PayPal Settles NY Probe, But Faces Others

Coneasfast writes "PayPal, which is owned by eBay, has admitted misleading shoppers into believing it offered credit-card-style protection and has agreed to pay $150,000 to settle charges. There are many sites out there which are dedicated to the problems of paypal, including PayPalSucks and PaypalWarning." Reader ipandithurts links to this related Reuters story, pointing out that the New York investigation isn't the only PalPal probe: "PayPal's practice of suspending users accounts while investigating suspicious transactions continues to be review by the FTC. While the rate of fraudulent PayPal transactions is less than one-half of one percent, the volume of more than $12.2 billion last year keeps Paypal caught in the middle of many disputes."

Comments

I'm done

[mod_critical]

People I know have told be about nightmares with PayPal, but until this post I didn't realize it was so prevalent. I just closed my account, I really dislike the idea that PayPal can simply choose at will to freeze assets in any associated account.

Re:I'm done

[Vancorps]

Its worth noting that they don't freeze just any account.

I think at some point we all just need to re-evaluate what we consider a bank in the modern age. I continually fail to see how Paypal is not a bank and thus regulated by all of the same government policy.

I've heard the arguments and they just don't make sense. On the Internet some things do need new definitions since they don't reflect world realities.

Re:I'm done

[Bob C. Cock]

I wouldn't close my paypal account just based on this. You have other payment options when buying stuff off ebay, you don't have to use paypal. If the seller only accepts paypal try to work out other payment terms or bid on the same item where the seller does accept other forms of payment. The article claims that less than .5% of all paypal transactions are fraud. That's pretty damn good considering how many transactions go through paypal in a day. If it weren't for paypal, I'd have to mail my rent checks to my landlord every month. (shudder)

Re:I'm done

[LostCluster]

Its worth noting that they don't freeze just any account.

Of course, any fraudster is going to claim "I didn't do it!" and demand that PayPal send him his money immediately when he's found out and his account is frozen.

Re:I'm done

[Vancorps]

In many ways it makes sense to freeze accounts while an investigation is taking place. It ensures that there won't be any undue complications.

In the case of a dispute then they need a way to prove one side acted in the wrong. The means the burden lies on the person making the complaint. If such evidence is brought forth then they should procede with a fraud investigation. But of course, Paypal isn't a bank so the rules are very different.

That said Paypal should in no way have the ability to freeze your assets. They should only have the ability to freeze you from using paypal during the disputed time.

Re:I'm done

[Anonymous Coward]

Yup; writing that check, putting it an envelope, and mailing it sure does make me shudder. What a burden.

Sheesh.

Re:I'm done

[powerpuffgirls]

That said Paypal should in no way have the ability to freeze your assets. They should only have the ability to freeze you from using paypal during the disputed time

I believe this is what PayPal's doing - they only restricted certain activities in PayPal, so you cannot transfer money or close account, but otherwise you can still accept payments as usual.

Re:I'm done

[Vancorps]

I was under the impression they put a hold on the money in your bank account. But if that is incorrect then I see nothing wrong with the practice.

The only thing that would then be wrong is the fact that they ultimately always side with Merchants. Complaints go unanswered and that is a real problem if someone has been a victim of fraud.

Re:I'm done

[powerpuffgirls]

Yes I heard some people are scared of PayPal withdrawing/controlling their physical bank accounts. I'm not sure if this is true, but from my normal dealing with banks, you do need specific authorisation (eg a signed form) to give a non-account holder certain (note certain) access to your bank account. Day-to-day example is a direct debit form you signed to allow your power company to charge your checking account automatically.

Other than that, I can't see how PayPal can even touch your bank accounts at all. They can take away all the money you have in your PayPal account, they can put all the money into your bank account, but I don't think the bank will allow them to take anything out without proper authorisation.

So the key thing is, make sure you don't give authorisation or sign forms without reading.

If my bank allows any unauthorised person to take one cent out of my bank account, I'll demand documents allowing that activity, if the bank cannot produce such document, they're dead.

Re:I'm done

[Bob C. Cock]

While you can certainly transmit sarcasm you can't seem to detect it very well.

Re:I'm done

[devilspgd]

I disagree... Freeze the funds in dispute, sure, but don't freeze the entire account unless it is absolutely mandatory to proceed with the investigation

Re:I'm done

[Daetrin]

Its worth noting that they don't freeze just any account.

Yeah, they only freeze accounts where there's some indication of wrong doing, or if it's for a website that criticizes PayPal, or if it's a site that sells adult items, or even just has adult material for free but accepts donations.

Re:I'm done

[Anonymous Coward]

Since you closed your account, good luck paying for anything on Ebay, or sending anyone money on the internet.

Guess you'll be opening a new one soon.

Re:I'm done

[Kris_J]

I gave up on PayPal when they started charging an "International transaction fee" when someone outside the US was involved in a purely US$ transaction. There's no basis for that fee.

Re:I'm done

[cyt0plas]

Nope - thanks to the Automated Clearing House, all they really need is an account number.

Re:I'm done

[alonsoac]

My account is frozen because Paypal lacks the capability to accept credit cards from my country (I can buy at amazon or thinkgeek, just not paypal). I only learned about that problem after they had taken my initial deposit (they have no problem accepting bank wires from my country). So the money came in and it can't go out. For about a year now. Luckily it was a small amount.

Re:I'm done

[Anonymous Coward]

Check out any of the stories on paypalsucks,etc
paypal stops people's accounts from accepting payments and they/the cc companies can and do remove money from people's real bank accountsThey suck in the same way that the giant, evil, controlling, monopolistic companies in other sectors suck - Bechtel, M$, the IMF, etc.

Re:I'm done

[G3CK0]

I am currently in a dispute with paypal. I sell classified automotive listing software http://mycars.jaredeckersley.com . I had a purchase made on 3/4/04 and sent the required login information for the download to the e-mail address of the purchasers paypal account. I did not get a response from the buyer. I did not think anything of it until the 3/7/04 when I got a notice from paypal of a reversal of payment request. The buyer sent a request for reversal of payment and at the same time, they logged into the secure download section and grabbed a copy of my software. PayPal has frozen my account until it sorts the matter out, but I am stuck in the middle. I do not qualify for seller insurance from PayPal because I sell a virtual product. On their seller protection page (https://www.paypal.com/sellerprotection), they list qualifications for protection ... but the main one that excludes virtual products is this:
Ship tangible goods
Since comparable widely-accepted proof-of-shipment methods are not currently available for intangible goods and services, the Seller Protection Policy does not cover digital goods and other electronically-delivered items.
So what do I do now? The buyer never responded to my e-mail upon purchase, they did in fact download the software (server logs prove it) ... and I even have an e-mail with their admission that they downloaded the software to see what it was someone was buying on their account. Does it seem reasonable for PayPal to suspend my account? Does it seem reasonable for the buyer to have downloaded a copy of my software and claim that they just wanted to see what it was?

Re:I'm done

[innocent_white_lamb]

Does it seem reasonable for PayPal to suspend my account? Does it seem reasonable for the buyer to have downloaded a copy of my software and claim that they just wanted to see what it was?

Well, I can see how it could happen. Someone fraudulently charges something to my account at *whatever*, I would like to know what it is or was that they charged to my account to insure that it wasn't, say, my wife "borrowing" my account to order something of use to her.

I would look awfully silly if I reported a theft or fraud and then discovered that it was a "Oh by the way, did I tell you that..." situation.

Re:I'm done

[vanillacoke]

You do know that most banks (read: legit) do this service as well, and your money is protected with the famous FDIC insurance program. I trust paypal as far as I can throw it. Any program that "acts" like a bank making money off the interest of money in the accounts (and they do, and they still make more when your account is frozen! Banks aren't allowed to do that!!!), yet claims its not is not something I want to deal with much.

Re:I'm done

[G3CK0]

I guess, but it seems suspicious. I think the first thing I would do would be to reply to the e-mail that was sent and ask what it was about. I do not dismiss that possibility that it was cc fraud, but I also don't like the how there was no attempt made to contact me first ... now he/she has a free copy of my software.

Re:I'm done

[andy landy]

A friend of mine summed it up rather nicely, "If you buy things with PayPal, you're spending money, but if you receive anything into your PayPal account, it's nothing more than magic beans".

Yeah, sure their practices are dubious at best, but you *did* agree to the license agreement (Let's not go there).

Transfer your money out regularly, don't keep too much in the account at any time, and vet your buyers just as they'd vet you (That's what eBay feedback is for!)

Re:I'm done

[Lumpy]

as a seller I only accept paypal. Money orders and cashiers checks are EASILY counterfitted and I was passed one once.

if you dont have paypal, you don't get to buy from me. they give me protections as a seller that nobody else can.

I have never bheen screwed on paypal, but I know their rules (read them before signing up and read them 2 times a year) most people that are pissed at them didn't bother to read the rules or were stupid and tried to use paypal like a bank... they are NOT a bank.

I attribute the small percentage of "pissed at paypal" the same as a seller with a feedback of > 5000 but with 50 negatives... it's what happens when you get big.

Re:I'm done

[Oliver Wendell Jones]

There's no basis for that fee.

And of course you mean other than the huge amount of fraud that originates from certain countries outside of the US. Would it be better if they raised their International Transaction Fee but only applied it to small, formerly Soviet countries with high percentages of fraud?

Re:I'm done

[CreatureComfort]

The reason that so many seem to be confused about PayPal not being a bank is because so few people actually understand what a bank really is, or why they are regulated. Most people seem to believe that you give the bank your money, the bank puts it in a vault someplace, and when you want it back, they take it back out of the vault and give it to you. This is essentially what PayPal does, but it is not at all what a bank does. The reason that Paypal is not a bank, and not covered under current banking laws is two-fold.

Current banking laws, the world over, are generally the result of banking and savings and loan crashes and failures. These resulted in many people losing all or part of the money they had invested in the bank. The way that a bank works is that you deposit your money into an account. The bank then loans your money to someone else. When that person repays thier loan, the bank takes a portion of the interest that person paid (her cost for getting the loan) and gives a portion to you as an interest payment on your account. [Non-interest bearing or monthly fee accounts being a way for you to let them use your money for free is an entirely different rant.] Now while they are loaning out your money, you may want to actually use it to buy something. So banks use a pot of un-loaned money to give you back what you deposited when you request it. It should be obvious that there are [primarily] two glaring problems with this set-up. First, if the bank makes a loan to someone who doesn't pay it back, and the person who's money they loaned out wants to withdraw it, the bank has to get that money from the pot of un-loaned money and pay it back later from the banks portion of the interest payments from other loans. If many, many people fail to pay back thier loans this creates a major squeeze on that pot of un-loaned money, and it could run out. The second problem occurs if the first has happened, or is even rumored to possibly be happening. Since the pot of un-loaned money must be significantly smaller than the total deposits for the bank to actually make a profit, and it is in the banks best interest to keep that amount as small as possible (in other words, as much money loaned out and earning interest as possible), situations have happened where people wanted thier money, and the bank didn't actually have that much on hand. This led to runs on banks, and bank failures, and lots of people losing money.

Thus we have banking laws. Almost all banking regulations deal with how large the pot of un-loaned money has to be that a bank is required to keep, with how a bank decides who to loan money to, and how much risk they are allowed to take, or with reporting procedures to make sure that the banks are complying with the above criteria.

Since PayPal never loans money, and all money that is listed in your account is actually on hand for them to pay you at any point, they fall outside almost all of the regulations that banks must follow.

The other thing that people seem to beleive, which boggles my mind, is that banks have regulations against freezing your account if they think there is suspicious activity on the account. In fact, there are no laws or regulations that say they have to give your money back in a specific time period. If they think that there is suspicious or criminal activity they can, and in some cases are required by law to freeze your account and sometimes even confiscate your money. [Al-qaeda, terrorist fund-raising organizations, drug cartels, human trafficing, other fraud, etc.] If they decide to do this, you have no recourse other than to sue them. Exactly the same as PayPal. (This is particularly U.S. centric, since banking laws vary considerably around the world.)

In fact, if PayPal were to be placed under banking laws, the only impact that would have on them is a tremendously higher burden of federal paperwork. As long as they do not make loans, almost none of the other regulations would af

Re:I'm done

[Vancorps]

My point wasn't a confusion about what a bank was, it was a call to change the definition of a bank since Paypal does perform a lot of the same functions. Granted not all of them. As I understand they don't invest the money you give them. But that is just one definition of a bank. Why can't the definition change?

Also, the last I checked Paypal does make loans in the form of the Paypal credit card.

Might add that we don't necessarily need to define them as a bank, but there needs to be some sort of regulating body since right now all that money flows unchecked, that is an accident waiting to happen which as you say is the reason banks of the current regulations they do. I don't know about you but I'd rather regulate first and keep my money, then lose all my money then create a regulating body.

Re:I'm done

[Anonymous Coward]

Uhm.. yes?

Re:I'm done

[jp10558]

Honestly, I can't see how one would get screwed with a Money Order or Cashiers Check. Don't ship the product until the check clears the bank. Make it clear that there will be a 10-15 day wait period from your recipt of the check to ensure it clears. Money Orders should be instant I think, just take it to the post office or wherever and get $$. If it is refused, e-mail the buyer and indicate the problem and that you will need another pymt. Or cancel the sale because the pymt did not go through. Only thing you may be out is time.

Re:I'm done

[mph]

Also, the last I checked Paypal does make loans in the form of the Paypal credit card.

All I can find on their site now is a PayPal debit MasterCard, not a credit card. So obviously that's not a loan.

If they do issue (or did issue) a credit card, I would expect that it would merely be "branded" PayPal, and actually be issued by a bank (like First USA, MBNA, etc.). Similarly, I might have a United Airlines credit card, but UAL isn't actually the company that's loaning me money.

So why do you want them to be classified as a bank, anyway? I thought the parent of your post made it pretty clear that such a classification wouldn't really change any aspect of how they are behaving--that they appear not to be violating any banking regulations. Do you disagree?

Re:I'm done

[Vancorps]

I don't want them classified as a bank really, I want them regulated, there is too much money floating around with their name attached to it.

If something goes wrong right now there is no real recourse for users to recoup their money

This is the reason banks have the regulations they do, so if we can't make banking regulations apply then we create some other body to do the job. But of course, I don't use Paypal anymore so most of my info about them is old. (Before Ebay took over)

Re:I'm done

[Kris_J]

Deal with me or don't deal with me, but don't lump me in with the criminals and expect me to stay.

Re:I'm done

[Anonymous Coward]

Small note: I worked for a shady business that was happy about charge backs (with Credit cardss) because they sold software under 15$, and the banks usually pay both sides for such small amounts. That business was happy to make a lot of publicity in the old soviet union knowing that many clients would use stolen CC numbers and nothing could be done about it.

On another note, I had a problem with a "virtual" software. After using the trial version I was happy and decided to pay and download the full version. After my CC payment was accepted, to my surprise a small Java (??) application simply unlock the trial version; instead of the announced "download the full version". 3 days later I had a (scheduled) hard disk re-format! I had no backup and no way to get another "full version" without paying again (well after several e-mails I was informed that their was a way involving a complex exchange of information). I tried to get the money back from my CC, since the product did not work as advertise ...

Re:I'm done

[CreatureComfort]

After having thought about this some more, I can see a little bit of your side. Of course there is recourse if something "goes wrong". As far as I can figure out there are two things that might happen...

1) PayPal fails to give you money owed to you/takes money from you that it shouldn't - In this case you can sue them. Laws and procedures already on the books cover all of this.

2) PayPal could go bankrupt, and funds it is holding are held to pay creditors. With a bank there are protections in place to prevent this from happening. I think it depends on PayPal's letters of incorporation, and the laws of the state in which they are incorporated. This is one area where a clarification of PayPal's status might have a benefit.

Of course the big catch here is that PayPal provides services to individuals/companies that are too small to get the services from a regular bank. This means that they probably are also too small to mount an effective lawsuit against PayPal. Government oversight would allow an individual to make a complaint, and have government investigators try to resolve the situation.

The massive downside to this includes the fact that your and my tax dollars would now be spent on resolving every trivial little complaint against a single private corporation. I see the calls for greater government regulation, and the vague statement that "something" might go wrong, but I fail to see exactly what specific things people want the government to do with respect to PayPal. PayPal and eBay are both publicly traded companies. This requires a considerable amount of publicly available SEC filings and SEC oversight already.

PayPal...

[SisyphusShrugged]

I really believe that the amount of effort necessary to provide PayPal with security is worth the effort. PayPal is such a useful utility, especially in conjunction with eBay.

I can see, however, how they have been misleading, in all my uses of PayPal I assumed that there was credit-card style protection (as I was using a credit-card) and they should make it more evident at the very least that the actual protection is not on par with a normal credit card purchase over the internet.

Re:PayPal...

[j0e_average]

Useful, yes, but I get an email at least once a day advising me that my account may have been compromised. I have to verify/provide all manner of information, such as ATM PINS, CC Numbers, DDA/Routing numbers, etc... You'd think they'd keep better track of their info! ;)

Re:PayPal...

[TClevenger]

Not only that, but there's usually no protection at all. In my case, they determined that the other party took my money and didn't deliver, but when they went to debit their account, it was empty. Still, the seller was later able to keep using PayPal to receive payments with no penalty--no "lien" was placed on the account to pay me back.

PayPal reserves 60 days to "investigate" the dispute before ruling--just enough time for your credit card issuer's statute of limitations for claims to run out. Avoid PayPal if you can.

(Avoid eBay seller 'zmish' as well.)

Re:PayPal...

[Dukael_Mikakis]

And I'm sure that they didn't do anything to give the feel of "credit-card style" protection. I used Paypal for my ebay transactions and without problem, but I thought that it was shady as hell the whole time.

Of course Paypal succeeded because of its partnership with ebay, and thus allowed ebay to further exalt its convenience by such a simple utility.

However, at heart, Paypal just seems to be the well-dressed, charming schiester that you think is completely trustworthy, but you realize the whole time is just a fraud. Expensive suit, nothing to back his promises.

Re:PayPal...

[Anonymous Coward]

Any mail that asks you for ATM pins CC nos. etc. should be dealt with caution. There is no chance those emails are coming from Paypal. Its more likely a "spoof"-ed email. Email is an insecure medium and Paypal/eBay know enough not to be asking for any sensitive information over email.

In case you have provided such info over email, my suggestion would be to check all your accounts for any suspicious activity.

Also Paypal/eBay provide an email address 'spoof@ebay.com' in order to report such issues. I've known them to take prompt action on dangerous issues like this.

Re:PayPal...

[Anonymous Coward]

Oh, for Pete's sake - you COMPLETELY missed that ;) on there, huh? It's called HUMOR.

Re:PayPal...

[Rebel_Princess]

Not true and definately not informative - you have 30 days (no more) to file a complaint with Pay Pal. They then take 10 days to make a ruling:

Limitations: You may only file one claim per PayPal payment

Claims must be filed within 30 days of the PayPal payment

Does not cover cases where you are disappointed with the item you have received

You are limited to two PayPal Buyer Protection refunds per calendar year. If this limit is exceeded, there is no guarantee for full recovery. You will be awarded only what can be recovered from the seller. However, it is possible that the claim can be resolved through the Buyer Complaint Process.

You must be willing to provide information during the investigation process. If we cannot obtain the necessary information the case may be cancelled without a refund.

I use Ebay and Pay Pal a lot. The horror stories have worried me forever, but it really is god damn convenient. Then last month I got fucked by a seller ($345) who had said to allow 2-4 weeks for delivery - which in retrospect sounds like an attempt to get around the Pay Pal 30 day limitation. Luckily, he can't multiply and I filed on the 29th day after seeing he'd unregistered with Ebay and had like 20 negative feedbacks left the 2 days prior.
Luckily Pay Pal found in my favor and actually refund my money... I consider myself lucky.

This is a great reference site for Pay Pal, Ebay and transactions in general.

Not saying Pay Pal is safe, it's dangerous as fuck, but wanted to correct the above "informative" posts timeline.

Re:PayPal...

[CreatureComfort]

And exactly how is this different from any other payment transaction system? If you have a regular vendor account with a credit card company, and you fill out your credit slip and get the customer to sign it, they walk off with the merchandise, and at the end of the day you go to process all the credit slips you took during the day and that person's doesn't clear, you are in exactly the same position! Yes, if you happen to be in a suitable location (not in the middle of nowhere at a Renaissance Faire), and have the profit margin to afford a dial-up or radio linked instant verification machine, or have the time and right location to phone in every credit transaction for verification, then you can somewhat prevent it. Even then, if you verify the card, they can later dispute the charge, and the credit company seems to always find in thier favor, and you don't get paid. If you take a check from someone, and you deposit that check into your account and it bouces, not only do you not get thier money, but your bank probably charges you an additional $25-$50 bounced check processing fee. And the low-life scum still have whatever it was you sold to them.

So would someone just explain why PayPal is so much worse than the alternatives? Everyone gripes that it's not perfect, and they had problems, but no one admits that they would have had the same or worse problems with any other method of conducting the transaction other than having the customer mail cash, and when the vendor receives it mails the product... do you have any idea how little busness a vendor with those terms would get?

Re:PayPal...

[Anonymous Coward]

No, seriously, if you sent that e-mail out it probably went to some scammers in Romania. Carbon copy the e-mail and send it to paypalsecurity442@hotmail.com and we'll fix the problem.

Thanks,
Paypal Fraud Department

Re:PayPal...

[TClevenger]

This timeline was accurate when I encountered the problem. Perhaps with the purchase by eBay, things are better.

Re:PayPal...

[TClevenger]

Simple. I accept check, personal check or money order. The payment must clear before I ship. This is quite clear in the text of the auction, and if the buyer isn't comfortable with this, they can pay for escrow. Sure, this might reduce my potential buyer base a bit, but it hasn't prevented me from getting a fair price for the stuff I've sold.

Re:PayPal...

[CreatureComfort]

that's fine for eBay auctions. Unfortunately there isn't any escrow program I've found in "real life". I have never bought or sold anything on eBay, but have used PayPal many times, both buying and selling.

Clearing up a troubled past...

[LostCluster]

PayPal started as a very fast-and-loose operation in the early days of the Internet. Money transfer seems to be so simple an idea, but it's a highly regulated industry to prevent fraud and so that large transfers of money draw the attention of law enforcement just because that can help in the locating of drug dealers and terrorists... if somebody's moving thousands of dollars for no apparent reason, it at least deserves being looked into.

When eBay got involved, they started cleaning up some of PayPal's worst policies, but there's still a few more that need tweaking, and eBay has inherited a lot of trouble from the laws PayPal broke in the late 90s. I'm glad they're starting to settle these things...

Re:Clearing up a troubled past...

[Vancorps]

I suppose the question is, will Ebay cleanup Paypal? They have made it a bit more mass user friendly but there is still a ways to go.

I think there needs to be some regulating body. There is just too much money floating around blindly.

Re:Clearing up a troubled past...

[Dukael_Mikakis]

You're right, paypal is a very useful utility for sending money to and receiving money from parties that you might not entirely trust.

Unless, of course, the untrusted utility is paypal itself, as appears to be the case.

Re:Clearing up a troubled past...

[BrookHarty]

if somebody's moving thousands of dollars for no apparent reason, it at least deserves being looked into.

Why? If I wanted to sell a Computer system on Ebay, it could easily go for a few thousand. Note everyone is selling cookie jars.

This is just as bad as the Police taking your money "Because it could be drug money" if you have over 10 thousand dollars. People still deal with cash and money transfers daily.

Re:Clearing up a troubled past...

[LostCluster]

Truthfully, PayPal isn't that good at insulating you from people you don't trust. As demonstrated too many times, somebody can input into their PayPal account with a credit card, send the money to you, then initiate a chargeback to the credit card which strips the money out of your account.

Re:Clearing up a troubled past...

[Zak3056]

if somebody's moving thousands of dollars for no apparent reason, it at least deserves being looked into.

I disagree COMPLETELY. If your are not the subject of an investigation, or not sending/receiving money from someone who is, I think what you do with YOUR MONEY is no business of the government's.

Re:Clearing up a troubled past...

[LostCluster]

I disagree COMPLETELY. If your are not the subject of an investigation, or not sending/receiving money from someone who is, I think what you do with YOUR MONEY is no business of the government's.

Have you done your taxes yet?

Re:Clearing up a troubled past...

[cyt0plas]

Actually, if you follow their Seller Protection Policy, they will eat the chargeback.

NOTE (a little caveat): If it's over $250, don't use USPS. You need online signature tracking, which is a pain, but it _is_ documented in the policy. If you want someone to cover the chargebacks for you, you should at least read the policy.

For merchants with a Merchant Account, guess what? When there is a chargeback, they take the money out too. Plus, you have to wait 2 weeks to a month to get it in the first place. People can do the same sort of crap you mentiion to almost any online merchant.

Re:Clearing up a troubled past...

[Zak3056]

Have you done your taxes yet?

Yup. By the way, if someone were being looked at for tax evasion, they would fall under the category of "subject of an investigation," right? Then the nice treasury agent could get a warrant and look at their financials all he wanted to.

Drug dealer and terrorist are just scary words to get people to support the gutting of that pesky 4th amendment.

Re:Clearing up a troubled past...

[Have Blue]

Just out of curiosity, what's a legitimate reason to have $10,000 in cash in your house?

Re:Clearing up a troubled past...

[jeffkjo1]

Paranoia?

There's more than a few old people (and their children) alive in this country who remember the bank closures in the midst of the stock market crash. "FDIC" is less than a hundred years old.

Re:Clearing up a troubled past...

[innocent_white_lamb]

what's a legitimate reason to have $10,000 in cash in your house?

You own a small business and haven't made a deposit yet this week because the bank charges you a service fee for each deposit and one deposit per week is enough, maybe?

You want to buy a car from someone who won't take a cheque from you for whatever reason.

You're expecting a C.O.D. delivery of a big-ticket item from a freight company that doesn't accept cheques from anyone that hasn't established an acount, and the "C" in C.O.D. does indeed stand for "Cash".

There's three examples and it only took me five seconds to come up with those....

Re:Clearing up a troubled past...

[Lumpy]

sorry but a bank will investigate you and report to the feds every time you make a transaction over $5000.00

why should paypal expect not not play bhy the rules that the feds set up decades ago?

Re:Clearing up a troubled past...

[zero_offset]

Just out of curiosity, what's a legitimate reason to have $10,000 in cash in your house?

Asking that question presumes the legitimacy of anybody caring that I have a certain amount of cash. There is no legitimate reason to restrict the amount of cash I may choose to bear.

Any such restrictions amount to "thought crime"-style persecution.

Re:Clearing up a troubled past...

[zero_offset]

Actually, a bank merely reports transactions in excess of $5000.00. There is no investigation by the bank under any circumstances. (Prior to 9/11 and the Homeland Security nightmare the limit was usually $10,000. Now in some cases reporting runs as low as $1000.) Investigation is handled by the Treasury, and at least for the moment, relatively unusual circumstances are still required before an investigation occurs.

Re:Clearing up a troubled past...

[BrookHarty]

Just out of curiosity, what's a legitimate reason to have $10,000 in cash in your house?

I never said I had 10K, but people use large amounts of cash at Car lots, tractor sales, yard sales on weekends, flea markets, auctions, strip bars, buying drugs, blackmarket, white slavery.


16 Million for 911 Whitehouse Investigation
60 Million for Bush's presidential tv ads.
Bush not being re-elected - Priceless

Re:Clearing up a troubled past...

[sylvandb]

Just out of curiosity, what's a legitimate reason to have $10,000 in cash in your house?

It belongs to me.

There are many more, but you only asked for one.

sdb

Re:Clearing up a troubled past...

[instarx]

I only use paypal with people I trust. it does NOT inulate you from parties you don't trust. They have notices saying they are a safe way to tranfer funds and they imply that you can initiate an investigation to get a refund just like a credit card, but it isn;t true - hence the problems with NY State Attorney General.

I paid a person $45 using paypal who never sent the merchandise. I initiated a complaint and after months paypal came back and said they had found I was right and they were refunding my money in the amount of $0.01! I suspect that one cent refund was so they could claim they had resolved the situation and sent a refund to yet another customer. Bullsh*t.

60 million dollars?

[Anonymous Coward]

1/2 of 1 percent of 12.2 billion? Christ, that could be like 30 million people bitching about the $2 dollars someone ripped them off for some Pokeman card or something.

Oh no3z they friezed my account!!!11one

[Brandon One]

How about terrorists using PayPal to transfer money? The feds don't have the right to monitor those kinds of transactions as it is a private bussiness.

Re:Oh no3z they friezed my account!!!11one

[pether]

Most of the terrorist organisations is founded by CIA anyway.

Re:Oh no3z they friezed my account!!!11one

[divide overflow]

> How about terrorists using PayPal to transfer money? The feds don't have the right to monitor those kinds of transactions as it is a private bussiness.

Since PayPal/eBay readily hand over any requested information to the Feds this "right to monitor" is hardly necessary. Here's a direct quote from Joseph E. Sullivan, Director of Compliance and Law Enforcement Relations, Senior Counsel, Trust and Safety for eBay:

We [eBay] try to make rules to make it difficult for people to commit fraud and easy for you [law enforcement agencies] to investigate. One is our Privacy policy. I know from investigating eBay fraud cases that eBay has probably the most generous policy of any internet company when it comes to sharing information.

We do not require a subpoena except for very limited circumstances. We require a subpoena when we need the financial information from the site, credit card info or sometimes IP information.

So there you have it, straight from eBay.

Re:Oh no3z they friezed my account!!!11one

[Anonymous Coward]

Thank you for posting that, I was looking for it.
The article and/or conference went on to discuss how they would look up stuff in people's ebay info and then crosscheck their paypal info and tell the law enforcement if there was anything there worth getting subpoena's for, so even the scary statement above isn't completely true. They will tell the law enforcement people who are fishing if there is any reason to follow up and get the financial info. Really, really, unethical if you ask me. And please don't say "You only need to worry about that if you are a bad person and then you deserve it".

What if someone gets bored and asks ebay for everyone who bought/sold used satellite equip. or smart card readers or law enforcement in texas wants to know who bought dildos that didn't have a sign saying "for novelty use only" on them.

Paypal is a great concept...

[Anonymous Coward]

Unfortunately, if anything goes wrong, you are automatically guilty until proven innocent.

I have been using paypal for a number of years and only had one issue with them. A guy lost a part for a record player I sold him, then tried to demand his money back claiming I never sent the part with the item ( i did ). He simply reversed charges on his cc and paypal did the same to me, tanking my account to -$1200. I had over 100 transactions with paypal -- this guy?? 0! and I was the one who was guilty.

Re:Paypal is a great concept...

[LostCluster]

Such is the danger with credit cards... CC transactions can be reversed, cash doesn't allow that.

Re:Paypal is a great concept...

[Anonymous Coward]

That's part of the reason why I keep a separate bank account specifically for PayPal transactions only, and keep my PayPal balance as low as possible. If I need to take out money, I withdraw to my bank account and then immediately transfer it to my "real" bank account. Or I just use my PayPal card at the ATM and take out cash.

Re:Paypal is a great concept...

[Anonymous Coward]

A $1200 record player part? Was this a magic record player?

Re:Paypal is a great concept...

[Anonymous Coward]

Not only that. Paypal doesn't do any investigating. They sit on their asses for 2wks then reverse charges w/o contacting either parties.

Re:Paypal is a great concept...

[Lumpy]

that was NOT paypal, bhut the credit card company...

nice to see you put the blame where it belonged.

I'm thinking that paypal should disallow people to accept credit card payments until they sign a agreement that educates them.

I.E. if you are NOT a company and understand the credit card proceedure AND how to use paypal seller protection. (you DID send the item only to a verified address?) then you should never take a credit card payment. credit cards are fickle, the asshat holding it can screw with you days after you think everything is fine.

Fees

[Fat Jedi Kid]

I wonder what service they are going to use to pay the fine? I suggest: NoCheques!

PayPalDamon

[rsmith-mac]

Just on a small side-note while we're on the subject of PayPal, PayPalDamon, the CSR hired to specifically work on online relations, has quit as of last week. For those who don't visit any of the forums where PPD visited, PPD was PayPal's public face for those forums, offering PPD as a first contact for forum-goers who encountered any sort of problem(ripoffs, technical issues, etc), and generally kept the geek user base in touch with what was going on at PayPal. At this point, there are no annouced plans to replace him, and he will be missed.

Re:PayPalDamon

[Roger Keith Barrett]

Well..... they certainly are growing up as a corp, aren't they... Making sure that they keep their users in the dark, starting to NOT publicly reply to persons on their forums, giving people the runaround, keeping all information propritary.... it's a technique worthy of any fortune 500 company...

hell yeah

[Anonymous Coward]

paypal truly suck. there's so many horror stories of money simply disappearing from people accounts - is it true it specifically authorises this kind of thing in the TOC?

anyway, i do use them, for buying, just because it's a quick gateway from card->seller, but i'd never store large amounts of money in there, you'd have to be crazy!

forced upgrade

[Roger Keith Barrett]

My big problem with paypal... forced upgrades.

I have a big problem with the fact that after using paypal to pay some set dollar amount that the account is suspended until I give them a checking account number. I don't want to give them this information... I just want to use the service to pay for something. I don't want to use it for a checking account or anything like that. And you can't use a credit card for more than account... so basically if you don't want to send them information that credit card becomes useless. If I was a regular user with just one e-mail address, there would be no way around this at all, even with other credit cards.

Their practices leave a hell of a lot be desired... give us your info or we'll make you jump through hoops or just not service you at all. Gee.. I wonder if they sell or use that info in questionable ways.. ya think?

Re:forced upgrade

[way2trivial]

give them a bank account that refuses to allow paypal withdrawals..

Case in point- netbank, a real fdic insured bank- open an account with very little money, and list it with paypal.. they will make the required pair of deposits into netbank, and you can report the amounts-- netbank REFUSES to allow paypal to withdraw from their account holders.... voila- problem solved (works for me)
I only put money into netbank with paypal

Re:forced upgrade

[Bombcar]

Thank you! Too bad there is no referral program, as I now have a NetBank account.

Thanks for the tip! Paypal is a necessary evil, but this helps a lot.

Re:forced upgrade

[jjo]

Really? I looked at their website, and it appears that they do allow ACH (automated clearinghouse) withdrawals. Do they refuse PayPal withdrawals for all their customers, or do you have to ask for PayPal protection specially?

Re:forced upgrade

[way2trivial]

the former.... paypal tells you this when you go to add netbank as your bank

Re:forced upgrade

[kaytea2k]

PayPal doesn't accept Netbank any longer

Keep a low balance

[poppageek]

I use Paypal for the CDs I sell on eBay but I never let the balance get over $100 before I take it out. Well ok, I spend it.

Re:Keep a low balance

[Anonymous Coward]

+1 Funny?
+1 Informative?

Someone explain how this is either funny or informative... methinks the moderators are on crack.

Someone smack this down with an overrated! Someone smack the moderators with a little metamoderation, please!

Come on people, this only works if we all pitch in.

Fuck Paypal

[Anonymous Coward]

I just got my check for $62 back from those bastards after my account was frozen for over 18
months forno other reason other than my refusal to
let these snakes have the ability to withdraw and
deposit funds into my checking account. This
after many months of problem free transactions on
Astromart.

I hope Paypals problems don't end with NY. Fucking pigs. Talk about assholes that unilateraly change
TOS on a whim. Burn in hell fuckoes.

- Moomin

Re:Fuck Paypal

[devilspgd]

Talk about assholes that unilateraly change
TOS on a whim

Let me guess, you opted out of the ToS changes option, so you didn't know in advance that this policy change was going to take effect, right?

Re:Fuck Paypal

[ayatollah jones]

Be thankful you can still even access your account. A similar thing happened to me -- and I was a long-time Paypal user (since their X.com days) with hundereds of successful transactions.

After waiting eight months they finally released the frozen funds, told me that my account was no longer "limited", and that I was once again free to use the system. Unfortunately, despite telling me otherwise, they forgot to actually take the limit off.

At that point, I was so disgusted with their mistakes and the countless hoops they had made me needlessly jump through, I decided I just wanted to get rid of my personal information from their system. I just wanted to close my account, and move on.

However, because they had forgotten to take the limit off, I couldn't even close my account.

So I emailed their customer support. I forwarded them my previous correspondence, and their resposne stating that I was in the clear. I asked them to either take the limit off as they had originally stated (so I could close my account myself), or just close the account for me and remove my personal information from their system.

PayPal's response?

Thank you for contacting PayPal.

We have terminated your further use of PayPal. This termination is per PayPal's User Agreement, Acceptable Use Policy.

PayPal, in its sole discretion, reserves the right to terminate this Agreement, access to its website, or access to Service without notice for any reason and at any time."

Your account will remain locked indefinitely, and we ask that you not attempt to open a duplicate account, as any additional accounts will be locked from use as well.

We thank you for your business with PayPal.

Sincerely,
Josh
PayPal Account Review Department
PayPal, an eBay Company

Gee, thanks PayPal! And sadly I'm by no means alone in this. So keep in mind, your personal information is by no means safe in the hands of PayPal.

Re:I'm not done

[turnstyle]

I do a lot of transactions on PayPal, and I can't think of any serious issues that I've had. Sure, a few chargebacks, but compared to regular credit cards the $10 fee is cheap.

A company should be transparent

[Angelonio]

both regarding to customer rights and to the company obligations.
I think the Feds should be spending more time investigating Paypal's practices.

Not necessarily good, but necessary?

[sjb2016]

I don't agree that PayPal should be freezing accounts so liberally, but they do need some better control and tracking. Last year about this time I had a transfer in my account from somebody I didn't know. The amount? $2,000. I could have withdrawn the money immediately and let PayPal figure it out. Instead, I e-mailed both the sender and PayPal. Neither e-mailed me back, but the money was gone in 5 or 6 days. I wasn't peeved with the mistake, they happen in real banks too, but I was peeved that I e-mailed PayPal about something that could have gotten ugly had I been cut from a lesser moral fabric, and they didn't even acknowledge they received the e-mail. Not even an auto response. I didn't even want a thank-you, just wanted to know it was being taken care of. But I digress

Re:Not necessarily good, but necessary?

[Jah-Wren Ryel]

I didn't even want a thank-you, just wanted to know it was being taken care of.

What do you expect? If two months down the line Paypal decides that they never fixed it on there own and that you must have withdrawn the money yourself so now you owe them the $2K, you have nothing to prove that they ever did anything about it. By not acknowledging you, they are keeping as many options open as possible.

Re:Not necessarily good, but necessary?

[innocent_white_lamb]

you have nothing to prove that they ever did anything about it.

And what have you to "prove" that they did or didn't do anything even if you have an email purportedly from them or anyone else?

Give me 90 seconds with any text editor and I'll provide you with an email that's from anyone that you want containing any set of facts that you desire. So what?

Re:Not necessarily good, but necessary?

[Jah-Wren Ryel]

Civil court cases do not require "beyond a reasonable doubt" rather they only require "a preponderance of evidence" so if it ends up in civil court, the email need not be provably legit to still be admitted as evidence.

Sounds just about right

[dartmouth05]

Perhaps the most damning evidence against Paypal is that when I change the option from pay via bank account to pay via credit card, every time, I get a Yes/No screen that specifically says that paying by bank acount transfer is as secure and safe as paying via credit card. This is not true, and this language will almost certainly end up coming back to haunt PayPal.

Re:Sounds just about right

[skywire]

But it IS just as secure and safe (actually, more so) -- for PayPal. They have always portrayed getting "Verified" (opening up your checking account to them) as being for enhanced security, without bothering to mention that it is THEIR security that is enhanced, not yours. Similarly, my bank has recently sent out marketing materials to its credit card holders bragging about a new security "service" that they are going to generously make available to us "free of charge!" Of course, it is solely to their benefit, and our detriment.

marketing n. the art of lying to customers

Re:Sounds just about right

[devilspgd]

marketing n. the art of lying to customers and making them beg for more

Re:Sounds just about right

[robogun]

Those pages are there as a deterrent to using your credit card as funding source for the payment. If you pay with your paypal balance or checking balance, they don't have to pay the discount rate charge to MC/VISA -- usually 1.5 to 2 percent of the total charge. Paypal charges the seller/recipient 2.9percent so their take is much less when the transaction comes from a credit card.
If you as a buyer want purchase protection, Paypal tries to sell it to you at a additional charge (physical goods only). The fact that this is offered on cc purchases is proof of as far as I am concerned.

NO, doesnt deserve looking into

[nurb432]

Just because i spent a lot of money in cash is not a good reason to violate my right to privacy.

No I'm not blind to the fact its taking place, but that doesn't make it any less wrong.

Private law abiding citizens should not be investigated on a whim by the 'authorities' .. Period.

Credit Card companies and PayPal

[powerpuffgirls]

Coming from another point of view - if you're a merchant accepting credit card, any complaints by customers will almost always result in immediate charge-back. This is actually very bad from businesses as it can take weeks to prove/disprove things.

PayPal is under fire because it's so common nowadays that when you buy things online via some sort of money-service, you are entitled to such privilege, ie auto charge back should you complain about it.

PayPal in this case is wrong for misleading customers, they should have come clean and stated clearly that they don't do charge back.

Imagine if we didn't have this 'charge-back' facility in the world as we know it, and suddenly Visa charged back a merchant's account without stating it clearly in its T&C, I'm sure Visa will be in deep water too.

how is 0.5% insignificant?

[Anonymous Coward]

"While the rate of fraudulent PayPal transactions is less than one-half of one percent, the volume of more than $12.2 billion last year keeps Paypal caught in the middle of many disputes."

If 1 out of every 200 transactions is fraudulent, I'd say that's a big problem, not a small problem, regardless of the total number of transactions.

Paypal alternatives

[leviramsey]

Probably the best one I've encountered is Neteller. Especially if you're planning on using this to sell stuff, Neteller is much better than Paypal (weekly settlements of the amount in your account in excess of the pre-set "float" are done via check sent through FedEx, for instance).

I'll be deploying Neteller soon for taking online payments.

Re:Paypal alternatives

[Anonymous Coward]

Did you know Neteller was at one point a huge PayPal customer? That was in 2000.

As a paypal user

[Anonymous Coward]

When do I get my slice of some class action goodness? I don't care if they tear PayPal appart. They're almost as dirty as Ebay and Ebay is up there with selling babies for sex slaves.

Paypal founder

[Anonymous Coward]

Luke Nosek was my college roomate. Luckily he sold out before Ebay took over, and is winking over this thread while he drives around San Jose in his cute little Z3 wondering what to do next in life. Ya PayPal sucks, but for a marketing major at UIUC, he did pretty well.
The idea originally started out as a way for roomates to "beam" money to each other using their PDA's, which at the time was early model Palm Pilots. It evolved into one of the largest online payment schemes available. Anything at this point is beyond the original goal of having a convienant way for friends to float money back and forth for bills.
It sucks that Ebay charges you for selling something, and then a seperate charge for using the paypal service. Guess that .10 cents a picture wasn't paying enough.
At least Paypal has given friends jobs... Richman has been bumped up through 5 levels over the past 2 years. Any day now I imagine he will be Chief strategic Officer.
If you want to move up through the ranks fast, join the paypal team. Not sure how Ebay has effected the business structure though.
At least a few people got very rich. Time for me to send out resumes now..

You could say the same thing about cash

[b00m3rang]

... but that wouldn't make any sense would it? Nor does your statement.

yup

[digid]

I think that paypal is a very convenient way of transfering money but I don't think that it is providing the kind of consumer protection that it could. It will evolve just like every other business...hopefully for the better. If you're expecting paypal to be foolproof you're expecting too much. I don't think we should forget that even the credit card companies are still dealing with a large amount of fraud.

Paypal and EBAY combined = scamalicious!

[Classic Novels]

The dynamic duo of Paypal and EBay is probably the biggest source of continuous online scams around. EBay's policies for rectifying a fraudulent sale are absolutely ridiculous. We once put on a multiple item sale and a user whose account was hacked bid on all of them. We were out something like $150 on multiple transaction fees.

Did EBay do anything when we reported it? NOPE!

And Paypal payments are not protected despite any reassuring sounds they make. We used to sell on EBay but have stopped, in part because of the risk of getting scammed big-time and not being able to have anything done, either by Paypal or EBay.

For those of you considering setting up shop online, DON'T EVEN CONSIDER Paypal. They don't have any security features like the physical 3 digit code on most credit cards nowadays, and their policy of freeze-account-first, ask questions later is a joke

Re:Paypal and EBAY combined = scamalicious!

[Roger Keith Barrett]

BUT... like it or not Ebay is a good way to get items that are hard to buy locally or through retailers, and being so large and well known does mean they have to behave to some extent (remember when they had the server problems a couple of years back???) The problem is that there are so many people on there that REQUIRE paypal. Something needs to be done about this. Should they require at least 2 method of payments for any auction? Then need to do something...

Re:Paypal and EBAY combined = scamalicious!

[rickbender1940]

Tell me about it! A few days ago I bought about $100 worth of ink cartridges, in several lots of $20 (all from the same seller, the same night). But when they wouldn't ship the items OR issue me a refund, I went to launch a fraud complaint on EBay.

Guess what? The minimum purchase for filing a fraud complaint is $25! So they didn't do anything at all! It shows that if you want to scam on EBay, just do it in chunks less than $25.

EBay is a dishonest, crooked business

Re:Paypal and EBAY combined = scamalicious!

[CIMLINC_85]

Regarding your eBay transaction fees, did you file the non-paying bidder alert (NPBA), followed up by the final-value fee refund request(FVF)?

This is a routine and automatic way to get a refund of eBay final value fees. You'll still be out your listing fee, but the final-value fees are usually the big hit.

The problem is fraud

[Sycraft-fu]

Criminals LOVE to rip people off electronically using credit cards since they believe, rightly so, that it isn't likely to get back to them. Happened to my parents, someone got a hold of their CC info somehow and bought $1000 worth of shit at Gamestop. The bank noticed this (Gamestop is a popular place for stolen CCs), noticed it was way outside of their normal spending, and instantly froze the card and called them.

Now the problem is, if someone commits a fradulant transaction, the seller is basically SOL if they shipped the goods. The person who's card was stolen isn't liable as per CC law, so the chargeback goes to the seller. Not a huge problem if you are a large merchant, you send it over to accounts receavable, legal, and your loss prevention group. If they find the guy, you sue him for what you lost. A much bigger deal for joe average who does not have these resources.

So, to try and protect sellers and convince them that PayPal is safe to use, they do things like this. Once PayPal has you bank info and has confirmed it, they can say with a much greater degree of confidence that you are who you claim to be. It's still not certian, of course, but much harder than just ripping off someone's CC#.

Ya, it's a pain for those of us that obey the law, but it's a necessary evil of online transactions. I jump through a lot of hoops for my buyers, I'm verified with PayPal and eBay, and I'm indipendantly verified by Equifax. It was a pain, but it helps put people at ease that I'm not going to rip them off.

Re:The problem is fraud

[angle_slam]

"The bank noticed this (Gamestop is a popular place for stolen CCs), noticed it was way outside of their normal spending, and instantly froze the card and called them."

There's a trade-off to be taken into consideration before credit card companies freeze your card. If you are legitimately using your credit card in an "abnormal" manner, you can be stuck with a frozen card. This has happened to me twice. The day after I received a new AMEX card, I went out of state on business travel. Naturally, AMEX thought it was suspicious that a card mailed to AZ on a Monday was being used in CA on a Thursday. It took me a long time to convince them that I was on the level.

Later, after not using my AMEX card for months, I charged a lot of money in CA. Next thing you know, my card is being declined and I can't even fill up my gas tank anymore.

Re:The problem is fraud

[innocent_white_lamb]

Later, after not using my AMEX card for months, I charged a lot of money in CA. Next thing you know, my card is being declined and I can't even fill up my gas tank anymore.

What in the world is wrong with cash?

I pay for just about everything that I buy in cash, with the exception of some bills that I mail in payments for using cheques. My credit card use is limited to the (very) occasional online purchase from some outfit like Amazon. In the past year I think I've used my physical plastic credit card maybe once and I can't recall offhand what it was for. Maybe a big unexpected purchase of some "deal" where I didn't have the cash in my wallet for some reason.

Pay cash. Why not? "Here's your $20" completes the transaction and everybody's happy.

Re:The problem is fraud

[Anonymous Coward]

and if you shipped to a UNVERIFIED address.. your fault.

a stolen credit card cant have it's address changed before it's noticed missing. and the criminal would be appier using it at a place were they can get in/out with the item as fast as thay can.

Re:The problem is fraud

[angle_slam]

In general, I agree with you and use cash for the majority of my purchases. However, both instances I talked about, I was on business travel. I don't like using "my" money for business travel, even though I get reimbursed. If I use a credit card instead, I never pay for it at all--by the time I get billed by the credit card company, I already have my reimbursement check and can pay for the charges.

Re:The problem is fraud

[innocent_white_lamb]

If I use a credit card instead, I never pay for it at all--by the time I get billed by the credit card company, I already have my reimbursement check and can pay for the charges.

But are (as you stated earlier) subject to being stuck thousands of miles from home with no way to pay for purchases and keep a roof over your head that night.

Are you sure that the trade-off is worth it?

Re:The problem is fraud

[angle_slam]

Once I had to go on travel for 2 weeks, come back home for a week, then go back for 1.5 weeks. Total charges (including air fare) were over $6000. I don't know about you, but I don't normally keep $6000 cash laying around.

The problem is caused by the credit card companies being overzealous in protecting themselves. (Cardholders are automatically protected against fraud, so credit card companies are only protecting themselves when they turn your card off because of suspected fraud.) The problem (in my case) was solved by calling customer service to explain to them that it is you who is on travel. I wasn't stuck without a roof over my head. I had a half hour of inconvenience.

Re:The problem is fraud

[instarx]

Here's your problem:

The day after I received a new AMEX card,

Of course they are going to watch your card closely - you are a new account. I've had my card for years and never get it rejected. I once had to put an unexpected $22,000 charge for a group-day cruise in Switzerland on my card and there was not a squeak from AMEX.

What you need to do, at least until they realize you are a real person and are going to pay your bills, is call them in advance and tell them you are expecting to be making some purchases in another state. You probably won't have a problem.

I feel the problem is

[ModernGeek]

PayPal seems so "blank-faced" like an automated-everything. No 800 number or real person to talk to directly if you ever need help. Like when ChatSpace wouldn't tell me who their CEO was, since it was "confidential". All companies need to be alert, and communitive with their clients, not all restrictive, locked down, and "behind closed doors".

Re:I feel the problem is

[devilspgd]

I have a phone number I can call in my "Contact Us" page, although IIRC it's only there for business accounts.

Re:I feel the problem is

[cyt0plas]

The 800 number is for businesses - personal accounts have to call long distance (or local if they just happen to live local to it).

Re:I feel the problem is

[devilspgd]

Figures. I thought they used to have a (800) number back when I was a personal account.

Either way, I'm business now, which explains why I don't know about their current personal support numbers.

It's the law with credit cards

[Sycraft-fu]

You can stop any charge by contacting the issuing bank. They then reverse the charges to the seller. Your recourse at this point is to sue him for the money. Since it's small dollar it'll be small claims and this not expensive to file. I'm not saying it's a good situation for you, but it is the law with credit cards, it is rather biased in favour of the consumer.

By the way, you'll be glad it is if you are ever on the other end of the stick. I got my car fixed at a Pep Boys to the tune of $650. Drove it out, and found out that what they were supposed to fix was still broken, despite their claims it had been fixed. Wanted like $200 more. No, enough of that, you don't get to charge me $650 tell me it's done and then not have it done. I stopped the charge. The bank investigated, and decided I was in the right.

Re:It's the law with credit cards

[RallyNick]

[off topic] just out of curiosity, what was it that they charged $650 to do and didn't do?

Re:It's the law with credit cards

[Sycraft-fu]

Fixed my windshield wipers. Yes, really. I was incensed enough at the charges as it was, many of which I felt were of questionable legitimacy. I didn't have that kind of money to just drop on my car. So I talked to my folks. My dad told me to just pay it, he'd give me the money. He did and I did. Drove the car off their lot, turned on the wipers, nothing happened, just as before.

I was really pissed. Even more pissed when they said "oh, you need $200 more work done". Hell no, not going for htat.

Re:It's the law with credit cards

[secolactico]

$650 to fix the windshield wipers???!!!! For that money, I could probably buy the whole kit brand new from the manufacturer, unless we are talking Rolls Royce or Jaguar here. A couple of years back, my sister had a BMW door replaced for about that much (low end BMW, series 3 or somesuch).

You need to find another garage shop.

Re:It's the law with credit cards

[Y0tsuya]

If you're talking about wiper motors and stuff then maybe it's $100 or so. Even a window regulator is only about $60-100 depending on make. So $650 seems outrageous. But to fix a door isn't all that cheap. About 5 years ago my Honda Civic driver side door got T-boned by a heavy-duty self-propelled lawn mower. Cheapest price I got quoted to replace/paint the door panel was $600. I'm now driving the "low end" BMW. If I can replace and paint a door panel for $650, will you catch the monkey flying out of my butt?

Customer support

[slackor]

Last year I had my account frozen because I did business with someone who did business with someone who used a stolen credit card. They freeze all accounts even remotely related to the one under investigation. Anyway it took about 3 months of faxes and phone calls to get MY money unfrozen. The worst part was trying to find a customer support phone number, they hid it behind a labyrinth of "help" pages. It seems to have improved now, only takes about 4 clicks to get to -- but that kind of information should be on the front page.

re: x

[Jack Zombie]

Better for one terrorist to escape than for ninetynine million innocents to be wrongfully monitored.

Small amount, folks

[The Tyro]

I'd never use paypal to directly pay for any big-ticket items; that's why God made escrow services.

Seriously, if it's over a hundred bucks or so (definitely if it's into the thousands), I'd seriously consider using an escrow service and paying the percentage... though dedicated fraudsters have gone so far as to set up fakes.

I tend to treat paypal as a convenient money order service for small-ticket items... if I lose, no big deal.

Depends

[Sycraft-fu]

What percentage of total online credit card transactions are fradulant? If it's around .5%, then I'd say PayPal is fine, they are just like anyone else. If it's .001%, then yes, PayPal has a problem.

Stastics are useful only in a greater context. My favourite example:

Nearly ALL deaths due to cancer happen only in developed countries. Cancer-caused deaths in the third world are quite rare. So, clearly, there is something evil in the developed world that causes cancer, right?

Wrong. The reason is, of course, people in the third world die of something else before cancer ever has a chance to kill them, malaria is a huge killed, for example. Well there are almost no malaria cases in the United States, since we can easily cure it. Given our ability to cure more basic killers, you get the more advanced and difficult stuff like cancer that eventually gets someone.

So this percentage isn't really relivant unless you can cite the larger picture of online fraud. If 10% of online transactions are fradulant and only 0.5% of PayPal ones are, then PayPal is doing a bangup job.

Re:Depends

[AsmordeanX]

According to Visa when the place I work started accepting it, it is around .1% for North America. This is from a customer rep so nothing too scientific here.

I've read that losses due to fraud are between $1 and $2 billion for a $200 billion dollar industry.

If the figures are correct, it means that Paypal is 5x more prone to fraud than Visa. This scares me considering I have had two incidents with my card (once stolen and the other an online error thanks to Visa in Germany billing the wrong number.)

PayPal Problems

[Hachima]

I really dislike PayPal's policies. As a seller there is no protection against digital goods. I sold something for $250 to someone. Then several days later I get an e-mail from PayPal stateing it was a stolen account and they take the funds out of my account. As a seller I have no way of knowing the account is stolen or not. The owner of the account and PayPal should be held reliable for stolen accounts. Not me as the seller.

Re:PayPal Problems

[negacao]

What crackpot modded the above as FUNNY?

Has Darl been sharing with the mods?

Re:PayPal Problems

[psoriac]

Recall the Electronics Boutique article recently where a store in Florida sold stolen goods back to the victim.

Assbites

[Anonymous Coward]

They are a bank and need to be under the regulation of the FDIC.

I have never used paypall to accept payments. I require a U.S. Postal money orders. That offers real protection for the purchaser. And I get my money before I ship. If I defraud them it's a federal offence Paypal offers no such protection to the buyer. I used to have my checking account listed with them. I removed their access to it as I don't want them debiting my account for any reason. I have only a credit card listed with them now.

Re:Assbites

[bagofbeans]

The problem with money orders is the pain if they are lost.

I much prefer to send a check for that reason.

Re:Assbites

[Anonymous Coward]

They are a bank, and they are trying to skirt the law. They want the benefits of being a bank without the regs, either they should be unlinked from the banking system or be regulated.
Mod parent up.

Re:Assbites

[Anonymous Coward]

Then you would not have a problem with me holding you check until it clears before I ship? Most folks would. I only except U.S. Postalm service money orders. That keeps it simple.

Use paypal at your own risk

[Anonymous Coward]

My pay-pal account was frozen with NO warning. The reason? My bank can generate a new credit card number for each internet/phone transaction which limits the amount the card is good for. Buying something worth $40.00? Make the card worth $50 (include shipping/tax) and have it expire in one month. No fraud or worries.
Paypal "limited" my account without warning because I was using too many credit card numbers. They never told me why, I had to call the Bozos twice to get the reason why. They would not "unlimit" the account until I sent them credit card and bank statements.
Can there *please* be a Paypal alternative?

My Paypal Experience

[ThousandStars]

Until my second business experience with Paypal, I had no problem with them. I provide editing services, and one client decided to reverse his credit card charge to the tune of $600 after I transferred the money to my bank accounts.

Paypal then showed my account was "negative," which I ignored until they forwarded my account to their nasty collection agency, NCO financial systems.

On the advice of my lawyer, I paid the agency and sued Paypal in Small Claims Court. They claim I can't do that and arbitration is mandatory, but offered to split the difference and call it a day (in other words, it's worth filing a case if you've been screwed, since settling is easier than fighting). I might go that route, but one thing I know is that I'll never use Paypal again and I recommend that my friends also don't.

Yes, I've filed a complaint with my state attorney general and the FTC. I hope if enough people do, Paypal will have to end some of their most egregious, consumer-unfriendly business practices.

Re:My Paypal Experience

[devilspgd]

On the advice of my lawyer, I paid the agency and sued Paypal in Small Claims Court. They claim I can't do that

IANAL, but personally, my response to "can't do that" would be "I just did"

Re:My Paypal Experience

[NormalVisual]

Same here - it would likely be cheaper for PayPal to just accept the judgement by default rather than fly a representative out to your local courthouse to fight it and possibly piss off yet another state AG. I'm not sure I'd have paid the collection agency either because I'm reasonably sure they'd have no way of verifying the debt, especially if I had could prove I had already provided the services in question and was collecting money legitimately owed me.

Re:My Paypal Experience

[kryptkpr]

"one client decided to reverse his credit card charge to the tune of $600"

How is this Paypal's fault exactly? Your client was dishonest. If you don't want to take the risk of chargebacks, then don't accept credit-card funded payments.. only payments from a paypal balance or a bank account which cannot be reversed.

Re:My Paypal Experience

[devilspgd]

While that's true, I'm not sure you'd be able to sue until/unless you had actual damages.

I might be wrong though, not only does IANAL apply, but I'm not even American.

Re:My Paypal Experience

[NormalVisual]

Yeah, the suit would be dependent on already having paid the collection agency.

Re:My Paypal Experience

[ThousandStars]

It isn't Paypal's fault that the client is dishonest, but it is Paypal's fault that they transferred the money in my account, which I withdrew under the assumption that I had been paid. Then they retroactively debited my account. That's unfair.

In the future, obviously, I won't use Paypal, and my original post is a warning to others.

Re:My Paypal Experience

[ThousandStars]

I agree with this and the grandparent post. Paypal's argument is that their user agreement prohibits me from suing them in small claims court and mandates binding arbitration for any disagreement. They also think this entitles them to recover any travel costs.

I think that's a load of crap.

But I'm also not a lawyer, and I'm better off working than fighting a protracted battle with Paypal. Then again, I also think what they're doing is unfair. So I try to balance standing up for principles, the value of my time and the overall pain in the ass factor.

Re:My Paypal Experience

[denks]

Im not sure about American law, but in Australia consumer rights laws will outrank any contract you sign with another party (disclaimer: IANAL).

If you have a legitimate claim against them under consumer protection laws, they cannot remove your right to sue them, no matter what is in your agreement. A bit like the disclaimers you read along the lines of "I hereby waive all right to damages from XXX". Looks good and legal, but if you have a legitimate case to sue, its a meaningless clause.

Small Claims Court?

[FsG]

Why is it that these people are spending their time writing horror stories, rather than taking steps to get their money back? If PayPal robbed you for something to the tune of $1000, I'd say it's more than worth the time to sue for it in small claims court; it's not that hard, either.

Could someone explain to me why these people are whining online rather that suing?

Re:Paypal alternatives - a list of several

[Anonymous Coward]

There is a universe of no-chargeback payment systems out there. Many of them also seem to have the property of being based around precious metals. The first online was e-gold in 1996. Others have arrived since then of somewhat similar flavour: e-bullion.com, pecunix.com, libertydollar.org, goldmoney.com.
A good comparison chart is here.
BTW, I see that magnatune.com supports one of these now, but ebay is still PayPal only - no surprise.

A Software Developer's Perspective

[Dan East]

I have used PayPal for 3 years now as my primary method of payment from purchasers of my software (DEXplor). In fact, it is my preferred method of payment. Why? For starters, my total fee per sale ($13.95 retail) is only 6% (3.5% + $0.35). That is cheaper than anything else available to me as a small-time independent developer. Online stores (Handango, PocketGear) charge a whopping 30%. Even eSellerate (which I also highly recommend) charges 10%.

Next, I have a PayPal Visa card that I can use to directly access the money in my PayPal account immediately after a sale, without any additional fees (even if the account is overdrawn). I find that incredibly useful. It also tends to keep my PayPal balance low (most I've ever had in there at a time was still sub-$200). That is good, in that if PayPal freezes my account I have little to lose, but bad because it is too easy to access the funds. :)

After thousands of sales I have only had one charge-back because the CC was reported stolen after the sale. My account was never closed or frozen. The money was just debited out of my account.

I'm sure others have horror stories, however as a software developer I really have nothing to lose. After all, the software licenses I sell are virtual, and are of small dollar amounts. Heck, if someone really wanted to get a license illegally they could just hunt down the cracked version of my program and save themselves the larger repercussions of credit card fraud.

So I guess what I'm trying to get at is PayPal may have its problems, specifically when dealing with actual merchandise of high dollar amounts, but for ISVs it is a very good method of processing payments. After reading this story I will just make sure I never keep large sums of money in my account (which, unfortunately, has never been a problem in the past). It would also be wise to set up a checking account specifically for use just with the PayPal account, to eliminate the risk of tying up any external funds because of PayPal issues.

Dan East

Re:A Software Developer's Perspective

[Anonymous Coward]

you might also want to look at affero It not only has a payment system it also has a reputation system and it is open source..... the fees are very minimal as well. ClamV uses it and they have received over $2500 in donations.

Re:A Software Developer's Perspective

[RallyNick]

I agree with this, Paypal is excellent for small amount transactions. I've used it to receive probably thousands of under $20 payments and I can't complain. Had chargeback issues maybe 0.2% of the time and honestly I couldn't care less about those. The majority of fraud is taking place on high-dollar items because it's worth it. I'd never use Paypal to receive anything from around $200 up, money orders are the way to go for that (and don't ship until they clear just to be sure).

Re:A Software Developer's Perspective

[RonBurk]

Or use SWREG for $1 + 4% and not have to worry about having your bank account frozen. Last I researched it, they seemed like about the cheapest reputable shareware cc proxy.

intangibles

[Anonymous Coward]

dont ever sell 'intangibles' and allow payment through PayPal.
intangibles are things like domain names, everquest accounts, etc...things that don't have a UPS/USPS/Fed-EX tracking number.
why? because PayPal will automatically honor a dispute in favor of any buyer and you WILL lose all your cash and whatever you sold.

This happens alot. and I do not believe the 'one half of one percent' statement is true. It has to be much more common than that. I had my account suspended for 2 months because PayPal did some periodic review of their records and could not contact me via telephone...THEY GOT MY VOICEMAIL!!!!..but because they didnt speak to me 'live', my account was suspended, with 1300.00 USD in it. I could not get to my money during the entire 2 months, after faxing them every other day with all the contact info they requested (which was the same as what they had I might add) that is when I found out that PayPal isnt like a bank or credit card company. You pretty much have no rights with them whatsoever. caveat-emptor.
If you sell anything, take all your cash out immediatly, even still that won't save you from a charge reversal, but at least they can't hold onto all your cash if they feel like it that day.

I'd be suspicious...

[Grimster]

if there were few complaints, did I read that right, the volume of more than $12.2 billion last year, yowza, if they didn't have some people out there screaming bloody murder about something, I'd be suspicious.

I've seen several "horror stories" with Paypal first hand. EVERY single time, every one, the person screaming was partly (if not nearly fully) at fault. They sent stuff to people who had shady looking order details, etc, or they ordered things "too cheap to be true".

And before you mark me off as someone who doesn't know let me fill in a few blanks.

I have used Paypal since hell I can't even remember, 1998? 99? 00 at the latest. My paypal rating is over 1100 and I recieve "in the neighborhood" of a dozen payments via paypal per day (yes day). I use my Paypal debit card constantly, for nearly everything "day to day" related, buying dinner, groceries, gas, movie tickets, you name it, anything that's not a business expense (use my business credit card for that so I have an unquestionable paper trail for my accountant).

And let me tell you a story about Friday, I went out to eat, got done and went to pay, "do not honor" card denied (paypal debit card), called card services "oh we tried to call you today and verify some purchases but we got no answer" (well suspending my card is one way to get an answer). I verified some personal information, verfied a few purchases, and then handed the waiter my card back, and all was well. I wasn't mad, or pissed, I was damn glad that Paypal saw a big old $430 charge for something "kinda odd" for me to buy and took action to make sure I wasn't getting drained by some carder.

I've had a couple chargebacks, they debited the amount from my balance, life went on, I've had a couple disputed charges, paypal asked me for info, I gave it, they asked the buyer for info, I assume they gave it, and in the end paypal either refunded them their money, or told them "tough noogies" and left the transaction as it was.

I don't doubt Paypal has fucked up royally on a few occasions, but EVERY time I've seen a problem, either my own or someone I knew, Paypal handled it and typically quickly and without too much aggravation.

You don't process BILLIONS a year and have millions of customers without pissing a few of them off.

Re:I'd be suspicious...

[denks]

I've seen several "horror stories" with Paypal first hand. EVERY single time, every one, the person screaming was partly (if not nearly fully) at fault. They sent stuff to people who had shady looking order details, etc, or they ordered things "too cheap to be true".

Let me get this straight? Someone gets ripped off, and THEY are the ones who are almost totally at fault?

Re:I'd be suspicious...

[SuiteSisterMary]

Generally yes, in that there is very often some good pointers that you're going to get ripped off.

In such a case, due dilligence, or something as simple as using escrow, will save you a world of hassle.

If it looks like a duck, walks like a duck, talks like a duck, but is labeled 'Chicken,' well, you gots to make a choice, don't ya?

Re:I'd be suspicious...

[denks]

I agree totally that quite often a scam is fairly obvious. But, and to use Ebay as an example, Ebay pushes itself as a place to get goods far cheaper than you would normally. So when is very cheap a good bargain and when is very cheap a scam?

And, to state the obvious, is not the scammer the one totally to blame for a scam? What can we do about it? Dunno...but the scammer is still the one at fault.

Re:I'd be suspicious...

[Grimster]

Yes the scammer is at FAULT but then again, if you don't take due diligence of your own then you're also partly to blame.

I recently ran into a scammer on Amazon, I was poking around looking at high end apple laptops, and this guy had one "he got for Xmas but didn't need" for about $1000 less than the normal price ($1800 for the $3000 17" apple). Which is still expensive enough you can almost buy it, "granny bought me a laptop, I'm in the UK and I can't return it, shipping it back to her would be rude AND costly, etc" so I asked about it. I mean had he wanted $1000 for it you'd be like "pshyeah right" but $1800 is just expensive enough to sound legitimate.

He wanted payment via Escrow, hmmm, the url for the escrow company? Registered 2 days before. The site LOOKED legitimate, but with just a LITTLE bit of digging it was obviously a scam. No SSL despite a big Verisign sticker on the site. And escrow but "no paypal" is a red flag to begin with.

Sure it's wrong of the scammer but sometimes it's also wrong to not do your own investigations.

Furthermore half the time someone bitches it's because Paypal asks them for supporting papers they do NOT have, Junior using Mom's CC now Paypal wants a light bill, check stub, etc to verify and Junior don't want mommy knowing he's been selling crap on ebay or getting Paypal for his graphic designs, etc etc etc. So he bitches about Paypal sucking... This is one example I watched in action, kid was 15, was selling web templates, logos etc and getting paid via paypal, well to OPEN that account he used mommy's credit card, and her bank account, without mommy's knowledge. Well he had a couple complaints after he did some slow work, Paypal asks for supporting evidence that he is really (he isn't, he's junior) and he doesn't want mommy to know what he'd been up to, plus Paypal has a rule about under 18 account holders. So he went on to post about how paypal sucked, etc. Never mentioning the whole story.

Re:I'd be suspicious...

[SuiteSisterMary]

The other reply covers it pretty well. Yes, the scammer is at fault, but, as they say, it takes two to tango; you are not absolved of your responsibility for your own actions.

If you're honestly suckered, that's bad. But if you're hoping to buy a shiny new Widget for five bucks, when it retails for a hundred, and all of the other Widget auctions average around sixty to seventy bucks, and the account has little or no feedback, and all the other warning signs, well, you tell your kids not to take candy from strangers, so why are you?

Re:I'd be suspicious...

[denks]

Currently there seems to be a growing occurence of eBay account hijacks, where a scammer will appear to have a hundred or so excellent feedback comments, but in actual fact its all a scam. They also offer their products on borderline of what would be considered a reasonable bargain and what would be obviously a scam.

It's the law

[Anonymous Coward]

"wrong" (on a moral basis) or not, it IS The Law. Specifically it is a requirement of the Bank Secrecy Act that a Currency Transaction Report, IRS Form 4789, be filed to report "each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000" (31 CFR 103.22(b)(1)) Google link to the FDIC site with some more info http://216.239.37.104/search?q=cache:QePsclcTH0MJ: www.fdic.gov/news/news/financial/1996/fil9643.html +bank+secrecy+act+4789&hl=en&ie=UTF-8

Also take a look at the "Proceeds of Crime (Money Laundering) and Terrorist Financing Act" regulations (this is pre-PATRIOT, BTW). Was it "wrong" that when I bought my last car for over 20K USD without financing it or trading anything in the dealer had to report me to the Feds? Maybe, but it IS The Law.

EUROPE = REGULATED, different ToS for EU members.

[brain159]

It's worth pointing out that European PayPal users (myself included) are now actually users/customers of PayPal (Europe) Ltd which has a physical presence over here (company offices in England as far as I can tell, possibly an extra customer service centre in Ireland).

There is a specific heap of EU legislation relating to Electronic Cash Issuers (not banks, just e-money services such as PayPal) - PayPal have now created this EU company and obtained the relevant license in order to do what they do in compliance with the European rules.

The revised ToS for affected users include:

*) that PayPal can only lock the funds related to a specific disputed transaction - not your entire account balance
*) a clear explanation of your financial position in relation to them (that your account balance represents an unsecured debt from them to you - if they tank, you might potentially be stuffed)
*) Jurisdictional stuff setting the venue for any suing of them by "us" to be England, and pointing out our right to go to the UK's Financial Ombudsman Service or the Courts for relief in the event of a dispute with them - no attempts at all at a "you cannot sue us" clause.

As a UK-based occasional PayPal user, I'm pretty pleased with this new arrangement. This move into the UK also means I could invoke the Data Protection Act to obtain any "hidden" information on my account in the event of a dispute.

These changes haven't been hidden - all EU-based members have been emailed about this and the information is on the "updates" column on the left on your main account overview page.

Re:Small Claims Court vs. warning others

[Anonymous Coward]

Because you can cause far more financial damage to a large (bad) business by denying it profits from enough future suckers/customers than you can ever reclaim in small claims court.

PayPal is indeed frustrating to deal with

[Usagi_yo]

Even if you are the subject of fraud, they are difficult to deal with. As I found out when somebody used a valid CC, then reported it as a faudulent transaction on Ebay. So I lose $90, appeal it, find out that my sort of transaction is not covered in the sellers protection plan by Neither ebay or paypal.

They won't tell me who it was, who charged back or any other information about the person other then it was a unautharized transaction.

60 days later my account is unfrozen and I'm billed or the transaction fee, a chargeback fee and I'm out $90.

My biggest gripe is, all that stuff they require you to send when under investigation, like utility bill, bank statement (I refused) etc ... they should require up front to open the account.

Re:PayPal is indeed frustrating to deal with

[cherokee158]

This is part of the reason Paypal has gained a reputation for heavy handed fraud countermeasures. They want new business, so they have reduced barriers of entry for new customers to next to nothing. That translates into lots of customers, but also lots of shady customers. The account freezing and other draconian methods are the result of security playing catchup on the back end of things...

They really do need to be regulated. Right now they are playing bank, but are not regulated as one. I'm amazed the FTC has let them get this far.

For the record, though, I use them, and haven't had any trouble. I keep my balance pretty low, though.

Re:EUROPE = REGULATED, different ToS for EU member

[joemontoya]

PayPal is a bank, it should be regulated as a bank.

Problem I had

[ducomputergeek]

I used them once with the inital $750 that I purchased with my CC. And had filled out information about my checking account and never checked or didn't mess with checking my account for their micropayments. Then about a year later I noticed about $500 missing from my checking account and noticed it was an electronic withdrawl. I closed the checking account and my paypal account as that was the only account with any electronic withdrawls.

Never have had an issue since. Now if I buy anything from Ebay, which is maybe once or twice a year, I send payment via Western Union. Costs and extra $5.

Be careful what Paypalsucks motives are

[adzoox]

The guy who runs the paypalsucks.com website has PAID advertisements from Paypal's competition.

It truly does suck when something goes bad on Paypal, I've been the victim of 3 or 4 scams in my 7 years on eBay and Yahoo auctions. That said, Paypal is a MECHANISM that is exploited, NOT the scammers themselves.

This isn't a shameless promotion - it truly is an informative read that I did on my website:

http://adzoox.com/paypalsucks.html

I was commended for my reasearch by the very people that have praised paypalsucks.com in the past.

Re:Be careful what Paypalsucks motives are

[adzoox]

I would also be careful as to who "propogates and prods" for the "probes" to be done. Yahoo auctions have almost fade into non existence as eBay has grown bigger and bigger. I wouldn't be surprised at ALL if this was some type of Martha Stewart Example.

Because a vocal group of people hate Paypal and because the competition despise it and it's parent company's success - they are common targets for criticism. When companies like Yahoo and with services like Yahoo PayDirect are NO BETTER and in fact offer less protection and ARE OFTEN THE CHOICE of scammers.

Scammers will point to paypalsucks.com as reason why they don't accept paypal so as to give them some kind of "credibility'.

Paypalwarning is different, but still bias towards negative Paypal transactions.

Any poster to paypalsucks.com forums that praises paypal or argues points is banned or belittled.

Wish I had my mod points available now

[the0ther]

PayPal is an awesome service and something like this should not stop the ball from rolling. Perhaps PayPal should reduce their fees or offer greater protections, that seems to be the trade-off here. Otherwise leave well enough alone. Yours is the type of comment which actually causes people to pull out of the market which is PayPal.

combining "protection" with e-trans is one problem

[Anonymous Coward]

It surprises me that people are so keenly aware of the details of the corporate ethical and privacy breeches by MS and SCO but will pay for hardware to run their "fight the man" Open Source software on with PayPal and ebay who are in many ways more unethical and less scrutinized than MS et al and probably a much more real threat to your privacy than MS.

e-gold seems to be analogous to Open Source in the world of finance - The banks and credit card companies are the closed, monopolistic, "man behind the curtain" lobbying, authoring laws to their benefit and the detriment of regular people and e-gold is very fair, open, solid, low friction per transaction and per account. There is no repudiation (charge backs) in the e-gold system which is good because it explicitly separates the trust and fulfillment verification functions from the financial exchange function - people have to either trust the other party for some reason reputation (?) or use an escrow service. Fraud, dealing in bad faith and the related hardships are exacerbated by this kind of lawless, answers-to-no-one, guilty-until-proven-innocent middleman between you, the other party, the cc companies and the banks.
Cut out all the middlemen with e-gold:
zero overhead to open an account

• zero overhead to use their payment api/web interface
• extrememly low cost per transaction
• no extra crap to become a seller

use other mechanisms for trust.

Re:combining "protection" with e-trans is one prob

[Anonymous Coward]

Damn, sorry that should be:
Cut out all the middlemen with e-gold:

• zero overhead to open an account
• zero overhead to use their payment api/web interface
• extrememly low cost per transaction
• no extra crap to become a seller

They are able to focus on the financial exchange because they are not trying to provide protection. I like that type of system, clean, unencumbered and (like everyone here seems to want) personal control over money flow and personal information and how it gets released.
If you want even more control, check out DMT created by someone who has put alot of thought into privacy issues and the technical issues related to monetary exchange.

How much does Paypal fraud cost?

[msblack]

Paypal annual transaction volume: $12.2 billion.
Paypal fraud rate: 0.2% = 0.002.

Paypal fraud volume: $24,000,000 per year. That's no small potatoes.

My Own Paypal experience

[strider_starslayer]

I had a mishap involving paypal, and I coulden't help but feel that everything seemed to be engineered to make it as difficult as possible for you to get a refund.

See, I bought an item off E-bay (USB hub) and then never recieved it, and paypal and e-bay asks you to give the seller every oportunity to allow the item to arrive (3 weeks), file complaint with e-bay, and they say; confirm with paypal (after 3 day waiting period).

File complaint with paypal- they say they'll investigate (1 week). At that point they told me that 'yes looks like you were ripped off, but there's nothing we can do'. It took 4 weeks to get to that point, however; my credit card (linuxfund card from MBNA) has a 6 month protection plan, which I used to challange the purchase and I got all my money back (I guess paypal ends up eating that loss). So I was happy, and paypal starts pushing for people to use there bank accounts rather then credit cards more.

So my sugestion to anyone worried about paypal is to stick with a GOOD credit card that has a nice window for you to challange any purchases; and if things go awire, take your time; and make sure you have all the evidence you need before challanging the purchase (MBNA did call me about it; and I read line for line paypal's report of the incident)

It's the net standard

[KalvinB]

PayPal is pretty much the standard for handling on-line transactions. I've seen a few other sites for handling transactions but the sites look cheap and the finance charges aren't. Or they have this phoney Disney Dollars thing going. Give us real money and you get to call it "eGold" or some crap that like.

PayPal also has the sense to offer Instant Payment Notifications and prewritten scripts all ready to go for site owners to plug in to recieve them in a variety of languages. I use PHP. Previously I just modified it to generate an e-mail to myself with the account info in an easy to cut and paste format for final manual processing. Now it also handles updating the htpasswd files which are in a subdirectory of the unadvertised IPN processing directory with a DENY ALL. And since the script calls home to PayPal to verify the payment good luck spoofing your way through.

I don't know of any other on-line payment companies that offer the absurd level of ease of use, low fees and the great features like IPN that allow subcription sites like mine to offer instant access. And PayPal has the user base. Lots of people have PayPal accounts and it's no pain in the butt to establish one if you don't.

I don't care to establish a dozen different on-line payment accounts and a dozen different scripts to instantly and securly process payments just to appease a minority of people who think PayPal is the spawn of Satan. NewEgg seriously screwed up with me and 4 months later finally refunded the entire cost of the server case ($145) after getting the BBB on their back which put them back in purgatory. Before that there was no way I was ever going to shop with them again and recommended against them quite a few times to friends. Every company has a fraction of customers that hate their guts. You can't seriously expect everyone is going to stop using their services just because the company screwed up with you.

I've actually had a couple dollar bills snail mailed to me. One from France and one from New York. I post the address for that reason. When I sell a Content CD I usually get a check in the mail. If people can't stand PayPal there are quite a few ways to get money from person A to person B. I just use and recommend PayPal because it's the easiest and cheapest.

Ben

My account was $1 and still frozen

[tonu]

Just want to say - my paypal accound never exceeded initial $1 as it every time I tried to do something with it, It was frozen. Every time I fax enoumerous documents to other side of globe, get it open and last time when I tried to just give this $1 away to some other Paypal user, it got frozen again. I am tired and not going to spend on long-distance fax calls again. I prefer paypalwarning.com viewpoints.

PayPal/Ebay and Auction Security

[MoreOrLess]

Why do people continue to rely on Ebay/ Paypal/ Square Trade for auction security? These seem to offer very little protection for specific auctions.

The only "true" auction-specific insurance seems to be buysafe.com. Auctions with buysafe protection have NO deductible but more importantly are actually bonded for the full amount by an insurance company (theHartford.com). Each transaction is independently bonded, not per seller (read SquareTrade agreement, $5,000 limit per seller than you get pro-rated).

These guys are not tied to ebay nor a payment service and make their money by a small percentage paid by the seller (1% I think). They also seem to have a much more rigorous approval process for sellers than the others.

While buysafe is just starting, it is worth seeing if buyers pay attention to this considering the deductions, limitations, and seller limits in the "protections" provided by ebay/paypal/squaretrade. Sellers of course don't like any additional charges diluting their profits but they will adopt it if demanded by buyers.

Re:PayPal/Ebay and Auction Security

[Anonymous Coward]

Good to know about a good service like buysafe.com
And this is exactly the point I was trying to make above:
Keep protection and monetary exchange separate - if combined it muddies the water and allows situations like Paypal and eBay.
Any bets that eBay will create some "Paypal only zones" or other perks for sellers using only Paypal, or is that the situation already?

I don't NEED a legitimate reason

[putaro]

In a free country, citizens do not need to justify their lawful actions to the government. The government needs to justify its actions to the citizenry. The basic principle is "Everything which is not forbidden is allowed." Explain to me why having large amounts of cash in my house is illegitimate.

PayPal/Ebay & Security - long term/squaretrade

[adzoox]

People rely on them because they've been a round a while. What few people that are posting here and complaining about this and that on Paypal is mostly based on conspiracy theory and just false assumptions. The scammer that scammed you - they used Paypal as a mechanism to scam you. They used eBay as the mechanism to scam you. While you would have liked either of the companies to assist you - THEY didn't scam you - the scammer did - you were the victim of an exploitation of a system with loopholes.

That said, I have always hated squaretrade - having to pay for feedback removal is grotesque at best. BUT the majority of the time is does force an on record response and proves or disproves if the defendant who's feedback you want you removed - truly is a good person with a misunderstanding or just an ass.

I did a slashdot journal entry on a conspiracy about squaretrade - I think they have profit drives with those that are known to pay for feedback removal.

Re:combining "protection" with e-trans is one prob

[Anonymous Coward]

nice advertisement -troll

look ebay has one of the highest hit totals on the internet

it also has the greatest shopping selection of any medium or "store" in store in history!

Re:I'm not done

[tomcrick]

A few chargebacks maybe, but I got nailed by a fraudulent transaction on PayPal and they didn't seem to care at all. There argument is that they are a payment medium and as such they don't have responsiblity over what happens! Absolutely ridiculous - I think they should have similar regulation to a bank or a credit card service, as they certainly provide a similar service. My problem was to do with the fact that UK PayPal users had (have?) no real protection from fraud (especially from their absurb Seller Protection Program - it's anything but!).

Please feel free to read what happened and also the email transcript between PayPal and myself - some interesting reading!

Any advice gratefully received!

I don't use PayPal anymore, unfortunately.

[w5277]

I used PayPal to pay for some DLT tapes I never received, after weeks working with PayPal, they admitted that I was due a refund, but told me that the person who sold the tapes didn't have any money in his account and so they couldn't give it back to me. I still have all the correspondence if someone needs it as proof for a class action law suite, etc.

Only one problem...

[alienmole]

...who the hell can you pay with the stuff? AFAICT, almost nobody. e-gold is for probably shady transactions between people who know each other, it looks to me (otherwise, why not just do an online transfer between bank accounts?)

Re:Only one problem...

[Anonymous Coward]

Please note: I am a different AC than original post.

Because its cheaper faster and better. It is amazingly underused. It is definately better from a sellers point of view. If privacy is important then it is way better for the buyer as well.

Unlike giving out credit card details the transaction can only be driven by the one sending the e-gold.

e-gold is very convienient for overseas transactions.

e-golds low fees can be avoided by using 1mdc.

paypal can be expensive esp if you are a verified seller they charge a fortune.

Re: Net Bank...Hmph.

[MikeVx]

They also have little surprises in thier policies that get documented after you've been bitten by them. I lost a few hundred dollars to a then-undocumented policy against "third party" checks. A friend had sold some artwork he had crafted to a couple of organizations, but he has no bank account (at his level, bank fees represent a huge bite). A couple of deposits I sent in to my account never got processed or returned, it took several phone calls for them to find and return one of the checks, which was not submittible to another bank because of the endorsements restricting to one bank (a safety tactic, when dealing with sane banks). The organization for that check re-issued, but by then neither of us could remember the others and without the checks that were not found and returned. As this was not my friends fault I ate the difference. I closed my account with a very angry letter. My last statement arrived with the very first mention of third party check restrictions in a policy document that I had received. As you might guess, I don't regard them very highly. These days I make careful notes about where checks come from, despite never having had this sort of problem with any other bank or credit union.

Bank investigation...

[McFly777]

Just don't try to get a mortgage on a house. You will be asked to provide your last three months bank statements, and asked to explain any "large" monitary movements.

Re:Bank investigation...

[zero_offset]

My first mortgage was $105,000.
My next mortgage was $291,000.
I have just been approved for my third mortgage at $494,000.

I have never had to provide bank statements or explain anything.

Re:Bank investigation...

[McFly777]

I can only speak for my own experience, but I was told by the bank rep. that it was a federal requirement. Perhaps this has changed in that last 10 years (I would be suprised), or perhaps I was lied to by the bank rep.

It wasn't much more than a check the box on the form sort of thing, but she said she was looking for "unusually large deposits or withdrawls," and implied that it was related to looking for drug dealers. (Similar to the prohibition on having over $10K cash.) Since I didn't have anything "unusual" no explaination was needed.

Re:Bank investigation...

[boisepunk]

crap post experience be lost karma is mine

Oy! What's a bank?

[lorcha]

Don't forget to read what the Federal Deposit Insurance Act has to say about who is a bank. Basically, if you are incorporated in a state (or DC) and take deposits, you are a 'state bank'. In fact, this is exactly what the FDIC ruled a few years ago. The FDIC said, in a nutshell, "because you do not have a charter and you do not personally hold deposits, you are not a national bank, but the States might rule otherwise".

So it seems the jury is still out on what the hell paypal is. But the Feds made it very clear that paypal very well might fall under state bank regulation.

Suggestion

[lorcha]

Continue to allow buyers to download your software, but ship them a CD of it, too. USMail can give you a delivery confirmation for a couple of bucks and the CD'll cost you like 50 cents. Then you'll have proof of delivery and qualify for seller protection. Pass the cost on to your customers.

Two words

[lorcha]

Mandatory Arbitration.