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..."

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

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?

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.

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?)

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

[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.

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?

[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.

Wha...?

[xenoweeno]

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

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.