Online e-Commerce Issues w/ PayPal? 410
A concerned entrepreneur submitted this question for your consideration: "I run a very small online company and the main method we obtain payments for products is via PayPal. In this digital age having an easy way to accept payments for goods is critical to small business survival. Have you had problems with PayPal freezing your accounts, have you had any issues with PayPal harming any of your credit? Neither has happened to me but it
it still is a concern. Recently, I was sent this site, became concerned and wanted to ask Slashdot readers for their input on security and any problems they may have had with this service." If you send your money to a website for safekeeping, you expect it to be safe, and a large part of this perception is based on dependable customer support. According the warning site, it sounds like PayPal might be a bit deficient on this end. Have any of you experienced similar problems?
"I don't necessarily trust the website I linked to, nor PayPal's statements. PayPal requires you to register your credit card AND your checking account and could conceivably and legally(?) remove any and all funds and stop you from withdrawing a dime from your PayPal account as well as your own checking account at their whim. What is a small business to do?"
Just an aside, if you are signing up for a personal account, you only need your credit card. It's merchants who want to use PayPal's premium features who have to specify banking information as well.
Mis-informed (?) (Score:2, Informative)
Is this a new policy? Paypal asked for my bank info when I signed up ~6 months ago... for their standard service (no premium features).
-sid
PayPal (Score:5, Informative)
I think the main thing to keep in mind is that PayPal is not a bank, and not FDIC insured.. I'd use it as a method to exchange money online, but not as a cash storage facility.
Not as a seller, but as a client... (Score:5, Informative)
Previous Articles (Score:2, Informative)
http://slashdot.org/article.pl?sid=01/10/17/191
http://slashdot.org/article.pl?sid=00/08/31/193
paypal has worked for me (Score:2, Informative)
The Anti-PayPal website is spamming all the Usenet newsgroups. They had a commercial interest in seeing a paypal competitor called c2it which is CitiBank's micropayment initiative. But c2it asked them to pull the ad. c2it had a link on Friday but not today (Monday)
Consider the source.... (Score:4, Informative)
Comment removed (Score:5, Informative)
Some other informative sites..." (Score:5, Informative)
Comment removed (Score:4, Informative)
Use a credit merchant. (Score:4, Informative)
PayPal is *not* a bank (Score:5, Informative)
Real banks have state charters and are closely supervised, have strict documentation and recording requirements, etc. I don't give a damn about the physical appearance of my bank, I do care about that little sign on the front door saying "FDIC insured." This doesn't mean that I'll never have problems, but it (and the state charter required for that insurance) does guarantee that they keep sufficient records for problems to be resolved, that money in accounts won't go *poof* if the bank goes under, etc.
But Paypal is nothing. If it goes under, the money it holds just disappears. If it says it's never heard of me, I have no way of proving that I have an account with thousands of dollars. If they make a payment, they have no statutory requireemnt to document that it was authoritized or to refund my money.
I'm not totally without rights, but instead of strong local oversight I have to deal with a civil suit in the Federal courts for a contract dispute. If I could prove that we had a contract (did you ever get a signed document from PayPal?). If I could afford the expense. If I could affort the long delays before the case is heard. And all of that assumes that they haven't changed their "terms of service" to require binding arbitration by an arbitrator of their choice.
During the early days, this may have been justifiable. Not just because it costs money and time to do it right, but because the regulatory agencies wouldn't have known what to do with something like PayPal. I know, because I actually checked local laws and discovered requirements for things like a physical location open to the public, cash reserves, etc.
But not now - even if PayPal is completely honorable (and I have no reason to believe otherwise), the lack of oversight limits how much confidence we can have in them. If they are acting like a bank and being perceived as a bank, it's long past time for them to BE a bank. Until then, they're no different than trusting "my buddy Bob" to deliver you the cash promised the next time he's in town.
I had my Credit Card Stolen and Used with PayPal (Score:5, Informative)
Just an aside, if you are signing up for a personal account, you only need your credit card. It's merchants who want to use PayPal's premium features who have to specify banking information as well.
First of all, some corrections of what was stated above...PayPal requires only a credit card, but you can only make $1000 worth of transactions with the account. This doesn't mean that it's a $1000 per transaction limitation, but more like all of the money you can ever use with them. Once you give them a bank account, *then* this $1000 restriction is removed. I believe their single transation limit is $250, but this might be for accounts without a banking account linked to them.
About 6 months or so ago, I noticed a $250 charge on one of my credit cards from PayPal. It struck me as odd, since I had only performed a single $50 transaction. I contacted PayPal and my credit card company, and found out the following:
The card with the $250 charge on it had actually not been the card I registered with PayPal. The info had been stolen from some other online vendor, and the thief created a new PayPal account with my card. The PayPal rep I spoke to claimed that the name on the account has to match the name on the card, so, obviously, this person found a way around their system (or the rep was wrong).
But, both PayPal and my credit card company handled the problem well. I wasn't accountable, and I had all of the money returned to me. The moral of this story is to make sure you check your credit card statements, because when mysterious charges start popping up, it's ultimately your own responsibility to catch them. How many people even bother to look at their monthly statements?
Gift Sales and PayPal (Score:3, Informative)
If you sell normal items with PayPal, I can say that I've never had a problem with it. I know a few people on here have horror stories to tell, but I really can't.
If you are selling anything where the sender is most likely going to specify a different address (i.e. gift sales), DON'T USE PAYPAL UNLESS YOU'RE DESPERATE. PayPal insists that the two addresses agree. I did a payment system for a Chicago popcorn business, whose main revenue comes in at Christmas when everyone's buying those big cans of caramel corn to send to their relatives. At that time, PayPal allowed different shipping addresses.
As Christmas season started, they changed their policy and stopped allowing it, basically axe-murdering my neat little scripts. :\ I wrote a work-around so they could specify their shipping address on our site, then buy the popcorn using PayPal...but it's ugly and I don't recommend it.
So if you're a gift company...be smart...keep in mind the constraints you have to work within if you're going to do a front-end to PayPal. PayPal doesn't work for everyone, although it can be really useful sometimes.
A semi-good Paypal experience... (Score:4, Informative)
To unfreeze it, I needed to fax them:
Despite the glaring violation of privacy, I did get the account unfrozen in under 24 hours, and I did find them easy to communicate with.
C2IT Security Holes.. (Score:4, Informative)
Re:PayPal (Score:5, Informative)
FWIW, the new version of Yahoo! PayDirect [yahoo.com] is FDIC insured. Its fees [yahoo.com] are similar to the current PayPal fees [paypal.com]. I haven't used PayDirect since it switched banks several weeks ago, but I remember that it was possible to contact Yahoo about the service if you were willing to pay for a long-distance phone call. (PayDirect is also the only service that I was able to get a tip bookmarklet [squarefree.com] to work with, so I'm biased.)
Re:Alternatives? (Score:2, Informative)
https://www.c2it.com/C2IT/Login
Real bank. FDIC insured and everything.
Re:The Lack of Physical Stuff (Score:3, Informative)
Also, note that deposit accounts are not assets of a bank, but liabilities; loans are not liabilities, but assets. (That is, if you go down to the bank and deposit $100, the bank's assets don't change, because they record both $100 in additional cash and $100 in additional liability to a depositor. A bank can make money only by profitably investing deposited amounts.)
Re:The Lack of Physical Stuff (Score:3, Informative)
I don't trust a bank because it's got a building. I trust a bank because it's FDIC insured.
E*TRADE bank is basically just a pretty website, but I trust them WAY more than PayPal, because they are FDIC insured like any other bank.
Re:Not as a seller, but as a client... (Score:4, Informative)
PayPal Tips (Score:5, Informative)
My tips are:
1) Setup a "Firewall" bank account. This allows me to receive payments from sellers to my PayPal account, then have PayPal direct deposit the money into this "firewall" bank account. This bank account has no money in it and once money has been transferred from PayPal to this bank account, I use the bank's tools to transfer the money to a checking account or savings account. This way, if someone gets into my PayPal account, they'll have very little or no money to rob from my associated bank account.
2) Use a dedicated Credit Card for Payments. With so many Credit Cards offering me free cards with 0% interest rate, I have the ability to use one just for online transactions. When the bill comes every month, it is easy to review. Fraud, or simple mistakes like double billings, should stick out greater than they do on my primary card.
3) When making Payments, use an affinity credit card that provides you with some benefit instead of your bank account. Using a bank account is preferred by PayPal because the cost to withdraw money from your bank account is significantly lower than charging your credit card. But their savings doesn't give you anything, so turn this neutral into a positive. By using an affinity card you can earn points on each of your PayPal purchases. I even had one case where someone on ebay bought something for me from $300 and due to problems I had to refund it. His $300 went to my bank account, then $300 came from my credit card to refund it back to him through PayPal, then I used the $300 in my bank account to pay off my credit card. I lost a little bit of money in the process due to PayPal's receiving fees, but at least I got 300 frequent flyer miles out of it!
4) Withdraw money promptly from PayPal. ANY company can suddenly go bankrupt from bad financial decisions you don't know about. It is therefore wise to use PayPal as a payment service and not a virtual bank account. When someone makes a payment, transfer it to your firewall bank account immediately so that it's in your control.
5) Read the fine print on PayPal's website. They have some very good fraud protection services that will protect you from evil people. But these services require specific things like "advertising PayPal as the only electronic Payment service you will receive." This really isn't much of a problem, it seems, since 90% of my ebay electronic payments have been made through PayPal (other 10% are BillPoint/Ebay Payments or Money Orders.) But you need to realize that if you take them up on their fraud protection, they have many ways to disqualify you if you don't follow their rules.
6) Trust your credit card. If you're using Credit Cards to handle purchases, many states like Maryland have VERY tough credit card laws which protect consumers. If you're using a 'new' service like PayPal, hide behind more conservative, regulated things like traditional credit cards and bank accounts.
I use Kagi (Score:4, Informative)
Another thing I like about Kagi is that unless I sell something, I don't get charged anything. And when I do, it's a flat rate, and very reasonable for the ability to take checks, credit cards, and foreign currency.
I'm not affiliated with them, but I am a satisified customer. If you're looking for a way to safely process a small number of payments online, look no further.
Re:Not as a seller, but as a client... (Score:4, Informative)
Another charge was attempted by IOPAY.COM soon after and declined again for security reasons. On October 1, I received notice of the fraudulent charges and telephoned CHASE VISA and stated that IOPAY.COM did not have my authorization and please do not accept any other attempts by IOPAY.COM to use my card. I cancelled my card and had a new card number issued.
Since then, there have been (I think) 4 attempted charges by IOPAY.COM, none of which is legitimate. I've never used my CHASE VISA card for online purchases. I've signed 3 statements to the fact that I did not authorize and do not authorize any charges by IOPAY.COM at any time, as well. I believe all charges have been made to the previously cancelled account and forwarded to the new one.
All additional attempted charges have been honored by CHASE VISA against my explicit direction and the earlier assessment by their own internal fraud department. I have had to deal with each charge specifically and have been threatened in writing and over the phone by CHASE VISA employees that I can be held liable for the charges if their own internal decision is that the charges are valid. As I said, I have signed three statements that the charges are not valid and am awaiting the fourth in the mail.
I finally cancelled my CHASE VISA card completely and hope this will resolve the issue.
So, you see, it isn't only PayPal that has poor customer service.
I believe that at least some credit card companies are in collusion with and silently accept knowingly fraudulent charges. They certainly stand to profit by it. Credit card companies make 2% or more per transaction, not to mention any interest accumulated on such charges.
I believe CHASE VISA is a willing, if not active, participant in such fraud, allowing pornography or other online sites to make charges that are not valid; and by having lax security and inadequate authorization measures, they are stealing from their customers in the hope that at least a percentage of fraudulent charges (which they stand to profit by) will go uncontested, or will be unsuccessfully contested (according to their dispute resolution rules) by their customers.
In my opinion, you're screwed either way. Our banking system needs stronger protection for customers.
Re:PayPal (Score:2, Informative)
al3x (Score:1, Informative)
Re:PayPal vs. real payment processing (Score:3, Informative)
It's also good for the purchaser, because if a business is legitimate enough to get a merchant account, you can probably trust them, at least somewhat. There's always the chance of fraud, but a business that accepts credit cards has essentially been pre-screened by the bank for you.
Re:Not as a seller, but as a client... (Score:5, Informative)
You give PayPal the money in exchange for a service if paypal does not provide the service you have a legitimate dispute and you can probably get your money back from the CC company. PayPal knows this, and that is why it is a violation of the PayPal TOS to file a dispute with your credit card company. If you dispute the charges, PayPal will be screwed if they can't get the money back from the other party. Of course we would alll agree that this is fair, but PayPal would much rather that _you_ be screwed.
PayPal encourages all buyer purchase disputes to be filed and resolved through the PayPal dispute resolution process, and reserves the right to terminate or restrict account privileges of buyers who file chargeback complaints without attempting to resolve the complaints through PayPal.
Of course by the time you've gone through the PayPal dispute process it will probably be too late to dispute the charge with your bank.
Re:Mis-informed (?) (Score:3, Informative)
This is a good way but NEVER do we ask for bank account Infos... we don't need their bank acocunt or anything.. only the bank name and phone...
I don'T know what PayPal ask from their user but they shouldn't ask more.. and for their merchant.. they need their bank account to transfert the money in the account !!!
[Note: I'll not post the URL of our site as I'm sure that not all
I tried blocking ETF's from PayPal and... (Score:3, Informative)
I am looking at creating a new chequing account just for the swept funds which then I will transfer the whole balance to an account that PayPal doesn't have access to.
Wired Mag Article (Score:2, Informative)
Re:Mis-informed (?) (Score:3, Informative)
In all that time, I never had a problem with them until recently. I tried to buy a cell phone on eBay and was duped by a nefarious seller. I called PayPal customer support and they told me to contact the "card-issuing bank" for any neccessary chargebacks. I did this and then PayPal treated the chargeback as a stop payment and charged me again for the same transaction.
Highly irritated, I called PayPal back and raised holy hell about it. they told me that they dont do "chargebacks" on completed transactions (which raised the issue that we dont know if a transaction will be a success until after money is transfered and classified as complete by paypal, thus making it nearly impossible to fit into their strict requirement for a chargeback...)
Anywho, they instructed me to file a fraud complaint, which I did. Then I found out during filing the complaint that per some eBay-PayPal agreement, I have to wait 30 days to file a complaint. So, that meant I had to sit idle for over a month without a cell phone and without my bargeld (german slang - "cash").
Finally, nearly 45 days later, I managed to get PayPal to investigate (there was hardly any investigating at all, honestly) and they gave me my money back. But, all the while during their 10-day investigation, they put my account on hold, preventing me from buying sending or receiving money...
Alas, though, we are in a crux. Due to this, I have come to detest PayPal. But, their security measure, however slim, are much better than BidPay or Billpoint. So, what are we to do when our only means of performing some function is also our worst? Sounds eerily similar to the whole Microsoft conundrum.
The customer service SUCKS! (Score:5, Informative)
After visiting that same site [paypalwarning.com] myself, I decided not to use PayPal any longer. I had never lost any money through PayPal, though I've used it only a few times to buy stuff on Ebay. I went to cancel my PayPal account to simply be sure nothing would happen (it had zero, but it could have potentially be used). However, I could not log in on the site, and got an error message saying I did not have cookies enabled, even though I did (and confirmed it by logging in to here [slashdot.org] and a couple other places that use session tracking with cookies). I sent email to their various support addresses the web site indicated. The reply on those said I needed to submit the request on the website. But I needed to login to do that, which I could not. I called them on the phone but got stuck in menu hell and voice mail hell. No one ever returned my calls.
A few months later I got email from PayPal. It was promotional. Technically it was not spam, since my account was still active, but now I really wanted it canceled. I tried the web site again, and it had not yet been fixed. I tried mail again and got the same stupidity. I tried calling a few phone numbers. I actually got someone on the phone, but it sounded like the phone system redirected incorrectly as they were not expecting an inbound call. As soon as I explained what I wanted, they said I needed customer support, and forwarded me to menu hell. After spending at least $5 for long distance calls I gave up calling.
I then proceeded to "get attention". Since the email was on an automatic bounce, I set up an automatic system to send them email. It was adjusted to send every 2 minutes so as not to cause damage, but perhaps get attention. After a couple hours of this, it did indeed get attention. I got email back from someone with a direct phone number. I cut off the process and called them. Although this person was in the technical area, he did promise to get my account closed out. He was unaware of the technical problems, and I tried to convince him he needed to get them fixed, although I didn't know what the cause was. We tried a few things, but it didn't fix it.
It's a shame that the only way to communicate with a company is by tactics like this, but this is not the first place this kind of thing has had to be done.
I have since found the problem and I know what fix is needed on their server(s) to correct it, although obviously that's not my job to do, so I won't.
My whole point is, this is a company that does not give a damn about customers, only about money. If they cared about customers, they would have much better customer support. If they had better customer support, they might be able to deal with some of the fraud problems people have a little better. Instead, they seem to be trying to cut back on staffing costs by cutting out customer support and trying to discourage customers from calling them. I even read in one of the various news articles that were linked from here [paypalwarning.com] that the president of the company had actually said they don't want to deal with people calling in to complain. To me that means they don't want their service to get better.
This is definitely a company that needs to go into bankruptcy. Just be sure your money is out before that happens. And if you have any reason to send me money for anything, please read my /. signature first.
It's easy to get Paypal's Number (Score:2, Informative)
Registrant:
Confinity, Inc (PAYPAL2-DOM)
1840 Embarcadero Rd.
Palo Alto, CA 94303
US
Domain Name: PAYPAL.COM
Administrative Contact, Technical Contact, Billing Contact:
PayPal, Inc. Hostmaster (PI2724-ORG) hostmaster@PAYPAL.COM
PayPal, Inc.
Palo Alto, CA 94303
Palo Alto, CA 94303
US
650.251.1100
Fax- 650.251.1101
Record last updated on 03-Nov-2001.
Record expires on 15-Jul-2010.
Record created on 15-Jul-1999.
Database last updated on 10-Dec-2001 05:16:00 EST.
Domain servers in listed order:
NS1.NIX.PAYPAL.COM 65.206.228.70
NS2.NIX.PAYPAL.COM 65.206.228.71
NS1.SC5.PAYPAL.COM 216.136.155.4
NS2.SC5.PAYPAL.COM 216.136.155.5
TechReview article on PayPal (Score:2, Informative)
http://www.techreview.com/magazine/dec01/schwar
Re:PayPal (Score:2, Informative)
I've never personally had a trouble with PayPal's service, though my business account is quite low volume. They seem to make good security assurances, process payments quickly, and allow me to deal with credit cards without a full blown merchant account. Not too bad a deal...
Re:I use Kagi (Score:1, Informative)
Specifically, "Either; 10% of each transaction with a minimum of $2.50 per transaction,
or, 5% of each transaction plus $5.00, whichever is less."
Luckily, I've used other payment systems for my more recent projects, and my Kagi volume is now pretty low (~$150/month), so I'm not actually going to lose all that much money in the great scheme of things, but I feel for those who are stuck using them actively.
They've also been a bit rude to me in the past, and seem kind of flaky in general, but that's anecdotal.
Re:Mis-informed (?) (Score:2, Informative)
Any vendor thats is compromised at the source can abuse your payment information. I learned the hard way as I got hit with almost a grand in online credit card fraud recently. The companies that were involved were great about it though. It was cleared up in less than an hour. Its the first time in all the years I've been shopping online that I've had trouble... which would be all of the years online shopping has been available.
Re:Consider the source.... (Score:3, Informative)
If you're talking about the owner of paypalwarning.com, I for one believe him. The site's been around awhile (I came across it it 3 or 4 months ago), so he doesn't need to spam to get visitors. The only thing spamming would gain him is bad blood and one hell of a bandwidth bill for this month. I say it's doubtful.
Shaun
My PayPal account was hacked. (Score:4, Informative)
The best part was, you feel pretty good with PayPal because of the third party insurance. But when you really need it, PayPal is not very helpful. I reported to PayPal right away and then realized that they don't even have a phone number regular users can call. It took them six days to reply my email asking for affidavit. I sent out my affidavit with police report right away via priority mail and it took them two weeks to reply me this time saying that they have never received it. Upon my request they finally gave me a fax number. About a week after I faxed everything to them, they reversed the two transactions, but then restored one, and then charged another $625 without any reason given. So my account actually got a even bigger negative number than before. I've sent tons of emails to them checking about this. And after 20 days silence, PayPal wrote me another email on Dec. 9, exactly two month since the hacking attack, claiming that they had never received my fax. Fortunately I did keep the receipt of the fax to prove that I have sent the fax and they had received it.
Today I got a statement from my bank saying that because the recurring overdraft situation has not been resolved for too long, they have closed my checking account and filed a record for five years. Next they will pass my case to an agent to collect the money from me. PayPal has no comments at all so far.
PayPal is a neat thing when there's nothing wrong. But once there's a problem (and the problem is likely to occur again since the hacker is still not tracked down yet), they just leave you aside. It reminds me a joke I've heard, something providing you a false feeling of security while you are actually being screwed. It refers to condom before... now I think it fits PayPal better.
I am working on suing PayPal since I have to get my banking record straight up. If anyone has similar experience and want to work on it together, please contact me at hook@263.net (sorry to use such an address... I only use it for first contact because it has spam filter.)
I have sufficient documents to prove the story. Including my certified affidavit, police report, bank statement, email history and transaction summary.
Hook