Round 39: Sallie Mae vs eBay/Paypal

This is Round 39 in our Worst Company in America contest, Sallie Mae vs eBay/Paypal!

Here’s what readers said in previous rounds about why they hate these two companies…

Sallie Mae:

“Sallie Mae has a program with my university where they let you divide your tuition for a semester up into monthly payments. But they charge you a $14 service charge for any payment made with a credit card! The only free way to pay is to have it automatically taken from a bank account… and we all know how reliable that is. Needless to say, I don’t use this payment plan anymore.”

“I recently had to change my home phone number due to harassment by SallieMae and the collection agencies they sold a debt to.

Someone has a similar name to mine (only the middle name is different), and they have been bugging me for 6 months. Once I finally got SallieMax to stop calling, they sold the debt to someone, and now THEY won’t stop calling.

Problem is, the new collector does not show up on Caller ID (shows up as Name Unavailable 000-000-0000) and they refuse to tell me which company they work for. “

“they have ruined the lives of many of my friends. They use scummy debt collectors, and are more than willing to garnish paychecks that are already too small to live on.”

“Was SallyMae also the one that paid bounties to schools that steered loans their way?”

“

I pay my student loans on time but I still have a horrible time dealing with Sallie Mae for consolidations and other regular issues.

They outsource their customer service overseas. Financial aid is a complicated business that doesn’t need to be further complicated by adding cultural barriers. I have no problem with accents, but I have a problem when the person on the other end doesn’t understand the concept of “half time grad student in thesis hours.”

They also cheated me out of my grace period, refused to tell me why and instead, just threw some economic hardship deferment forms at me to get me to stop asking.

Also, their marketing is insane. I was receiving consolidation offers even after I called to find out I couldn’t consolidate until after I graduated!

Now that I’m in repayment I get bombarded by emails about their special programs and services. It’s difficult to sift through the crap to figure out what is important.

They don’t have to worry about customer service because once they’ve got us we can’t go anywhere else and the government subsidizes them. “

“Way back when I was going to grad school, I decided to take the minimum amount of credits (all credit requirements already met) while working on my dissertation. Sallie Mae (or one of its progenitors) promptly started requiring me to repay my student loan. I called and asked how I could get it postponed. Their rep told me I had to become at least a half-time student. So I added a few more credits (at several hundred dollars a credit). The notices for repayment continued to arrive. I called again and was told being a half-time student didn’t entitle me to receive a postponement. I told them I had been told otherwise by one of their reps. They said tough, they couldn’t be held responsible for misinformation by their reps. Ended up my paying some $500 (a nice chunk some 20 years ago for a grad student) more than I should have. A really great organization. We’re not responsible for any information we might give you.”

“

Sallie Mae is terrible. My wife has student loans through them and while she was still in school, she was constantly bombarded by credit card offers, “deals” on MP3 players and TV’s, car ads and freaking LIFE INSURANCE offers.

Now that my wife is out of school, I have begun repaying the loans. The latest thing Sallie Mae emails us constantly about is this thing called UPromise. Basically it supposedly helps you save to pay off your loans by automatically putting aside the change on debit card purchases (so if you spend $2.48, it would put $0.52 in your UPromise account). For me, totally unnecessary, but it would seem on face that this is a genuine program. That is until you really check it out and see that it’s just another way to expose you to more ads imploring you to blow your money on anything BUT student loans.

On top of that, Sallie Mae will not automatically withdraw monthly payments from my bank account in excess of their preset payment plans. Surprise, surprise, all of their plans are as close to the minimum payment as possible with no indication that this will end up costing you thousands of dollars during the lifetime of the loan.

I understand they are running a business not a charity, but I just think it’s sick the way they prey upon college students and recent college graduates. I would never consider them for any loan of any type ever again.”

“I dislike Sallie Mae for the simple fact that they send me TONS of junk mail, even after changing my accounting settings and submitting a request in writing.”

eBay/Paypal:

“In the early days, eBay used to be a flea market shopper’s paradise. I could find one-of-a-kind items sold by honest sellers cleaning out Grandma’s attic. Quality homespun niche businesses sold unique items not found in regular retail stores. Items were priced fairly and shipping rates weren’t outrageously inflated. Shopping on eBay was fun, additively so.

In recent years, eBay has become an overpriced junk warehouse. Thirty sellers will auction the same “one-of-a-kind” item at a starting bid of $.01, with a bargain basement shipping rate of $24.99.

If anything is left in Grandma’s attic, the heirs are selling it at double its value.

Retail chains have an eBay store that only sell merchandise the foot traffic didn’t want.

Unscrupulous sellers bait customers in with low prices only to kick them in their Paypal buttocks with sneaky fee-avoiding, high shipping rates.

Paying is no longer your pal. The consumer protection process is so convoluted that by the time eBay gets around to denying your claim, the seller has already begun defrauding other unsuspecting buyers under a new identity anyway.

I used to be an eBay addict. I simply had to browse everyday just in case I missed that special item I didn’t know I wanted. Now, it might be four times a year I find myself on eBay…and rarely do I leave having place a bid or purchased something.

Nothing exciting, nothing unique, nothing cheap (unless you are referring to quality). “

“Ebay is Just EVIL, They grew and grew off of their community, bought paypal, and are now Raising their Rates to up to 10% of the value of your listing! INSANE! Their saying its to “improve their website”…. you need BILLIONS to improve your website? I WILL NEVER SHOP EBAY AGAIN after their recent fee changes, They stabbed every customer they had in the back”

“

I got scammed for a car that arrived with $2000+ of damage off eBay. The auction stated just $400 of damage. Paypal told me I was wrong without asking for my side of the story, or any estimates for that sake. That’s enough for me.

A list of the damages stated in the auction: Cracked windshield, broken control arm, minor ding.

Actual (that I told PP about): Cracked camber, rims were scraped/spray painted, rear bumper was painted dark blue (the car was black), Cigarette holes in the back seat, larges holes on drivers side carpet, passenger side rearview mirror was missing, four flat tires.

And they told me that they sided with the seller and not to contact them. When I did I was told that they get many scams on cars from fraudulent buyers.

Boy wish I had the Consumerist back then “

“ebay/paypal no contest. They sent me a letter telling me that they weren’t going to credit my account for a fraudulent failure-to-refund (mail fraud was involved) charge.

The first paragraph of the letter said they weren’t refunding me.

The second said that Paypal does not support or condone fraud.

Hypocritical idiots, and I’m already working on closing my account (but paypal claims I need to wait for 4 months to pass since the last transaction before being able to close my account. I think that’s bullshit).

BTW, I did finally get my money back from my bank. Suck it, paypal. (and I just tried again to close the account and it failed again, and the CSR who claimed he’d close it for me by phone the other day was apparently a liar)”

“EBay is full of scams. In my opinion, one of the more insidious is the hijacked account scam.

Phishers send out millions of emails – “Your eBay account will be suspended”; “There is a problem with your eBay
item”, etc. Emails have a “click here to respond” button that asks you to log in.

And that’s it. The scammers have a legitimate username and matching password! The account has been hijacked!

Shortly thereafter, up to three dozen one-to-three day listings of very expensive, usually sold at list price electronic, athletic or similar equipment will appear as if for sale by the hijacked account holder. Listings always say: “Email me here (not the eBay contact address) for shipping or buy-it-now or other information”.

Those who email are given a spectacular price . . . perhaps 1/3 of list including shipping. They are told that they will receive a payment invoice through eBay’s Trust and Safety or similar department and that the transaction is perfectly safe because it is approved by eBay. The seller asks only for name and shipping address.

If the potential buyer asks about PayPal, he is told that the seller’s account is temporarily full; or there is a problem; or there is a divorce; or some other reason why he needs to deal directly through eBay.

Shortly afterward, he receives an authentic looking “invoice” from eBay and perhaps a second eBay email stating that they have investigated the transaction and it is safe.

The invoice asks the buyer to send the money by Western Union to somewhere in Europe. Once sent, the money is lost. Gone. Of course, the buyer never receives the purchased item because it never existed.

Everything in this scam is forged: the phishing email; the eBay invoice; the eBay verification letter. Nothing appears in the buyer’s eBay inbox because nothing is sent from eBay’s own server.

If eBay receives complaints about a listing, it will eventually remove it — perhaps in minutes, perhaps in hours. During that time, the scammer receives email for potential buyers, some of whom will end of sending money by Western Union because the deal is just too good to turn down. The scammers never expect these listings to stay valid for an extended period; just long enough to get some people interested.

A few days latter, the same scammers return with new hijacked accounts and the same listings. Even the “email me here” addresses are the same.

This is a HUGE business. We are talking about $1,000 – $2,000 or more per transaction. In cash.

I believe eBay is part of the problem. They have no organized system to screen for obviously hijacked listings; they frequently leave the listings up even after complaints. More important, it is just too easy to list a sale on eBay. There is no secondary “sale only” password or other verification. Finally, even though these scams leave a mile long electronic trail (including having to show up at a Western Union office somewhere to pick up the money), eBay seems to make minimum, if any attempt, to shut them down.

In my opinion, eBay needs to stop saying: “we are only a venue” and start protecting its customers.”

“Paypal freezes your money for no good reason. They regularly screw both buyer and sellers. They claim to have protections but the requirements are so convoluted its nearly impossible to get coverage even if you’re trying to follow the steps. They take a huge chunk of the sale price in fees for doing nearly none of the work or risk.”

“It isn’t a transaction “on eBay”. It is a scam that uses hijacked eBay accounts to make offers to people who send them emails. They try to make the buyer think that it is a legitimate transactionthat is approved and escrowed by eBay. Of course, eBay doesn’t send out invoices; doesn’t approve transactions; doesn’t collect or escrow money. But to get a $3,000 computer, audio or other product for only $1,000. Wow! Just send the money by Western Union! Ebay will hold that money until you receive your product!

I understand that there are lots of scams and scammers; and lots of people looking for a bargain. But with very little effort, eBay could shut this whole thing down by responding instantly to reports; by making it harder to list sales (extra password?); and by using the law to go after the scammers.”

This is a post in our Worst Company In America 2008 series. The companies nominated for this honor were chosen by you, the readers. Keep track of all the goings on at consumerist.com/tag/worst-company-in-america

STILL OPEN FOR VOTING: TransUnion vs Diebold, Best Buy vs CompUSA, DeBeers vs Verizon, Exxon vs United Airlines, Sony vs Ticketmaster, Comcast vs The American Arbitration Association