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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."
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.
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.
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.)
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.
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.
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
every day http://en.wikipedia.org/wiki/Special:Random
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
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.
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.
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?
Could someone explain to me why these people are whining online rather that suing?
I made a PHP/MySQL library that prevents SQL injection & makes coding easier!
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.
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
Better known as 318230.
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 $430 charge for something "kinda odd" for me to buy and took action to make sure I wasn't getting drained by some carder.
I've had a couple chargebacks, they debited the amount from my balance, life went on, I've had a couple disputed charges, paypal asked me for info, I gave it, they asked the buyer for info, I assume they gave it, and in the end paypal either refunded them their money, or told them "tough noogies" and left the transaction as it was.
I don't doubt Paypal has fucked up royally on a few occasions, but EVERY time I've seen a problem, either my own or someone I knew, Paypal handled it and typically quickly and without too much aggravation.
You don't process BILLIONS a year and have millions of customers without pissing a few of them off.
--- www.f-theocean.com
I gave up on PayPal when they started charging an "International transaction fee" when someone outside the US was involved in a purely US$ transaction. There's no basis for that fee.
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.
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.
the former.... paypal tells you this when you go to add netbank as your bank
every day http://en.wikipedia.org/wiki/Special:Random
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
Work Safe Porn
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!
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
"Unheard of means only it's undreamed of yet,
Impossible means not yet done." ~~ Julia Ecklar
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.
Sigmentation fault - core dumped