this won’t happen in future. Unfortunately I don’t feel too confident about this.

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