Paypal Deals Blow To Freenet

hankaholic writes "I was checking into the latest progress of the Freenet project when I noticed a disturbing note on their homepage: 'Paypal has frozen the account we use to accept donations over the web, they refuse to give any reason other than "use of an anonymous proxy" [...] all of the projects subscriptions have been canceled which is a significant setback. Other means of accepting donations, including E-Gold, are still active.' Paypal is sending them a check for their remaining balance. The news update on the Freenet homepage also includes contact information for some people at Paypal."

Comments

Must have been considered a liability

[dacarr]

But that being said, Paypal is doing this a lot - it's almost as if they're going by textbook rule rather than rule and exercising discretion

I mean, Come on, Paypal, you of all people should know better! (FP?)

Re:Must have been considered a liability

[chronus22]

Paypal does have a habit of scamming its customers. Attrition.org has a good article about one person's experience here.

Re:Must have been considered a liability

[Alien Being]

"going by textbook rule rather than rule and exercising discretion"

I disagree. They are using discretion. But instead of clearly explaining their position they are using ambiguous terms to disguise seemingly ad hoc decisions as standard operating policy. Their so-called policies are just another form of "anonymous proxy".

Re:Must have been considered a liability

[dasmegabyte]

"One person's experience" does not constitute a habit. I have used Paypal for years -- since its inception -- transferred tens of thousands of dollars with it and never had a serious problem, and only a handful of minor ones (most during the first couple years). Talk about YMMV. It all comes down to how much you trust Paypal...my money's never there for more than a week. Nor should it be...they make no claim to be a bank, so why use them as one?

It's more likely that they shut down freenet because they were using an anonymous email address. I'm sure you can see where an anonymous email address could be a bad thing for a company that wants to make its money transfers secure and trackable. Paypal recently placed a hold on my account for my use of fake DNS information on my domain unlogged.org (the whole idea of which was to create a form of private computing by not logging anything). I removed the account, verified my other email addresses, and everything was flowing again within the week.

Re:Must have been considered a liability

[the_mad_poster]

Talk about YMMV. It all comes down to how much you trust Paypal...

Exactly. And, in the opinion of a lot of people here, the few major transgressions of PayPal are enough to warrant a strong mistrust. I wouldn't trust anyone else that did this either, as soon as I found out about them. On top of that, it's more the mishandling of complaints than anything. If I have a gripe against paypal, and I present it, I damn well expect it to be resolved, not treated like a by-the-books, scripted response issue.

Hey, they're a business. They treat their customer like shit, they should expect the same from their potential customers. No excuses.

Re:Must have been considered a liability

[Frizzle Fry]

Paypal does have a habit of scamming its customers

The writeup clearly says "Paypal is sending them a check for their remaining balance." So how is anybody being scammed? They are getting the money that is rightfully theres, and after that paypal no longer wishes to do business with them. I don't see the big deal.

Re:Must have been considered a liability

[orthogonal]

Paypal does have a habit of scamming its customers.

But even worse than this, PayPal forces you to be a customer.

I made a purchase from 78s2CD.com> (they offer old 78 rpm recordings in CD form, hence the name, and do an excellent job of it too -- it's a great source for vintage Gilbert & Sullivan recordings, among others).

After I gave PayPal my credit card information, I found I had an unwanted, unasked for account with PayPal.

So I logged on to PayPal to close the account -- only to find that, in order to close the account, I first had to provide more information in order to activate it..PayPal required my Social Security Number and my mother's maiden name in order for me to activate and access the account, even though all I wanted to do was close it.

Now, many banks, unfortunately, use this data, Social Security Number and mother's maiden name, to identify customers: by providing that to PayPal, I'd have made it much, much easier for PayPal -- or a rogue PayPal employee, or someone who hacked PayPal's servers -- to gain access to my brick-and-mortar bank account (remember, the credit card number identifies this, and PayPal already had that) or to otherwise steal my "identity".

Naturally, I didn't want to give this information -- among other things, I have no way of knowing that would be deleted when I closed my account. But under the USA Patriot Act, giving incorrect information to a financial institution might be illegal. So I couldn't just fake it and close the account either.

So I contacted Paypal, and talked to a rep -- who told me that PayPal could not (sure) close the account, and I'd have to log in and provide my personal information.

To his credit, when I contacted 782CDs's owner, Jim Lockwood, he apologized, and offered to let me send check in the future -- and even said that he'd ship the CDs before he got the check, on my word that I'd sent it. And now, 782Cds accepts both Paypal and credit cards directly.

But I'll never buy (or donate, sorry OSS projects) via PayPal again. Even though my PayPal account still exists in some database limbo, neither closed nor fully open.

Re:Must have been considered a liability

[hendridm]

they make no claim to be a bank, so why use them as one?

I agree it's unsafe to leave sizable funds there for an extended period of time, given their track record of unpredictability, however, I'd say they do position themselves as a bank. They offer a Visa bank card, interest-bearing money market account and online bill payment. They want you to keep your money there for awhile (so they can earn interest on it, like a bank) and try to give you incentives to do so.

For the record, I've had perfect service in the ~4 years I've had a PayPal account, however, I know there are plenty of horror stories out there. I really like PayPal, but it isn't perfect.

Re:Must have been considered a liability

[DragonMagic]

This, like nearly half of the YROs recently, have NOTHING to do with ANY rights, online or not. Paypal's a business, and decided it no longer wished to do business with a company who fell into a category that is against their terms of service. Paypal is sending them their money.

So what's the terrible, rights-infringing or rights-squashing act performed here?

Re:Must have been considered a liability

[CoolGopher]

"One person's experience" does not constitute a habit.

Then maybe I should chip in with my experience too? I had my account disabled after I'd requested to have my name on file changed (as I legally had my name changed, and wanted my PayPal account to reflect that fact). They refused to change the name, even after I'd provided the various forms of documentation. Then once I told them to just forget I even asked (I was getting fed up with them - I have better things to do with my time, thank you very much), they disabled the account.

After quite some time of getting no response, I finally got told that to reactivate it, I needed to send in various documentation. Again. Same deal. Same stuff that I'd already faxed them a couple of weeks earlier (and I don't like faxing internationally). Alright, so I play along, give them their stupid papers. After another substantial wait, I get told they refuse to reactivate my account due to the fact that I have multiple accounts and that's against their policy, and that I'll need to close all of them except one. WTF? At this point I was getting seriously pissed off. Needless to say, I don't have multiple accounts. If I did I wouldn't be concerned about this particular one. And how in the blue f*ck am I supposed to close an account when I can't even log onto it?!

After another round of seriously narky emails, they reactivated it, but I've never used it since. I keep it for emergency use only, but as long as I have a choice, they're not getting my business any more.

Re:Must have been considered a liability

[LostCluster]

Western Union's service has always made itself above board and auditable. They'll collect personal info when the government demands it, or when the money-sender feels like demanding it so that the receiver has to verify that they are the person the money is intended for.

They've got no way to revoke the transaction if it's fraudlent. That's your problem to figure out... they're just about getting the money from point A to point B.

That I think is PayPal's biggest problem... they're oriented to the buyer's advantage at the expense of the seller. However, that sender-side revocation capability esentially requires a credit check to even be possible, which means demanding the social security number upfront from everybody in a way Western Union never has to.

Western Union never cares how good you are at future payments of debt... they've got the cash in hand before they'll do their thing.

Re:Must have been considered a liability

[dasmegabyte]

Seriously. Sometimes I think all the PayPal haters don't realize how much WORSE the banks and credit card companies are than anything PayPal has done. What, hold a payment to be sure it wasn't fraud? Deactivate some small-change accounts that have suspicious access records? Place an arbitrarily long "clearing" period on any transaction it pleases? Paypal is great because 99% of the time, it Just Works. And it's got great tracking and reporting features.

Besides, my point of view is this: a guy has an unreasonable expectation of a service. Service does not provide. Guy makes unreasonable demands of said service. Said service carefully continues the process, to be sure they aren't being scammed. Guy gets pissed off and makes ServiceSucksAndIsAScam.org. Meanwhile, the service has figured everything out and sent the guy a check, which he grudgingly accepts -- but leaves the domain live! Basically, one asshole can lash out and make a lot of bad press based on completely unreasonable demands.

We had a kid who used our hosting service but never paid us. Kept putting up porno pages in direct violation of our co-loc's TOS (thus endangering everybody on the server). One day, four months into this, he asks for a hand with CGI. I say sure, help him, and ask when he intends to pay us. In exchange for this, he puts up a website bashing our service, and calling us money-grubbers. Considering 85% of our sites owe us money at any given time, we're anything but "grubbers." Still, in this delusional pervert's eyes, we were out to get him. Thank god my superintendent knows the kid and could smack some sense into him...that completely libelous and unwarranted bad press would still be out there, otherwise, because we haven't got the money to send his (poor) new ISP a C&D.

Re:Must have been considered a liability

[Jaysyn]

Let me get this straight, Paypal disabled the account because of an anon. email address, but yet they have a physical address to send the check off to. Something is fishy.

Jaysyn

Slashdot Uses PayPal

[johndiii]

Absent a satisfactory response from PayPal, Slashdot should stop accepting PayPal to pay for subscriptions.

Re:Slashdot Uses PayPal

[H310iSe]

Boycott PayPal? While it's difficult for some PayPal clients to just drop them any PP user whose primary role is technological (and therefore is equipped to do the work needed to replace them) should cease their relationship with PP as soon as possible. It would be offensive if Slashdot continued to use them after such an outlandish stunt.

Now, having said that, I'd like to hear Pay Pal's side of the story first...

Re:Slashdot Uses PayPal

[Surazal]

I've been uneasy about using their service despite the "convenience" it would offer me in the online world. The horror stories keep piling up, and I don't see an end to it.

PayPal, you are free to consider me a "lost customer" at this point. I will take my business elsewhere.

Re:Slashdot Uses PayPal

[next1]

what about simply getting a merchant account?

surely it would be worth it with a 50,000 member site, even if the individual sales were only relatively small amounts.

i used to accept credit cards inhouse for a subscription type online business and at the time i introduced that i only had about 25 customers.

after the initial setup costs (which were reasonable anyway), a merchant account offered a far better deal than that offered by people like paypal and this way you are in control.

and re; passwords etc; the point is you process inhouse, so all they are entering is their credit card details. there are no new passwords etc to remember. personally, i prefer that method of online sale any day to something like paypal.

i would talk to your bank, it may not be as expensive as you think.

Re:Slashdot Uses PayPal

[secolactico]

I've never been thrilled seeing SlashDot and other sites like the EFF accepting PayPal

"Me too!" *ducks*

Seriously, I used to use Paypal for auctions and donation to certain sites, but then, one day they decided they didn't like my country, so I'm now unable to use them. Now I cannot subscribe to Slashdot nor patronize other sites that take only Paypal.

I realize that it's very convenient for webmasters and Paypal probably offer ease of use or somesuch, but for potential customers from unsuported countries, we are SOL.

Nor do they seem to have plans to support my country any time soon.

Re:Slashdot Uses PayPal

[cbreaker]

Must be Canada. They're always causing trouble.

Re:Slashdot Uses PayPal

[zenyu]

PayPal, you are free to consider me a "lost customer" at this point. I will take my business elsewhere.

Easier said than done, they like to consider you a customer for life. I loged on once and found that they wanted me to agree to a new user agreement which I found objectionable. Well when you call them up they transfer you to different agents who all say they can't close your account unless you accept the agreement. Very Kafkaesque, consider yourself lucky and wise if you never accepted the $10 sign-up bonus. Now I have to change my regular bank so that they don't have any current information and another security breach there can't haunt me.

PayPal problems

[Lordofohio]

Paypal is certainly a shady company. To find out why, go to www.paypalsucks.org

Re:PayPal problems

[nacturation]

PayPalSucks.com is certainly a shady company. To find out why, go to adzoox.com/paypalsucks.html

Re:PayPal problems

[Gudlyf]

You have to wonder if many of the people who have had their accounts "mysteriously" deactivated or put on hold really were doing something bad (in the eyes of PayPal) afterall. I'm sure there's got to be people claiming total innocence and crying foul, when in fact they don't want you to know they did a little gambling on the side with the PayPal money or subscribed to an adult porn site, or heck maybe commited some sort of fraud. If they claimed any of those things, their complaints wouldn't hold up a full 100%.

I'm not defending the heavy-handed operations of EBay/PayPal, but I also wouldn't want to look at things from only one perspective. I think people should be able to do whatever they want with their PayPal money, but really the best thing to do is immediately withdraw what you have as soon as you get it.

Re:PayPal problems

[Jeff DeMaagd]

I think credit card issuers are worse. If you think Paypal is bad, DON'T start a business and accept credit cards from Visa / Mastercard either.

In one case, the card issuer had authorized a $1200 transaction, then the next day they put it on hold. The package had already shipped. The customer probably could have claimed that it was unauthorized use and kept the package, but thankfully the customer was an honest person.

I know one guy in which his business was bilked out of about $20,000. He simply had the misfortune of dealing with a person that used a stolen credit card number. When the fraud was exposed, the card issuer sued him to recover the money. I haven't talked to him lately, last I heard he said that he'd probably have to file for bankrupcy and lose his business.

Card issuers really don't take much risk in terms of fraudulent card use, often they automatically do charge-backs when a transaction is contested, even if the business took every required means of verifying the card.

Re:PayPal problems

[GooberToo]

First, let me say that I've worked in the CC industry for years. I have good friends that work for some of the largest ISOs in the country. Generally speaking, what you're stating doesn't smell right.

If they authorized it, they are contractually bound to pay it unless there is a charge back. Charge backs are resolved through their own process and should not directly effect the bank's promise to pay. In the case above, it sounds like the merchant failed to follow the guidelines which are clearly layed out and now he's paying the piper. Different banks have slightly different guidelines, as set by their risk departments. If that store did not check ID and signature or did not swipe a card as as required to ge their discount rate, then they should expect to get it in the tail pipe. It's simply not acceptable for mechants to shink away from their contractual obligations and expect the issuing banks and/or visa/mc to absorb the merchant's mistakes. I can assure you that merchants tend to go out of their way to fail to follow simply contractual obligations and then want to blame someone else. I can't say for sure this is what happened to your friend, but I can say, the odds are greatly in my favor for being correct.

Charge backs, on the other hand, do tend to be in the card holder's favor. Just the same, most banks have groups which watch for fraud from cardholders, as it relates to chargebacks. Additionally, while the odds do tend to be slanted toward the cardholder, as long as the merchant has properly upheld their end, a chargeback can be denied, so long as the merchant made reasonable efforts to address the dispute. Especially if the goods were not returned by the cardholder.

Paypal has had a long history...

[NightWulf]

of screwing over companies. Personally I don't trust the company at all. http://consumeraffairs.com/online/paypal_02.html is the consumer reports complaints page on the many problems paypal has given "customers". Caveat Paypal!

Re:Paypal has had a long history...

[adzoox]

Look up any better business bureau report for almost any company - if you based your shopping habits on this fact alone - you'd never shop anywhere.

Paypal also has a long history of being business saviour and small business boom tool. Paypal has a long history of neing an easy way to donate to causes quickly - many many noble causes.

Just because people don't make a site paypalisthebestthingsinceslicedbread.com doesn't mean they are all bad.

It is the ONLY way I accept credit cards for eBay auctions. I sell 200+ items a month 75%+ pay with paypal 50% of those paying with credit cards. A merchant account (which places liability on me) is more costly and requires an ENORMOUS upfront cost - plus the funds are not nearly as instanteously mine.

I have to be sent a check from a merchant account, I have the money on a spendable debit card as soon the money is deposited at paypal.

why?

[Anonymous Coward]

why do people put up with this crap?

i refuse to get paypal for the simple reason that one small complaint (which paypal won't divulge) can lead to them freezing potentially thousands of dollars.

they are NOT a bank, and don't need to be accountable! yet they offer bank like services...

Re:why?

[arazor]

After all these reports of complaints why are people still letting their money "sit" in paypal. I mean soon as money gets deposited in my account I withdraw it, granted Im not a large operation. But couldnt these groups withdraw fund at least once a day to minimize the damage of paypal "freezing" an account.

Just my opinion...

--
I'm going to support Kerry right until I vote against him on November 2

Their call, but a borderline one...

[LostCluster]

This is eBay's house, they get to set the rules.

Since their takeover of the company, PayPal's free-wheeling days abruptly ended. PayPal can no longer be used to fund online gambling of any kind, it can't even be used to fund porn of any kind.

Now, online gambling is of questionable legality in all fifty states and many other places in the world where real gambling is prohibited or heavily restricted. However, most forms of pornography are legal in nearly all parts of the world except where the government is heavily controled by religious influence.

Here in the USA, the government's nowhere close to banning porn.

I think eBay's concern is keeping the PayPal name from being soiled by anything contraversial becase if anybody says "Boycott PayPal... they're helping fund Thing X!", then that indirectly means a boycott of eBay.

Re:Their call, but a borderline one...

[LordK3nn3th]

Don't be too sure about that.

Paypal has the right

[bersl2]

to determine with whom they do business. As long as they send Freenet the balance and don't steal, I see nothing (catastrophically) wrong with this.

Re:Paypal has the right

[Entropius]

They do have that right legally; there is nothing legally wrong with it. However, it's up to individuals to determine whether something's ethically wrong with it and determine whether they dislike Paypal for it.

If I own a store, there's nothing stopping me from refusing to serve people with tongue piercings. There's also nothing wrong with people who sympathise with the tongue-pierced from boycotting or criticising* my store.

That whole vote-with-your-dollars principle that's put forth by capitalist theorists as a way of enforcing business ethics? It only works if you do it.

*As long as they don't run afoul of slander/libel laws...

Re:Paypal has the right

[edp]

"Paypal has the right to determine with whom they do business."

I do not understand the thinking behind statements like this. What is your point? There is no dispute that a right exists. However, that has nothing to do with whether it is behavior we wish to encourage or discourage or whether the behavior is good or bad for us.

If a company makes a policy we think is harmful to interests we want to promote, why shouldn't we criticize it, even boycott it? The fact that the company has a right to do what it does is not a reason for us to remain silent and do nothing.

If Jane opens a new restaurant and serves only foods loaded with things that are bad for you (and loaded in gross disproportion to any benefit, such as good taste), she has a right to do that, and I have a right, and it is a good idea, for me to avoid that restaurant. It is also a good idea for me to advise my friends to avoid the restaurant.

The fact that somebody has a right to do something means we should not use force to stop them. It does not mean we should not use other means to discourage them.

Contact Paypal

[Lehk228]

From the Freenet page

If you are concerned about whether your account might be at risk due to your political opinions you may wish to speak to their PR contact Hani Durzy at (408) 376 7458. If you are an investor and you would like to see what other political opinions Paypal doesn't like, you may want to speak to their Investor contact Tracey Ford at (408) 376 7205.

Paypal can do what they please

[Roland Piquepaille]

Paypal isn't a bank, it isn't FDIC-insured, and doesn't have any kind of the obligations normal banks have toward their customers. They're been freezing/witholding/cancelling accounts willy-nilly ever since they started. Nothing new here. The only interesting bit is that they probably want to detach their names from the Freenet name, that sort of reeks of piracy, RIAA suits and kiddy porn. Basically, it's a bunch of verified pirates trying to not be associated with a piracy activity tool. Amusing...

Sad, but unsurprising....

[King_TJ]

PayPal has grown increasingly hostile towards anyone accepting payments via their service if they do anything "out of the ordinary". Not long ago, I heard about a woman complaining because her PayPal account was suspended after she accepted donations to help keep her "size acceptance" web site going. (PayPal seemed to be afraid it was pornography-related in some way, since you had a female collecting money from her personal web site.) In reality, she was trying to boost the self-esteem of overweight women and let them know about events where they could meet guys interested in larger women.

They're also scared of anyone or any business that doesn't provide full disclosure of their whereabouts (complete address, phone/contact numbers, and so on). To put it in perspective though, don't forget they're just one of the arms of eBay nowdays - so their primary interest is simply being a facilitator for their own auction buyers and sellers to complete transactions. If you even so much as look vaguely like you do things in a similar way to eBay auction scammers, you'll get cut off in an instant.

Re:Sad, but unsurprising....

[LostCluster]

PayPal is no longer the best vendor to use if your transactions are not happening on eBay...

- If you're taking donations on the web, Amazon.com has a much friendlier service going.

- If you're running a porn site, there's subscription billing companies designed especially for you out there.

- If you're running a low-volume e-store that's not using eBay, you're best positioning yourself on Yahoo Shopping or a simlar storefront-providing network.

- Large volume stores should be handling their own credit card transactions. Contact your favorite bank.

Re:Sad, but unsurprising....

[orthogonal]

In reality, she was trying to boost the self-esteem of overweight women and let them know about events where they could meet guys interested in larger women.

Guys who are interested in "larger women" can find them in any chat room.

In fact, that, and "larger" women pretending to be petite women, and other guys pretending to be petite women, is about all you can find in chat rooms. :)

Paypal Warning

[eraser.cpp]

This website was established because of paypal doing this kind of crap.

Re:bashing paypal

[radicalskeptic]

I've never dealt with Paypal, but some of the stories over at PaypalWarning.com are pretty scary. Apparently Paypal has a habit of freezing accounts with almost no reason given, then sitting on the accounts which have hundreds of dollars tied up in them. Some of the stories also explain that it is nearly impossible to clear up the problem promptly, and that the best way to get your account unfrozen is to say you're going to complain to the Better Business Bureau or your local district attorney. Of course most of the stories I read were from two or three years ago. Maybe they've changed.

PP was fined $10 million for violating PatriotAct

[loggia]

PayPal was recently fined $10 MILLION for violating the US Patriot Act.

It's not a company I do business with.

Control of the means of production...

[br00tus]

That sucks. I just got a DSL line and threw Freenet up on my computer at home. It really makes you think of what a Nazi-like authoritarian world we live in that even a few people using a little p2p network that gives them some degree of anonymity is a threat to the system, as it might help put them beyond the jackboot of authority.

Freenet is a p2p pioneer - it actually came out before Gnutella did, and only one month after Napster launched. I like the applications that use it like Frost as well. Of course, a project like Freenet takes a lot of development time, needs lots of high-bandwidth 24/7 nodes running it and updating, and pile all of the authoritarian, anti-freedom people on top of that and you can see why awesome things like Freenet have trouble getting off the ground.

It's unfortunate that my programming skills are such that I can't make much of a contribution to Freenet - and that my monetary situation is such that I can't afford even a small donation. My programming skills are improving however, and perhaps my monetary situation will improve as well. I enjoy developing p2p applications because it is intellectually challenging and also because I feel its ultimate aims are good. Not all problems can be solved technically though. A boycott of sorts might be good - perhaps there should be a campaign to use eGold instead of Paypal for paying, and let Paypal know about it. Not only could people receiving money stress eGold, or some other competitor, or even drop Paypal, but people contributing money can refuse to use Paypal. I'm really sick of all of this crap!

Not about controversy

[phorm]

Well, yes, I'm sure that ebay wouldn't want to have anything to do with a topic so controversial as pornography or sex. Certainly they would be very careful about products that were probably not legit in such areas. And certainly, they wouldn't want anything to do with dubious internet privacy software.

I think that if ebay is concerned about such issues, it's in a direct relation to profit/controversy... guess that freenet just isn't profitable enough for them.

Re:Not about controversy

[linuxrunner]

The best part about the parent post....

is that he knew exactly where to find those links... especially those penis enlargement pills.

heh.. just making an observation.

Re:What an incredible suprise

[adzoox]

Paypalsucks.com is sponsored by Paypal's competition. Anyone who disagrees with the moderator has their IP address blocked from entering the site. Most thos that post are spazz freaks who couldn't handle a normal transaction anyway.

An eye opener about PaypalSucks.com

Re:PP was fined $10 million for violating PatriotA

[mebon]

PayPal was recently fined $10 MILLION for violating the US Patriot Act.

To a lot of slashdotters that would be a reason to do business with them.

say what?

[nanojath]

Paypal Deals Blow To Freenet

Am I the only one who read this and tried to figure out how it was that Paypal was selling cocaine to Freenet?

No problems in the last year

[LPrime]

I run a mid-sized jewelry shop on the web and have been using paypal for over a year. I actualy switched from using MerchantServices because of the constant headache with fraud and chargebacks. As much as people hate to hear it, PayPal is on the side of the merchant not the customer and in 9 cases out of 10 (at least for me) the customer is the one trying to screw me over. Before I get flamed, I would like to say that I am in no way trying to deffend their actions in this case, however I have learned that their verification techniques are always based on some specific activity.

Re:PP was fined $10 million for violating PatriotA

[taped2thedesk]

Interesting... story about it here

Maybe they're being assholes because they think freenet might land them another "patriot" act violation? Don't see how it would, but the whole 'anonymous' thing might be catching their eye...

Whatever they are thinking, I'm probably going to be closing my PP account out soon...

Prepare for...

[Mike Hawk]

Well this thread will contain hundreds of anecdotes and 0 posts about how this will actually hurt Freenet other than to say something brilliant along the lines of "if you aren't with us you are against us." Paypal is not a monopoly. Sack up and move on.

It's not hard to see how this might happen

[eclectro]

ebay, who owns payal now, will fold an auction if it feels the temperature outside is wrong.

It's not hard to envision a scenario where the RIAA called somebody up at ebay and said, "Hey, look, we have found a couple of illegal mp3s on freenet and we are going to sue you because you are helping sponser illegal filesharing."

ebay being ebay folded like a cheap card table.

I haven't been on freenet for a while so I do not know what is on there. But it works for your favorite *AA

Re:this is GOOD news.

[ShaunC]

Under his influence, Freenet took the path of the closed source projects - pump out new features, do not debug existing ones, do not provide support, all for the single goal of profit.

You clearly haven't been following Freenet latley. Debugging old problems is _all_ that's been going on for the last month. Two major insertion bugs were recently fixed, one that's apparently been around for years. Bugs in the next-gen routing system are being fixed almost daily. Releases are being pumped out like they're going out of style.

And profit? Are you out of your fucking mind? Toad makes the equivalent of US$1500/month. He could earn more working at McDonald's. Twice within the last six months, the project has had to send out pleas for donations just to afford to pay him that much... And now PayPal, in its infinite wisdom, has gone and screwed the project out of - at the very least - the time it's going to take to find a new method of accepting donations.

Re:bashing paypal

[AKAImBatman]

Hacked?! Oh, please. You're one of an innumerable number of fools who responded to a "please verify your account" email or a "security update" email that asked you to enter your eBay or PayPal userid and password.

Arguably, scammers are getting very clever at their email attacks. They'll send you an email with a link like this: http://www.ebay.com/cgi-bin/verify.dll?Acct=1234

At first glance, it LOOKS legit. And when you click on the link, it takes you to a page that LOOKS like the real thing. Many even have links to the real site. The only way to know that it's fake is to look in the URL bar, and keep your head straight about them asking for passwords and credit cards.

The sad part is that companies seems to be doing very little to prosecute these scammers. I've received emails for both eBay and Citibank. Both times I've gotten no response on my fraud report.

Fraud prevention - anonymous proxies disallowed

[eltoyoboyo]

Freenet is going to get their $550 and can no longer use Paypal.

Anything beyond that is "Paypal said/Freenet said"

We may not understand exactly what happened. The nature of the closing leads me to speculate that someone was trying to access the freenet Paypal account repeatedly by browsing through an anonymizing proxy server. See Anonymity and Paypal (and other online businesses) from the Anonymity 4 Proxy Support Pages to get an idea what might happen when you try to access paypal from an anonymous proxy. I'll quote: "So if paypal finds out that you are using a proxy to fool their logon system into allowing you in, you are quite likely to find your paypal account closed. If I'm not mistaken, they clearly state in the user agreement that you can't connect from an anonymous proxy."

The Anonymity 4 support tech is correct. On paypal.com in the User agreement, Under "Closing Accounts and Limiting Account Access" paragraph 2 - "Any of the following events may lead to your account being limited: " "item xvii (Use of an anonymizing proxy;)"

This is not censorship news, it appears more like carelessness on the part of someone at Freenet.

Re:bashing paypal

[ShaunC]

account was "hacked"

I wonder if maybe that has something to do with the freeze? Everyone's first guess seems to be that PayPal cut off Freenet because they didn't approve of the project, but the whole bit about "use of an anonymous proxy" has me curious.

The Freenet project leaders have said they've never logged into PayPal through a proxy. Maybe someone else was trying to brute-force the project's PayPal password through a proxy? Maybe a large percentage of Freenet's donors, being generally privacy-minded types, used proxies when they logged into PayPal to send money to the project? PayPal is known to freeze accounts which have been sent fraudulent funds, whether they know it or not; maybe now they're freezing accounts which receive funds sent from someone using a proxy.

I really hope PayPal provides an official explanation.

Introducing the latest nazi type ... *drums* ...

[Too Much Noise]

The Latin Grammar Nazi!!!!! *bows*

caveat Paypal means "let Paypal be wary". What you were probably looking for is caveatis Paypal(um)

Re:PayPal has that right...

[madcow_ucsb]

Refusing service is one thing. But the main reason people are pissed about paypal is they have a tendency to refuse service..*and* not let you get your money out of your account.

Happened to two of my friends. One had over $5000 in there for a couple months before they decided that no, he didn't actually do anything wrong and wrote him a check. This is definitely a company that needs some more regulation. It looks like a bank and acts like a bank. But it isn't governed by any of the laws that real banks are.

Terminating an account and mailing you your balance is fine. Annoying, but fine. Holding your money hostage? Definitely not ok.

That said, with the number of people this happens to, you'd have to be a retard to keep money in the account. I use paypal, but *only* via credit card and I sure as hell don't leave any money with them.

*ALL* banks suck.

[EvilStein]

PayPal isn't a bank, #1.

How about having a bank not only freeze your account, but bar you from getting an account for FIVE YEARS?

Yes, it's called "ChexSystems" - a private company. US Bank will throw you into ChexSystems for very minor mistakes, even if you pay them off. I closed my US Bank account years ago, but a check for $20 went through after it was closed. US Bank did nothing to notify me. No letter, nothing.
Finding a bank that does not use ChexSystems is next to impossible.

That sucks far worse than PayPal, to say the least.

Re:*ALL* banks suck.

[sweede]

man, i know exactly what you are talking about, except i had a lost a checkbook, reported the range of numbers, closed that account and got a new one w/amcore bank. This was done at an office, not over the phone.

about a month later i get a letter in the mail saying that my account (the closed one) was overdrawn ~400. called up amcore and they said that they never recieved any notification of lost/stolen checks nor a cancellation of my account. soon after ( a few days), i get another bounced check statement and then a letter to go to court. i got it fixed in court (judges rock), but the would not fix my account with the credit agencies. this was almost 4 years ago and i have ~3 years left before that is cleared off my credit record.

closed the new one and got a US Bank account, Never had an amcore account again.

Re:Introducing the latest nazi type ... *drums* ..

[Too Much Noise]

I'm sorry, we had to outsource the sanskrit grammar nazis to India.

oh, wait ...

PayPal Terminated our Business Account too...

[Anonymous Coward]

PayPal notified my one company, Psychotropics Cornucopia, Inc. http://www.psychotropics.org/ , Thursday May-15th 2003 via a "canned" email (see below for the full text of it) that stated in part: "Due to the severity of the violation, or your accounts history of repeated violations, your account will be permanently locked".

The only email notice we received from PayPal/Ebay terminating our account - no advanced notice, no discussion, just abrupt termination.

------

> Date: Thu, 15 May 2003 14:52:54 -0700
> To: Ronald Bennett
> Subject: PayPal (KMM30070882V34963L0KM)
> From: "customercare@paypal.com"
> Reply-To: "customercare@paypal.com"
> MIME-Version: 1.0
> Content-Type: text/plain; charset = "us-ascii"
> X-Mailer: KANA Response 7.01.102
> Message-Id:
> X-UIDL: [4O"!%U*!!oXj"!SHg"!
>
> Dear Ronald Bennett,
>
> We regret to inform you that your PayPal account will be permanently
> locked for the following reason:
>
> * engaging in activity expressly prohibited under the Acceptable Use
> Policy.
>

They further stated that we violated their Acceptable Use Agreement by selling illegal drug paraphernalia. It's obvious from their "canned" email that no one from PayPal ever actually examined our company, our many services, nor our past PayPal transaction history. We only sell advertising, videos, and memberships (non-adult) - NOT pipes, etc.

We opened our PayPal account back on June-21-2000 and in that time we *never had any disputes* and we *never had any reversed payments* - an amazing record given our activity. We had a "Business account" (which costs much more than a personal account) with PayPal and yet they never attempted to call us nor email us regarding their actions until after they terminated our account; all they sent was one brief automated email - not exactly customer service.

We requested more details from them regarding why our PayPal account was abruptly closed, but we never any response other than automated emails that mentioned nothing we didn't already know. PayPal was very convenient and served us well for nearly 3 years, but no more.

Our experience should serve as a warning to others who rely on PayPal ... doing so can be disaster ... many folks think the above can't happen to them until it does, then it's too late.

On the bright side, we'd already begun phasing PayPal out prior to them suspending our account, but I personally know of several people who have lost substantial amounts of business due to PayPal "problems".

Ron Bennett

What we need is...

[jonwil]

I have said it before and I will say it again.
What we need is a replacement for paypal that is just as easy to use (e.g. for payments online etc) but which follows banking rules and doesnt do the crap paypal does.

As for paypal itself, if they were more open about account freezes and gave people a chance to sort things out, they wouldnt get anywhere near as much flak.

One of the biggest reasons for account closures is this:
person a pays money into a paypal acct
person a then pays person b
person b either leaves the money in their paypal acct or takes it out and into their regular bank
person a then (for whatever reasons) issues a chargeback or bank thingo and wants their money back. Paypal now freezes the account (and often the bank account and such as well) of person b while they sort out the whole mess.

What paypal should do is to tell person b that person a has done the chargeback and now wants their money back. That way, person b can give paypal such money as is necessary to resolve the chargeback with person a's bank and the whole issue would sort itself out.

Another good idea if you use paypal is to set up a seperate account just for dealing with paypal. At any given time it should only contain money about to be transfered into paypal or money thats just been transfered out of paypal. If you transfer money out of paypal to this account as soon as you get it then transfer it straight from this account to your regular account, paypal cant touch it.

Re:But they freeze your BANK account!

[nacturation]

If they freeze your account, and it's your only bank account, guess what? You are absolutely fucked! There is no way for you to get money out of your bank account until paypal unfreezes it.

YOU: [ringing bank]

BANK: Good afternoon, Whatever Bank.

YOU: Yes, I just tried accessing my money and it says my account is frozen.

BANK: Okay, can I have your account number please and verification?

YOU: [give info]

BANK: Ah, yes. It seems we received a call from a company in a different state this morning.

YOU: Okaaayyy...?

BANK: And they asked us to freeze your account for no particular reason. So we did.

YOU: Wait a second. You're saying that an unrelated third party is able to just call you up out of the blue and freeze my account in violation of my banking agreement?

BANK: Absolutely, sir. You see, we freeze all bank accounts at the request of any unknown third party.

YOU: So if I asked you to freeze your own personal account...?

BANK: You bastard. Now *my* money is frozen and I can't do anything until you authorize me to unfreeze it.

YOU: Hah, now you know what it's like.

BANK: Actually, we're just joking with you. You see, according to banking regulations, you are our customer. The only time we would ever freeze an account is if the bank is going to be out some money and we need to put a reserve on the money you already have with us.

YOU: But I read on Slashdot...

BANK: Yes, we've been getting calls about that all day. It seems that somebody on Slashdot has been spreading FUD.

YOU: Well, maybe I shouldn't be surprised.

BANK: Hey, it's Slashdot, isn't it? I'll fancy a guess and say that the person who said that didn't present any evidence to back it up?

YOU: Yeah, that's exactly right.

BANK: We have to deal with people like that all day. They make unsubstantiated claims about what PayPal can or can't do. Why, just the other day, a customer said that PayPal sold their home without them knowing it just so that PayPal could recover a chargeback!

YOU: Oh come on!

BANK: No, I'm serious. You'd be surprised what other people can come up with when the burden of proof is absent.

YOU: Actually, I probably wouldn't be. From time to time, I read Slashdot at -1.

BANK: [laughs] On Friday, someone said that the GNAA acquired this bank.

YOU: [laughing hysterically] Oh, that's a good one. Well, I guess my account can't be frozen then?

BANK: Of course not. At least not by PayPal. They would need a court order to do something like that.

YOU: Thanks, that's good to know.

BANK: No problem. Have a good afternoon!

Simple - Use NetworkForGood.org

[Anonymous Coward]

Paypal does suck sometimes, and they do have many examples of using dubious business practices. So what? Big deal. I don't think they lost any money, did they? Why doesn't Freenet just publicize that they can accept money through NetworkForGood.org? From their website:

Network for Good is the Internet's leading charitable resource -- an e-philanthropy site where individuals can donate, volunteer and get involved with the issues they care about. The organization's goal is to connect people to charities via the Internet -- using the virtual world to deliver real resources to nonprofits and communities.

Founded in 2001 by the Time Warner Foundation and AOL, Inc.; the Cisco Foundation and Cisco Systems, Inc.; and Yahoo! Inc., Network for Good is an independent, 501(c)(3) nonprofit organization headquartered in Vienna, VA.

In addition to connecting the public with opportunities to give, Network for Good works to advance nonprofit adoption of the Internet as a tool for fundraising, volunteer recruitment and community engagement. It represents a groundbreaking partnership with leading technology and media companies and more than 20 nonprofit foundations and associations who share the desire to foster the informed use of the Internet for civic participation and philanthropy.

You can donate to their 501c3 organization here, I believe.

Governments Fault

[logicnazi]

Almost certainly paypal had no choice in this manner. There are a great deal of government regulations about monetary transfers that prohibit anonymity. The failing war on drugs justified a great many rules restricting the anonymous flow of money (which didn't stop the drugs only encourage another criminal enterprise of money laundering) and the war on terror combined with the public prominence of the internet nailed the lid in anonymous monetary transfers.

Even if the significant government powers to stop and track sucpiscous monetary transactions don't explicitly bar paypal from allowing anonymous accounts (as the page suggests freenet was doing) the considerable influence of the government forces them to do so anyway. After all paypal relies on the patronage of credit card companies who we know would rather bow to government pressure than stick up for privacy. These E-gold type places can continue in the face of this opposition because they don't accept credit cards and they technically aren't transfering USD (rather ounces of gold) so probably fall under less restrictive laws. Most likely though they are simply too small to have been noticed yet.

Face it guys anonymous monetary transfers aren't going to be offered by a for profit company. Such companies have too much to lose by not allowing government scrutiny.

On a related note I wonder if Osama would pat up his 35 pounds of gold using E-gold.

Re:But they freeze your BANK account!

[shaitand]

Somewhat offtopic, but while your bank will not freeze your account at the request of a random third party.

Something fairly nasty that they will do, is automatically debit your account and pay any company who runs through a check-by-phone type transfer. All that is needed is the information on the bottom of your check and no authorization whatsoever. It's happened to me 3 times now, each time for somewhere between $250-$500.

This is 100% automated. The first time I did a check by phone to pay my monthly providian bill, not only did they charge that, they also charged me for the full $500 balance of my mother-in-law's bill (she lived with me and I guess they figured I'd surely want to pay the credit card bills of everyone!).

Sure enough, the charge came through automatically, no review, not even so much as a check to verify that the name it was put through under was on the account!

I've switched banks twice since and had check by phone frauds nail me at each bank (and yes, the providian thing was the first and only time I actually used a check by phone legitimately) because they ALL process them automatically with NO review and no authorization. Anybody you write a check can charge your account without signiture for up to your full account balance plus whatever the bank will cover for you.

I thought the primary purpose of a bank was to lock my money up and insure in every possible manner that your money can only be removed with your authorization?

I never write checks anymore, I'm afraid to.

Credit Cards

[stimpleton]

Since I am a non-US merchant, my PayPal account is verified via credit card. Welp, 2 months ago I got an email about "unusual account detail access", and the account was on hold, by PayPal admin.

Here's the kicker: I asked that the acocunt be shut and all account details deleted. They could not do that and needed to investigate.

Since that time, many transaction appeared on my car for Online Casinos etc Presumabely by the person that hacked the PayPal account..

It ended with cancelling my card with my bank and claiming back all the transactions I hadnt made.

Lesson: Unlike many online merchants that (supposedly) delete your CC details after each transaction, PayPal dont, and have your number and details.

Re:Anonymity is not a virtue

[Eric Smith]

Good job PayPal in not making payments to anonymous recipients.

This had NOTHING to do with payments to anonymous recipients. Paypal doesn't provide any means whereby anonymous recipients could receive money.

If Paypal doesn't like the aims of the Freenet project, perhaps they may be within their legal rights to drop the account. But it's certainly not very ethical. Suppose other major corporations behaved the same way...

• "Sorry, sir, McDonalds will not sell you hamburgers because of your registered political party."
• "No, you can't buy a Ford automobile because records show that you have donated money to the ACLU."
• "Because you protested the war, you can't open a checking account with Bank of America."
• "SBC has disonnected your telephone service because you've written software that is released under the GPL."

Do you want to live in that world? Or do you want corporations to have to treat individuals in a nondiscriminatory fashion?

[I'm obviously not claiming that the corporations I've named have any such policies; they were chosen arbitrarily as examples.]

one of the many Paypal catch-22s

[mabu]

I ran into a problem with Paypal recently, explifying how they're they're there for you until you really need them.

I purchased a product from a merchant online (sleazebag named Big Impressions out of Arkansas (avoid these losers). They took my money and then didn't ship the product when it was ordered. I complained for several weeks and was blown off. By the time I complained to Paypal, it was just past 30 days from the transaction and Paypal refused to investigate because the transaction was 30 days old, so I got screwed.

Based on my research, in the absence of any terms, a merchant has 30 days (domestically) to ship a product, but Paypal requires you to report the problem within 30 days, so by the time the merchant legally screws you, Paypal doesn't have any responsibility to investigate. It's totally useless. Thanks for nothing Paypal!

Not if you use a service like MBNA's "ShopSafe"

[RKBA]

Not if you use MBNA'a "ShopSafe" credit card service. Please note that I have no vested interest in MBNA whatsoever, except as a happy customer. If you have a regular MBNA credit card, what MBNA does is provide software you can install on your computer that automatically connects up to their credit card "NetAccess" service (you have to log in with name and password each time) and lets you generate "disposable" credit card numbers as needed (much like Spamex.com does with their disposable email address service that I also use :-).

I generate a new credit card number for each and every Internet transaction, and the MBNA ShopSafe software lets me set the maximum amount that can be debited to each disposable credit card number as well as the expiration date (up to one year in the future). The way I handle PayPal is to generate a disposable credit card number with an expiration date of one year and a reasonable credit limit (say $500 for example, or whatever you want). If I were to ever want to rescind my credit card information from PayPal, I do not even have to contact PayPal at all - I just start up the ShopSafe software and tell it to delete the particular disposable credit card number that I provided to PayPal so that no further charges can be charged to that account number. I'm very surprised that as far as I know, MBNA is the only one who provides this type of service, so they have no competition in this area.

Nice try.

[warrax_666]

Even if it worked ideally, it means your server could be passing, say, child porn.

Yes, but it also means it could be passing, oh, I don't know... information about a planned organized revolt against an opressive government or inside company information from a whistleblower about e.g. pollution of ground water. Welcome to the double-edged sword of truly free speech.

If I ran a server and someone was engaged in such nefarious activity, they would be "censored" pronto, as in rm -rf *-

That's certainly your perogative (and you would probably be breaking laws if you didn't). Incidentally, I would certainly also do so.

-how in the world can not knowing what's going on (the Sgt. Schultz method?) be an improvement?

It's the difference between being a common carrier and not being one.

If I participate in FreeNet, I'm basically saying: "Here is some disk space and network bandwidth, use it for whatever (and I mean whatever) you want -- I neither care nor do I want to know what you use it for.". IOW, I'm donating resources for good or bad.

Not knowing (or being able to know) what is actually stored on your computer gives you (morally, if not legally) common carrier status.

But nice try.

Cahoot and Discover too

[blorg]

Sorry to reply to my own post, but the other two providers posters have mentioned, Cahoot and Discover, also use Orbiscom, along with (to quote from their website) "Discover, MBNA, Citibank, ABN-AMRO, Abbey National, Credit Lyonnais, Swedbank, Citi EU and Nippon Shinpan".

Here's a list of their clients for anyone who is interested.