November 22, 2004

• I avoided them for years, but once eBay took over, I went ahead and signed up* - no problems from either end, as buyer or seller. I wonder what ratio of the class-action suit problems predate eBay's taking them over? * however, I maintain a secondary, PayPal-only bank account, so they can't screw me too bad.
• When you say the link seems to disappear, do you mean that you can't view the link in your browser or that you click on it but nothing loads? You're thinking of jumping ship, but how will you pay for your purchased eBay goods? How will you send friends and/or loved ones money in a timely and easy fashion? How will you donate to organizations or charities or artistic endeavors? (Please answer these questions so I, too, can get my money as far away from paypal as possible.)
• I would be interested in hearing any stories about people having money withdrawn from their bank accounts or credit card through PayPal without their consent.
• I think Paypal is pretty dang handy, but the horror stories worry me too. I have the feeling that most of the people who had problems fell prey to phishing schemes (responding to an email that appeared to be from Paypal asking them to verify their account information/password for instance). Next thing they know, their account is cleaned out. Go figure. It can hardly be Paypal's fault when people fall for that kind of stuff. If there are other (more legitimate) problems, I'd like to know more about them too. The biggest problem I see with Paypal is that they are operating like a financial institution but not regulated like a financial institution.
• Hey, I get fake email from PayPal all the time lately. Them and some chick who desperately wants to be my friend and could I check out her webcam, and, oh, I seem to have won the lottery about eighteen different times this week. I am a lucky fellow, though.
• Oh, and I'm getting a copy of W32 Sober.I about every hour for the past three days, too. Anybody want one? I can't use it, I'm on a Mac.
• Wolof, I'll trade you Sober for Opener.
• A most kind offer, genial. Thank you for thinking of me.
• Paypal is most definitely a scam. Most complaints by Paypal customers are entirely legitimate, and not the fault of their own negligence. Unfortunately, Paypal is a scam created in defense of a scam. The amount of online credit card fraud is tremendous. A small percentage of the whole but the dollar amount is still staggering. Many, many online stores have been literally driven out of business by the cost of credit card fraud. This is no exaggeration. Credit card companies have strict policies that protect their card holders and themselves by forcing fraudulent charges back onto the merchant. Paypal quickly discovered this once they got set up, and since they were the middle man, were in danger of being the ones stuck with all those fraudulent charges. (Credit card companies deal with brick and mortar merchants in the end, Paypal deals with anonymous sellers and buyers who can withdraw their funds from Paypal immediately and disappear.) Paypal's response: force the cost back onto their customers. Likely illegal policies forcing innocent sellers to bear the charges when Paypal's system is scammed. Pulling money directly out of customer's bank accounts to pay for fraud accusations, even when Paypal has no authorized access to those accounts. Policies that cut off Paypal customers once any possible hint of fraud has been detected and seizes all moneys in their accounts - again, likely illegally. People can of course complain to Paypal, and Paypal has many systems set up to make it seem like they're being heard, but Paypal has no incentive to actually listen and act. Their goal, after all, is to force fraud cost back onto all their customers. There's no point in giving their customers a way out. People could also take Paypal to court, but who's go the time and money to take Paypal to court for less than $50,000? If it was more than that, the transaction likely didn't take place thru Paypal. Paypal knows this. However, they're the only game in town. No major financial institution wants any part of online transaction processing. Banks are risk adverse, and they already knew how risky online credit card transactions are for the processor. Paypal could go to much greater lengths to verify the legitimacy of sellers and buyers, but that would require diligence on a level similar to getting a loan, and driven away customers. Paypal could have been up front with their customers, and educated them about the amount of credit card fraud, and thus the amount of diligence that Paypal had to engage in, but that would have made people nervous about online transactions and driven away customers. Plus all the diligence in the world is worthless for international transactions. Paypal has found it more lucrative to do a huge volume of transactions, and subsequently lose a small number of customers by treating them fraudulently, then do a much smaller number of transactions and treat the customers with respect. You must keep this all in mind when using Paypal. They are not a friendly merchant, interested in competing for your business. They are your enemy. You must consider them much like the gang of thugs running a local ferry service, who often beat up and rob their passengers, occasionally throwing them over the side of the ferry for good measure. But they're the only ones running a ferry. I suspect many Attorneys General who are familiar with the PayPal situation find themselves in a difficult quandry. They know large numbers of constituents are being illegally abused by Paypal, but they also know much larger numbers of constituents and small businesses depend on the service Paypal provides. Can you shut down the water company if they're only poisoning a couple blocks of the city? ...and man, did I run on.
• Thanks Nal. That was beautiful.
• Nal's comment certainly has got me thinking twice about using PayPal for online auctions. However, I use PayPal in a different ways with great success: Most of my money is in US Banks, but I live in Germany. (The exchange rate sucks, BTW) A bank transfer costs around $40, but if I send money from my US PayPal account to my German PayPal account, there's no charge. Secondly, the tenants renting my place in the US send their rent to me via PayPal. This is an invaluable aid for living outside the country. I've been doing this for the last three years with no problems. My two euro-cents.
• Two minor corrections: Most complaints by Paypal customers are entirely legitimate, and not the fault of their own negligence Should 'not wholly the fault of their own negligence' For example, that JCS guy in the above post - sure he had reason to believe the payment was legitimate, due to the information Paypal gave him, but shipping a laptop to Russia from the US? New organized crime capital of the world? What an idiot. You must consider them much like the gang of thugs running a local ferry service, who often beat up and rob their passengers, occasionally throwing them over the side of the ferry for good measure. Should end - The ferry thugs engage in this action because they occasionally get ambushed and robbed themselves by a bigger gang of thugs on the far shore. Hardly makes it right though.
• Y'know I just tried to use PayPal to sign up for MeFi. Thought I could give a credit card number, end of story. But nooooo. They insist I open an account and send them my bank acc't #. I balked. It seems contrary to common sense. Is this really how it's supposed to work?
• Rauol, not only that, but PayPal will try to encourage you to use funds from your bank account while trying to discourage you from using the credit card linked to the account. That marks the first and only time a banking type entity tried to discourage me from using a credit card (I have good credit.)
• Credit card worked fine for me!
• PayPal works for stuff that is not porn?
• I believe paypal will let you transfer funds without giving up your bank account number, but they make it look as though you have to be "verified", or whatever the term is, by providing your bank account as a fallback. There may be a level on whch papal is ok, so long as you don't fall for the verification.
• The thing about paying with credit card through Paypal is the recipient will have charges taken out same as a merchant who offers credit card transfers. So, for example, you might pay Matt $5 but he will only get $4.75 or something along those lines. With a bank account transfer the recipient gets the full amount. I learned this the hard way after selling a high dollar item on eBay and someone paying for it with a credit card. They took almost $20 in fees.