Judge Says Paypal's Arbitration Rules Unfair

MooRogue points to this article in today's San Francisco Chronicle, which reports U.S. District Court Judge Jeremy Fogel's ruling that Paypal "attempts to isolate itself from challenges," noting "Judge Fogel also refused to dismiss the class-action lawsuit going against Paypal." I guess I've been lucky with PayPal so far, but I know a few people who haven't.

Comments

Paypals response:

[geekoid]

"This is totally unfounded. Just because people use our system, doesn't mean we need to bear any responsibility for what goes on with are system! Jeez, you people are all acting like money is important and should be regulated..."

Re:Paypals response:

[Anonymous Coward]

>"This is totally unfounded. Just because people use our system,
doesn't mean we need to bear any responsibility for what goes on with
>are system!
>
This just comfirms my long-held thoughts that Paypal and other such services are basically created for suckers.

Re:Paypals response:

[Anonymous Coward]

your to lame to read BitchX.doc

Re:Paypals response:

[iamplasma]

Does it occur to anyone that this was basically exactly the argument that Napster was running, in that they weren't responsible for the use of their system? I seem to recall at the time that /. thought it was the best argument ever, or does the strength of the argument depend only on if /.ers are getting free stolen music from the arguer? I mean at least Paypal has a largely legitimate business going, unlike Napster which was founded upon the supposed "abuse" of the system.

Oh, and before you mod me as Flamebait, I want to point out that this is a genuine opinion, and not just something intended to tick people off. I'm just saying that you have to either accept or reject (IMHO reject) that line of argument, you can't accept if just for those you like and reject it for others.

Re:Paypals response:

[Anonymous Coward]

Napster worked. It did what it's users expected.

Paypal doesn't.

What's your problem ?

Re:Paypals response:

[Prior Restraint]

Does it occur to anyone that this was basically exactly the argument that Napster was running, in that they weren't responsible for the use of their system? ... I'm just saying that you have to either accept or reject that line of argument, you can't accept if just for those you like and reject it for others.

Well, I don't think that geekoid's comment really reflects PayPal's legal arguments, though. A better analogy would be to say that Napster had the option of shutting down anyone's account without notice, on the flimsiest of reasons, and without any way to appeal the decision (seizing the MP3s on the customer's drive is optional).

In fact, this was the sort of thing the RIAA was demanding that Napster do, and Napster kept saying it was wrong/technically infeasible. They did eventually get around to blocking some account holders, but only after it was obvious that the courts weren't coming to the rescue.

Re:Paypals response:

[Anonymous Coward]

It's not like napster was selling you the ability to download illegal music off of it's servers for a price. It was a program that used servers to facilitate transfer of music and files. No money changed hands from the clients (to my knowledge) to Napster. This seems like the main purpose of paypal, to profit from the use of its "system". Banks, credit card companies, and businesses such as Western Union do the same thing, but have strict regulation of their services. Napster seems like a totally different system (now dead) that did an entirely different thing, for free.

Not everyone thinks the same way. Not everyone sees the whole picture.

Re:Paypals response:

[mrscorpio]

While stolen IP was still flying around, there is a big difference between IP (Napster's illegally traded mp3's of RIAA music) and cash money (what people trade on PayPal).

Chris

Re:Paypals response:

[Anonymous Coward]

what one has to remember is that napster was just a system to connect people together to trade songs; paypal is actually a third party to be trusted in money transactions. besides that, if napster messes up, someone gets the wrong song. if paypal messes up, someone loses their money.

personally, i think any company that i give credit card numbers to should be a little more secure. if i pay for a CD from best buy on my credit card, and their computer systems mess up and Joe Moneytospend's new plasma TV is on my statement on the end of the month, you bet your ass im gonna have some words with best buy.

Re:Paypals response:

[Anonymous Coward]

Yep. 'Fraid so. With "IP" the owner doesn't lose anything, but his neighbor gains a duplicate. Unless the owner envies his neighbor, and desires that his neighbor not have the blessings he has, he won't have a problem with it.

Re:Paypals response:

[iamplasma]

Oh yes, I do understand all that, but the parent was more referring to Paypal fraud (unless I'm much mistaken) and users abusing the system. I was simply pointing out that the argument "we aren't responsible for our users" has to be either right or wrong, not just depend on if you like the company.

As for the difference between IP and cash, I recognise it exists (though IMHO IP should be just as valued, however much RMS and Napsterites may not like it), but it's not really relevant to what I was talking about.

Re:Paypals response:

[Fesh]

I'm not seeing this point brought up, so I'll go ahead and air it. The difference is that PayPal is a bank, whether they like it or not. They store money for you. They make it convenient to pay for things without using cash. A bricks-n-mortar bank would be screwed on so many different levels if it behaved like this, why is PayPal any different?

Re:Paypals response:

[Fesh]

Amendment: I didn't see the point brought up in this thread. D'oh. 'S what I get for reading at 1+/highest first/nested, I guess.

Re:Paypals response:

[Shagg]

I seem to recall at the time that /. thought it was the best argument ever, or does the strength of the argument depend only on if /.ers are getting free stolen music from the arguer?
I'm just saying that you have to either accept or reject (IMHO reject) that line of argument, you can't accept if just for those you like and reject it for others.

How many hundred thousand people have /. accounts now? You do realize that not everyone on here has to have the exact same opinion. Some people on here could post that they thought it was the best argument ever during the Napster days, while others can post here now and say that it's a weak defense on the part of Paypal.

I'm not trying to flame you specifically, but I get tired of hearing this complaint. I don't remember signing away my freedom of thought when I signed up for /.

Re:Paypals response:

[Anonymous Coward]

Like Napster, PayPal shouldn't be blamed for illegal acts that their users conduct over their system. But they certainly should be blamed when they handle fraud allegations by stealing their users' money.

Re:Paypals response:

[MikeFM]

PayPal is NOT a bank. They are more like the digital coffee can in your backyard that you bury money in until you decide to do something with it. If you want to use a bank go use a bank, if you don't then stop bitching and enjoy the benefits of not having to use a bank. You know when you sign up that they aren't a bank and are not federally insured and so forth so if you don't like what you get then stop complaining.

For my part I love PayPal. They've never screwed me over in the slightest. They've answered questions when I've asked. They give relevant information for tracking my money. All things I've never had any bank do better for.

Re:Paypals response:

[jasonditz]

Perhaps the more poignant question here is: If Paypal does this and it works so well, why should brick-n-mortars have to operate with so many annoyances? Seriously, if people agree to Paypal's terms then whats the problem? Don't like the deal, don't agree to it.

Re:Paypals response:

[Anonymous Coward]

if it walks like a duck, talks like a duck, and looks like a duck, its a fucking duck.

if it stores money like a bank, makes interest like a bank, and transfers money like a bank, its a fucking bank.

deal with it

Re:Paypals response:

[Grax]

Napster created a system for exchanging music files. They didn't regulate what files you put on their system. In my opinion their operation was every bit as "legitimate" as the whole of the internet.

Exchanging files is quite a bit different than exchanging money. Having your Napster account frozen does not affect your ability to spend money. I see a big difference here.

obligatory link

[packeteer]

www.paypalsucks.com

Re:obligatory link

[saskboy]

One "man"'s flamebait, is another man's interesting. Funny how a redundant remark about this website was modded differently. I thought modderation was supposed to be pretty objective?
For my thoughts on the sucker trap that is PayPal, please see my remarks farther down this page... and on this link.
http://forums.ebay.ca/dws?50@182.FDRqfJgpuY x^1@.ef 77095/4

Re:obligatory link

[Anonymous Coward]

fine

Re:obligatory link

[Jucius Maximus]

also: paypalwarning.com.

Another Article, Same Jist

[Murdock037]

Nice to see Slashdot isn't getting more than a few stories a day from the Register at this point.

But just in case you love the vulture, they still beat 'em to it:

http://www.theregister.co.uk/content/6/27028.htm l

Re:Another Article, Same Jist

[LucidityZero]

There's a difference between The Register and SlashDot? It thought the only difference was the message boards here... ;)

Re:Another Article, Same Jist

[jsse]

It's the shame they deserved. There are hundreds of submitted stories at any given time and they don't take them seriously.

It's not the first time they rejected my submission in just few minutes only found it reapeated in /. headlines a few days later from different submission. They simply don't spend time verifying the news, thus lost the first hand on them.

Call me a whinner, but I'm sure a lot of us has the similar experience. If /. editors keep treating submissions like dirts, fewer and fewer people would care to submit.

You can mod me down now, but please think about it. I personally hate to see /. being down to a Register redirector.

Re:Another Article, Same Jist

[Anonymous Coward]

Users send in most stories. If you have one that is breaking news, send it in or STFU.

Re:Another Article, Same Jist

[greenrd]

Call me a whinner

You're a whiner who can't spell.

It's inevitable that the vast majority of submissions will get rejected, however good. Reason #1, 2 and 3: there are too many. Reason 4: Different editors, different preferences. Reason 5: They are human, they are fallible. Reason 6: Number of submissions can be used as a crude barometer of community interest. Reason 7: No-one is putting a gun to their head and forcing them to break a story first - it's their perogative to wait a bit, change their minds, wait for confirmation, etc.

Do I need to go on? I think not.

Is Ebay a bank?

[MrCaseyB]

I thought I remembered a story about a decision that would make ebay follow all the rules and regulations that traditional banks follow. What was the outcome of that and would that have prevented ebay from being able to screw people like this? IS Ebay even FDIC insured?

Re:Is Ebay a bank?

[jbolden]

Banks aren't required to be FDIC insured. Its an optional service of the Federal Government.

Re:Is Ebay a bank?

[NineNine]

Actually, I'm thinking about PayPal. Either way, it's a moot point now. It already came and went. EBay/PayPal won. It was ruled that they're not technically a "bank", and so they don't need to be regulated.

Essentially, when you put money into EBay/PayPal, you're taking a gamble that you're gonna get it back. No FDIC insurance there. Hell, not even any regulations that say that they have to keep xx% of cash on hand. If there were a run on PayPal/EBay (ie: a lot of people withdrawing cash), I seriously doubt they'd be able to handle it. In fact, that's a good idea...

Somebody needs to organize a day when as many as people withdraw cash from PayPal. When they bottom out, that'll get the Fed's attention.

Re:Is Ebay a bank?

[Anonymous Coward]

Your idea will probably get the Fed's attention.

If conspiring to cause a run on a payment house isn't considered Terrorism(C) yet, it will be after your idea has its run.

Re:Is Ebay a bank?

[Anonymous Coward]

porn-boy, the fed doesn't give a shit about a couple million dollars in a pseudo-bank. And, even if everyone tried to withdraw their money, most would find their accounts "frozen."

Re:Is Ebay a bank?

[joshki]

Would you keep your money in a bank that wasn't FDIC insured?

Didn't think so.

Re:Is Ebay a bank?

[soapvox]

Actually yes, I keep my money where it is NCUA insured, its called a credit union

Re:Is Ebay a bank?

[joshki]

Same difference.

Re:Is Ebay a bank?

[jbolden]

I take it you don't remember Reagan's term in office. A lot of people learned that state insurances were not FDIC insured.

Re:Is Ebay a bank?

[jbolden]

I use a money market with no FDIC insurance.

Re:Is Ebay a bank?

[plague3106]

Funny enough, my credit union is FDIC insured.

Re:Is Ebay a bank?

[Anonymous Coward]

Burn! Not just would but do!

Re:Is Ebay a bank?

[Zeinfeld]

What was the outcome of that and would that have prevented ebay from being able to screw people like this? IS Ebay even FDIC insured?

FDIC insurance is irrelevant unless eBay (owner of Paypal) goes under. FDIC insurance is not a requirement to perform bank functions, but federal regulation is.

I don't see why Paypal is not subject to the same rules as any other bank or money transfer agent. Nor do quite a few state attorney generals. If you take money from consumers and hold it in accounts the Federal Reserve regulations apply to you, period, end of story.

This case is rather more interesting, the judge essentially threw out the mandatory arbitration claim as being, well arbitrary.

Contracts should not trump the law. It is one thing for two companies negotiating a million dollar contract to agree to be bound by arbitration, it is quite another for a company to unilateraly impose terms on consumers.

Of course extreeme Randite Libertarians will blather on incessantly about 'rights' however this is one case in which the law is defined empirically. The law is what courts rule it to be. Courts have refused to uphold contract terms that usurp the common good since the days of Claudius.

Federal small claims

[jbolden]

For local cases small claims courts work really well. Generally for about $25 you can file, there are no lawyers, the case takes place within a month of filing, the judge hears both sides and the thing is over in less than 15 minutes. Suprisingly often once you "sue" in small claims court you can get the other side to actually negotiate in good faith.

With the internet there is a great deal of "mail order" type business going on for a county based system to work. But the system itself works pretty well. I don't see any reason the Federal Government couldn't set up an internet based small claims court under the interstate commerce clause. Also maybe raise the limit to say $25k. For large cases hiring an out of state lawyer to handle a suit is not unreasonable its insane for small cases and there are lots of small cases.

Re:Federal small claims

[dr_dank]

If the issue is with PayPal, you forgo your right to sue for "binding arbitration" (read:a private court that will almost certainly be in PayPal's favor), IIRC. Hopefully, the class action suit will put an end to that nonsense.

Re:Federal small claims

[DDX_2002]

$25K is awfully high. At that sort of value, what'll happen is that you get a lot of commercial disputes moving into small claims. Once that happens, they show up with their 12 binders of documents, their lawyers (at $25K it's worth hiring one), the legal objections, etc. All of a sudden, the 15 minute trials take hours or days, it takes many months to get a trial date and there's no advantage vs. using a normal superior court.

And any dispute involving a federal court is going to require lawyers, which leads to all the bad things above. The contract was probably drawn up in one state, you live in another, what law is applicable? What law was intended by the parties? Does anyone know if there's such a thing as federal contract law in the US, or is it purely a state matter?

Re:Federal small claims

[jbolden]

Ask people who have gone through a divorce. $20k won't last long in lawyers fees even for bad lawyers. As for binders, objections... in a small claims court the judge conducts the investigation not the lawyers. They could only object to the judge (which isn't going to go over well) unless they intend an appeal in which case it would go to "real court" (I don't know what the rules are regarding small claims appeals).Also small claims judges want to keep lawyers out so they often much harser on lawyers than on individuals; I think consulting a lawyer is OK but acting like one loses you points.

As for the contract law; I'd assume most of these cases are pretty clear cut. If they get to the point that it requires subtle points of contract law (rather than points true in all states) the judge might just split the money down the middle -- again I don't know in practice they cases were usually hung on issues of fact not on issues of law -- the idea in small claims is to move cases along.

Re:Federal small claims

[Anonymous Coward]

blockquothe the poster:

Ask people who have gone through a divorce

He was referring to the amount of the claim, not how much you had to pay in legal fees when your wife asked for a divorce, YOU FUCKING SICKO!!!!

Must you pathologically change the subject? Get off my forum. See a shrink, buddy.

Re:Federal small claims

[iamplasma]

I can't remember the exact court case, I think it was "Actor's Equity... v Someone", and it was admittedly also an English case, but supposedly a contract cannot oust the courts, they can make you go to arbitration, but once that is complete you can proceed to the courts.

Without links to more info (and I don't really know where to look for US details), I don't know how much the US situation differs, but I'd assume that the courts would find similarly, so even if you do have to go through annoying arbitration, it's not really binding, you can just then proceed to the courts.

Oh, and IANAL.

PayPal...

[ak_hepcat]

I've used PP a few times, and it's gone pretty well for me. I've never 'deposited' money in them, mostly because I realise that *** They Are Not A Bank ***, just a western-union house. If only western-union didn't charge as much money for money-transfers, they could take over the paypal market. ($18US for a $40US transfer. Hello? Can you say unreasonable markup?)

Re:PayPal...

[LordNimon]

I'm pretty sure WU's costs are much higher than PayPal's. WU has physical offices around the world, and that's not cheap. WU's only mistake was not taking their business model online before PayPal did. Now that they've missed the boat, they're probably not interested in even trying.

Re:PayPal...

[Anonymous Coward]

If only western-union didn't charge as much money for money-transfers, they could take over the paypal market. ($18US for a $40US transfer. Hello? Can you say unreasonable markup?)

That depends on a couple of things.

First off, yes, it's $18 on $40, but I believe it's a stepped rate -- i.e. $18 for anything up to about $300 or something. Then it notches up a few bucks for the next few hundred. So they'd probably charge you the same $18 to wire $5 somewhere.

Second, it is a lot, but the one time I used it, I was sending a payment on the last possible day to a credit card outfit. Since I'd also missed another recent payment, I would have been hit with a $20 late fee, plus 5% of the payment, plus a ding on the credit report, which I was trying to clean up at the time. All in all $18 was cheap peace of mind.

When you call the all-night pharmacy to have a pack of condoms at 2:30am, you can expect to pay somewhat more than retail.

Re:PayPal...

[Anonymous Coward]

Actually, they're trying now, with an interesting service called BidPay. It actually mails the seller a money order.

Re:PayPal...

[dvdeug]

If only western-union didn't charge as much money for money-transfers, they could take over the paypal market.

www.bidpay.com - by Western Union - only charges $3 to send small amounts of money anywhere. I don't usually use them, but they were the only way I could get money to one Estonian seller.

not a troll but

[evacuate_the_bull]

mentioning paypal on slashdot is almost worse than mentioning MS....this is going to get ugly

Re:not a troll but

[mijok]

hey, let's see how ugly it can get? what will happen on /. once PayPalladium (TM), the pay-for-drm-etc. system), comes out?

Re:not a troll but

[neurocide]

that's only funny cause there was a MSDN ad on the page for me. :)

new paypal scheme...

[edrugtrader]

route all your paypal transactions through online gaming. have people deposit money into gambling accounts and then withdraw into paypal.

paypal legally can't charge fees on money accepted from gambling sites... so they don't.

i save a lot of money this way.

Re:new paypal scheme...

[mike3411]

Yes, I can see how that would save you money. If only it weren't counteracted by the fact that all gambling providers (both physical and online) will _always_ make money off of you (in other words, you will lose money). While it's smart to save some $$ when you do win, wouldn't you be better off not purchasing the services of the gambling industry in the first place?

Re:new paypal scheme...

[Anonymous Coward]

Given your name (e drug trader) I have to wonder if this isn't a new troll account...

'Yeah, I save a lot of money by laundering it through gambling sites ...' [???]

Re:new paypal scheme...

[Anonymous Coward]

I'm not sure I understand how that works? Someone wants to pay your $500 via Paypal. What exactly is a "gamling account" and how would someone deposit it there? Thanks.

Re:new paypal scheme...

[M3shuggah]

You seem to be missing the point. Not all gambling sites charge a "cash out" fee (I'm not going to mention one because this is not an advertisement), thus, as long as you are able to avoid the temptation to "roll the dice" from the point when you transfer the funds to your gambling account to the time you cash out your "credit"... you shouldn't lose anything.

Some gambling sites have a surcharge, but most that due (that I've seen) are lower than PayPal's fees. ;)

Re:new paypal scheme...

[M3shuggah]

:s/due/do

Re:new paypal scheme...

[Anonymous Coward]

He's not suggesting gambling. He's suggesting opening an account at an e-casino, and passing the account passwd to someone else to withdraw money from, without ever actually gambling.

Gambling accounts always let you withdraw money, otherwise the small percentage who win couldn't get their money back.

So it's the online equivalent of meeting someone at a casino, and they pay you in chips, and you cash the chips and leave.

I advise that you seek other careers than mafioso don. Your brain is not devious enough.

Re:new paypal scheme...

[mike3411]

You're missing my point. I'm not referring to surcharges/cashout fees/whatever, I'm referring to the fact that if you gamble with $100, statistically speaking, you're going to end up with less than $100. So even if you save money on surcharges or fees or whatnot with paypal, your net profit is negative (or your net loss is positive). Unless you're one of those uber-l33t MIT cardcounters, you are _not_ going to make money off gambling of this nature. These sites are a business like any other, and are structured to ensure a reliable profit margin.
This is all statistically speaking, of course, so none of that "you're wrong, I gambled $10 and won $500! muahahahahaha, i finally found a get-rich-quick scheme that actually works!". Although, at least w/ most of the sites, there's some established winning ratio, so you'll only lose like 25% of your money in long-term. Beats the stock market, which is a total crap shoot these days.

Re:new paypal scheme...

[Anonymous Coward]

Are you capable only of writing and not of reading?

Re:new paypal scheme...

[mike3411]

aha, i see, i supposed he was referring to a method of saving on taxes/other fees or somesuch. Seems like an awful hassle to avoid paying whatever % PP charges, but I suppose for larger transactions it would be relevent.
I decided against mafioso some time ago, but not due to a lack of deviousness (you heard of Microsoft? yeah, that was one of my crueler, trickier ideas, back in the day), but rather because I couldn't possible consume that much spaghetti. Not to imply that mafiosos are all italian, but judging from movies, um, yeah they are.

Re:new paypal scheme...

[Anonymous Coward]

maybe he's myfuckingsql's twin brotheR!

Re:new paypal scheme...

[Asgard]

No, I think you are missing the point:

Step 1: Route money from paypal into gambling acct.
Step 2: Transfer out of gambling site into Paypal acct.

Notice that Step 1.5 is not 'gamble'. The idea is to just use the gambling site as a way-station for the cash. Unless they force you to convert 'in' money through gambling to 'out' money, it could work.

Re:new paypal scheme...

[edrugtrader]

... well, first off, if money was deposited and then instantly withdrawn, i wouldn't lose money.

second, i do this on poker sites. poker is a skill game, i have a positive expected return.

Re:new paypal scheme...

[silicon_synapse]

Do you even know what money laundering is?

Re:new paypal scheme...

[Bodhammer]

There is capital punishment for stupidity - it's called evolution...

good that a judge is doing this

[intermodal]

by doing this, it greatly reduces the strength of a EULA i would think...clickwrap's value as a legal tool is being shown here as not being what companies would like it to be, which is good considering the draconian things they put in them...i seem to recall one a while back where the eula said you could not write an unfavorable review of the software....

Re:good that a judge is doing this

[No One]

Nope. The judge isn't saying that the contract isn't valid, he's saying that some of the terms are unfair and unenforceable. If anything, the basic assumption is that the EULA is a vaild contract, which would actually strengthen EULAs.

ANTI-PayPal Communities

[Joe Jordan]

Visit PayPalSucks.com for an entire community pissed off at PayPal.com's practices.

Re:ANTI-PayPal Communities

[Anonymous Coward]

Again slashdot mods show their intelligence. This same link was already posted but marked flamebait. Now when it should be marked redundant it is marked +2 informative.

Re:ANTI-PayPal Communities

[Anonymous Coward]

Notice that most of the people on that site are ones who used PayPal to pay for an auction for the first time and had a bad experience. I've been using PayPal for about 2 years for business (quite a lot of money) and so far so good.

Re:ANTI-PayPal Communities

[NortWind]

Visit PayPalSucks.com [paypalsucks.com] for an entire community pissed off at PayPal.com's practices.

Yes, an entire community of whining morons. "Ooo, PayPal charged me for a service!" "Ooo, PayPal prefers I use email to communicate with them!" I've used PayPal over 200 times, and they have always come through quickly, efficiently, and with great documentation of my accounts and transactions. They have even had to compensate for some of eBay's bad *coff* *monopolistic* *coff* behaviors, such as pushing BillPay and copying the PayPal "Pay Now!" button with their own "Pay Now!" button. If you don't like PayPal, don't use PayPal. How can it be any more simple?

Re:ANTI-PayPal Communities

[Anonymous Coward]

I use a special debit card that only has enough money on it to buy what I buy online. It's accepted everywhere a credit card is and doesn't invoke any fee's (free checking and debit account). Paypal can't be any better than that.

Re:ANTI-PayPal Communities

[NortWind]

I use a special debit card that only has enough money on it to buy what I buy online. It's accepted everywhere a credit card is and doesn't invoke any fee's (free checking and debit account). Paypal can't be any better than that.

PayPal is better than a debit card for at least two important reasons:

As a seller on eBay, I don't have to got through the expense of becoming an affiliate of a credit card company in order to accept credit card payment. Can you accept credit card payment with your debit card?

As a buyer on eBay, I can pay for an auction in a couple of minutes after the auction closes if the auction accepts PayPal. Most eBay auctions (I believe it is near two thirds) accept PayPal. Can you settle an auction like that with your card, and no PayPal account?

No probs yet, but just to be safe...

[Anonymous Coward]

I haven't had any problems with them yet, but they kept insisting that I make transfers directly from my bank account rather than from my credit card. I went ahead and removed my checking account after I read some things about them this weekend, figures something like this would be happening just as I did that.

no prob here

[greymond]

I've been using paypal constantly with ebay - both selling and buying - I even take donations via paypal on my website. I havent had a problem with them at all. I read through some of the old slashdot's on this and it seemed that people who had LOTS of money (ie: more than 1 grand) in there PP account somehow got fucked over but the people like myself who have $100 or less in there at any given time are left alone just fine. Maybe this is something the conspiracy people should look into - like maybe paypal fucks with the people who put alot of money in there at once because they know they can get away with it because the majority of people who run small amounts won't complain and will stick up for PP.

Re:no prob here

[larry bagina]

that logic seems backwards. If you put $10,000 in a pay pal account, you have $10,000 to throw around, probably more, and can afford a lawyer.

If $25 goes missing or gets frozen, it's probably not worth your time to bother.

Re:no prob here

[GoogolPlexPlex]

If you put $10,000 in a pay pal account, then after they take their transfer fees you probably have a significant number of hundreds of dollars less (to throw around...) Or worst case, they freeze your money and you have nothing.

Re:no prob here

[RallyNick]

that logic seems backwards. If you put $10,000 in a pay pal account, you have $10,000 to throw around, probably more, and can afford a lawyer. If $25 goes missing or gets frozen, it's probably not worth your time to bother.

nope, i don't think it's backwards. the point is that the number of people who run thousands through paypal is small, while that of the people who run $25 is huge. they can make some extra profit by messing with a few big accts and they'll have few complaints. trying to get the same extra cash from many small accts would prolly put and end to their bussiness. also, affording a lawyer was until now moot, as you couldn't sue them if you used them.

i can confirm too that i've had thousands of $50 and under transactions and not a single problem ever. i wouldn't dare accept anything over $300 though.

PalPal democratizes taking credit cards

[gentlewizard]

I used PayPal earlier this year to accept credit card payments for a seminar I co-produced. It all went very smoothly: following the instructions in their online manual, I was able to add the Paypal button to my website and also pre-populate the signup form for new PayPal users.

Best of all, the fees were only $0.30 plus 2.9% per transaction, with no monthly minimum, terminal fees, etc. like with a standard credit card processor. This page at PalPal shows the comparison.

To me, this means that accepting credit card payments is not just a privilege of those who can "qualify" at a bank, but available to anyone with just a painless web signup. And the fees are less too.

If PayPal can ever get its customer service act together, it will really give banks a challenge. The credit card processors don't care: they're getting huge traffic from PayPal.

Re:PalPal democratizes taking credit cards

[vanyel]

Absolutely! That's why I use them --- it makes taking credit cards painless. I don't keep much in the paypal account, so I'm not out much if some turkey manages to get it frozen somehow...

Re:PalPal democratizes taking credit cards

[Anonymous Coward]

Good for you. I hope Paypal doesn't take all of your money.

Re:PalPal democratizes taking credit cards

[Anonymous Coward]

Until someone uses a stolen credit card to pay you and then your account and funds siezed. It happens and its not pretty.

Re: PalPal democratizes taking credit cards

[Black Parrot]

I thought it was the 38 Special that democratized taking credit cards.

Re:PalPal democratizes taking credit cards

[krogoth]

The problem is that PayPal wants direct access to your money. They want to keep your credit card number on their computers - I don't have a problem with their security, but the less security you NEED, the safer it is. This of course requires extra checking, so it would take me 3 weeks from signing up to being able to pay.

Re:PalPal democratizes taking credit cards

[Bagheera]

To me, this means that accepting credit card payments is not just a privilege of those who can "qualify" at a bank, but available to anyone with just a painless web signup. And the fees are less too.

One of the issues that has been brought up is that PayPal is NOT more economical than a merchant account. You reference their site, and I honestly wish I could find a good merchant account link - but I know from friends in business that the transaction fees are less than 2.9%.

While the point of qualification may be valid (there is none for a paypal account) the "savings" are non-existant for most business users. And, to be quite honest, it's not that difficult to qualify for a merchant account. A friend of mine started her business on-line with a merchant account and no real credit after a bankruptcy.

The real issue is that PayPal is NOT a bank, does not have the oversite that a bank does, and makes it so they can screw their users if they feel like it. The Judge in this instance has stepped in and told them "No, sorry, you aren't going to keep screwing your users."

Good for the Judge.

Re:PalPal democratizes taking credit cards

[Guppy06]

"PalPal democratizes taking credit cards"

First off, I just have to say how I laughed at that title. That's like saying Lenin democratized Russia. Replacing one oppressive regime with another doesn't change anything. PayPal just makes sure everybody is oppressed evenly.

"Best of all, the fees were only $0.30 plus 2.9% per transaction, with no monthly minimum, terminal fees, etc. like with a standard credit card processor. This page [paypal.com] at PalPal shows the comparison."

That's all well and good, but my problem (well, one of them at least) is that they charge per-dollar to begin with. For most normal bank transactions, you are charged per-transaction, not per-dollar, and it's only with credit cards do we see this baseless pricing racket put in place. I mean, it't not like transferring $100.00 requires ten times the amount of bits to move through the wire than $10.00.

On top of that, it takes them several days to transfer money to my checking account, but they can take it from my account "instantly?" Why does it work that way? Maybe so PayPal can skim a little interest off the transaction on top of the transaction fees? Charging me twice, are they?

I live in Louisiana. My bank is in Texas. When I sell things on eBay, often times when a person mails me their check and I mail the check to my bank, it takes less time to get my money than it would have taken through PayPal.

"To me, this means that accepting credit card payments is not just a privilege of those who can "qualify" at a bank, but available to anyone with just a painless web signup. And the fees are less too."

The problem aren't the middle-men who set up the transaction services, the problem goes much higher than that, rooted in the oligopoly that the credit card industry has become. Look at the recent legal troubles Visa and MastarCard are finding themselves in.

"If PayPal can ever get its customer service act together, it will really give banks a challenge."

It will be a cold day in hell before most banks can challenge my bank as far as I'm concerned. And PayPal has a long way to catch up with normal banks.

Just as an example, most banks don't make you sit through click-through ads before you can access your account. If that's not outright contempt for their customers, I don't know what is.

I have so much more respect for Citibank and c2it at this point that it's not even funny. Seriously. Large uber-corp offering a better service at a better price than some dot-bomb start up. Go figure.

Re:PalPal democratizes taking credit cards

[acvh]

I used to sell merchant banking services for a large (no longer extant) NY money center bank. For a small, first time account (like many paypal users) the fees were as much as 4% of the amount charged, and you also had to have a business checking account with them (which had monthly fees as well). AMEX used to charge 6% for small shops; I don't know what their number is now.

And that was assuming that you qualified (monthly minimums again).

Re:PalPal democratizes taking credit cards

[GigsVT]

I've not had a merchant account personally, but I have worked freelance for people who do have one, so I have some idea about the costs.

Generally, you have to have a good amount of volume to get below 2.9%, because there are a lot of minimums and fixed costs. If you want an account, some places make you rent a swipe terminal, even if you don't need it, most also have other fixed monthly fees that make the effective percentage much higher for a low volume seller.

Paypal isn't a bad deal, it isn't a great deal like it used to be, but for a small seller that wants to take credit cards, it is almost definitely cheaper than a real merchant account with some place like EFS Concorde.

Re:PalPal democratizes taking credit cards

[Zathrus]

it't not like transferring $100.00 requires ten times the amount of bits to move through the wire than $10.00

No, but it is ten times the risk. The bank is lending out money, usually at a very short term rate. They have to make the money somehow, and also cover their asses in case the debt goes bad (what happens if you never pay back that $100? I've worked in the high risk credit industry -- 10-15% chargeoff is par for the course).

Not cheering or jeering Paypal here, just pointing out some economic realities.

Re:PalPal democratizes taking credit cards

[gentlewizard]

I'll reply here to this one and the next couple. I don't use PayPal as a storage area, only a conduit. I transferred the funds out each day, and I was as frustrated by the 3 day delay as anybody. But you're right, there's a risk there that they will freeze funds (they've done it in the past) so I was careful not to leave anything lying around.

paypal

[Anonymous Coward]

I've used paypal (and their bill payment service)
for some time now without problem .. but one has
to wonder how you would remove yourself from the
jaws of the beast without getting bitten. Hopefully
they'll clean up their act before my number comes
up ;) ..

The website mentions some $16mil/day in transactions. They can't be screwing up That
often. I feel a lot more comfortable using
PayPal to pay people than I do using it to
receive money, however.

What more can you expect from a company that

[tcc]

Doesn't delete your account even if you specifically ask them to do so after many emails, fax, etc... and if that wasn't enough, they still spam you with their newsletter and promotion...

I mean, it was one thing that they didn't give me that 5$ credit when my friend added himself, and sent them a message to confirm that he got refered by me, but blattantly spamming and keeping your information in their database like this even after repeated requests is just plain wrong.

At least I'm lucky, I didn't do the mistake of running a merchant service with them, especially after all the horror stories I've heard.

Re:What more can you expect from a company that

[vsync64]

Also he has to transfer $250 from his bank account to his PayPal account.

Re:What more can you expect from a company that

[jandrese]

When did this happen? I never had to have any of my friends do that to get the $5. I still like my PayPal account, but maybe that's because I understand what it is. I never keep any money in it and I use it to give tips to websites, to buy the occasional cheap item off ebay, to pay my Slashdot bill, and the like. I've had people pay me with ebay before and I always move the money off to my real account once I get it. It's really a convienent system, and I hate to see it get shut down and replaced with a ton of incompatable rivals no better than the original.

Re:What more can you expect from a company that

[Anonymous Coward]

I had this same problem with them.

I filled in a complaint with the Attorney General in my state (a one page form on the AG web site).

This complaint will not result in any action, but serves the purpose bringing a small matter the the attention of my state's AG office.

If enough people have problems and do this, then Paypal would have more trouble than just this 1 judge nipping at their butts.

I would urge anyone that has had a problem with paypal to spend 10 minutes and fill out a complaint report on their state's Office of the Attorney General page.

If paypal gets enough bad publicity and state AG's get enough complaints then they will act (sometimes in concert i.e. M$ antitrust proceedings). The AG's love cases where a lot of people are being ripped off in a high profile case (results in good pub for their respective offices).

no conflict of interest here...

[Anonymous Coward]

I guess I've been lucky with PayPal so far...

http://slashdot.org/subscribe.pl

Re:no conflict of interest here...

[GoatPigSheep]

yep, I am certain there is some bias here. As a note, real magazines and newspapers point out when they are involved with something they are coverering (eg. a magazine talking about their parent companies stock, will point out they are owned by the company in the feature)

Let's make PayPal Open Source!

[Anonymous Coward]

I mean, who else but the experienced and well-travelled Open Source developer community would be better qualified to improve a system such as PayPal?

Arbitration could follow a similar methodology as the one implemented for GPL infractions in public projects.

The reliability and trustworthiness of PayPal would be greatly enhanced by having the honest, dedicated, and hard-working developers of the Open Source community oversee and develop a new PayPal system.

Only when we encourage the Open Source community of developers to follow their dreams can we seize control back from entities such Citibank.

Re:Let's make PayPal Open Source!

[Stonehand]

For the panel, I would recommend Theo de Raadt, Richard M. Stallman, Eric Raymond, Alan Cox and Hans Reiser. Peace and harmony for all!

I never had a problem

[Marqui]

However, I NEVER leave money in the paypal "account"!!!!!! Use it for what its for, sending/recieving money and you should be ok. It is NOT and never claimed to be a bank!!!

Ebay + Paypal

[handsomepete]

The unfortunate thing is that Ebay and Paypal were (and still are, I s'pose) linked so closely. I just sold about 30 items on Ebay and almost all of the inquiry e-mails I received contained the line "Do you accept PayPal? That's the only way I can bid." I ended up caving and getting an account just to up the chance that I would get a decent price on everything. Lo and behold, half of the auction winners ended up paying that way. So far, I've had no problems but plan on closing it immediately after I've finished collecting and shipping.

Now, correct me if I'm wrong, but I was under the impression that Ebay acquired Paypal. Do they have any known plans to let it die slowly and shove their credit card program to the forefront? Have similar problems emerged from the Ebay cc service?

Re:Ebay + Paypal

[tiedyejeremy]

I don't think the acquisition is final yet. It seems like, in time, paypal and any other existing money clearing houses, as well as esnipe and the like, will be acquired by ebay, who will naturally become big and bloated like [karma whore] M$ code, [/karma whore] Di$ney, GE, Tyco, Enron, U.S. Government, etc. It's just the way business works. Start small, righteous, and efficeint and progress toward bloat.

Re:Ebay + Paypal

[larry bagina]

ebay is dropping their cc service in favor of paypal.

Re:Ebay + Paypal

[/dev/trash]

Didn't ebay buy Paypal?

Re:Ebay + Paypal

[Eccles]

I just sold about 30 items on Ebay and almost all of the inquiry e-mails I received contained the line "Do you accept PayPal? That's the only way I can bid."

As someone who bids and buys on e-bay, I look for either PayPal or ebay's payment system. Western Union's fees are outrageous, and sending a check is such a hassle for a small transaction.

Now, if instead there was a way for me to send you a number, which is an encrypted one-time code for transferring a set amount from my bank account to yours, I'd love to just e-mail that instead. But as far as I know, there's nothing even close to that anywhere.

Re:Ebay + Paypal

[handsomepete]

Now, if instead there was a way for me to send you a number, which is an encrypted one-time code for transferring a set amount from my bank account to yours, I'd love to just e-mail that instead. But as far as I know, there's nothing even close to that anywhere.

Soon I bet the Palladiumites will be using that example as a positive use of trusted computing (joking, joking....) I don't think Paypal would necessarily be bad if it hadn't garnered itself such an awful reputation. Hell, it's a good idea - allowing anyone to use credit cards over the internet to accept payment. Great for auctions and independent/small businesses. It's just a shame it didn't pan out so great. Recovery from the kind of backlash it has received is gonna be hard.

Re:Ebay + Paypal

[Anonymous Coward]

read.comprehend.post

Re:Ebay + Paypal

[alanjstr]

eBay bought out a similar service a while ago, the only 'competition' to PayPal. But obviously PayPal was the big name, so now they're buying them too. Its not a done deal, though, since there are various regulatory hurdles, etc.

Re:Ebay + Paypal

[Anonymous Coward]

Good luck getting your money _out_ of PayPal...

That seems to be the most common problem.

Re:Ebay + Paypal

[Anonymous Coward]

"Do you accept PayPal? That's the only way I can bid."

No way you should believe that. I don't have credit cards, don't use PayPal, and buy stuff on eBay all the time. I pay with US Postal Money Orders, works just fine.

MOD PARENT DIAGONALLY

[Anonymous Coward]

This man, he speaks the truth.

hypocrosy?

[larry bagina]

Does slashdot still use paypal as the only billing option for subscriptions?

Re:hypocrosy?

[Anonymous Coward]

no

Re: hypocrosy?

[Black Parrot]

Nope, 'hypocrosy' is when your lower pair of eyeballs are crossed.

PayPal needs a lot of work, and regulating...

[saskboy]

As the defacto online payment system in North America, it needs rules, and fast. The current system allows for people to make minor, unintentional typos, and be charged $25US for the mistake. We are not talking math errors, I mean getting a bank routing number wrong. The transaction will fail, and the good forgiving folks at PayPal ding you $25US each time you hit the transfer button.
The documentation on their website interface is lame. There is not one place I could find that explicitly says that the dollar figure you enter will be in USD, even if you are logged in as an international memeber. They also conceal the fact that you will likely never see your $5 sign up bonus, until you complete an un-insurable, $250US, single transaction. How is that for a requirement that isn't even in fine print, it is on another page that the fine print links to?!
eBay chat boards often have discussions about PayPal problems, including one fellow today that was told in an email from PayPal support, that he would have to register 2 credit cards with him, because they lost the registration for his original card! If anything goes wrong with your PayPal account, basically you are screwed, and have no way to get your money other than suing a mega-business.
Good Luck,
Unhappy PayPal user

Re:PayPal needs a lot of work, and regulating...

[vsync64]

We are not talking math errors, I mean getting a bank routing number wrong. The transaction will fail, and the good forgiving folks at PayPal ding you $25US each time you hit the transfer button.

Do you complain when your bank charges you $20 for bouncing a check? It's the exact same thing.

Re:PayPal needs a lot of work, and regulating...

[saskboy]

The difference is that your cheque already has the bank transfer numbers written on it, and it is a mathematical error if you mess up, not a typo. The consequences are also well known. However in the computer world, consumers expect an explaination of the risks when they press a button that can cost them $25 each time they press it. Plus, you would only write a cheque to bounce once, while you may double click a button without thinking twice.
My point is also that you can visit a bank branch, and explain your situation to the manager, who being human may decide to cut you some slack. PayPal doesn't even have bank branches, nor adaquate telephone support for instances like this. There is no real-world recourse for International, much less US domestic users who encounter a problem.

Re:PayPal needs a lot of work, and regulating...

[vsync64]

However in the computer world, consumers expect an explaination of the risks when they press a button that can cost them $25 each time they press it.

Whenever I'm filling out something that asks for my routing and account numbers, computer or no, I triple-check the fields, because it's fairly obvious that an error will cause money to be debited either from someone else's account or a nonexistant account. I would expect problems to arise from this, ranging from delays in the transaction to fees for the inconvenience. If I wanted details ahead of time, I would *gasp* read the terms of service.

Plus, you would only write a cheque to bounce once, while you may double click a button without thinking twice.

No offense, but how long have you been using computers? Buttons are not meant to be double clicked. Web links are not meant to be double clicked. This behavior has been standard since, well, forever, as far as I know. (Now, that's not to say they couldn't set up something like Slashdot's FORMKEYS variable. I don't know if they do that or not; I'm not about to go double-clicking buttons to find out.)

PayPal doesn't even have bank branches, nor adaquate telephone support for instances like this.

Well, my policy in such cases is to just whois their domain, call the phone number, and ask for customer service. :-) It worked with Hotwire...

Re:PayPal needs a lot of work, and regulating...

[saskboy]

Your sarcasm is not needed. I have been using a computer for many years, and would not make the mistakes I mentioned, but my point is that in the real world, people are mistake makers. PayPal doesn't allow for mistakes, and so is not a people friendly service. They advertise themselves as easy to use, but they really offer nothing that is easy or helpful to anyone that is not already an expert at online transactions, and hevean help you if anything should go wrong. Mistakes don't always happen because of the consumer too, sometimes businesses make them, and wouldn't you want to work with a business that is willing to help you when you or they make an error?

Re:PayPal needs a lot of work, and regulating...

[Anonymous Coward]

Fuck you you snarky litte asshole. I shit upon you and your proclaimed ignorance.

Law jumping

[papasui]

Paypal does need some sort of governing body to prevent it from just taking peoples money. Regardless of whether there a bank they are a company dealing with consumers money and need federal regulation as the money comes across state lines.

Re:Law jumping

[Anonymous Coward]

a fool and his money are soon parted...

etched into the sidewalk at 303 Bryant Street, Mountain View...

PUT DOWN YOUR PIPE!!!!!

[Anonymous Coward]

FUCKING HIPPIE.

WHY do people still join class-action suits?

[pla]

So far, in my life, I have joined three class action suits, all basically after-the-fact since I had no intention of suing on my own behalf and the letter said basically "join or give up your share".

In one, I don't actually know why someone filed suit, only that I got a free movie rental. In another, I got a whopping $4.00 (four *dollars*, not hundred) in exchange for well over a hundred dollars in abusively-applied late charges from my CC company (who I have only "fairly" paid late twice in over 10 years). In the other, I got less than the cost of the stamp to mail the response (don't even remember what company I got *that* cash-cow from).

After the CC deal, I resolved never to join another class-action suit.

The actual people who got screwed... get screwed again, by the lawyers, who make hundreds of millions. And, these settlements don't even "punish" the companies involved as a result, since it "costs" them less to pay off the occasional suit than by changing their offensive business practices.

I'll join another class-action proceeding when it involves the executives of the offending company going to prison. Other than that, I see no point in lining yet another up-and-coming lawyer's pockets with *my* suffering.

Re:WHY do people still join class-action suits?

[cpeterso]

Firms accused of chicanery could get IRS tax break: Companies that cooked books may be able write off fines

plus, companies that must pay fines may be able to deduct those fines from their taxes as "ordinary and necessary" expenses. For example, in the early 1990s, Alaska lawmakers were incensed to learn that Exxon Corp. would be able to deduct almost all of its $1 billion settlement with the state and federal governments over the Exxon Valdez oil spill. A study by the state legislature calculated that tax deductions and the settlement's multiyear payment structure lowered Exxon's actual out-of-pocket cost to $463 million.

Congress has denied tax deductions for only a narrow range of payments -- including fines and similar penalties paid to governments, some antitrust damages, bribes, kickbacks and treble damages in antitrust cases. On the other hand, almost all payments in private lawsuits are deductible, including punitive damages.

Re:WHY do people still join class-action suits?

[Anonymous Coward]

If I could do it all over again, I'd be a lawyer. Win or lose, you get still paid.

Re:WHY do people still join class-action suits?

[Murdock037]

It's a tiny point, and I'm sure nobody cares, but:

No class-action lawsuit will ever result in somebody going to prison, as they are civil suits. Only criminal cases can result in incarceration.

Oddly enough, IANAL.

Re:WHY do people still join class-action suits?

[ramzak2k]

along the same lines - with obscene charges that the lawyers take how are the poor exactly protected by the law ? Shouldnt the government be using some of the tax payers money into helping them get lawyers COMPETENT enough to fight the case ? Wont that be a fair way to bring some equality before law ?

Re:WHY do people still join class-action suits?

[Some Dumbass...]

And, these settlements don't even "punish" the companies involved as a result, since it "costs" them less to pay off the occasional suit than by changing their offensive business practices.

Unless they're a borderline-profitable dot-com which might be sunk by a big lawsuit. Like PayPal, perhaps?

Re:WHY do people still join class-action suits?

[mosch]

class action lawsuits generally don't help you individually (unless you're one of the lawyers, or the damage was quite incredible), but they do help society as a whole, because it makes it hard for companies to knowingly fuck people lightly.

Let's say a company does something that screws you out of $20. Are you going to do anything? No, it doesn't make sense. Now let's say a lawyer finds a million people who got screwed, now the company is facing a real lawsuit, and has incentive not to pull those kind of shenanigans again, even though you might only get $5 back after all is said and done.

I'm all for class action lawsuits against paypal. A company who locked down a tad over $100 of my money, and won't even allow me to refund it to the sender. They're an illegal bank, and I'm happy to see that a money-hungry lawyer is busy fucking them hard, even if I never see a dime because of it.

btw, if you're looking for a paypal alternative that's run by a real bank, is FDIC insured, and doesn't charge you to send or receive money, check out c2it by citibank.

Re:WHY do people still join class-action suits?

[dillon_rinker]

...ungtil the law changes. Two things are necessary to fix corporate America:

1. Corporate death penalty. Hey, shareholders! Your stock certificates are now toilet paper, because you gave your money to criminals! This will encourage stockholder responsibility; no longer will they be able to focus on the bottom line to the exclusion of all else, unless they LIKE seeing their assets on an auction block.

2. Jail time for executives in civil cases. Demanding that I give you my wallet is a crime, but cheating someone out of $100,000,000 is business as usual? I don't think so. Just because the loss of cash results from a contractual disagreement doesn't mean that FRAUD is not occurring.

Re:WHY do people still join class-action suits?

[Anonymous Coward]

c2it appears to be dead...

Ah well...

PayPal sucks.

Re:WHY do people still join class-action suits?

[geekplus]

I'll join another class-action proceeding when it involves the executives of the offending company going to prison. Other than that, I see no point in lining yet another up-and-coming lawyer's pockets with *my* suffering.

"Class-action" and "prison" are mutually exclusive. Prison requires a criminal trial, and there are no class-action criminal "suits".

But I get your point -- it's definitely not worth the time.

Re:WHY do people still join class-action suits?

[quintessent]

And don't forget it's the attorneys who really benefit. It doesn't matter what the company offers the plaintiffs as long as the attorneys get away with a few million in their pockets. Notice that you, the one who is supposedly being compensated, did not approve the final agreement. Guess who did?

U R TEH COP!!!

[Anonymous Coward]

GET LOST!







Slow down cowboy!

DON'T USE PAYPAL!!!

[Anonymous Coward]

PAYPAL allows MICHAEL SIMS to CENSOR my posts!!! I'll never get over the censorware project!

--Seth F., posting ANONYMOUSLY to avoid being CENSORED by MICHAEL SIMS

WHAT MOVIE IS THAT FROM?

[Anonymous Coward]

k thx bye.

spalling?

[Anonymous Coward]

It's hypocrisy, fuckwit.

Go after eBay next

[philovivero]

offtopic? you be the judge...

I've got screwed on eBay:

One of their big sellers, with literally dozens of items daily, had an auction for an item that should be worth about $200, but is fairly obscure. They made the mistake of not putting a reserve on it.

After it got bid up to $13, and I was the high bidder, the auction ended. I got all the emails saying to contact the seller.

The seller somehow 'lost' the item, and couldn't ship it to me. This after they charged my CC.

After two weeks of calling, finally the seller recredited my CC. My only recourse? I gave them a negative mark. That's it. Nothing else.

As a final insult to injury, they put me on their spam list, so I get spams from them now and again. And I have a strong feeling that they sold my email address to other spammers.

Re:Go after eBay next

[Anonymous Coward]

How in the hell is this eBay's fault?

If you knew that it was too good to be true (to be that cheap), then you should have had the smarts in the first place to NOT buy it.

Re:Go after eBay next

[Ubergrendle]

With all due respect, it sounds more like an Ebay problem more than anything else. Paypal is just the money handler...they're no better or worse than a bank or a credit card company in this case. The negative feedback to the company will add up over time...eBay is most effective since it manages itself via the herd mentality. Still doesn't mean you got burned on a good deal, though.

Re:Go after eBay next

[unitron]

If they charged your credit card, you shouldn't have been calling for a refund, you should have been insisting that they deliver the item, even if they had to go out and buy a new one somewhere. Don't offer, acceptance, and consideration add up to contract?

A few things to cover.

[DiveX]

After the thread regarding junk faxes/telemarketing calls a few weeks ago, I am happy to say I won my first case. The company I was going to sue over a prerecorded call agreed to pay $300 plus a promise to never call again.

However a few things are incorrect in your statement. Filing fees can vary greatly. In my county, for a claim of less than $100, there is a $79 fee. For anything between $100 and $5000, it is $96 (I know, strange but true). In several states, you are allowed to have a lawyer represent you, so it isn't just person vs person, although the judge may provide you with a lot more leeway. I now have one suit pending and am prepared to file another if they do not meet my demands within another week. Judgement is the easy part, collecting can be impossible.

Re:A few things to cover.

[puppet10]

You can alway hire a collection agency to hound them, or hire an off duty police officer to serve the court judgement. If they don't pay they will be in contempt of court and you can file a complaint. Of course how far you'll be willing to take it generally depends on the amount of money or anger involved.

Re:A few things to cover.

[King_TJ]

Good for you! I'm glad to hear you were successful in winning your case. Now you have me curious though.... I have no idea what the filing fees are for my county. I'm also wondering how you managed to track down enough information on the company soliciting you to bring them to court?

I've had several illegal telemarketing calls from those automated dialers that play a recording - but my caller ID box typically shows a bogus number. (Often, it shows the name and a number for a company that manufactured the dialers!) I guess I could "play along" and leave my info at the beep, hoping I could pry the info out of whoever calls me back trying to complete the sale.... but I haven't gone that far yet.

Wha...?

[xenoweeno]

There can't be that many people who think that PayPal sucks!

Re:Wha...?

[nEoN nOoDlE]

that's the best Karma whore I've ever seen! These links should keep me busy for hours!

Re:Wha...?

[Anonymous Coward]

There [moojohn.com] can't [216.239.53.100] be [vanrein.org] that [sumcomputers.com] many [paypalwarning.com] people [paypalsucks.com] who [boycott-paypal.com]think [hotspotshawaii.com] that [trashcity.org] PayPal [blogspot.com] sucks! [nopaypal.com]

Wow. It looks like a lot of people can't stand PayPal. Thank you for that informative list of links. Before this, I was unaware of just how bad PayPal was. I never figured people would be so upset as to set up anti PayPal sites.

Re:Wha...?

[KilobyteKnight]

Oops, didn't mean to post this anonymously.

There [moojohn.com] can't [216.239.53.100] be [vanrein.org] that [sumcomputers.com] many [paypalwarning.com] people [paypalsucks.com] who [boycott-paypal.com]think [hotspotshawaii.com] that [trashcity.org] PayPal [blogspot.com] sucks! [nopaypal.com]

Wow. It looks like a lot of people can't stand PayPal. Thank you for that informative list of links. Before this, I was unaware of just how bad PayPal was. I never figured people would be so upset as to set up anti PayPal sites.

Re:Wha...?

[happystink]

I've said it once and I'll say it again: Any huge company on the web is bound to have a lot of people hate them even if they do almost everything right. You listed 9 sites that hate paypal, and I have to admit, it makes a convincing first look, but where are the 1 million sites by people who love paypal? Oh right, people who love things don't make websites about them, people who hate them do. 9 people in this case. And yes I know there are more, but come on, before you get impressed by those links, remember, those are 9 people who made websites. Want to count the number of sites that say Microsoft sucks and compare? How about linux?

Want to see a real Paypal party?

[Anonymous Coward]

Check these losers out: Paypal forum at auctionwatch. You think some people on slashdot are bitter, you ain't seen nothin' yet.

Comment removed

[account_deleted]

Comment removed based on user account deletion

You want to short the PayPal dollar

[asmithmd1]

You need to get people to deposit their Paypal dollars with you. You offer them say 6% interest. As soon as you get any paypals you redeem them for USD$ This action puts pressure on paypal to keep coming up with cash. Eventually they have to devalue their currancy. When they change the exchange rate to .8 USD$ to 1 Paypal you buy back paypals and restore everyones account. This is how George Soros made over 1 billion USD$. Instead of paypals he did the same thing with 3rd world currencies

Alternatives?

[Anonymous Coward]

Ok, so paypal sucks. Are there any good alternatives though?

Re:Alternatives?

[schon]

Ok, so paypal sucks. Are there any good alternatives though?

Yes.

They are FDIC insured, so you have some recourse if they screw you.

Re:Alternatives?

[Anonymous Coward]

Unfortunately, it's not useful for e-commerce unless you're in the US and only do business with US customers. Their terms-of-service require residency in the US.

Financial regulation is needed everywhere

[Animats]

Banks are regulated. Money market funds are regulated. Credit card companies are regulated. Money transfer firms are regulated. Sooner or later, a judge is going to rule that PayPal is subject to regulation as one of those classes of businesses.

They're all regulated for a good reason. They hold other people's money. There's a strong temptation to abuse such a position. Historically that's been a major problem, and thus there is regulation. PayPal is no different.

Re:Financial regulation is needed everywhere

[f97tosc]

An alternative to regulation is transparency.

Slashdot and other sites can have an enormous impact on businesses.

If everybody knows that Paypal sucks, there is no need for a new law preventing Paypal from sucking.

Tor

Re:Financial regulation is needed everywhere

[greenrd]

The parent post, I think, perfectly captures the sheer naievete of the libertarian outlook on life.

To attempt to rebut it would lend it too much credence by association. ;-)

Something wrong with paypal

[Anonymous Coward]

Phase 1. Become a cheap online bank and get millions of users to use your service.
Phase 2. Change from a bank to a "money transfer service" with no guarantees and high fees.
Phase 3. ???
Phase 4. Profit

Paypal used to be good. They had some major policy changes a year ago or so. Since then, they suck.

What you say?

[Anonymous Coward]

somebody set up us the narc!

PLZ READ PARENT BEFORE POSTING!

[Anonymous Coward]

k thx bye.

Interest on the slush fund?

[Anonymous Coward]

The one single point that jumped out of this article for me, was the allegation that Paypal would be collecting interest on the frozen accounts. That is a big no-no, and should move
this discussion away from the civil/class action
stuff, and straight into federal-pound-me-in-the-ass charges for the people at the highest levels of the company.

They are simply not allowed to do this, and one of the most important things that enables them to claim that they are "not a bank", which they point out repeatedly in their agreements, is that
they fully insulate the deposit money from their corporate assets. Collecting interest on the deposit money is exactly the opposite of this.
Did you think they put that detail in the licence agreement because it sounds good? No! They put it there because it is the very thing that allows them to operate outside of banking laws.

If they don't do this, then there might be some serious consequences -- instead of having a judge merely suggest that their arbitration policies might be unfair (which was simply a wave of the gavel intended to remove a barrier for the procedure of a specific lawsuit), they could find themselves on the wrong end of a judicial ruling to the effect of, despite their claim to the contrary, PayPal is a bank, has function as a bank, and has violated federal, state, and local banking laws. Tack on a few mail fraud violations, and you might get to see pictures of another suit in handcuffs.

Looking forward to it.

PayPal royally screws over international customers

[unco]

Its actually much worse than this for international customers.

If a paypal user uses the paypal features for ebay auction, a paypal button to pay the seller will appear on the auction page. If the auction is in a currency other than US dollars, the buyer will follow the link to pay the seller, and being confronted with no warning, put in the, say, Australian dollar amount. Of course, paypal uses US dollars, which are worth a lot more. The buyer may be someone who has never used paypal before!

Withdrawing funds to an international account will cost you about 5% again! Add in the 2.9% receiving fee and you're paying about 8% in fees. But paypal don't inform you of this charge, you only find out the amount when you go to withdraw the funds. The measly help text below is their attempt at an explanation. Paypal would apparently be surprised to learn that my credit card gives me the flat interbank rate on all transactions, no matter how small.

Why is the foreign exchange rate different from what I see in the newspaper?

Foreign exchange rates displayed and used for your International Transaction will differ from the rates that you may see in the newspaper, on the Internet, or on television. Published foreign exchange rates are often the interbank rates, which banks charge each other for transactions valued at U.S. $1,000,000.00 or more.

Well, paypal, when you withdrew US$1 when I signed up, I was only charged the interbank rate. Please Explain?

The system does suck and I don't use it

[ehiris]

I replaced my CC after somebody (not through paypal) was abusing it and because I forgot to change the numbers on Paypal they locked my account and wouldn't reactivate it with the new numbers and only with my checking account.

Needless to say, they have not seen a dollar since from me.

If you sell something online please offer more payment options then paypal!

Re:The system does suck and I don't use it

[Vegeta99]

oh, they will. Just find government issued ID, a copy of the statement, get their fax cover sheet (your own wont work, you MUSt use theirs) and wait 6-8 weeks, they'll unlock it!

Re:The system does suck and I don't use it

[Vortran]

Other options.. of course. I always accept cashier's checks and money orders. However, what besides PayPal is instantaneous and convenient?

I really hate waiting for snail-mail payments and I hate going to get money orders or cashier's checks when the seller doesn't accept PayPal. Am I missing something better?

Vortran out

So you don't like PP's conditions

[DABANSHEE]

Well then don't use them

It's that simple.

Bloody McDonald's coffee spillers.

Re:So you don't like PP's conditions

[schon]

Well then don't use them

It's that simple.

Yeah, that's great.

"You don't like Fat Tony's 200% monthly interest? Don't use it. It's that simple.

Last I checked loan sharking was illegal too.

If is REALLY is that simple, why do we need laws against that?

Re:So you don't like PP's conditions

[plague3106]

I don't think it was the conditions, i think it was the mistakes they made.

As far as your McDs coffee spiller remark goes...well if you knew all the details of the case you would probably see the settlement was justified.

Re:So you don't like PP's conditions

[King_TJ]

Hmm.... someone modded your post as a troll, but I changed it to "insightful" myself.

Why? Because you, unlike many of these people, get the point!

Federal govt. has governed everything related to banking or investing with an iron grip... one that tightens over time and strangles innovation.

PayPal is most certainly *not* a "loan shark" or anything of that nature. A number of people are pissed off because they didn't pay attention to the terms of service that were spelled out on PayPal's site.

Granted, the courts *may* find that they need to take a little more initiative in stopping fraud - but that's a far cry from the people on sites like "paypalsucks" who seem to want the entire service shut down as "illegal".

Ever since I started using PayPal, I kept the thought in the back of my head that it's not wise to keep large amounts of money in a PayPal account. Unlike a traditional bank, they choose to offer you a potentially higher rate of return (interest), at the "expense" of not being FDIC insured. PayPal has always positioned itself as an extremely convenient money transfer system; not another "online bank". (Among other things, they don't offer home equity or personal loans.) It's a "work around" for individuals and small business owners who want to accept credit card payments without having their own merchant account. It's also an alternative to giving a teenager/college student a regular debit/credit card for "emergency cash". A parent can deposit an exact amount in a PayPal account, give the youngster a PayPal VISA card, and effectively control and monitor their usage of the funds. (If the student spends money, it shows up on PayPal's site as soon as it happens. That sure beats my bank, which only seems to post updates once every morning.)

In fact, I dare say that if it wasn't for the advent of PayPal, traditional banks would not have gotten the much-needed "kick in the pants" to modernize their web sites. Online bill-pay for checking accounts is now more of a standard than an exception - and I think it took something like PayPal to get us there.

Re:So you don't like PP's conditions

[Anonymous Coward]

Well then don't use them

Just like banks, credit unions, credit card companies, and insurers. We don't need any pesky restrictions on companies whose entire purpose is handling large quantities of money. Sure, maybe the occasional person loses their life savings, but don't worry about it, the market will self correct.

Meanwhile, here on Earth companies which hold millions of dollars of customer money each year are held to a higher standard. Otherwise the risk catastrophic failure of the system is too high.

Bloody McDonald's coffee spillers.

Yeah, what a bunch of whiners. Real mean like coffee hot enough to cause third degree burns. McDonald's is jsut cutting edge for serving coffee 40 degrees hotter than your home machine can make it. (The poor woman who suffered these serious burns only originally sought a settlement of $20,000, but McDonald's refused. She ended up with $160,000 after the lawsuit, much of which was certainly eaten by legal fees. Sure, she got $2.7 million, but those were punative damages awarded by the jury as a warning to McDonald's. And how serious is 2.7 million to McDonald's? Two days of coffee sales. Life's tough.)

Re:So you don't like PP's conditions

[shepd]

>McDonald's is jsut cutting edge for serving coffee 40 degrees hotter than your home machine can make it.

Look, either way she'd be hurt rather badly.

I just wish the coffee contained acid -- that way this dumb idiot would be part of the Darwin Awards and she wouldn't have seen a dime (dead witnesses don't talk).

Seriously, though, it doesn't matter how bad the damage is, if you do something clearly unintended and dangerous with a product, YOU ARE STILL AN IDIOT.

Sheesh, next thing you know someone will sue a rat poison company because it fell and got mixed in with the veal, causing the person eating the veal to go blind due to the abnormally high concentration of POISON in the rat poison on his veal.

Oh, look, I spilled HOT coffee on my lap and today it is ABNORMALLY hot coffee, so I think I'll sue.

I'm just waiting for a now deaf person to sue the manufacturer of their stereo for making it abnormally LOUD.

But, as I'm not a coffee connoisseur, maybe the point of coffee is to drink it lukewarm? Only avid coffee drinkers can attest.

I am a bit of a stereo connoisseur, though, and part of the point of a stereo is to have as much headroom as possible to help ensure the best dynamic range and quality. I guess you just can't compare coffee, rat poison, and stereos, though.

Re:So you don't like PP's conditions

[packeteer]

Actualyl being from Seattle i know that coffee is to be server burning hot. Part of the ritual of coffee is adding whatever you want to while it cools down to YOUR desired warmth. Everyone likes it a different temp and you can get it hotter once you get it to if you go to a REAL cafe it is HOT. I doubt anyone gulps it right away but i also assume they dont spill it on themselves.

Re:So you don't like PP's conditions

[perljon]

Yeah, like McDonald's had been sited numerous times for serving coffee 40 degrees too hot. And also that the person receieved 3rd degree burns and was in the hospital for months.

I like hot coffee, but no coffee ever should be capable of giving me a third degree burn. Yes, a person is responsible for there own actions. In this case, McDonalds was handing out loaded guns. (Giving out coffee that is capable of giving 3rd degree burns to people driving cars is just asking to be sued.)

Picture of 3rd Degree Burns

Re:So you don't like PP's conditions

[forgotmypassword]

Seriously, though, it doesn't matter how bad the damage is, if you do something clearly unintended and dangerous with a product, YOU ARE STILL AN IDIOT.

dude, she had to have a skin graft around her vagina

I bet you wish they still manufactured lawn darts and baby toys composed entirely of small plastic parts.

Re:So you don't like PP's conditions

[shepd]

>I bet you wish they still manufactured lawn darts

Yep. I had them as a kid and they were lots of fun. Of course, I wasn't an idiot, and had I been my parents wouldn't allow me to play with them. Not to mention they followed the "accompany with appropriate parental supervision" adivice on the box.

>baby toys composed entirely of small plastic parts.

That's a little silly, don't you think? A 6 year old is pretty safe with most things when a parent is watching. Babies (in general) aren't particularly safe with anything.

>dude, she had to have a skin graft around her vagina

Bummer for her. I know a certain someone who had to have their privates sewn back ON after improper use of a knife (or was it scissors)? This doesn't mean the company making the "weapon" is at fault for someone else's blatant misuse of the product.

Re:So you don't like PP's conditions

[sphealey]

Federal govt. has governed everything related to banking or investing with an iron grip... one that tightens over time and strangles innovation.

Actually, the federal government's "iron grip" has been loosening every year since the passage of the Glass-Seagal Act in 1932, leading up to the big "banking deregulation" of a couple of years ago.

The result of that deregulation is of course the current shipwrecks of Citicorp and others, who once the leash was off decided it was OK to lie, cheat, and allow other to steal their stockholders' money (e.g. by giving it to Enron).

There is a reason that the federal government regulated banking in the first place: moral hazard is implicit in banking operations, and the amounts of money that get processed are an irresistable magnet for those of weak character.

sPh

Re:So you don't like PP's conditions

[Anonymous Coward]

Look, either way she'd be hurt rather badly.

Huh? If it's remotely drinkable, it's not hot enough to char your skin and put you in a hospital. If it's not, they shouldn't be selling it as food.

Re:So you don't like PP's conditions

[fataugie]

So who the fuck made her put it in her lap? She was a fucking idiot and she paid the price for being stupid. I can't beleive that McD's had to pay her anything. They should have sued to keep her from ever entering their premises again and lowering the IQ of the assembled....as if that was even possible (they use icons on the registers for Christ's sake!)

Re:So you don't like PP's conditions

[Anonymous Coward]

If I can't drink it, it's not coffee. If its only use is to char skin off, it's a weapon.

Re:So you don't like PP's conditions

[King_TJ]

I daresay that the ultimate magnet for those of "weak character" is politics, not banking!

In any case, I don't really see much evidence of govt. loosening their grip on financial regulation. They're busy adding new restrictions to what the online stock trading businesses can and can't do, for example. (eTrade just got in trouble for one of their business practices a few weeks ago.)

I don't have a problem with federal govt. doing what they're constitutionally bound to do when it comes to maintaining the federal reserve and minting currency. I just see an awful lot of red tape of very questionable value when it comes to such things as computerizing the banking industry and electronic funds transfers/payments.

The bottom line: If I have cash, I can carry it, store it, loan it, or give it away to anyone I please with no restrictions. If that same cash becomes an electronic number in a computer (instead of a physical piece of paper), all of a sudden it's 1000 times more confusing and convoluted.

Re:So you don't like PP's conditions

[shepd]

>If it's remotely drinkable, it's not hot enough to char your skin and put you in a hospital. If it's not, they shouldn't be selling it as food.

Agreed, and since no other customers (AFAIK) complained of 3nd degree burns to their lips, mouth, and throat due to that coffee, I think she used the coffee improperly.

That's the neat thing about skin, though. All coffee, of any reasonable temperature, can cause 3rd degree burns. Its all in how long it stays in contact with your skin. People who aren't stupid know not to gulp a mouthful of coffee and keep swishing it around their mouth for 10 minutes. Coffee is intended to be sipped in small amounts that cool quickly enough in your mouth to not cause burns.

And there we have the problem. Coffee is not intended to cool on people's private parts, and therfore, unless the majority of customers that day sued for a burnt mouth, she is still an idiot.

Re:So you don't like PP's conditions

[greenrd]

I'm curious as to your opinion on laws on fraud, in particular financial fraud, which is not always easy to pin down. Do you think that the kind of shenanigans that Enron failed to pull off should be legal, or not? If so, do you concede that much of the motivation for financial regulations are intended to (a) prevent and penalise fraud, and (b) create the kind of stable business environment that fraud and shady business practices are not conducive to?

To bring in the previous topic, burying an extremely important provision in a mass of legalese can be regarded as fraud. For example, the intellectual property agreement that I unwittingly signed when starting my PhD as part of matriculation, is believed by the student's union to be legally groundless, and allegedly the university has received legal advice to the same effect (which is why they've changed their procedures on IP agreements for new students).

The prevention of immoral and/or destabilising fraud and deception is an important motivation for regulation. I therefore find it interesting that libertarian-leaning folks always seem to concentrate on governmental force and never say a word about fraud (which would not be construed by a reasonable person as akin to physical force, except metaphorically) - except to pay token lip-service to punishment of fraud.

Re:So you don't like PP's conditions

[Anonymous Coward]

She was the most famous victim, but not the only one by any means:

During discovery, McDonalds produced documents showing more than 700 claims by people burned by its coffee between 1982 and 1992. Some claims involved third-degree burns substantially similar to Liebecks.

Good luck sipping this:

Further, McDonalds' quality assurance manager testified that the company actively enforces a requirement that coffee be held in the pot at 185 degrees, plus or minus five degrees[....] Plaintiffs' expert, a scholar in thermodynamics applied to human skin burns, testified that liquids, at 180 degrees, will cause a full thickness burn to human skin in two to seven seconds.

Well

[FakePlasticDubya]

I have used PayPal for over two years now, I have the debit card and use it often. I earn around 2% on my balance and can move money to and from my actual bank accounts. I have never had ANY problems with it. I've used it mainly for eBay transactions, but I still keep a $300-500 balance and have never had any issues.

It's all a gamble

[lpret]

Ebay is as much of a gamble as PayPal. If you're already *hoping* that the item you ordered on Ebay is truly what it is, one more gamble that you'll actually get your money sent is only reasonable.

Oh come on

[DDX_2002]

Flamebait? Are you kidding? The BC government is considering sweeping changes to the justice system here, and amongst the serious objections to increasing the monetary jurisdiction of small claims courts was that they would become a commercial contracts court of first resort, and as a result, get bogged down and stop working almost immediately.See pages 37 and 38: http://www.bcjusticereview.org/recent_announcement s/2002/potential_reforms_07_02.pdf

And unless there is a federal common law of contract, the court sitting in diversity jurisdiction is going to have to apply the law of whatever jurisdiction the choice of law part of the contract says. This is going to require learning what the law of that state is, and NO you can't just assume it's the same. If you do, why bother having courts, you're running a lottery system.

Finally, don't forget that the point of suggesting a small claims court for internet disputes is to make things cheaper and simpler. Travel time alone makes resolving small dollar value cross-country disputes impractical, which is why your EULAs all say the dispute will be resolved somewhere convenient to the company and inconvenient to you. The normal response of a company sued in another state would be to hire a local lawyer to handle the dispute, not send its people in person. At that point, as noted above, lawyers and legal argument get involved and complexity goes up, time savings go down.

Re:Oh come on

[jbolden]

As I said in the original. If the transaction takes place on the internet no reason the case can't as well. People submit their stories via. email; use IRC (or the telephone) for Q&A, documents by snail mail or email (they generally aren't many physical documents with an internet transaction anyway) and that's about it. I don't remember doing anything in small claims court that required my phyical presense.

Re:Oh come on

[DDX_2002]

Well, for a start by physically being present you probably attorned to the jurisdiction of the court, waiving the right to contest the court's jurisdiction over you.

How do you get around the Seventh Amendment? Since you're creating a federal court, any dispute over $20 and the parties have the right to a trial by jury.

Re:Oh come on

[jbolden]

Interpretation is up to the supremem court. $20 relative to average income might be pretty high.

We've had something like 4000% inflation since 1791. Throw in even 3-4% real economic growth per capita over 211 years and you pick up another 511-3926 multiplier. Even using the low figure:
$20 x 40 inflation x 511 for economic growth = $40k.

I'm not an economist but $20 back in 1791 was a lot of money.

This wouldn't be an issue if the banks were better

[targo]

I come from a small country in Eastern Europe (Estonia) but I have lived in the US for the last three years. One thing that surprised me most when I moved here was the backwardness of the US banking system (this is not meant as a flamebait, just the sad truth). In my home country there's a very advanced electronic banking system. Some examples:
1) Whenever you open an account in any bank, you always get free Internet access to it and full control over your account (since 1997).
2) You can transfer money from any account of any bank to any other account of any other bank, the account number system, routing and other issues are standardized by the central bank (since 1995).
3) In most banks, all Internet-based transactions are free (since 1994).
4) Proper security. None of this 4-6 digit PIN nonsense, you get either at least two passwords (one made up by you, the other comes on a password sheet that contains tens of different passwords and changes from session to session), or a smart card (since 1996).
I guess there are lots of other features by now but these are the ones that were implemented 5+ years ago and still aren't implemented in the US.
I find it truly weird that I have complete control over an account and I can handle all sorts of transactions in my home country that is thousands of miles away but I still have to walk over to my local bank that is just 3 miles away every now and then.
Just one example of how useful the system was: When we went out to lunch with friends, we never had to go through this bill-counting ritual (got change for 20?) when paying for it, one guy paid for lunch, and the others just transferred money immediately and directly to his bank account.
If only the US banks got their act together and implemented a normal bank-to-bank transaction system, we wouldn't have this discussion here.

We are the solution

[Anonymous Coward]

You can claim that the AC poster is hippie, but just like the wide-open promiscuous slut protocols of the internet beat everything else and changed the world, and open system for money transactions will win in the end.

I propose what I call the "open hawala."

It is a system for transfering and verifying electronic promises.

The heart of the system is GPG signed IOUs that promise to give a certain person a certain amount of cash on demand, and explicitly state that the promise is transferable. The format is ascii, human readable with tags for machine parsing; something like this:

I, (originator= Rickey Rich ) promise to give to (recipient= James Tetazoo ) $100 on request, or a lesser amount and a promise for the remainder. This promise is transferable by Mr. Tetazoo.
-----
GPG v31.337 signature 090asdf9g80qw349u09fj90q23jfasdjq30498a0f
----

When Mr. Tetazoo went to spend the money, he would quote the previous message and append his transfer statement to it, so it would look like this:

>I, (originator= Rickey Rich ) >promise to give to (recipient= James Tetazoo >) $100 on request, or a >lesser amount and a promise for the remainder. >This promise is transferable by Mr. Tetazoo.
>-----
>GPG v31.337 signature >090asdf9g80qw349u09fj90q23jfasdjq30498a0f
>----
I, (tranferer= James Tetazoo ), transfer this promise to (recipient= Mary R. Callahan ) and it is not a bribe to allow me to graduate, I promise.
----
GPG v31.337 signature
234hj32kjlnKLJHhdThisPostIsAllAComplete Lie23lkjsq0 o349
----

When Ms. Callahan presented the promise to Mr. Rich for collection, he would use GPG to verify the signature of Mr. Tetazoo to confirm that Mr. Tetazoo had indeed transfered his promise.

A number of considerations prevent this from being a private Chaumist type e-cash:

1) Mr. Rich must archive all of his issued promises, or else Ms. Callahan or Mr. Tetazoo anyone recieving the promise can present him the promise again for second payment. In order for people not to make copies of the message and double spend, the original issuer has to keep track of them all.

2) If Mr. Tetazoo does double spend his money, say bribing Ms. Callahan while also paying off his all night gambling debt it Caleb Jaffa, who transfers it to John Saul Montoya, Mr. Rich should be able to consult the two trails of transfers to see where the "Y" is that indicates the devious double-spender. He should be able to mark that person's name in the database and refuse all future promises that have that person in the trail.

3) Mr. Rich is encouraged to make his database of past transactions and marked double-spenders available publicly. This way someone considering the validity of a promise originating from Mr. Rich can quickly see if Mr. Rich claims to have already redeemed that promise; if Mr. Rich has an alarming number of promises currently outstanding; if he has been in business a long time and has issued promises successfully redeemed to the people on that chain before; etc.

4) Because the system is completely open like that, you can check to see every bit of Open Hawala money that your boss / college aged child / congressional representative spent (as long as you know all their electronic identities).

5) This system constitutes a method of issuing credit, and a democratized system of relaxing and constricting the supply of money (as long as the promises are used as money). It is democratized because individuals will make individual decisions to issue or not issue promises, to redeem for cash or spend online, completely on their own feelings of optimisism or trust, and completely divorced from Alan Greenspan's opinions on George Soros's facial expressions at the Oak Room last night.

6) Credit Cards charge as much as 2 percent of each transaction, and worse, they force all customers at a business to share the cost by forbidding the merchant from making that charge explicit in the price. (PC's for everyone in Cambridge is one of the only hold outs.) This removes the information about the cost of credit card transactions from the market system, creating a black sucking friction on the economy. With Open Hawala, anybody with a bit of cash and integrity can be a credit lender, thus injecting competition into the system; the O.H. issuers will be able to charge 100.50 for a 100.00 promise, or less, or more, depending on competition and how much people value electronic money.

This is just waiting to happen. Nothing is stopping it from happening now. Like the 3 years of internet pre-napster, there is just a huge yawning vacuum waiting to be filled. Who will write the app and start doing it ? (Actually applications plural, because the database of transactions and sharing it with everyone and distributed searching is different from the little "wallet" app that a person will use to keep track of their current promises.)

I suggest we simply start writing it in the traditional open source method. I'll sketch out a few functions and post them to slort's journal, and you guys can post changes there, and we'll mod down the bugs !

Re:We are the solution

[Anonymous Coward]

Something like this exists already. It's called "cash".

Re:We are the solution

[Anonymous Coward]

There are big differences between this and cash:

1) can't send cash by email to the guy who is selling something on ebay, without paying a few percent to some money-changer (or 90 cents to the USPS for a money order, but that uses snail mail)

2) Sneak theif can take your cash and spend it. If he steels your floppy disk or hacks into your computer and copies your files, he can't spend this *unless he knows your GPG key* or *unless he can fake id that he is you and present it to the original promise issuer*

3) This is most importantly not cash in that it is not annonymous. This creates a watchable, analyzable economy. No cheating on taxes. It's hard to buy drugs with this.

I prefer cash to this open hawala. But for electronic transactions at a distance this is better.

Sorry, amigos, but PayPal rocks

[SunPin]

As a human with physical disabilities, I must dissent from the general sentiment here and say PayPal is a lifesaver. I don't think I've dealt with cash or coins for the last year with the debit card. The transaction fees are reasonable and for what I use it for--which is everything--it is a treasure.

Perhaps the real issue is that PayPal is a monopoly. CitiCrap doesn't count.

Re:Sorry, amigos, but PayPal rocks

[Zeinfeld]

As a human with physical disabilities

??? What other species post here regularly ???

Re:Sorry, amigos, but PayPal rocks

[Dr. Manhattan]

Perhaps the real issue is that PayPal is a monopoly. CitiCrap doesn't count.

Do you mean that it's not very common, or that it has some fundamental problem? If the latter, what's the problem with Citibanks's c2it? I just heard about it today in this article.

Re:Sorry, amigos, but PayPal rocks

[SunPin]

:)

Sometimes I wonder...prudence dictated absolute clariy.

Re:Sorry, amigos, but PayPal rocks

[Kredal]

Trolls post here all the time. (:

Gangster Economics 101

[M3shuggah]

The assumption you are making is that edrugtrader is talking about gambling his money after moving the funds to a gambling account... he is not. He is just talking about routing it through a gambling service because by moving the funds in this manner, the regular PayPal fees are not applicable.

Students... this could be called money laundering.

Interesting definition of "free"

[raymondlowe]

From citibank "c2it".

*We will not charge a transaction fee when you send cash to someone within the U.S. using your bank account or credit card. If you have established a c2it line of credit, you will incur finance charges if you choose to fund your transaction from that credit line. Transaction fees will apply for sending money to someone outside the U.S. Your credit card company may assess a finance charge and fee each time you send money.

**In addition to the $10 transaction fee, any difference between the foreign exchange rate given to you and the foreign exchange rate received by c2itsm Service will be kept by c2it. Click on Fees, Limits and Availability for more information.

c2it and When there's money 2 move are service marks of Citicorp.

Free if the transation is entirely in the US and doesn't use credit. One of the big advantages of PayPal is that all it works internationally.

I know I'm taking a risk with PayPal but I don't leave any money in their and wouldn't use it for anything large. However it has allowed me to purchase things internationally from auctioners without having to expose my credit card details to that unknown person.

Rather than complaining about how terrible it is -- why is there no good competition out there? Or for that matter why doesn't PP clean up their act? Are their margins so thin they can't afford more real humans to check suspect transactions?

R.

Re:Interesting definition of "free"

[mosch]

Allow me to address your points:

1. finance charges: paypal doesn't even offer lines of credit, so there's no comparison. Nobody forces you to take out a c2it credit line instead of linking to checking, savings, or your credit cards.
2. credit card fees: paypal doesn't shelter you from credit card cash advance fees either. If you put money into your paypal account from your credit card, and your credit card charges that, you'll also get hit
3. international fees: yep, $10 to transfer money internationally, while then paypal imposes a withdrawal fee on the international recipient, in addition to the percentage they get from the sender (and in the case of business accounts, the receiver).

No good competition? c2it is good competition, as is Yahoo Paydirect which is run by a reputable bank (HSBC). Nearly every service out there is better, cheaper, and more fair than paypal. They just don't have the name recognition because paypal was the first major player in the market.

Unhappy with Paypal? Call Craig at (402) 935-2258

[goingware]

PayPal's executives have stated publicly that they try to avoid phone calls to keep their costs down.

If you're unhappy with PayPal, PayPalWarning.com lists a bunch of phone numbers. Call (877) 672-9725 if you want to reach them toll free.

Here's a bunch of known paypal numbers:

(402) 935-2000 / (402) 935-2001 / (402) 935-2062 / (402) 935-2258 [this is Craig, complaints resolution manager] / (402) 935-7733 / (402) 537-5740 (fax) / (650) 251-1100 / (888) 221-1161 / (800) 836-1859 / (877) 672-9725 / (866) 272-9725

And addresses, in case you need to send a process server or wish to register a complaint in person:

PayPal, Inc.
1840 Embarcadero Rd.
Palo Alto, CA 943030

PayPal, Inc.
11128 John Galt Blvd.
Omaha, NE 68137

I signed up for paypal because it was the only way someone who had something I wanted to buy would accept payment. But I wouldn't allow them access to my checking account. They won't let you spend more than $250 through their service unless you allow them direct access to your checking account.

After reading PayPalWarning.com, I decided that I never would use them again.

I was unaware until recently that by giving PayPal access to your checking account, you forgo the liability protections that a credit card vendor is required to give you.

So if you pay a lot of money through paypal for some merchandise you never receive, you basically have no legal recourse - you're screwed. If you had paid with a credit card, you could dispute the charge with your credit card company and they'd have to give you your money back.

I think I'll call Craig when I get up and ask him to delete my account.

Monopoly

[yerricde]

What if the only person offering the product you seek allows payment only through PayPal? Do you expect every individual to have a Visa/MC merchant account and accept credit cards?

Try BidPay

[yerricde]

I live in Louisiana. My bank is in Texas. When I sell things on eBay, often times when a person mails me their check and I mail the check to my bank, it takes less time to get my money than it would have taken through PayPal.

Then use Western Union's Bidpay service, as another poster in this sid pointed out. Bidpay will mail you a money order.

Re:Try BidPay

[Guppy06]

"Then use Western Union's Bidpay service [bidpay.com], as another poster in this sid pointed out. Bidpay will mail you a money order."

First off, they're rather expensive compared to simply getting the money order yourself. While a WU money order form the local Winn-Dixie costs around $0.75 (if I remember correctly), they want to charge $3.00 on their website. Even USPS Pay@Delivery is cheaper than that ($1.00, making it cheaper than mailing a USPS money order through first class mail), and it has the added gimmick of not paying me until the package is delivered.

Second, I have no problem with personal checks, and they're about as ubiquitous as cash in the US. And the customer can usually get the check out to me before WU gets off its rear end and processes the information.

However, I'll keep that in mind for the occasional European buyer I get. "Personal cheque? What's that?" "What is this 'domestic money order' you speak of?" The usually end up wanting to pay in cash (which, aside from doing me no good, is usually quite illegal).

Although I can't really blame them for not wanting to use cheques any more. I've seen a few examples of UK cheques and, while the average US personal check has more safety features than your typical $20.00 bill, my three-year-old niece could probably forge a UK cheque.

Re:Try BidPay

[Guppy06]

No, wait, European buyers don't seem to use credit cards, either. Which now makes BidPay completely useless to me.

spammers @ that site

[Anonymous Coward]

That dumbass spammer at paypalsucks.com sent a post to just about every newsgroup in existence, advertising their web site. That alone is enough to make me not want to visit their site, and to continue using Paypal. Long live Paypal!

Re:This wouldn't be an issue if the banks were bet

[sphealey]

I guess there are lots of other features by now but these are the ones that were implemented 5+ years ago and still aren't implemented in the US.
I find it truly weird that I have complete control over an account and I can handle all sorts of transactions in my home country that is thousands of miles away but I still have to walk over to my local bank that is just 3 miles away every now and then.

Essentially all of those services are available from US banks and the larger merchants. You can live your financial life on-line if you choose to do so, and the banks are pushing their customers in that direction.

Why are USians resisting that push? Simple: they aren't stupid. In the US there is common law, written law, and precedents stretching back to colonial times that grant reasonable levels of protection to consumers when they engage in paper based transactions. If I give you a paper check, you and I both have certain rights and duties, and we know where we stand if something goes wrong.

There are no such protections for electronic transactions. None. Nada. Zero. And the big boys want the little suckers, I mean people, to go all electronic. Care to guess why?

sPh

Re:This wouldn't be an issue if the banks were bet

[targo]

If I give you a paper check, you and I both have certain rights and duties, and we know where we stand if something goes wrong.
There are no such protections for electronic transactions. None. Nada. Zero. And the big boys want the little suckers, I mean people, to go all electronic. Care to guess why?

Estonia has had an electronic signing law for a while, electronic documents are just as binding as papers.
Also, we are discussing big guys screwing little guys in the US, not in Estonia, so it kinda disproves your point, doesn't it?

I guess that when there was a shift from gold coins to paper money then there were also many guys like you raising panic. But history has proven that the new system's efficiency far outweighed any other concerns.

Re:Unhappy with Paypal? Call Craig at (402) 935-22

[paypaldamon]

Hi goingware,

Giving PayPal your bank account does not give PayPal access to your bank account on a whim.

The sending limit you mentioned is in place to reduce the probability that you are dealing with a stolen credit card. It also limits the amount of damage someone could do with a stolen credit card.

"So if you pay a lot of money through paypal for some merchandise you never receive, you basically have no legal recourse - you're screwed. If you had paid with a credit card, you could dispute the charge with your credit card company and they'd have to give you your money back."

Your chargeback protection is still available if you use your credit card. However, we do ask that buyers file a Buyer Complaint with us before filing a chargeback. Why? a) we might be able to recover for you b)it alerts us to a potential problem with someone selling goods.

Regards,
Damon
PayPal Consumer Relations

The judge is wrong...

[Anonymous Coward]

He's ignoring precedense in arbitration cases, which has traditionally said that if someone accepts the standards for arbitration, they must uphold them, even if the terms seem very user-unfriendly. The difinitive case, upheld by the supreme court, is Gateway 2000 v Hill, (522 U.S. 808; 118 S. Ct. 47) in which a user protested a Gateway arbitration requirement that required the user to pay a $1000 fee and travel to france in order to go through arbitration.

And personally, I've used PayPal extensivly as a buyer and seller with no problem. Much faster and easier than money order.

Re:The judge is wrong...

[Frobnicator]

You missed a quote from the article:

Fogel's ruling, issued Aug. 30, struck down PayPal's requirement that customers submit disputes to private, binding arbitration in Santa Clara County, rather than suing in court. It is the latest of several business arbitration policies to be overturned since the state Supreme Court set standards in 2000 for determining when a company's rules were unfairly one- sided

So at the national level (minimum standard) by using the service the people agree to be bound. But states can provide additional consumer protection (stricter standard). In this case, they decided that one-sided business practices could be challenged in court.

This isn't against the supreme court ruling at all. They just need two claims in the suit: (1) Challenge the business practice (one-sided arbitration) and (2) Seek assistance from improperly-handled complaints.

Frob.

Re:What can you say but...

[Anonymous Coward]

You could say that Rick Austenson is a homo, but that is off topic for a first post, so I guess you were correct first poster, post on!!!!!!!!

Re:Unhappy with Paypal? Call Craig at (402) 935-22

[Anonymous Coward]

Customer Relations my ass you guys at paypal suck shit. Eat a dick and die you bastards!!

Re: opinions on fraud

[King_TJ]

You seem quite focused on debunking Libertarian politics as unworkable.

On the contrary, the only real problem I see with the Libertarian party is the number of clueless people who profess to believe in it, yet don't really understand it. (This, of course, happens constantly with the Republican and Democratic parties too. I guess it just makes it easier to single out thoughtless comments when the party in question has a small minority of constituents.)

Regarding your specific questions about Enron and Libertarian beliefs on handling fraud:

I truly believe much of the corporate fraud (a la Enron) we see today is enabled and encouraged by our current state of government. They built this monster themselves with endless legal regulations (and loopholes), and then try to play the hero when they enact new legislation (or enforce current legislation) to halt it after the fact.

Certainly, Enron's C.E.O. should be punished. I've never met a Libertarian who believed fraudulent business practices were acceptable. (At its core, Libertarianism can pretty much be watered down to one basic concept. You should have the right and freedom to do whatever you like, *as long as it doesn't infringe on another person's right and freedom to do the same*.)

The more legal "fine print" you introduce into a system, the more opportunity arises for a crafy individual (or in these recent Enron-style cases, accounting firm) to doctor records and make things appear on the "up and up".

The most useful tool in the hands of the individual attempting to defraud another is confusion. Even in the case of the street con who challenges people to "guess which cup the ball is under" or to play a card game with him for money, he's only able to cheat people because they can't understand how his scheme works.

Government red-tape makes the perfect blanket to hide fraudulent business practices under.