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So, it's clear from the text that it needs to be understood in the context of the PayPal User Agreement. I tracked that down assuming that it would limit PayPal

So, it's clear from the text that it needs to be understood in the context of the PayPal User Agreement. I tracked that down assuming that it would limit PayPal's ability to charge you to their actual damages. But no, in fact the text is quite shocking: > If you are a seller and receive funds for transactions that violate the Acceptable Use Policy, then in addition to being subject to the above actions you will be liable to PayPal for the amount of PayPal’s damages caused by your violation of the Acceptable Use Policy. You acknowledge and agree that $2,500.00 U.S. dollars per violation of the Acceptable Use Policy is presently a reasonable minimum estimate of PayPal’s actual damages - including, but not limited to, internal administrative costs incurred by PayPal to monitor and track violations, damage to PayPal’s brand and reputation, and penalties imposed upon PayPal by its business partners resulting from a user’s violation - considering all currently existing circumstances, including the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated because, due to the nature of the violations of the Acceptable Use Policy, actual damages would be impractical or extremely difficult to calculate. PayPal may deduct such damages directly from any existing balance in any PayPal account you control. [emphasis is mine] As I read this (not a lawyer) PayPal claims that any violation of their acceptable use policy will result in an a̶u̶t̶o̶m̶a̶t̶i̶c̶ charge of $2500 because that represents the "minimum estimate" of the damage your violation causes them. On top of being completely a completely unacceptable policy, the idea that any violation costs them at least $2500 is complete fucking horseshit, if you'll pardon my explicitness. There is absolutely no way I would ever do business with PayPal as a seller under any circumstances, even if it was my customers' preferred method.

colejohnson66 4y ago
That does not say anything about it being automatic. Just that $2,500 is a "reasonable minimum estimate" (which it obviously isn't), and that PayPal, at their discretion, may impose such a charge on you.
- deleted 4y ago
  [deleted]
- bscphil 4y ago
  You're right. To clarify, what I was trying to imply by "automatic" was just that you will presumably be charged that much regardless of what PayPal's actual damages are. As I see it, it's a punitive fine that they can impose automatically without bothering to calculate actual damages for minor violations of their policies.
- ineptech 4y ago
  IANAL but that sounds like "If we charge you $2500, and you argue that that's too high, you'll lose."
- TomSwirly 4y ago
  Can you explain what incentive PP has _not_ to impose the full $2500 fine? I mean, it's money in their pocket, right?
  - bscphil 4y ago
    Other people have pointed out in this thread that the language of the acceptable use policy is so broad that it arguably violates it to sell a Basic Instinct DVD over the Internet. Given this, PayPal obviously won't actually be pursuing every violation, but rather wants to create as many violators as possible, giving them unlimited power to close the accounts and claim damages against nearly everyone. The people it actually takes this steps against will be those who violate some secret internal policy, presumably. They don't enforce it against every violator because the number of violators means it would destroy their business.
CPLX 4y ago
This policy has been discussed on HN before. It’s extremely cynical, and unique to PayPal’s status as a service that holds money for you. Any service could say that you’ll have to pay $2,500 for violating the TOS if they want to. Instagram could say it, but nobody would give the money to them willingly and since it’s a bullshit clickwrap contract they’d have a hard time finding a sympathetic court to inflict it on you. The problem is that PayPal says it and then doesn’t just shut your account down unaccountably with no human recourse they take thousands of dollars of your own money when they do it, and you’d have to fight them in court for it. It’s a fait accompli situation. No it’s not remotely ethical.
- htrp 4y ago
  Possession is 9/10ths of the law
  - deweyusa 4y ago
    This is nonsense, and typical layman logic when it comes to matters involving abandoned property and theft when on another premises. It is not even remotely inline with reality. In almost any jurisdiction in the US, one has legal recourse when someone takes their money or property. Whether it's in the other's control or not, it's still just as equally defined as theft.
    - DangitBobby 4y ago
      It's not completely nonsense, but maybe it kind of dances around the point. 99% of the time people don't have any legal access whatsoever because it's much too costly. Practically, people only have legal protection in catastrophic scenarios, where they have no choice but to pay exorbitant fees. So good luck getting your property back in 9/10 cases.
    - mlyle 4y ago
      In this case, it's a reasonable approximation. If property is the subject of a reasonable dispute-- e.g. whether a contractual term applies-- whomever is holding the property has the upper hand. Especially if the amount of property/money is small compared to the probable cost of litigation and especially so if one is unlikely to recover legal fees.
metadat 4y ago
They've really taken the "Pal" part out of PayPal. They should rename themselves to PayUs.
lettergram 4y ago
The reason I posted this was the new section - #5. Effectively, they can charge anyone using PayPal $2500 per incident of the following violation after Nov 3, 2022 (why the title was changed I don’t know): > involve the sending, posting or publication of any messages, content or materials that, in PayPal’s sole discretion, (a) are harmful, obscene, harassing or objectionable, (b) depict or appear to depict nudity, sexual or other intimate activities, (c) depict or promote illegal drug use, (d) depict or promote violence, criminal activity, cruelty or self-harm (e) depict, promote or incite hatred or discrimination of protected groups or of individuals or groups based on protected characteristics (e.g. race, religion, gender or gender identity, sexual orientation etc.) (f) presents a risk to consumer safety or (financial) wellbeing, (g) are fraudulent, promote misinformation or are unlawful, (h) infringes the intellectual property rights or other proprietary rights of any party or (i) are otherwise unfit for publication.
- NautilusWave 4y ago
  So PayPal can't be used to sell most contemporary pop songs???
  - lettergram 4y ago
    > (g) are fraudulent, promote misinformation or are unlawful Say I run a UFO spotting website with 300 posts on UFOs. I have a steady stream of revenue of $5,000 per month from subscribers and use PayPal to collect payments; have been for a decade. If paypal labels my website and all its posts as misinformation, given the terms as I understand them I could instantly have $750,000 frozen or withdrawn from my PayPal (and bank account? - unclear). That's 300 posts x $2,500 minimum fine.
  - patmcc 4y ago
    It's completely ridiculous, this language seems to make me selling a DVD of Schindler's List a violation. That depicts violence and discrimination quite a number of times.
  - drak0n1c 4y ago
    It would seem, given the vaguely described religious animosity incitement clause.
morelish 4y ago
At least under UK contract law such a term isn’t valid as pre calculated damage clauses are considered null.
- jpswade 4y ago
  PayPal are basically a law unto themselves.
- izacus 4y ago
  Oh? And how do you intend to prove that against PayPals foreign legal team?
kweks 4y ago
A few examples of these clauses being exercised were on HN: - https://news.ycombinator.com/item?id=29935515 https://news.ycombinator.com/item?id=29935515 - https://news.ycombinator.com/item?id=32739950 https://news.ycombinator.com/item?id=32739950 If it wasn't obvious, cherry-picking bits and pieces from various jurisdictions isn't legal; PayPal deftly deflects any legal challenges to their various dispersed entities making them essentially untouchable if you don't have unlimited resources. If anyone is interested, in the EU, this is their playbook: - Ignore all communications unless it's a C&D from lawyers - Deflect responsibility to PayPal Luxembourg. - They have, or have had literally 90% of LU lawyers retained, meaning your case will not / cannot be accepted by the majority of LU law-firms due to conflict of interest - Deflect onto the CSSF (Luxembourg Monetary Watchdog) - Respond to the CSSF that the complaining company is not based in Luxembourg, which results in the CSSF concluding that they are not the competent structure to rule. - Case closed, your funds have been stolen, and PayPal has artfully dodged the relevant regulatory bodies.
- miga 4y ago
  Can it happen that there is no competent court to rule? When Luxembourg CSSF or court claims they are not competent, that means the case should revert to your location.
- TomSwirly 4y ago
  If what you say is true, the company morally should be torn down and their executive jailed, but legally our society allows and even facilitates such completely immoral and unethical actions. A society that rewards people and organizations for placing themselves above the law is a society on the way down.
  - kweks 4y ago
    The most disappointing element of this whole process was to see PayPal manipulating the entities that are meant to provide regulatory control. In this instance the CSSF is rigorous, but ultimately rigid. They have clearly defined boundaries and protocols. The problem is that companies such as PayPal exploit this to their benefit - which means that they ultimately use the watchdog entities as peons to execute their illegal practices.
fredgrott 4y ago
a question, why would Paypal tell competitors it's breakeven costs per transaction in such a document? I mean it's obvious that is what the number is and represents.
loceng 4y ago
I always find it interesting that around this amount of money is what's selected often for in hopes of a quick payment - as in, for most people, if it's a single one-off event - if they have money - $2.5k is bordering on deciding between wasting your time and paying a lawyer likely up to a similar amount for bare minimum involvement and response from a lawyer, or just paying it and getting it off your mind. If they ding 1,000,000 people with that who are more likely to pay than not, it's a sweet ~$2.5 billion. Is this simply a new revenue stream tactic since they're arguably at their peak and aren't going to gain more market share? Maybe they're just trying to milk the remaining users for as much as they can while they see PayPal being a sinking ship?

colejohnson66 4y ago

That does not say anything about it being automatic. Just that $2,500 is a "reasonable minimum estimate" (which it obviously isn't), and that PayPal, at their discretion, may impose such a charge on you.

deleted 4y ago
[deleted]
bscphil 4y ago
You're right. To clarify, what I was trying to imply by "automatic" was just that you will presumably be charged that much regardless of what PayPal's actual damages are. As I see it, it's a punitive fine that they can impose automatically without bothering to calculate actual damages for minor violations of their policies.
ineptech 4y ago
IANAL but that sounds like "If we charge you $2500, and you argue that that's too high, you'll lose."
TomSwirly 4y ago
Can you explain what incentive PP has _not_ to impose the full $2500 fine? I mean, it's money in their pocket, right?
- bscphil 4y ago
  Other people have pointed out in this thread that the language of the acceptable use policy is so broad that it arguably violates it to sell a Basic Instinct DVD over the Internet. Given this, PayPal obviously won't actually be pursuing every violation, but rather wants to create as many violators as possible, giving them unlimited power to close the accounts and claim damages against nearly everyone. The people it actually takes this steps against will be those who violate some secret internal policy, presumably. They don't enforce it against every violator because the number of violators means it would destroy their business.

CPLX 4y ago

This policy has been discussed on HN before. It’s extremely cynical, and unique to PayPal’s status as a service that holds money for you. Any service could say that you’ll have to pay $2,500 for violating the TOS if they want to. Instagram could say it, but nobody would give the money to them willingly and since it’s a bullshit clickwrap contract they’d have a hard time finding a sympathetic court to inflict it on you. The problem is that PayPal says it and then doesn’t just shut your account down unaccountably with no human recourse they take thousands of dollars of your own money when they do it, and you’d have to fight them in court for it. It’s a fait accompli situation. No it’s not remotely ethical.

htrp 4y ago
Possession is 9/10ths of the law
- deweyusa 4y ago
  This is nonsense, and typical layman logic when it comes to matters involving abandoned property and theft when on another premises. It is not even remotely inline with reality. In almost any jurisdiction in the US, one has legal recourse when someone takes their money or property. Whether it's in the other's control or not, it's still just as equally defined as theft.
  - DangitBobby 4y ago
    It's not completely nonsense, but maybe it kind of dances around the point. 99% of the time people don't have any legal access whatsoever because it's much too costly. Practically, people only have legal protection in catastrophic scenarios, where they have no choice but to pay exorbitant fees. So good luck getting your property back in 9/10 cases.
  - mlyle 4y ago
    In this case, it's a reasonable approximation. If property is the subject of a reasonable dispute-- e.g. whether a contractual term applies-- whomever is holding the property has the upper hand. Especially if the amount of property/money is small compared to the probable cost of litigation and especially so if one is unlikely to recover legal fees.

metadat 4y ago

They've really taken the "Pal" part out of PayPal. They should rename themselves to PayUs.

lettergram 4y ago

The reason I posted this was the new section - #5. Effectively, they can charge anyone using PayPal $2500 per incident of the following violation after Nov 3, 2022 (why the title was changed I don’t know): > involve the sending, posting or publication of any messages, content or materials that, in PayPal’s sole discretion, (a) are harmful, obscene, harassing or objectionable, (b) depict or appear to depict nudity, sexual or other intimate activities, (c) depict or promote illegal drug use, (d) depict or promote violence, criminal activity, cruelty or self-harm (e) depict, promote or incite hatred or discrimination of protected groups or of individuals or groups based on protected characteristics (e.g. race, religion, gender or gender identity, sexual orientation etc.) (f) presents a risk to consumer safety or (financial) wellbeing, (g) are fraudulent, promote misinformation or are unlawful, (h) infringes the intellectual property rights or other proprietary rights of any party or (i) are otherwise unfit for publication.

NautilusWave 4y ago
So PayPal can't be used to sell most contemporary pop songs???
- lettergram 4y ago
  > (g) are fraudulent, promote misinformation or are unlawful Say I run a UFO spotting website with 300 posts on UFOs. I have a steady stream of revenue of $5,000 per month from subscribers and use PayPal to collect payments; have been for a decade. If paypal labels my website and all its posts as misinformation, given the terms as I understand them I could instantly have $750,000 frozen or withdrawn from my PayPal (and bank account? - unclear). That's 300 posts x $2,500 minimum fine.
- patmcc 4y ago
  It's completely ridiculous, this language seems to make me selling a DVD of Schindler's List a violation. That depicts violence and discrimination quite a number of times.
- drak0n1c 4y ago
  It would seem, given the vaguely described religious animosity incitement clause.

morelish 4y ago

At least under UK contract law such a term isn’t valid as pre calculated damage clauses are considered null.

jpswade 4y ago
PayPal are basically a law unto themselves.
izacus 4y ago
Oh? And how do you intend to prove that against PayPals foreign legal team?

kweks 4y ago

A few examples of these clauses being exercised were on HN: - https://news.ycombinator.com/item?id=29935515 https://news.ycombinator.com/item?id=29935515 - https://news.ycombinator.com/item?id=32739950 https://news.ycombinator.com/item?id=32739950 If it wasn't obvious, cherry-picking bits and pieces from various jurisdictions isn't legal; PayPal deftly deflects any legal challenges to their various dispersed entities making them essentially untouchable if you don't have unlimited resources. If anyone is interested, in the EU, this is their playbook: - Ignore all communications unless it's a C&D from lawyers - Deflect responsibility to PayPal Luxembourg. - They have, or have had literally 90% of LU lawyers retained, meaning your case will not / cannot be accepted by the majority of LU law-firms due to conflict of interest - Deflect onto the CSSF (Luxembourg Monetary Watchdog) - Respond to the CSSF that the complaining company is not based in Luxembourg, which results in the CSSF concluding that they are not the competent structure to rule. - Case closed, your funds have been stolen, and PayPal has artfully dodged the relevant regulatory bodies.

miga 4y ago
Can it happen that there is no competent court to rule? When Luxembourg CSSF or court claims they are not competent, that means the case should revert to your location.
TomSwirly 4y ago
If what you say is true, the company morally should be torn down and their executive jailed, but legally our society allows and even facilitates such completely immoral and unethical actions. A society that rewards people and organizations for placing themselves above the law is a society on the way down.
- kweks 4y ago
  The most disappointing element of this whole process was to see PayPal manipulating the entities that are meant to provide regulatory control. In this instance the CSSF is rigorous, but ultimately rigid. They have clearly defined boundaries and protocols. The problem is that companies such as PayPal exploit this to their benefit - which means that they ultimately use the watchdog entities as peons to execute their illegal practices.

fredgrott 4y ago

a question, why would Paypal tell competitors it's breakeven costs per transaction in such a document? I mean it's obvious that is what the number is and represents.

loceng 4y ago

I always find it interesting that around this amount of money is what's selected often for in hopes of a quick payment - as in, for most people, if it's a single one-off event - if they have money - $2.5k is bordering on deciding between wasting your time and paying a lawyer likely up to a similar amount for bare minimum involvement and response from a lawyer, or just paying it and getting it off your mind. If they ding 1,000,000 people with that who are more likely to pay than not, it's a sweet ~$2.5 billion. Is this simply a new revenue stream tactic since they're arguably at their peak and aren't going to gain more market share? Maybe they're just trying to milk the remaining users for as much as they can while they see PayPal being a sinking ship?