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Paypal Charged Under PATRIOT Act

Posted by Hemos on from the fighting-them-man dept.

A reader writes: "Yahoo has the story: Paypal has been charged under the PATRIOT act for accepting and profiting from transactions with illegal gambling sites. According to their new rules they will no longer allow gambling payments due to the higher chargeback risk. It's good to see them charged for something, even if they have never had to atone for the thousands of customer dollars they have stolen." I know of a number people who've had problems, but I will say that I've had no problems with PayPal - on both my personal account and on the Subscription side of things.

9 of 281 comments (clear)

  1. PATRIOT Act? by MeanMF · · Score: 5, Insightful

    Yet more evidence that the PATRIOT act had little or nothing to do with actual terrorism...

    1. Re:PATRIOT Act? by archeopterix · · Score: 4, Insightful
      Yet more evidence that the PATRIOT act had little or nothing to do with actual terrorism...
      Yes, and this holds true even if you don't like PayPal. Two evils clash again, mixed feelings arise. To all who rejoice because of this: you may be next.
  2. PATRIOT by Anonymous Coward · · Score: 5, Insightful

    How is illegal gambling a matter of national security unless "terrorists" are directly profitting from it?

  3. This was coming all along... by Str8Dog · · Score: 5, Insightful

    PayPal has been used for quite a while in the grey market... DSS hacking hardware, Drugs by mail, Betting... It was only a matter of time they got busted for it. They are profiting on illegal activities.

    --


    Str8Dog
    using System.Darkside; public
    1. Re:This was coming all along... by ryanr · · Score: 4, Insightful

      Yes, now they can go after the US Mint.

  4. Laugh or Cry? by micheas · · Score: 5, Insightful

    I don't like PayPal. So seeing them nailed under the Patriot act if kind of funny, But, using the Patriot act this way is confirming the worst fears of everyone aout this act.

    It is truely sad when the fight for our rights is being led by companies like PayPal.

    --
    Work bio at MMWD
  5. PayPal's side by Sanity · · Score: 4, Insightful
    I emailed PayPal customer support over their apparent politically motivated freezing of whatreallyhappened.com's PayPal account (see here for the wrh.com account). To my surprise they responded quite quickly, but said that under the terms of their privacy policy they couldn't discuss the issue with me, but that there was another side to the story.

    What Paypal does is actually quite difficult, and I suspect it is a constant battle for them to prevent their service from being used illegally, and without them getting landed with massive liabilities. This is primarily due to the braindead way that credit cards work. I suspect that people that have had bad PayPal experiences might simply have become victims of the fact that Paypal has to be extremely aggressive about fraud just to survive.

    Before everyone hangs them out to dry - perhaps stop to think, for a moment, what their side of the story might be.

    1. Re:PayPal's side by Guppy06 · · Score: 4, Insightful

      "and without them getting landed with massive liabilities."

      Their strategy for this involves their legal department repeating the phrase "We're not a bank! Really!" over and over again.

      "I suspect that people that have had bad PayPal experiences might simply have become victims of the fact that Paypal has to be extremely aggressive about fraud just to survive."

      No, they're extremely aggressive about hiding fraud. If you have a problem (such as being defrauded by a seller), PayPal will tell you "not our problem, deal with the seller," conveniently neglecting to tell you about the "dreaded C-word" (chargeback).

      PayPal doesn't want anybody to know about fraud because they don't want anybody to know about credit card fraud policies. When the buyer issues a chargeback, PayPal loses money, and it's more cost-effective for them to hide and/or sidestep fraud than to combat it.

  6. This is screwed up on so many levels by AssFace · · Score: 5, Insightful

    I am torn on this one. I use PayPal and have transferred a lot of money back and forth - but never at one time (meaning many small - max under $1000 transactions). They have been just fine for me.
    It is great if you have a household of shared rent and bills and you want to easily pay one central person without any paper checks.

    But I don't think that it is fair that PayPal is allowed to bypass the bank laws for the most part.

    I do know (not personally as in "my mother" but personally in the sense that I have "spoken" with them on the net via e-mail and discussion boards) people that have had 10s of thousands of dollars get locked up by PayPal.
    I trust PayPal for my small $300 transactions, and I even have it hooked up to my bank without too much worry on my part. But from what I have heard of others, I would not keep large sums of money in there (the few people that I know had over $50K in there when it was frozen and then basically taken from them).

    To be fair, the people I know that had their money taken were doing illegal things - so it became very hard for them to seek legal action against PayPal. It would be amusing to approach the athorities and try to explain that PayPal stole from you money that you were not going to claim on taxes and was obtained via non-legal ways.
    Whether or not PayPal kept that money when they realized what was happening, or if they just freeze any high $$ accounts (I had heard that they freeze them all if they are high $$ and/or high traffic so that they can investigate them and then unfreeze them if they are "okay"... not sure what is "okay" and who determines that).

    I know a close friend that used a credit card only once in 2 years, and the one time that they used it was to sign up for a website subscription (not slashdot) via PayPal.
    She then quickly had many charges run up on her card - it was someone that had stolen it. She had to run through circles with PayPal and the cc company to resolve it - in the end, it was someone at PayPal.

    And then the gambling. I personally have no issues with gambling - I don't have a moral issue with it - and the only reason the states really doesn't like it (no matter what moral claims they state), is that it is not something they can tax.
    So I don't personally feel that gambling should some get in trouble for this.

    Were I for some reason allowed to make decisions on all of this - I would want PayPal to be treated legally like a bank, and I would want gambling to be allowed to stay on the continental states and then taxed.
    As for the drug dealers that lose their money... I'm pretty ambivalent on that one.

    --

    There are some odd things afoot now, in the Villa Straylight.