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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.
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.