I think you are concerned with correctly filling out The Universal Ledger of All Objective Truths. That's not what we're concerned with. We're concerned with f

I think you are concerned with correctly filling out The Universal Ledger of All Objective Truths. That's not what we're concerned with. We're concerned with figuring out what we think is most likely. You are correct that we have insufficient information to know with high confidence who is telling the truth, but if we are in a position to use PayPal, we have to make a judgement anyway. Further, not having enough information to know most things with high confidence is the common case; we usually have to make decisions based on imperfect information. In such cases, we have to use the imperfect information available to us. Prejudices is one word for it; Bayesians call it our priors. For the record, I actually think PayPal is a net-good. I think that most of the negative press they put up with is unwarranted, and is a result of people not understanding how they are allowed to use the service. In addition, I think most people do not appreciate that PayPal is much more tolerant than the alternative that was the only-game-in-town before PayPal, which were merchant accounts with banks.