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Paypal Reverses Payments Made To Indians
bhagwad writes "Beginning January 28, Paypal has been reversing the payments made to any Indian provider of services. In addition, Indian users have been unable to withdraw their money to their bank accounts. As a result, a large number of Indian Paypal accounts have negative balances running into the thousands of dollars. The worst part is that users weren't informed beforehand — the funds were just whisked away. Indian providers have gone ballistic, with over 2,000 posts on a thread on the reversal of payments and over 700 posts on this thread about the delay in transfers. Paypal hasn't given any explanation to this behavior other than they're looking into it. Although Paypal claims in the above blog post that payments made for 'Services' are not being reversed, this is not true. All payments not made for 'Goods' with a shipping address have been reversed — in fact, the Paypal e-mail tells the Indian sellers to encourage their clients to lie and claim that they're paying for goods with a shipping address instead."
Why anyone trusts PayPal with their money.
Banking reform in the US should include subjecting PayPal to all the rules and regulations that apply to banks. I find it strange how they've managed to avoid being classed as a bank all these years in the first place. Current regulations leave a lot to be desired, but making PayPal adhere to them would be a good first step.
Why PayPal needs to be regulated as a bank, and why I refuse to use it.
No you are completely and utterly wrong. There is a very authoritative document from the Fed that explains how banks expand the money supply, but a simple starting point for you would be the wiki page on Fractional Reserve Banking.
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As a result, a large number of Indian Paypal accounts have a negative balances running into the thousands of dollars.
Does anyone else see that as a good opportunity to cease their relationship with PayPay (for those stupid enough to have kept using them anytime in the past, oh, decade)?
Remember - Not a bank, by their own maneuverings. You can't actually owe PayPal money, because they don't sell anything or provide any (direct for-cost) services. Sure, you can owe their other customers money, but PayPal itself?
Negative balance? Yeah, time to close that account. Thanks, PayPal, but you can keep "my" negative money. Funny thing, about forced arbitration clauses - You can stack the system as much in your favor as you want, but to get government sponsored armed thugs to go shake down your clients, you need to step in to a real court of law and risk setting some seriously unfavorable precedents.