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.
The Lack of Physical Stuff (Score:4, Interesting)
When you go into a regular bank, you look around and see they have pretty lightbulbs, nice counters, poorly decorated walls, and all sorts of plush chairs and things. They've even got those little pens. Other people are waiting inside. These things make you *want* to be there.
A website might be real, real pretty, but that doesn't have any physical worth. When I step into a pretty bank, I know that my money is probably going to be secure because in the worst case senario, they've got physical stuff to back my loan with. While this doesn't have practical application in the real world, this is a large part of how our brain percieves things.
Paypal is dubious because they've got nothing to look at. Sure, they've got a big customer base, but *where is* paypal, and who runs the thing? I think the digital world is still evolving in that we still can't estimate worth by a website. I hope we can in the future.
Trust and Convenience (Score:5, Interesting)
Re:Consider the source.... (Score:2, Interesting)
Paypal's debit card (Score:3, Interesting)
1. Signed up for a Yahoo! Mail account, and told Paypal to send policy updates and transaction details there. I think alot of these companies want to keep in contact with you so you don't get trapped when they have to change policy.
2. Signed up, and received, the Paypal debit Mastercard. You get this by being a Premier or Business member. This debits straight from the Paypal account. I pay for art prints, supplies, and shipping through Kinkos, Mail Boxes Etc, and even the US Postal Service (yep, they take credit cards now).
Their main aim is to keep cash in the account, so that they can make money off of it. They make no jokes about it either -- clues are there if you go to their money market fund and read through the prospectus.
Also, Paypal *does* insure the accounts though The Traveler's Group (a well known, respected insurance company). They sidestep that issue.
Of course you could use Spamazon (more trouble than it's worth) or Yahoo! PayDirect (less features, more secure, more time consuming). But Paypal's the best bet here.
Vigorous anti-fraud group... (Score:2, Interesting)
I've never had any problem with PayPal, but my use has been minimal. I think it is worth noting, though, that PayPal has got one of the more vigorous anti-fraud groups around. I think their fraud rate is around 1/2 of 1 percent, which is (IIRC) lower than many credit cards.
Some of this information is from an MSNBC Article [msnbc.com] that showed up on SANS NewsBytes [sans.org]. But I've also heard personal anecdotes from security professionals who'd rather have the Mafia after them than PayPal.
Linux related from their consumer complaints... (Score:1, Interesting)
Consumer reporting scam: Larry Lawrence (12/6/01)
PayPal continues to hold my $600. Illegally.
Several months ago I was offering the general public a free copy of the popular OS called Linux 8.0. This is a freely distributable program under the general license agreement. The customer only had to pay for shipping. ($5.00 US dollars)
I had hundreds of people that responded to the offer and I delivered the program as offered and according to the law. PayPal sent me an e-mail saying that they were going to suspend my account unless I could provide proof that I had permission to distribute this software.
Well, I e-mailed them back several times and explained to them that I did programming on my own and would never consider distributing software that was against any law. PayPal said that I had to prove that I had permission from Microsoft to distribute the software. Microsoft has nothing to do with Linux. Linux has always been to my knowledge, a free OS.
I am e-mailing you first before taking legal action as this is the professional way to do business.
They have closed my account, which is fine accept that they hold my funds without paying me interest on the funds and refuse to return the funds.
Yet Another Personal Story (Score:2, Interesting)
They did not unlock my account, however; their stated reason was that the address on my driver's license did not match that on my bank statement. When I explained that I was a college student, they simply repeated their first request, but now they wanted a credit card statement as well, despite the fact that I never entered (and did not own) a credit card. Without anything else to do, I simply removed all of my banking info from their records. I would have closed my account, but it's not possible to do that when you're suspended.
I have a credit card now, so I could probably get it unlocked. I don't feel like spending the time and money to do that, though, and I don't have enough confidence in PayPal to trust them with my money, either. So I've made do with waiting for people to process personal checks, or paying the extra few dollars for money orders.
Re:The Lack of Physical Stuff (Score:3, Interesting)
think about the assets of a small-mid sided bank office (wild guesses here, I'm not a banker):
Commercial building maybe 500k, but is likely leased
Computer equipment: 200k
office furniture, pens, etc: 100k
specialized facilities (safe deposit vault): 500k
So their physical assets might be as much as 1.2 million, supporting moderate number of small business accounts (200 maybe) and a decent number of personal accounts (3000 maybe), again, more guesses. Assuming an average value of these accounts at $2000 each (guessing) that's 6.4 million. And that's just the deposit side of things, not the loan side. Even with the wild inaccuracies of my guesses, it's not hard to see that the physical assets are not likely to match up much against the value of the accounts.
Suckered Once Again! (Score:1, Interesting)
The little shit-squeeze that Slashdot has just graciously provided another bijillion hits to, is getting paid to scare people away from PayPal. He's trying to scrounge CitiBank referrels.
Way to assist the spammers and slimeballs, Slashdot!
Re:I rate PayPal a 5 out of 10 (Score:5, Interesting)
Look at it like this:
You pay money to a merchant, he lets it sit there for a couple of weeks before he pulls it out.
The merchant pays a small amount to PayPal for the convienence, but the big money comes from the interest on the money.
$50 for two weeks might not seem like much, but multiply it by thousands, and it adds up quick.
Consequently, when you want to take money out, they have the transaction take a couple of extra days to squeeze every drop of interest.
I have had problems...... (Score:3, Interesting)
But on 3 separtate occasions I have had payments held, and also on one occasion I have had my account frozen. And yes it did take me FOREVER to get a hold of anyone on the phone (thank god for "free" LD on my cell). I was told it was a "routine" random freeze, blah blah blah, several days later they "unfroze" my account. And yes it was a major and total bitch, but there really aren't any other shows in town, so what do you do?
Serious volations of PayPal policies. (Score:3, Interesting)
Dear [recepient's e-mail address suppressed],
On 09/03/00 you received $10.00 from [my e-mail address suppressed].
Our policy is to cancel unclaimed payments after 30 days, so
unless you sign up for a PayPal account these funds will be
returned to the sender. Don't let your money get away!
Note that this warning was sent some 14 MONTHS (!!) after the payment was sent. This is in gross violation of the stated policy of returning funds after 30 days. Moreover, as a sender, you don't have any clue in many cases whether the funds were actually credited or not.
In my case, it was only $10 at stake, but if many other payments were similarly misused, the interest racked up could have been quite substantial.
Bob
Seller beware! Just had experience this week. (Score:2, Interesting)
So I get 700 characters to tell them that the guy had said the item arrived broken (see UPS thread here for that) and I should file a claim and send him the money. I offered to take the item back and give him the money back, he declined. (Now obvious why.) UPS kept saying things were being investigated and I haven't followed-up very often.
I go through the Paypal form (no other contact permitted, they make this quite clear). Then I log into my account to find they have debited the $1800.00! I don't keep much money there, mostly for impulse E-bay items, but it's gone now. I have received no communications from them at all.
Basically they seem to try to pass the fraud buck along to the seller if at all possible even though the breakdown was clearly on their side. It's even worse because like most people I never would have dealt with such a transaction without Paypal's supposed verification and protection. So they are just facilitating fraud if their protection is no good. This review process had better be simply nominal or I'm going to pitch a fit.
Saludos, Mig
Hi, (Score:2, Interesting)
I realize there are some concerns whenever a site such as PayPalWarning comes up, but please realize:
a) the internet is a free forum where users can state whatever they want
b) you can find horror stories about many companies on the internet
PayPal is a payment service that allows parties to pay one another for a variety of reasons. All customer situations that do not violate our terms of can be resolved.
Account restrictions, which are brought up on a regular basis, are quite rare (reasons for an account restriction can be found in our terms of use) and they can be resolved with the assistance of the user.
Points to ponder
-PayPal continues to add 20,000+ users per day.
-We also conduct well over 200,000 transactions daily.
At times, our anti-fraud measures do catch legitimate users, but these can be rectified. These measures, while viewed as extreme at times, has allowed us to keep our fraud rates extremely low.
Some of the issues on PayPalWarning involve:
-Seller not shipping goods to a buyer (we offer limited protection and do not guarantee recovery from a seller)
-Payments reversed due to chargebacks (explained in the terms of use)
Re:Mis-informed (?) (Score:3, Interesting)
It's really moot, though.
They keep changing their story, and their requirements so much, you can't keep up with them. Any money you have in your "account" isn't really yours at all, if they say so. I would be very scared to have more money in that account than I could afford to lose, which lately has been about $20.
As a matter of trust, how can you trust an establishment that claims they can make all their money through interest on the float, and that they are quick and easy to use, then over a period of 18 months starts adding fees here and there, adding no value, and apparently doing something that gives fodder to those writing paypal horror stories? I can't claim that such stories are true, but where are the rebuttals? Where is the free/easy to use account I had a year ago? Something screwy is going on.
Re:PayPal is *not* a bank (Score:2, Interesting)
A bank story (Score:3, Interesting)
- Man starts online bookstore, running it out of his home. Achieves modest success with a small but loyal customer base.
- Nationally syndicated columnist discovers online bookstore, interviews owner. Writes it up as example of ordinary guy doing Amazon.com on a small scale.
- Thousands of people read column, go to bookstore site, place orders.
- Man gives resulting credit card transactions to his bank.
- Bank says, "Whoa nellie! That's a lot of money! How do we know you can fulfill these orders? Your account is frozen!"
- Online bookstore suddenly has no income, folds.
It's tempting to point fingers, especially at the bank. But that's shortsighted. Our monetary system has been around for so long, we forget how cumbersome and convoluted it is. Ultimately, every transaction carries a risk of fraud and loss. You shouldn't be suprised if anybody involved, merchant, buyer, bankers, whoever, does their best to avoid getting stuck.And all of them do get stuck occasionally, not just the little guy. Difference is the big guys can spread out the cost of fraud over more transactions.
Re:Consider the source.... (Score:2, Interesting)