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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."
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.
Post apocalyptic gaming goodness
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...
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.
Just because i spent a lot of money in cash is not a good reason to violate my right to privacy.
.. Period.
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'
---- Booth was a patriot ----
"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.
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.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...
Why don't you embrace your slashbotness instead of living in a dreamworld?
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.
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.
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.
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.
When information is power, privacy is freedom.
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.
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!)
perl -e 'print "Just another Perl newbie\n";'
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.
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.
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