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PayPal Settles NY Probe, But Faces Others

Posted by timothy on from the probe-away-captain dept.

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."

3 of 218 comments (clear)

  1. PayPal... by SisyphusShrugged · · Score: 5, Insightful

    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
  2. Clearing up a troubled past... by LostCluster · · Score: 5, Insightful

    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...

  3. how is 0.5% insignificant? by Anonymous Coward · · Score: 5, Insightful

    "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.