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If they wanted companies to be licensed they could just require a license. Instead they require a license and a bond worth millions of dollars in some cases, no
by thinkcomp 15y ago
If they wanted companies to be licensed they could just require a license. Instead they require a license and a bond worth millions of dollars in some cases, nominally to protect consumers. Yet if you have a million consumers in a state and a $1,000,000 bond, that means that if the company defaults, each consumer gets back a dollar.
This doesn't sound like consumer protection to me. It sounds like an artificial barrier to entry.
Also, PayPal has had licenses in all states that require them since its IPO, and clearly there's no connection between this issue and customer service.
- pyre 15y agoWell, there is a (flawed) line of reasoning that says that if you can come up with $1M then you must be more trustworthy than someone that can't.
- deleted 15y ago[deleted]
- zackattack 15y agoI don't think it's that flawed. Would you elaborate?
- pyre 15y agoTrustworthiness is not tied to money, the ability to make large sums of money, or the ability to convince others to loan you money/invest in you.
- tapp 15y agoDepends on context; in some cases it absolutely is. Courts often "trust" people to go free temporarily if they can post bail pending trial. Lenders will "trust" you with their money in the form of a loan if you can post collateral.
- jbooth 15y agoYeah, but "ability to pay a court-ordered settlement" correlates pretty highly with having some cash reserves.
- hessenwolf 15y agoYes... but you don't usually have 1 million customers and owe them all money at once. That's just daft.
- MichaelGG 15y agoAnyone that has a balance in PayPal is owed money by PayPal. So, any account that does more than just send out funds to other accounts (that is, purchaser-only accounts) is owed money. Same for a bank. Any customer with an account that's greater than zero is owed money by the bank. It's not a stretch at all to have a million customers owed money.
- hessenwolf 15y agoMy apologies. The excess over your reserve per customer is unlikely to equal the account value per customer. Wait, are paypal under the auspices of the financial regulator? Who approves their reserving methodology? My spaghetti monster, do they even have to hold a reserve, or can they just spend all your money on the derivatives market?
- eropple 15y agoSounds to me like the bond needs to be a couple tens of millions, then. If you want to get into banking, you had better have the chops to be able to treat your customers correctly. It's not a hard concept.