PayPal glitch over security checks

Paypal logoDennis Van Tine/ABACA USA/Empics Entertainment

Paypal, the online payments company, has admitted that it is facing "technical issues" which has led to many more payments being held for security checks, causing delays to payments. Ironically the problem emerged as the company tried to introduce a system of faster payments.

So what does it mean for customers?

The glitch

PayPal, which is owned by eBay, had pledged to speed up the process of transferring money from PayPal accounts to users' normal bank accounts. Previously it had taken up to three working days - and it was changing the system so that transfers could be done in a few hours.

It introduced changes to the system to make this possible, and because of the volume of transactions it was suddenly trying to get through, the glitch emerged. PayPal always refers some payments for security checks - as the regulations require it. However, it started referring an unusually large number.

Users were informed that their funds would not be available for 21 hours while they were checked out - and that after this time it would take another two hours for the cash to be in their account.

In a statement PayPal said: "We have recently experienced technical issues that have resulted in more transactions than usual being reviewed. Although most withdrawals are not subject to review, a minority of customers have been told it may take up to 24 hours for us to review the transaction."

What it means

The good news for those affected is that Paypal has said that problems should be addressed by 'the end of the week'. We can only hope they were referring to the end of today. At that stage, things should run as normal again.

However, it is yet another reminder that so much of our finances are based on computer systems that can and do go wrong. The horrors of June's NatWest glitch left many people feeling vulnerable, and July's technical problems from Nationwide showed that IT nightmares are not just restricted to one financial organisation.

In an age where all financial institutions are reliant on technology, there's no way to avoid it. Our only option is to create our own safety nets. We need to make sure that if there is a problem with one area of our finances, we have somewhere else to turn.

This means we cannot afford to have our current accounts running to the final pennies each month - and we need a few days' buffer in case of problems. Likewise it's worth having funds in another account, in case there are widespread problems with our usual one.

The notion of putting emergency cash under the mattress is one that will just turn your home into a burglar's paradise - but in a world where things can and do go wrong, it's worth having a more secure alternative.

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PayPal glitch over security checks

Using a mobile phone to make and receive calls, send texts and browse the web while abroad can be extremely costly – especially if you are travelling outside the European Union (EU), where calls can cost up to 10 times as much as at home.

To avoid high charges, Carphone Warehouse suggests tourists ensure a data cap is in place, use applications to check data usage, turn off 'data roaming', avoid data-intensive applications such as Google Maps and YouTube and use wi-fi spots to update social networking sites.

Payment Protection Insurance (PPI) is supposed to help people to continue meeting their loan, mortgage or credit card repayments if they fall ill or lose their jobs. However, policies are often over-priced, riddled with exclusions and sold to people who could not make a claim if they needed to.

At one point, sale of this cover - which was often included automatically in loan repayments - was estimated to boost the banks' profits by up to £5 billion a year.
Now, though, consumers who were mis-sold PPI can fight back by complaining to the bank or lender concerned and taking their case to the Financial Ombudsman Service (08000 234567) should the response prove unsatisfactory.

It could be you, but let's face it, it probably won't be. In fact, buying a ticket for the Lotto only gives you a 1 in 13.9 million chance of winning the jackpot.

With odds like that, you would almost certainly be better off hanging on to your cash and saving it in a high-interest account.

No-frills airlines such as EasyJet may promote rock-bottom prices on their websites. But the overall fare you pay can be surprisingly high once extras such as luggage and credit card payment fees have been added - a process known as drip pricing.

Taking one piece of hold baggage on a return EasyJet flight, for example, adds close to £20 to the cost of your flight, while paying by credit card increases the price by a further £10.
It may therefore be worth comparing the total cost with that of a flight with a standard airline such as British Airways.

Cash advances, which include cash withdrawals, are generally charged at a much higher rate of interest than standard purchases.

While the average credit card interest rate is around 17%, a typical cash withdrawal of £500, for example, is charged at more than 26%.
What's more, as the interest accrues from the date of the transaction, rather than the next payment date, costs will mount up even if you clear your balance in full with your next payment.

Supermarkets such as Tesco and Asda often run promotions under which you can, for example, get three products for the price of two.

However, it is only worth taking advantage of these deals if you will actually use the products. Otherwise, you are simply buying for the sake of it, which is a waste of your hard-earned cash.
To avoid paying over the odds, it is also worth checking the price per kilo to ensure that larger 'economy' packs really are cheaper than the smaller versions.

Buy a train ticket at the station on the day of travel and the price is likely to give you a shock - especially if you are travelling a long distance at a busy time of day.

However, you can cut the cost of train travel by 50% or more by going online and making the purchase beforehand - especially if you book 12 weeks in advance, which is when the cheapest tickets are on sale.
Other ways to reduce the price you pay include avoiding peak times and taking advantage of so-called carnet tickets, which allow you to buy, for example, 12 journeys for the price of 10.

Most High Street banks offer packaged accounts that come with monthly fees ranging from £6.50 up to as much as £40, with a typical account charging about £15 per month.

Various benefits, such as travel insurance and mobile phone insurance, are offered in return for this fee. But whether or not it is worth paying for them depends on your individual circumstances.
Before signing up, it is therefore essential to check that you will make use of enough of the benefits, and that you cannot get them for less elsewhere.

Overseas money transfers or travel money purchases attract the same high rate of interest as credit card cash withdrawals.

Worse still, most credit cards – and debit cards – also charge you a foreign loading fee if you use them to make purchases while abroad.
You can, however, avoid these charges by using a Saga Platinum or Nationwide Building Society credit card.

Numbers starting 0871 cost 10p or more from a landline, while those starting 09 can cost more than £1 a minute from a mobile phone.

And the operators of these high-cost phone lines, some of which are banks, often get a cut of the call charges.
Most 09 numbers are linked to scams and should therefore be avoided at all costs, while 0871 numbers can often be bypassed by searching for an alternative local rate numbers on the

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