things take time, and you may just be producing more than the population can use yet, 3 weeks isn't very long to get a population productively established ... the problem with peat is it's not an 'environmentally friendly' product and adds nothing you or the worms need, paper is waste, and vermicomposting is really about waste disposal, so why buy a "non-renewable" resource when there's tons of scrap around to use?

try chopping up some cardboard [they love the starchy glue - "processed carbs" :) ], make sure it and the paper are staying wet enough, disturb the bin enough to insure it's not compacted or too wet, and try to add as much wet sugary stuff as you can [melon bits and other fruit scrap] to get a good bacterial population happening all over the bin, and give'em time

Bill