Personal Blog of Carl Pei

I used to give money from time to time to beggars, but after several incidents and revelations, I will never do it again.

In China, beggars are professionals and will take measures, such as wearing dirty clothes and adding dirt to their body in order to maximize profits.

• Incident 1. A month ago, I was in the buffet section of a Macau casino offering some of the world’s best buffets. Sitting by a table was a beggar from Zhuhai whom I’ve seen numerous times on the streets looking very poor now enjoying a great meal.
• Incident 2. During the Chinese New Year celebrations we were outside setting off fireworks. A beggar, male crippled with only one arm disturbed me for a few minutes asking for money. After the fireworks, on the way home I saw the same man, wearing the same dirty clothes, but now carrying a smart citybag walking home rapidly. He now had two arms and was enjoying a cigarette after a hard days work.
• Incident 3. A friend one told me of how he was standing in the line of a bank behind a Guangzhou beggar who deposited 200,000 CNY (approx $45,000 USD) at the counter. When the beggar was walking out of the bank, my friend glanced at his bank statement which now showed more than a million CNY! A regular hardworking Chinese can’t make a million in a lifetime.
• Incident 4. Yesterday I heard a street vendor ask a beggar who was missing an arm how business was going. The beggar said, “Not bad.” Beggars see themselves as businessmen.

Another type of business model used by beggars here is to buy crippled people (normally children) and send them out to beg. At the end of the day, the owners come and pick them up and take all the money. If the cripples don’t manage to get a certain amount of money, they will be beaten or not given food.

So you see, no matter which kind of beggar you decide to give money to, it is a complete waste. If you have money to throw away, give it to some regular hard working person who needs and deserves it more.

Just today, the limitations put on my two PayPal accounts were lifted.

A PayPal limitation basically means that your account is locked to various degrees, and you have to show them evidence that you are the person behind the account. The amount of evidence depends on how limited you are. Everyone gets limited sooner or later, so it is advisable to learn as much about the process as possible.

The limitation is a security measure by PayPal to protect themselves from people using stolen / hacked credit cards that causes them to lose money. It is necessary, but also a very tedious process for their honest customers. For instance, many links inside their Resolution Center were broken and lead nowhere. Not only to protect themselves, the limitation is also a way for them to retain higher profitability, using the money of their customers to invest. I had almost $10k USD in my account which they locked for 2 weeks, which can get them around $25 USD in interest in a Swedish bank, much more if they invested more cleverly.

My personal account, which was limited once before got limited once again. This time, I had to show them bank and credit card statements together with proof of address.

My premier account, which had its limitation lifted the 25th January, was limited once again the 27th after I withdrew $1.500 USD. They wanted statements of 2 credit cards, photo ID and proof of address.

I’m not home, so I had to call home for my parents to help me gather the needed information. After many hours of frustration, a phone call to PayPal and much waiting, my accounts were finally restored today.

Lessons learned:

1. Never keep money in your PayPal account waiting for the dollar to rise. There is no perfect moment, just withdraw and forget about it.
2. Only add the credit cards and bank accounts that you currently use. Having more means you will have more to prove to them.

Living in the EU sucks big time. Not only do you have to pay 25% taxes on virtual goods like vBulletin, you are also limited by all these regulations. This time, European Union Anti-Money Laundering regulations get in my way. I log in to check my email and immediately my heart sinks as I read the title, Notification About Your PayPal Account. I knew it was bad. Below is an excerpt of the email:

We are sending you this notice because you have received more than X0,000.00 SEK in total payments to your PayPal account.

PayPal is required by law to comply with European Union Anti-Money Laundering regulations to collect information from customers when they receive more than the set limit in total payments. Please log into your account, go to the Account Overview page, and follow the instructions there about how to provide the required information. These steps need to be completed as soon as possible to comply with this regulation.

They want me to fax a proof of identity (ID card, drivers license or passport) and a proof of address (utility bill). Oh well, I can’t do anything but comply. I hope they’ll sort it out quickly after I fax them the documents.

I’ve finally concluded my anime network auction, and accepted a private bid. The sale included two established sites, beginnings and plans for a forum, and one month email support and viral marketing plans/strategies for the websites. This morning we moved the sites and I’m all done.

It has been a few hectic days, and I think one of the buyers was trying to pull a trick on me to make me lower the price by bidding and then not replying after I accept bid. Luckily, there were quite many people interested so I still managed to sell. In the end, it sold for $4,200 USD. I could probably have gotten more if I let the auction run for longer than 5 days, but I am happy with the sale. The buyer was an avid anime fan, and I know that he will do a good job with the sites and earn back his investment quickly.

This Was a Huge Step

This sale has been my largest to date, actually it’s only the third time I sell a website. I remember half a year ago reading a friend’s blog that he sold a site for $x,xxx USD, I was very shocked and a little jealous. Those amounts were just pipe dreams for me, and who knew that one day I could do something like that too?

Nice Hourly Wage

During the three or so months, the sites have made around $1,100 on AdSense and $100 on Chitika. The sites sold for $4,200 which brings the total to $5,400 USD.

Investment has been minimal. Not more than $30 has been spent on domains, and $30 was spent on the Sitepoint auction. I used the same Host Monster hosting account as for some other sites, so no additional cost here. This brings profit to around $5,340 USD.

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After reading about a scammer rampage on the DP forums, I thought I should share a trick that I use when doing larger ($100+ USD) transactions on PayPal.

Background

PayPal has a system where, if the buyer is not happy, he/she can file a dispute against the seller, and have PayPal review it. If the buyer acts professional, uses good rhetoric and provides some kind of evidence, the PayPal staff will deduct the money from the seller’s account and transfer it into the buyer’s. The typical PayPal employee isn’t the world’s most educated and will often favor the buyer, even if the evidence is sketchy.

This opens an avenue for scammers. People might buy a website or services from you, and then chargeback, losing you time and money. To counter this, one must look at how the PayPal dispute system works. For each transaction, the buyer can file one dispute, and can choose whether or not to escalate it (let PayPal staff review it).

How to Prevent PayPal Fraud

To counter this, here is what I do: Remember that a buyer can only file a dispute once. After receiving payment from someone, I do not immediately hand over the goods. Instead, I explain to the buyer the PayPal situation and use examples (important) of times I and other people have been scammed. I tell the customer to file a dispute for the money he just paid me, and close it immediately. Now, they can’t ever open it again, even if unhappy with the product. My money is safe.

This is not only against scammers, but also inexperienced buyers who for instance after buying a site, runs it down the drain and regrets the purchase.