10 ms·

PayPal Redirects Charitable Contributions Without Consent, Lawsuit Says

301 points by jayzee 10y ago

mayyuen318 10y ago
So it is kind of hijacking those charities to be their members?
djrogers 10y ago
This looks really bad for PayPal. "It did not have an account with the Giving Fund, even though its profile page there included its logo, mission statement and tax identification number." TLDR; PayPal is soliciting donations for over a million charities, most of whom are unaware of this.
- MichaelBurge 10y ago
  It sounds like they already have a team manually collecting information on charities. It wouldn't be so unreasonable for them to manually write a check to the actual charity after 6 months with no collection, which would take most of the meat away from the lawsuit. The free money would probably help their conversion rates with this trick, too.
  - BHSPitMonkey 10y ago
    > It sounds like they already have a team manually collecting information on charities. Probably not. There are many online databases of registered charities already, and I wouldn't be surprised if new ones get scraped into them automatically. It seems likely that PayPal would have used an already existing dataset.
ploggingdev 10y ago
I think this (charity donations) is one of the perfect use cases for the blockchain. To be clear, I am not suggesting Bitcoin, but the underlying blockchain technology. Having publicly visible transactions will be a huge boost to transparency and shady practices like those described in the article just won't fly. Every other month a news article about banks exploring blockchain tech keep popping up in the media and I hope banks find a way to incorporate blockchain technology into the existing system.
- eximius 10y ago
  Blockchain technology is (nearly) useless without the blockchain being public. Banks need stronger distibuted consensus primitives than theyre using now, but blockchain is overkill.
  - detaro 10y ago
    It would be interesting to figure out how much of the process you could make public without compromising the privacy of the donors too much. How much additional risk would be added by just publishing a log of all donations, with just the sender anonymized (with the sender knowing or even choosing the id, so they can verify their donation went through?), and how could that be mitigated?
    - z3t4 10y ago
      With Bitcoin it is almost impossible to figure out who an account belongs to. It's however easy to follow the money as every transaction is public. So while you can see what the charity does with the money, and also confirm that they received it, it's almost impossible for the charity to figure out who sent the donation. An account in Bitcoin is just a long random number. And you can create as many accounts as you like. In order to find out who the account belongs to you have to trace back the money to an exchange, and not only hope they will cooperate, but also that they have not deleted the records of the transfer.
TrinaryWorksToo 10y ago
Man, I donated through this. I didn't know the charity wouldn't get the money.
- Gibbon1 10y ago
  You could write a letter demanding proof that they directed your money properly or refund it.
uladzislau 10y ago
So basically PayPal itself would call it fraud if somebody else would be doing it, right?
- jrcii 10y ago
  Bingo
Animats 10y ago
PayPal is going to lose this one. They're acting as a charity fund-raiser, which is highly regulated due to a long history of flaky fund-raising.[1] PayPal is probably going to claim they're a special snowflake because they're a payment processor or something, but that probably won't fly, because PayPal claimed to the public that they were collecting funds on behalf of a charity. [1] https://oag.ca.gov/charities https://oag.ca.gov/charities
jfim 10y ago
It looks like that the Humble Bundle is also affected by this. On their webpage, it says "Charitable contributions administered by PayPal Giving Fund" and "PayPal Giving Fund retains ultimate discretion and control over the use of the donations it receives from Humble Bundle." Is there a way to know which charities are registered with Paypal?
- LoSboccacc 10y ago
  so I did great to always specify 100% to the devs
- jeff18 10y ago
  Humble Bundle co-founder here. This does not apply to us. The lawsuit refers to a feature PayPal Giving Fund launched a few months ago on their own website, to let people pay charities that are not yet registered. On our side, for charities that are paid via PayPal Giving Fund, we require them to be fully onboarded. For our "choose your own charity" feature, which lets you customize which charity you are supporting, we only allow our customers to choose charities that are fully registered with PPGF. You can verify this by noting that we only support a fraction of the charities listed on PPGF. Why use PPGF (or Tides.org, our backup) in the first place? There are regulations that require you and the charity to do a fair amount of paperwork and register with various states. When you are tiny, you can probably fly under the radar, but when you are approaching $100M raised for charity, it is a good idea to be fully compliant. PPGF is an easy way to maintain sanity, because we can focus on fully complying with every state with the PayPal Giving Fund 501(c)3. PPGF then handles maintaining compliance with the states (+ UK) on their side. However, for this to actually legally work, the PPGF needs to retain control over the funds, hence the scary disclaimer on the site. If they didn't actually pay a charity we work with, which has never happened, we would obviously let the customer know and make it right. We will be updating the disclaimer next week to be less opaque.
  - jfim 10y ago
    Thanks, that makes a lot of sense! :)
everybodyknows 10y ago
Given the founder's opinion, caught on video, that "single-digit millionaires have no effective access to the legal system", perhaps they weren't too concerned. https://theintercept.com/2016/10/31/trump-fan-peter-thiel-says-single-digit-millionaires-have-no-effective-access-to-our-legal-system/ https://theintercept.com/2016/10/31/trump-fan-peter-thiel-sa... But this offense will tried in a different courtroom, the same that VW and Uber have lately been 'splaining themselves in.
paulmd 10y ago
Remember when in the aftermath of Katrina, Paypal seized donations fundraised from Something Awful intended for the Red Cross for "fraud" and then refused to release them even when everyone told them they knew full well what was going on? After they got called onto the mat they finally agreed to release the funds but only to one of their own selected list of charities, all of which had vastly greater overhead expenses. In the end Lowtax finally had to tell them to refund everyone and have them make individual donations instead. Paypal is shit, the best thing you can hope is that you fly under the radar, because the horror stories are very real. They are not a bank, they are an unholy, unregulated "money transmitter" and if they choose to screw you there is nothing you can do about it. Have fun with your mandatory binding arbitration.
- facetube 10y ago
  Absolutely. Paypal attempted to direct the funds to the United Way, a high-overhead charity that they had an existing relationship with. [1] 1: http://www.somethingawful.com/news/paypal-fiasco-summary/ http://www.somethingawful.com/news/paypal-fiasco-summary/
- nolok 10y ago
  FYI, Paypal is declared and regulated as a bank in the EU, declared in Luxembourg. So if something like this happens to you as an european, either sender or receiver, use your rights. > As of July 2007, PayPal provides localized versions of its service to customers in the EU through PayPal (Europe) S.A.R.L. et Cie, SCA., a wholly-owned subsidiary of PayPal that is licensed as a bank in Luxembourg. Whereas: > In the United States, PayPal is licensed as a money transmitter, on a state-by-state basis
  - smartbit 10y ago
    @nolok what is the value of this regulation? Some recent/current examples. 1) During the banking crisis after 2007 EU banks loose 100billions of euro's and the taxpayer mostly payed for their losses. 2) They get 80billon euro's for free every month (quantitative easing) from the ECB which goes down the drain, iow into their profit, not into supporting the economy. 3) Up till the Greece crisis, Greece had to pay high interest rates to the commercial bank because of the risks associated with lending to Greece, but when the shit hit the fan, the commercial banks got their loans redeemed by the IMF/ECB instead of the banks having to write them off. 4) And more recent, N26 is regulated in Germany but had very flakey security https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money. And I can go with al long list... I couldn't agree more that Paypal can not be trusted, in my vocabulary Paypal US stole the money from the designated charities. To say that Palpay is nice and good in Europe because they regulated by Luxemburg banking authorities, IMHO is far stretched.
bfuller 10y ago
Whoever owns PayPal must have had experience running an extortion racket
- Analemma_ 10y ago
  I'm just glad Y Combinator would never do business with a person like that.
  - hkmurakami 10y ago
    Don't the PayPal mafia all hate the current PayPal?
shiggerino 10y ago
The banks are ultimately to blame for the rise of companies like PayPal. Bank transfers are still batch oriented and stuck in the 1960s, they have no excuse for not providing all the services PayPal provides.
jakobegger 10y ago
Why is it, when an established company does something like this, the headline talks about "redirecting contributions", instead of calling it what it is? Why not just say "Paypal Defrauds Donors"?
- linuxkerneldev 10y ago
  I remember that several Xorg developers alleged that Paypal robbed Xorg. I think Xorg never got anything back. https://ubuntuforums.org/archive/index.php/t-1417033.html https://ubuntuforums.org/archive/index.php/t-1417033.html I recall reading a bible quote or might have been another religious book. It said, when a powerless man breaks the law, a crime has been committed, but when a powerful man breaks the law, the law was unclear.
  - tokenizerrr 10y ago
    PayPal absolutely steal money from people. A community I run once tried a donation campaign to pay for hosting costs etc. At some point paypal decided this was fraud (right after someone sent a larger sum of money) and locked the account. Locking an account means they take the money, and there is no way to get it back, apparently. They kept coming up with excuses as to why no one was allowed to access the money and refused to refund people. I wanted to try my hand at fighting them a year later and the account was gone entirely. Bye money.
  - philipov 10y ago
    Because when you have lots of money, you can afford to use the threat of expensive libel lawsuits to keep people in line. The prospect of dragging someone into litigation is enough of a chilling effect they don't even have to commit to it for it to be effective.
    - conflagration 10y ago
      Like a Universal Health Care you could have a "Universal Law Care", a per se legal costs insurance for every natural person. You might have to pay low fares measured in daily rates calculated from your rate of income/wealth for any legal action you take, but nothing that would put your way of life at risk. With automated processes in law becoming more and more of a thing, it would be possible to handle cases faster and on a much finer grained basis, without sucking so much time and resources. Think of a fully-automated arbitration process. There would still be "manual law", where you could always escalate to, if you think Robo-Judge is wrong. Meanwhile wet-ware judicature would also get much more efficient/cheaper by help of automation (I think a wide-spread acceptance of teleconferencing into court would also help). In a scenario like this, such obvious fraud would not be a thing anymore imo. And we could be there soon (except maybe for the Universal Law Care part).
deleted 10y ago
[deleted]
yaur 10y ago
It seems to me that the donors are the little fish here and that charities who's logos were used with the intent to deceive the customer/doner are the ones that can eat PatPal alive.
dandelion_lover 10y ago
PayPal is long known for its fraudulent behavior. Here is a good list of references: https://minifree.org/paypal/ https://minifree.org/paypal/
Nightshaxx 10y ago
So my parents run a non-profit and a recently letter we got from Amazon Smile explains what is happening here. Amazon Smile is a service were you can choose a charity for Amazon to donate to. When you shop at Amazon, a small percentage of that money goes to the selected charity. Recently they got a letter in the mail explaining they had been chosen as recipients of this Amazon Smile money. The thing is, they never chose to be featured on Amazon Smile. Amazon used some database of non-profits (that they had never heard of) in order to present options to customers, then notified the non-profits later. The letter specifically said that in order to collect the money, they needed to create an account with Amazon smile. PayPal is probably just pre-populating their list of charities, failing to fully notify recipients of the donations, then saying "Whoops, I guess we got to do something with the money."
- JoshTriplett 10y ago
  Which non-profit? I'd love to hear more about how Amazon Smile works from the charitable organization's side.
  - Nightshaxx 10y ago
    They just instruct some classes for engaged couples. Nothing that interesting. https://org.amazon.com https://org.amazon.com will probably be of interest to you.
- brohoolio 10y ago
  That probably explains why the amazon smile program included a local charity that caught me by surprise. I didn't think the local office would be technically savvy to sign up for a special amazon program.
- bluetwo 10y ago
  Wow. That just sounds arrogant on the parts of Amazon and PayPal.
  - deleted 10y ago
    [deleted]
solotronics 10y ago
if you have been screwed by PayPal please consider Bitcoin. I started accepting Bitcoin for various things and really love being fully in control of my money. there are no intermediaries!
lolc 10y ago
At least some of the donations would have been made directly to charities had Paypal not advertized in their name. So charities who weren't informed, couldn't get or didn't want a Paypal account were deprived of donations. They did the whole thing to get people to use Paypal but didn't want to put in the effort to run it properly. In effect they ended up defrauding charities. If you put up a sign that says "accepting donations for charity X" and then don't make every effort to donate the collected money to X, it's fraud. "Paypal accused of defrauding charities" would have been the appropriate title.
bostand 10y ago
Paypal is evil, but what are the alternatives? AliPay? WebMoney? Bitcoin??
- happywolf 10y ago
  The good'ol cash or physical check will always work. Don't believe so called the 'new money': you lose all control of your own money and at someone else's mercy.
  - innocenat 10y ago
    I doubt anything physical would work if you are on different continent.
    - happywolf 10y ago
      Then using a credit card will be the best bet as you can file charge-back.
  - vidarh 10y ago
    Physical checks are headed for the dustbin of history. I write at most a check per year these days, and haven't had a new checkbook issued in the last decade. When I moved to the UK 17 years ago, it was the first time I'd seen a check since childhood - they were already "extinct" for most purposes in Norway back then. Since then I've witnessed the rapid decline in check usage in the UK as well. Cash is headed that way too but it'll take longer.
- k-mcgrady 10y ago
  Probably depends where you live. In Europe bank transfers (generally free or very low cost and instant/within 24 hours).
- driverdan 10y ago
  Bitcoin is great. For people who don't use Bitcoin I use Square Cash or Venmo (owned by PayPal).
tyingq 10y ago
The actual lawsuit: https://www.scribd.com/document/340533057/PayPal-Complaint-Feb-28 https://www.scribd.com/document/340533057/PayPal-Complaint-F... Aside from the contributions themselves, they are seeking $1,500 per occurance in "treble damages" and an unspecified amount for punitive damages.
partycoder 10y ago
It seems this needs to be appended to https://en.wikipedia.org/wiki/PayPal#Criticism https://en.wikipedia.org/wiki/PayPal#Criticism
RichardHeart 10y ago
Using charities legally registered names and goodwill to acquire money into your business, with literally no connection whatsoever to those legally registered entities is the definition of fraud. Imagine you started to collect on behalf of the red cross, directly to your personal bank account, then sent the red cross a letter, letting them know that if they wanted to register with you and accept your terms, you might give them some money that you fraudulently collected by abusing their name and good will. Fuck PAYPAL
nannePOPI 10y ago
If a human were to do something like this he would get prison time. Instead since it has been done by "a company", nothing will be done. I wish we, the humanity, would start to treat limited liability only as a financial tool. If something like this is done, it's not the company that must be sued, but the people who made it.
- mdholloway 10y ago
  Agreed in principle. Limited liability is created by statute, and can and should be rolled back as needed to prevent pathological outcomes.
- mikeash 10y ago
  Maybe companies should be "imprisoned" as well for things like this. Obviously you can't actually put them in prison, but you could force them to cease operations for a period of time, which is effectively what you do to a person when you imprison them.
  - greenyoda 10y ago
    Unfortunately, this also hurts the employees of the company, most of whom had no connection to the criminal act. I'd rather hold the decision-makers who perpetrated the crime personally responsible.
    - mikeash 10y ago
      That's no different from imprisoning individuals, where their family or anyone else who depends on them gets hurt. If you depend on a criminal then you'll suffer when they're punished.
davidgerard 10y ago
How is (a) claiming you accept donations on behalf of a charity and (b) not passing them on anything other than blatantly fraudulent? Surely at the least those charities have a claim against PayPal as well.
throwawaylalala 10y ago
If they are a money "transmitter", then how are you allowed to keep a balance? I am ignorant of the lawsaround that, but it seems that's a womp rate sized hole?
intopieces 10y ago
They picked the perfect plaintiff to lead this fight. A woman who did her due dilligence -- compared PayPal's website to the charity websites, donated a significant amount of money, then followed up with those donations. Unless PayPal can prove they repeatedly attempted to disburse the money to the charities by encouraging them to open an account, I don't see how PayPal can come out on top with this one. Truly a garbage company.

301 points by jayzee 10y ago

So it is kind of hijacking those charities to be their members?

This looks really bad for PayPal. "It did not have an account with the Giving Fund, even though its profile page there included its logo, mission statement and tax identification number." TLDR; PayPal is soliciting donations for over a million charities, most of whom are unaware of this.

MichaelBurge 10y ago
It sounds like they already have a team manually collecting information on charities. It wouldn't be so unreasonable for them to manually write a check to the actual charity after 6 months with no collection, which would take most of the meat away from the lawsuit. The free money would probably help their conversion rates with this trick, too.
- BHSPitMonkey 10y ago
  > It sounds like they already have a team manually collecting information on charities. Probably not. There are many online databases of registered charities already, and I wouldn't be surprised if new ones get scraped into them automatically. It seems likely that PayPal would have used an already existing dataset.

ploggingdev 10y ago

I think this (charity donations) is one of the perfect use cases for the blockchain. To be clear, I am not suggesting Bitcoin, but the underlying blockchain technology. Having publicly visible transactions will be a huge boost to transparency and shady practices like those described in the article just won't fly. Every other month a news article about banks exploring blockchain tech keep popping up in the media and I hope banks find a way to incorporate blockchain technology into the existing system.

eximius 10y ago
Blockchain technology is (nearly) useless without the blockchain being public. Banks need stronger distibuted consensus primitives than theyre using now, but blockchain is overkill.
- detaro 10y ago
  It would be interesting to figure out how much of the process you could make public without compromising the privacy of the donors too much. How much additional risk would be added by just publishing a log of all donations, with just the sender anonymized (with the sender knowing or even choosing the id, so they can verify their donation went through?), and how could that be mitigated?
  - z3t4 10y ago
    With Bitcoin it is almost impossible to figure out who an account belongs to. It's however easy to follow the money as every transaction is public. So while you can see what the charity does with the money, and also confirm that they received it, it's almost impossible for the charity to figure out who sent the donation. An account in Bitcoin is just a long random number. And you can create as many accounts as you like. In order to find out who the account belongs to you have to trace back the money to an exchange, and not only hope they will cooperate, but also that they have not deleted the records of the transfer.

TrinaryWorksToo 10y ago

Man, I donated through this. I didn't know the charity wouldn't get the money.

Gibbon1 10y ago
You could write a letter demanding proof that they directed your money properly or refund it.

uladzislau 10y ago

So basically PayPal itself would call it fraud if somebody else would be doing it, right?

jrcii 10y ago
Bingo

Animats 10y ago

PayPal is going to lose this one. They're acting as a charity fund-raiser, which is highly regulated due to a long history of flaky fund-raising.[1] PayPal is probably going to claim they're a special snowflake because they're a payment processor or something, but that probably won't fly, because PayPal claimed to the public that they were collecting funds on behalf of a charity. [1] https://oag.ca.gov/charities https://oag.ca.gov/charities

jfim 10y ago

It looks like that the Humble Bundle is also affected by this. On their webpage, it says "Charitable contributions administered by PayPal Giving Fund" and "PayPal Giving Fund retains ultimate discretion and control over the use of the donations it receives from Humble Bundle." Is there a way to know which charities are registered with Paypal?

LoSboccacc 10y ago
so I did great to always specify 100% to the devs
jeff18 10y ago
Humble Bundle co-founder here. This does not apply to us. The lawsuit refers to a feature PayPal Giving Fund launched a few months ago on their own website, to let people pay charities that are not yet registered. On our side, for charities that are paid via PayPal Giving Fund, we require them to be fully onboarded. For our "choose your own charity" feature, which lets you customize which charity you are supporting, we only allow our customers to choose charities that are fully registered with PPGF. You can verify this by noting that we only support a fraction of the charities listed on PPGF. Why use PPGF (or Tides.org, our backup) in the first place? There are regulations that require you and the charity to do a fair amount of paperwork and register with various states. When you are tiny, you can probably fly under the radar, but when you are approaching $100M raised for charity, it is a good idea to be fully compliant. PPGF is an easy way to maintain sanity, because we can focus on fully complying with every state with the PayPal Giving Fund 501(c)3. PPGF then handles maintaining compliance with the states (+ UK) on their side. However, for this to actually legally work, the PPGF needs to retain control over the funds, hence the scary disclaimer on the site. If they didn't actually pay a charity we work with, which has never happened, we would obviously let the customer know and make it right. We will be updating the disclaimer next week to be less opaque.
- jfim 10y ago
  Thanks, that makes a lot of sense! :)

everybodyknows 10y ago

Given the founder's opinion, caught on video, that "single-digit millionaires have no effective access to the legal system", perhaps they weren't too concerned. https://theintercept.com/2016/10/31/trump-fan-peter-thiel-says-single-digit-millionaires-have-no-effective-access-to-our-legal-system/ https://theintercept.com/2016/10/31/trump-fan-peter-thiel-sa... But this offense will tried in a different courtroom, the same that VW and Uber have lately been 'splaining themselves in.

paulmd 10y ago

Remember when in the aftermath of Katrina, Paypal seized donations fundraised from Something Awful intended for the Red Cross for "fraud" and then refused to release them even when everyone told them they knew full well what was going on? After they got called onto the mat they finally agreed to release the funds but only to one of their own selected list of charities, all of which had vastly greater overhead expenses. In the end Lowtax finally had to tell them to refund everyone and have them make individual donations instead. Paypal is shit, the best thing you can hope is that you fly under the radar, because the horror stories are very real. They are not a bank, they are an unholy, unregulated "money transmitter" and if they choose to screw you there is nothing you can do about it. Have fun with your mandatory binding arbitration.

facetube 10y ago
Absolutely. Paypal attempted to direct the funds to the United Way, a high-overhead charity that they had an existing relationship with. [1] 1: http://www.somethingawful.com/news/paypal-fiasco-summary/ http://www.somethingawful.com/news/paypal-fiasco-summary/
nolok 10y ago
FYI, Paypal is declared and regulated as a bank in the EU, declared in Luxembourg. So if something like this happens to you as an european, either sender or receiver, use your rights. > As of July 2007, PayPal provides localized versions of its service to customers in the EU through PayPal (Europe) S.A.R.L. et Cie, SCA., a wholly-owned subsidiary of PayPal that is licensed as a bank in Luxembourg. Whereas: > In the United States, PayPal is licensed as a money transmitter, on a state-by-state basis
- smartbit 10y ago
  @nolok what is the value of this regulation? Some recent/current examples. 1) During the banking crisis after 2007 EU banks loose 100billions of euro's and the taxpayer mostly payed for their losses. 2) They get 80billon euro's for free every month (quantitative easing) from the ECB which goes down the drain, iow into their profit, not into supporting the economy. 3) Up till the Greece crisis, Greece had to pay high interest rates to the commercial bank because of the risks associated with lending to Greece, but when the shit hit the fan, the commercial banks got their loans redeemed by the IMF/ECB instead of the banks having to write them off. 4) And more recent, N26 is regulated in Germany but had very flakey security https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money. And I can go with al long list... I couldn't agree more that Paypal can not be trusted, in my vocabulary Paypal US stole the money from the designated charities. To say that Palpay is nice and good in Europe because they regulated by Luxemburg banking authorities, IMHO is far stretched.

bfuller 10y ago

Whoever owns PayPal must have had experience running an extortion racket

Analemma_ 10y ago
I'm just glad Y Combinator would never do business with a person like that.
- hkmurakami 10y ago
  Don't the PayPal mafia all hate the current PayPal?

shiggerino 10y ago

The banks are ultimately to blame for the rise of companies like PayPal. Bank transfers are still batch oriented and stuck in the 1960s, they have no excuse for not providing all the services PayPal provides.

jakobegger 10y ago

Why is it, when an established company does something like this, the headline talks about "redirecting contributions", instead of calling it what it is? Why not just say "Paypal Defrauds Donors"?

linuxkerneldev 10y ago
I remember that several Xorg developers alleged that Paypal robbed Xorg. I think Xorg never got anything back. https://ubuntuforums.org/archive/index.php/t-1417033.html https://ubuntuforums.org/archive/index.php/t-1417033.html I recall reading a bible quote or might have been another religious book. It said, when a powerless man breaks the law, a crime has been committed, but when a powerful man breaks the law, the law was unclear.
- tokenizerrr 10y ago
  PayPal absolutely steal money from people. A community I run once tried a donation campaign to pay for hosting costs etc. At some point paypal decided this was fraud (right after someone sent a larger sum of money) and locked the account. Locking an account means they take the money, and there is no way to get it back, apparently. They kept coming up with excuses as to why no one was allowed to access the money and refused to refund people. I wanted to try my hand at fighting them a year later and the account was gone entirely. Bye money.
- philipov 10y ago
  Because when you have lots of money, you can afford to use the threat of expensive libel lawsuits to keep people in line. The prospect of dragging someone into litigation is enough of a chilling effect they don't even have to commit to it for it to be effective.
  - conflagration 10y ago
    Like a Universal Health Care you could have a "Universal Law Care", a per se legal costs insurance for every natural person. You might have to pay low fares measured in daily rates calculated from your rate of income/wealth for any legal action you take, but nothing that would put your way of life at risk. With automated processes in law becoming more and more of a thing, it would be possible to handle cases faster and on a much finer grained basis, without sucking so much time and resources. Think of a fully-automated arbitration process. There would still be "manual law", where you could always escalate to, if you think Robo-Judge is wrong. Meanwhile wet-ware judicature would also get much more efficient/cheaper by help of automation (I think a wide-spread acceptance of teleconferencing into court would also help). In a scenario like this, such obvious fraud would not be a thing anymore imo. And we could be there soon (except maybe for the Universal Law Care part).

deleted 10y ago

[deleted]

yaur 10y ago

It seems to me that the donors are the little fish here and that charities who's logos were used with the intent to deceive the customer/doner are the ones that can eat PatPal alive.

dandelion_lover 10y ago

PayPal is long known for its fraudulent behavior. Here is a good list of references: https://minifree.org/paypal/ https://minifree.org/paypal/

Nightshaxx 10y ago

So my parents run a non-profit and a recently letter we got from Amazon Smile explains what is happening here. Amazon Smile is a service were you can choose a charity for Amazon to donate to. When you shop at Amazon, a small percentage of that money goes to the selected charity. Recently they got a letter in the mail explaining they had been chosen as recipients of this Amazon Smile money. The thing is, they never chose to be featured on Amazon Smile. Amazon used some database of non-profits (that they had never heard of) in order to present options to customers, then notified the non-profits later. The letter specifically said that in order to collect the money, they needed to create an account with Amazon smile. PayPal is probably just pre-populating their list of charities, failing to fully notify recipients of the donations, then saying "Whoops, I guess we got to do something with the money."

JoshTriplett 10y ago
Which non-profit? I'd love to hear more about how Amazon Smile works from the charitable organization's side.
- Nightshaxx 10y ago
  They just instruct some classes for engaged couples. Nothing that interesting. https://org.amazon.com https://org.amazon.com will probably be of interest to you.
brohoolio 10y ago
That probably explains why the amazon smile program included a local charity that caught me by surprise. I didn't think the local office would be technically savvy to sign up for a special amazon program.
bluetwo 10y ago
Wow. That just sounds arrogant on the parts of Amazon and PayPal.
- deleted 10y ago
  [deleted]

solotronics 10y ago

if you have been screwed by PayPal please consider Bitcoin. I started accepting Bitcoin for various things and really love being fully in control of my money. there are no intermediaries!

lolc 10y ago

At least some of the donations would have been made directly to charities had Paypal not advertized in their name. So charities who weren't informed, couldn't get or didn't want a Paypal account were deprived of donations. They did the whole thing to get people to use Paypal but didn't want to put in the effort to run it properly. In effect they ended up defrauding charities. If you put up a sign that says "accepting donations for charity X" and then don't make every effort to donate the collected money to X, it's fraud. "Paypal accused of defrauding charities" would have been the appropriate title.

bostand 10y ago

Paypal is evil, but what are the alternatives? AliPay? WebMoney? Bitcoin??

happywolf 10y ago
The good'ol cash or physical check will always work. Don't believe so called the 'new money': you lose all control of your own money and at someone else's mercy.
- innocenat 10y ago
  I doubt anything physical would work if you are on different continent.
  - happywolf 10y ago
    Then using a credit card will be the best bet as you can file charge-back.
- vidarh 10y ago
  Physical checks are headed for the dustbin of history. I write at most a check per year these days, and haven't had a new checkbook issued in the last decade. When I moved to the UK 17 years ago, it was the first time I'd seen a check since childhood - they were already "extinct" for most purposes in Norway back then. Since then I've witnessed the rapid decline in check usage in the UK as well. Cash is headed that way too but it'll take longer.
k-mcgrady 10y ago
Probably depends where you live. In Europe bank transfers (generally free or very low cost and instant/within 24 hours).
driverdan 10y ago
Bitcoin is great. For people who don't use Bitcoin I use Square Cash or Venmo (owned by PayPal).

tyingq 10y ago

The actual lawsuit: https://www.scribd.com/document/340533057/PayPal-Complaint-Feb-28 https://www.scribd.com/document/340533057/PayPal-Complaint-F... Aside from the contributions themselves, they are seeking $1,500 per occurance in "treble damages" and an unspecified amount for punitive damages.

partycoder 10y ago

It seems this needs to be appended to https://en.wikipedia.org/wiki/PayPal#Criticism https://en.wikipedia.org/wiki/PayPal#Criticism

RichardHeart 10y ago

Using charities legally registered names and goodwill to acquire money into your business, with literally no connection whatsoever to those legally registered entities is the definition of fraud. Imagine you started to collect on behalf of the red cross, directly to your personal bank account, then sent the red cross a letter, letting them know that if they wanted to register with you and accept your terms, you might give them some money that you fraudulently collected by abusing their name and good will. Fuck PAYPAL

nannePOPI 10y ago

If a human were to do something like this he would get prison time. Instead since it has been done by "a company", nothing will be done. I wish we, the humanity, would start to treat limited liability only as a financial tool. If something like this is done, it's not the company that must be sued, but the people who made it.

mdholloway 10y ago
Agreed in principle. Limited liability is created by statute, and can and should be rolled back as needed to prevent pathological outcomes.
mikeash 10y ago
Maybe companies should be "imprisoned" as well for things like this. Obviously you can't actually put them in prison, but you could force them to cease operations for a period of time, which is effectively what you do to a person when you imprison them.
- greenyoda 10y ago
  Unfortunately, this also hurts the employees of the company, most of whom had no connection to the criminal act. I'd rather hold the decision-makers who perpetrated the crime personally responsible.
  - mikeash 10y ago
    That's no different from imprisoning individuals, where their family or anyone else who depends on them gets hurt. If you depend on a criminal then you'll suffer when they're punished.

davidgerard 10y ago

How is (a) claiming you accept donations on behalf of a charity and (b) not passing them on anything other than blatantly fraudulent? Surely at the least those charities have a claim against PayPal as well.

throwawaylalala 10y ago

If they are a money "transmitter", then how are you allowed to keep a balance? I am ignorant of the lawsaround that, but it seems that's a womp rate sized hole?

intopieces 10y ago

They picked the perfect plaintiff to lead this fight. A woman who did her due dilligence -- compared PayPal's website to the charity websites, donated a significant amount of money, then followed up with those donations. Unless PayPal can prove they repeatedly attempted to disburse the money to the charities by encouraging them to open an account, I don't see how PayPal can come out on top with this one. Truly a garbage company.