14 ms·

PayPal penalised for 'deceptive' practices

380 points by uladzislau 11y ago

alyandon 11y ago
I once made a major purchase off eBay and received merchandise that was substantially different than what I ordered. It took 4 months, many exchanges with PayPal via their "dispute center" and many phone calls to have my purchase refunded. They even closed my dispute at one point claiming that I hadn't returned the merchandise because their support staff was too incompetent to check the DHL tracking # on DHL's web site to verify that I had indeed returned the merchandise (at my expense). I will never make a major purchase with PayPal again.
- gr3yh47 11y ago
  you're supposed to handle disputes for ebay merchandise through ebay channels, not directly with paypal. This may have been part of the cause of difficulty.
  - alyandon 11y ago
    Sorry, but you are incorrect. I followed the exact instructions that were provided to me at the time (circa 2009) on eBay's own web site for opening a dispute case with the eBay seller.
WDCDev 11y ago
I had a missed payment on a less than $10 balance and was hit with a $25 overage. I complained, had the overage removed, paid my bill and since then have never used their service again.
rip747 11y ago
About time, but $25M is nothing for them. Nowadays we have all our clients using Stripe for their CC processing, but back in the day, our clients could use anyone they want. One poor soul choose to use PayPal against our insisting he not. Three days before he had to give the security deposit to the convention center where his organization was hosting their conference, PayPal froze the account. I can't express the stress and despair this poor guy had in voice while talking to him, explaining there was nothing that I could do on my end and that he would have to contact PayPal and try to explain the situation and get the funds released. Ultimately the conference went on, but I never followed up to find out how, if he got the funds released, worked something out with the convention center or something.
- aleksandrm 11y ago
  Agreed, $25M is nothing and they should be slapped with a much higher penalty. PayPal is the scummiest company on Earth. A buyer opened a dispute with them, and PayPal robbed me of $2500, tried fighting them for 2 years but eventually gave up.
  - coffeedrinker 11y ago
    PayPal has some serious issues with regards to what you say, but I used it last summer to transfer money from USA to Europe for my daughter and the fee was a fraction of what the bank wanted. Banks can be pretty scummy in their own way.
    - 1_player 11y ago
      Have you ever tried TransferWise? With customers and family around the world, I'm thinking of switching to them to handle transfers instead of Paypal/Stripe. They seem to have the most honest fees around. Disclaimer: not affiliated with them. Just genuinely curious.
      - dhimes 11y ago
        I use them. It's been great so far.
      - toomuchtodo 11y ago
        Bump for TransferWise. They're a treat to work with!
      - gav 11y ago
        I've used Xoom in the past as to send money to family in the UK, it's always been fast and easy. However they charge $4.99 up to $2999, with TransferWise there's no fee and slightly better rates (0.6346 vs. 0.6262). I'm going to try them out next time, thanks for the tip!
      - vezycash 11y ago
        About TransferWise. I checked their site based on your recommendation. However, something bothers me. There's a form on the Top-right corner. "You send," "You Receive." I tried checking how much would be received in dollars if I sent $1000. However, the form wouldn't let me. It doesn't allow comparison between the same currency. It felt shady to me. I've sent this message to them already. But wow! They do support a lot of countries - far more than Stripe. I'm surprised I've never heard of them before.
arbitrage 11y ago
PayPal is not a bank, although people seem to think it is, and they seem to be more than happy to let people think that. It's long overdue for some serious regulatory oversight.
- true_religion 11y ago
  Don't they have quite a bit of oversight since they're a monetary transmitter? What more oversight would be needed?
- icebraining 11y ago
  It is in Europe (registered in Luxembourg).
- deleted 11y ago
  [deleted]
- dangrossman 11y ago
  > It's long overdue for some serious regulatory oversight. It's hard to imagine there being more oversight than the over 200 governments regulating them currently, including ~55 separate agencies in the US. https://www.paypal.com/webapps/mpp/licenses https://www.paypal.com/webapps/mpp/licenses PayPal is a fully licensed and regulated bank in some regions including all of the EU, and is licensed and regulated by each US state it operates in. Many of the startup alternatives people recommend seem to be operating on a "try to grow fast enough that we can afford to operate legally when states start suing us" basis, as they aren't similarly licensed.
- s73v3r 11y ago
  Why aren't they a bank? Because they claim they aren't?
  - dangrossman 11y ago
    Because federal regulators said so over 10 years ago. They don't accept deposits as defined by FDIC, engage in fractional reserve banking, or otherwise meet the definitions of a bank in the US. They're more like an escrow service, holding funds on your behalf in accounts at actual banks. They are a money transmitting entity, which means obtaining 54 state/territory licenses to operate in the entire US, and they hold all of those.
nvk 11y ago
Unrelated, but still a bit shady. They still try to trick me into using back account instead of credit card, even though I've set credit card as default... I know CC processing costs them more, but It's so annoying.
- irl_zebra 11y ago
  This is typical of them. To do my best to take a jab at them every time I can, when I am forced to pay with PayPal, I specifically select my AMEX to pay because it has the highest transaction fees for them.
  - toomuchtodo 11y ago
    > I specifically select my AMEX to pay because it has the highest transaction fees for them. I thought I was the only one.
    - oddevan 11y ago
      Eenope. I also trust AmEx's fraud prevention infinitely more than PayPal's.
  - rip747 11y ago
    with the volume that they do, they aren't paying the fees you think they are.
rlpb 11y ago
> The proposed settlement states that the company will set up a $15m fund to compensate affected customers and pay a further $10m fine to the bureau. Why must there be a fund? Paypal knows exactly who they gave the service to by default, and exactly what interest and other charges they received from them. So why can't they just be ordered to immediately return the full amount to each affected user?
- aeturnum 11y ago
  That may be possible in this case, but the laws are written for the general case. The fund is an approach that allows users with grievances to get relief over a variety of mediums and timescales. Even here, who knows what data paypal has retained about who used the feature and when?
  - rlpb 11y ago
    > Even here, who knows what data paypal has retained about who used the feature and when? They will have records of how they get their income for accounting and tax purposes. If they don't, I expect they'd be in far more trouble with the tax authorities.
seiji 11y ago
Related: why doesn't anybody take down LinkedIn? They run consistently obviously illegal spam/marketing practices. Why do they get a free pass? Is the "mafia" part of PayPal mafia too strong? Too many cross-bred investor attachments all the way down making some services "untouchable" no matter what they do? We need something like the EFF but for out of control tech companies needing to be denounced for the public good.
- arenaninja 11y ago
  LinkedIn has some niche competition. I've seen at least two oil-oriented ones based out of Houston, and a few others elsewhere
  - fs111 11y ago
    xing.de is bigger than linkedin in the German speaking world and has been a profitable business for years. They are way less spammy.
    - deleted 11y ago
      [deleted]
- ohitsdom 11y ago
  I'm missing the LinkedIn comparison. PayPal handles money. Their track record of horrible customer service has caused a lot of financial trouble for people and institutions. What are the complaints with LinkedIn? As far as I know, it's more of spammy contacting behavior. Which I get that's annoying, but not even in the same ballpark as PayPal.
  - logicallee 11y ago
    The claim I heard is (from the perspective of the complaint), that they "use your gmail account [with your nominal permission] and get the names of your contacts, to whom they then 'impersonate' you." (scare quotes because I don't view it this way.) i.e. your contacts will get a message "from you" as though you were asking them to do something. Even though you have not actually taken that action. Personally this is not my perspective, and it doesn't bother me because when I receive these messages it's pretty obviously automated mail from linkedin, and it's pretty obvious that LinkedIn got it from the person's email contacts. It doesn't cause me to think the person actually necessarily took any action or sent that to me themselves. I also haven't been bothered by the volume of it. To me, it's the kind of thing that's a small price to pay for hacking a network of connections together, which is probably a benefit to everyone in it. we need more social networks, not fewer.
baliex 11y ago
I made use of PayPal Credit the other day to defer payment of an item for 14 days. Is this the same thing or something different? Having looked at my transaction history, I don't seem to have been charged anything for the service. Where might I check to be sure?
- daj40 11y ago
  The issue that they've been nailed with isn't so much that they over charged people, its that they signed people up without notifying them. If you are using the service intentionally, then you aren't affected. On another note, I have been using PayPal for years and haven't had any real issues with it. I mean it takes a while for eBay to get the money to me after a sale, but other than that its not bad. Have I just been lucky? Or is anyone else not experiencing problems that others are?
- calinet6 11y ago
  The main issue is that "PayPal Credit" and "PayPal Balance" are nearly indiscernible concepts to the end user, and could cause you to sign up for the "credit" when you really just meant to use your "credits."
hurin 11y ago
Many years ago I tried to sell a World of Warcraft account via. Paypal. I got lots of buyers -- all of whom tried to pay with stolen paypal accounts. After they made a payment I would ask for a photo-copy of their ID, or to wait 3-days to make sure the payment went through properly (Paypal's normalized way of handling this was to mark the Payment as confirmed leaving the seller thinking everything was okay only to reverse it say 3 days later, screwing the seller). If I recall one of the buyers even offered to try a different account when I told them the payment got flagged. In about a week's time I had received $5000 or so worth of transfers (all of them from stolen accounts!) Subsequently Paypal froze my account. I never was able to sell that World of Warcraft account either.
- TorKlingberg 11y ago
  Does PayPal even allow selling things like WoW accounts? Otherwise you don't really have a right to complain.
  - hurin 11y ago
    PayPal isn't a merchant platform -- it's a payment service so yes you can accept personal payments, it might not be covered by seller protection if that's what you mean. That's no excuse for terrible security policies though. I mean literally every buyer had a stolen account!
    - daj40 11y ago
      How were you determining the accounts were stolen? Also, as much as we would love to say companies are responsible for the security of our accounts, losing credentials is also a user issue.
      - hurin 11y ago
        > How were you determining the accounts were stolen? About 3-5 days after each payment was confirmed Paypal would reverse it due to it being unauthorized. More so the payment would show up as confirmed/valid initially, at no point during the process did Paypal make you aware of the possibility of the payment being reversed nor to help you confirm/validate that it was in fact authorized by the account holder. > Also, as much as we would love to say companies are responsible for the security of our accounts, losing credentials is also a user issue. Of course it's a user issue at a certain scale, but when it's that prevalent I am inclined to say that company is primarily at fault. It was just a WoW account, so not a big deal for me, but I'd really hate to be a merchant or someone otherwise relying on Paypal day-to-day, that sounds absolutely horrible.
NelsonMinar 11y ago
This is the product PayPal advertises in every single purchase customers make online. I don't understand why any serious business uses PayPal for payments when the company is injecting an extra step (or two) into the purchase workflow. How many sales do merchants lose because of the interruption?
- Osiris 11y ago
  I sell a software production online. The purchase page has a simple credit card payment form, and off the side is a small "PayPal" button an an alternative payment method. Despite the fact that the PayPal button is tiny compared to the credit card form, a full 2/3 of customers use PayPal to complete the purchase. That's why people use PayPal, because a large percentage of customers prefer it over credit card payments. Also, I prefer PayPal disputes because they don't charge a chargeback fee like credit cards.
  - sombremesa 11y ago
    For me, it's not that I prefer PayPal, it's that I don't want to give my credit card details to a business if I'm not sure they can keep it reasonably secure. And the fewer places I have my card the better. You might get the same results with Amazon Payments, unless you have an international audience.
    - jliptzin 11y ago
      You can use a virtual credit card number for such instances
      - fastball 11y ago
        What's a virtual credit card?
        Domenic_S 11y ago
        Some banks will issue one-time use numbers for your cards, limited to a certain transaction amount and then they're gone. A pretty cool idea, but until they have an app that generates these numbers at the push of a button nobody really uses them. Too much of a hassle.
yc1010 11y ago
I think PayPal has been instrumental in illustrating to people that their money once it is in the paypal system is no longer THEIR money I had trouble before with paypal holding onto funds for months nearly killing my business, when I contacted the Financial Services Ombudsman, their reply was along the lines of "they are a private limited company in this country, they can do what they want"
Chinjut 11y ago
Wow, nothing but complaints about PayPal here. Interesting to keep in mind next time the Elon Musk hagiography starts up again...
- JoeAltmaier 11y ago
  Hey, he stopped having any influence on PayPal behavior years ago. Similar to how Apple decays into senescence when Jobs is not there running it.
  - joosters 11y ago
    That would imply PayPal started out good...
  - marcosdumay 11y ago
    When did he get out? PayPal is misbehaving since essentially forever.
    - myth_buster 11y ago
      Wasn't it Max who worked on Fraud detection/prevention?
    - azernik 11y ago
      Sometime in 2002: PayPal was acquired in September of that year, and he'd already founded SpaceX in June. So, more than a decade, which is pretty "forever" in this industry.
  - FireBeyond 11y ago
    Maybe so. On the flip-side, let's not pretend PayPal was this once benevolent entity that's been corrupted since Musk departed. It has always been sketchy and the subject of much complaint.
- dimino 11y ago
  I've been very wary of PayPal given the vocality of those who've had issues, but I've used it a couple of times, in a couple of different ways, and have seen no issues. I've used PayPal to: * Buy/sell things from eBay (~$2k in transactions) * Send money/receive money from friends (~$5k in transactions) * Use their PayPal card abroad as a pair of primary cards (one in my name, on in my girlfriend's name) ($~2k in transactions in various foreign countries) I even had to settle a disputed transaction from eBay on a sale I made, and though they returned the ~$140 USD to the buyer, since I provided proof of delivery in the form of a tracking number, I was "covered" under their sellers protection policy, and didn't lose any of my money.
calinet6 11y ago
I've noticed and felt uneasy about their UX around Paypal credit. When checking out, the option is "Use Paypal Credit" or "Use Paypal Balance" -- in standard jargon, of having 'credit' or 'credits' at a payment site, to me those mean roughly the same thing. I've almost made the mistake a couple times, but caught myself. To others it surely could be deceptive, and probably did cause errors. Totally scammy. It's really bad. I complained but got no response, and it's not a surprise. I'm glad that this (among other things) didn't fly.
quadrangle 11y ago
!@(*#& I was one of those tricked by this scheme which is 5,000% obviously deceptive. There is ZERO chance that Paypal folks were unaware that people would accidentally use the credit product. I wrote them a complaint and changed the default but never heard back. FUCK YOU Paypal, you MUGGED me and stole money from me. I am CERTAIN they end up getting more than $25m out of this scheme. This settlement just means they have to share the profit with the UK Gov. We need a class action suit in the U.S. demanding they return the late fees they criminally charged people like me.
- atourgates 11y ago
  While I don't share your level of rage, I've used "Paypal Credit" and BillMeLater (before it became Paypal Credit) accidentally several times. For a long time I refused to add a bank account to my PayPal account simply so my credit card would be my default payment option. Then BillMeLater had an attractive promotion, so I used it 1x and paid off my balance before it accrued any interest. Since then, BillMeLater and now PayPal Credit are my default payment options. There's no way to change this, and it's a very consumer-unfriendly practice. I'm glad they're getting fined, and I sincerely hope this results in their allowing user-defined default payment settings.
  - Einstalbert 11y ago
    The fact that "Paypal Credit" is my default payment choice bothers me to no end. If you explicitly select anything else, it demands you log in even after logging in on most sites. I never thought I'd be on the receiving end of the Paypal horror-stick, as I am a consumer and not a merchant, but wow.
- pix64 11y ago
  When I signed up they gave me an option for it to not become the default, but then gave me at least one other page trying to trick me into setting it as the default.
- tim333 11y ago
  > have to share the profit with the UK Gov. Actually not the UK govt. The fine was levied by the CFPB: "The Consumer Financial Protection Bureau (CFPB) is an independent agency of the United States government responsible for consumer protection in the financial sector."
jbrooksuk 11y ago
When I was much younger I was doing freelance work for some guy I was referred. He said he was using his girlfriends account because he doesn't use Paypal himself and this was a one off job. I thought, "yeah, that's fine, cool." Anyway, a while later he disputes that I didn't do the work for him (I did, with evidence) and Paypal take the money back, freeze both mine and his and that's that. They won't re-open my account because it's been associated with a fraudulent account. They tell me that this guy had been using someone else's account and that I should go to the police. The police say that the guy doesn't live at the registered address, never has. And that was the end of it. Even though Paypal knew it wasn't my fault they wouldn't unfreeze my account. That was about 8 years ago and it's only recently I've setup a new account to accept donations for my project. And I did that begrudgingly... I NEVER use Paypal for accepting payments online, it's always Stripe.
- Domenic_S 11y ago
  That's how these things work though. If you ran a brick & mortar store and some guy bought $1000 of items from you with his "girlfriend's" credit card (which turns out later was a stolen card), you'll eat the chargeback AND not get your product returned to you. Anyone who accepts payments of any kind is taking that risk. Stripe/Square/whoever operates the same way. Even cash is a risk - if you get passed counterfeits and don't catch them at first, the secret service will confiscate them and you won't be compensated.
chimeracoder 11y ago
It's ridiculous that Paypal is literally a bank at this point, yet somehow subject to none of the same regulations and consumer (or merchant) protections as one. > PayPal is accused of making the service the default option for new sign-ups without making clear that it was doing so. Different but related: No matter how many times I tell them that I want to pay with my real credit card instead of "direct bank transfer", it never persists. I must have set this as the default in my settings a hundred times. No luck.
- hussong 11y ago
  Funny, I had it the other way round. I wanted paypal to pull the money from my bank account, but the UI would insist on using my credit card (it would always jump back to credit card).
fonnesbeck 11y ago
I closed my PP account 2 years ago and would never consider using the service again. Once upon a time it was a necessary evil, now it is no longer necessary (just evil).
- atourgates 11y ago
  Doesn't this significantly impact your ability to use eBay?
  - juliangregorian 11y ago
    Use what now?
  - yc1010 11y ago
    Amazon marketplace is significantly cheaper and cleaner. Here in Europe a lot of eBay sellers are 100% not paying any VAT either it is only a matter of time before they or ebay endup in serious trouble over that.
  - Karunamon 11y ago
    eBay's gotten pretty awful, too. Fees, awful CS... I've not used the site seriously since the asinine decision to not allow feedback for buyers. They've become downright hostile to people who don't intend to make a living on the site.
ajtaylor 11y ago
Any settlement which allows the company to only pay a fine and not admit wrongdoing is not a deterrent against future wrongdoing. The fine nearly always is far outweighed by the profit. It wouldn't surprise me to discover that the potential for fines are part of the product planning process.
- vidyesh 11y ago
  The fine is $10M the rest $15M is the fund to compensate affected customers.
railsisfails 11y ago
Right now, any other payment company could hold your money, kill your cat, fill your car with stinky waste, spoof rude emails to your friends and family, and finally blow raspberries at you, and it would still be heads and shoulders above the stinkfest of paypal.
- nish1500 11y ago
  I am paying my payment processor 10% - 15% of each transaction in processing and cross border fee, because, I am told: 1. They are small, and don't get good exchange rates 2. My location makes for a long money route, so I pay between 4% - 8% in cross border fee on every transaction The above fee doesn't even include the final transaction and conversion fee when I withdraw the USD balance to my home currency. From where I stand, I would be saving 3% - 5%, or more with PayPal, on every transaction. I am willing to take the risk.
  - tim333 11y ago
    Transferwise when I just looked only charge 1% off interbank for USD to INR. Maybe use Stripe (2.9% + 30¢) for USD and then that?
    - nish1500 11y ago
      Stripe isn't available in my country.
JustSomeNobody 11y ago
Things like this amaze me. I really would like to be a fly on the wall just to see if this is incompetence or if they actively choose to deceive people. I would love to hear the conversations that occur around this. I've never worked for a company that was shady, so this really does fascinate me that companies do this and think they can get away with it (assuming, of course, that this simply was not incompetence).
joshstrange 11y ago
> The eBay-owned company has offered to settle the case, without admitting wrongdoing. I'm getting REALLY sick of this shit. Wish normal people could just pay off the government to avoid facing consequences for their actions...
- benihana 11y ago
  They can. It's called a fine.
  - heynk 11y ago
    Yeah but you're still charged with something and it's still on your record. It would be more like if you could write the gov't a check to 'pretend this never happened', with nothing on your record, and probably a written promise from the gov't that they'll never say anything bad about you.
    - dragonwriter 11y ago
      > Yeah but you're still charged with something and it's still on your record. Not if its a civil settlement. > It would be more like if you could write the gov't a check to 'pretend this never happened', with nothing on your record, and probably a written promise from the gov't that they'll never say anything bad about you. The government says negative things about firms that enter into a settlement without admitting to guilt all the time, including about the specific conduct that led to the investigation that was settled. In fact, in this specific case, the CFPB said all kinds of negative things about PayPal and the actions that led to this settlement in the press release announcing the settlement. [0] So, its hardly at all analogous to "a written promise from the gov't that they'll never say anything bad about you". The consent decree also includes additional restrictions (beyond those in the law) on and oversight of PayPal's behavior going forward, so its also very much not analogous to "pretend this never happened". [0] http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-paypal-for-illegally-signing-up-consumers-for-unwanted-online-credit/ http://www.consumerfinance.gov/newsroom/cfpb-takes-action-ag...
- 11y ago
r2pleasent 11y ago
Paypal has so many things wrong with their company. The majority of employees, even in the business support department, have absolutely no clue what is going on. They will give you an answer to a question, you will call back later, get a new agent, and then you'll get a completely different answer to the same question. Half the time the customer support is clearly just improvising, because the system is such a mess that there are no clear processes for fairly common situations. Let me give an example. A customer on our website makes an order for digital goods. We collect photo ID, check their IP, call them. The customer then opens an unauthorized claim. We call in and outline the information we have. Half the time, the agent will tell us that the information we have collected is irrelevant to an unauthorized dispute. Let me clarify that. The photo ID documents, IP address on file, and phone number of the buyer are considered irrelevant in a claim where the buyer alleges they did not authorize a purchase. Absolutely ridiculous, right? Then magically, if you call back and connect to the right agent, they will actually look at your evidence and use it to help determine the case. These cases can be upwards of $500, and must be extremely common. And yet, somehow, there is no clear standard for what proof we need to collect in order to win an unauthorized dispute. The company is a headache to work with. Half our time is spent verifying and doing risk management in our business, simply due to the horror that is PayPal.
- techaddict009 11y ago
  Why dont you quite them and use service like stripe?
  - troncheadle 11y ago
    Stripe isn't better. Dispute processes with digital goods are really hard. I'm fairly sure that the evidence that you submit (to paypal or stripe) is actually evaluated by the bank that the customer filed a dispute with. I don't think this kind of thing can really be held against the payment processor. Every bank probably has it's own processes and standards and every payment processor likely feels the same frustration that we do. It used to really frustrate me when we would get stripe disputes. Now I have a collection of materials I go out and get, and then just send it out hoping for the best. I try to look at it more like rolling the dice than a business process. It seems to be consistent (in that sending the same materials for similar disputes yields the same result) but it is not at all transparent or an exact science.
daj40 11y ago
Maybe a lot of these issues will be resolved when eBay spins PayPal off? Most of these issues seemed to have really started right around the same time they were acquired.
thewhizkid 11y ago
My account was permanently frozen a few weeks ago with no (valid) explanation. I have $2k sitting in their that I cannot retrieve for 180 days. I also bought an iPhone on Ebay using PayPal weeks before. It turned out to be stolen (i.e. it was killed) and returned it back to the seller immediately. The seller issued me a refund via PayPal using an e-check that not surprisingly bounced. Took me hours on the phone over a few weeks, being transferred back and forth between PayPal and eBay (both parties told me to take it up with the other), in order for PayPal to finally open a ticket to dispute the transaction and force a refund to me. Never again.
abalone 11y ago
"Our focus is on ease of use, clarity..." That's rich. PayPal's business has primarily been based on obfuscating the difference between card payments and bank drafts, and steering consumers to a choice that is not in their best interests. Bank drafts (ACH) are almost all profit for PayPal but much worse for customers, as the consumer protections are weaker, reward programs are nonexistent and there is a risk of overdraft and associated bank penalties. But every time you sign into your PayPal account that you've linked to your bank account, it defaults to paying by bank draft. Every time. There is no preference. They are just hoping that a percentage of their customer base won't notice or bother to switch to paying by card (which is not as easy as it could be).
- colanderman 11y ago
  At one point PayPal's website was so broken in the web browsers I used that it refused to let me log in. This had the brilliant side effect that I was able to use my credit card through them; I never could figure out how not to use ACH when I was logged in.
avarius 11y ago
Fun fact: PayPal's founding CTO, Max Levchin, has since then founded Affirm[1], a credit startup that directly competes with this product. Wonder what he thinks? [1]: https://www.affirm.com https://www.affirm.com
joering2 11y ago
People's lives have been seriously damaged because of this -- why no criminal charges?? This is no difference than being caught with $100MM bag of heist outside the bank and giving cops $1.5MM as a form of penalty. What is also very interesting, is that, yes PayPal is probably one of the most hated tech company in the world, right after Comcast, which I don't believe offers anything outside US. Then why we glorify those like Musk that made its initial fortune off of PayPal sale?? I never heard pointing fingers at PayPal founder, but ultimately should't those in charge be accountable??
- tim333 11y ago
  Ebay acquired Paypal in 2002. If anyone's held accountable it should probably be them rather than Musk.
  - geomark 11y ago
    PayPal's evil ways predate that acquisition. My own bad experience happened before it was owned by eBay. It was the usual - arbitrary freezing of account due to unspecified suspicious activity that they would provide no response about and was going to take six months to resolve. I eventually got my funds out and never kept a balance there again. The "PayPal mafia" is such an ironically apt title for the group that founded it. So proud of their anti-fraud tech which is actually horrid - just sweep up anyone's account for whatever reason and call it successful fraud prevention.
DigitalSea 11y ago
This has been a long time coming in my opinion, but $25m is nothing for Paypal. I have had my fair share of troubles over the years, but none worse than the time I got paid for doing some freelance work into my Paypal account, I ended up with a balance of around $8k and it took me 3 months to get it released. I went through their ID process, sent them stuff and would wait a week only to be told to send it again. The problem with Paypal is they are too big to care. They've essentially become a bank, nobody knows what is going on, you get passed on from department to department when you need answers and they are always quick to freeze your Paypal balance when they want you to do something or want to insinuate you have done something wrong. I would have slapped them with a $100m penalty, $25m is just too little to make any kind of impact or different to Paypal.
random3 11y ago
PayPal said I can't change the country on the account but instead have to close it and open a new one. I closed the account and let them know I'm not opening a new and it's not (only) because of that inconvenience, but for all the crap that I keep reading they do to other users. It my mind it's a crappy company and the only impactful way you can express that is by not using it.
analog31 11y ago
This is only an anecdote, but I use PP to process payments for my side-business, selling a small gadget for a fairly specialized market. My experience has been overwhelmingly positive. And I closely monitor traffic on web forums for comments from customers, which are fairly frequent, so I think I'd know if PP had negatively affected their experience, or if they were hesitant to buy my product due to PP. Most of the complaints that I've read about, concerning PP, have to do with the eBay side of the equation. And it probably helps in my case that I sell a tangible good at a pretty modest price. I don't have an eBay store, but sell through my personal web page and hand-crafted web order form. Simply based on the my little corner of the market, it wouldn't break my heart if eBay and PP split up. Two benefits of PP for me, both are kinda weird: 1. I can just download the entire year's list of transactions, dump it into a spreadsheet, add some more columns, and it becomes my ledger. I spend no more than a few hours a year on accounting. 2. PP has a deal with the post office. You can generate a first class shipping label from your transaction, whereas the post office website only offers priority mail and above, so PP reduces my shipping costs. And I've also had fabulous service from the post office, so maybe I'm just a freak. ;-) With all this said, I can't discount the horror stories. It's useful information, since I certainly wouldn't want a decline in PP's reputation to affect the trust that people put into my own business.
atmosx 11y ago
Hm paypal. I used my account last month. I used paypal regularly to make online payments (never in order to receive money). I had no major problem, only strange thing is that... In order to un-subscribe from services (e.g. like the NBA league pass, which I wanted for a month, not lifetime) I need to follow a step-by-step tutorial because the subscriptions listing is literally hidden.

380 points by uladzislau 11y ago

I once made a major purchase off eBay and received merchandise that was substantially different than what I ordered. It took 4 months, many exchanges with PayPal via their "dispute center" and many phone calls to have my purchase refunded. They even closed my dispute at one point claiming that I hadn't returned the merchandise because their support staff was too incompetent to check the DHL tracking # on DHL's web site to verify that I had indeed returned the merchandise (at my expense). I will never make a major purchase with PayPal again.

gr3yh47 11y ago
you're supposed to handle disputes for ebay merchandise through ebay channels, not directly with paypal. This may have been part of the cause of difficulty.
- alyandon 11y ago
  Sorry, but you are incorrect. I followed the exact instructions that were provided to me at the time (circa 2009) on eBay's own web site for opening a dispute case with the eBay seller.

WDCDev 11y ago

I had a missed payment on a less than $10 balance and was hit with a $25 overage. I complained, had the overage removed, paid my bill and since then have never used their service again.

rip747 11y ago

About time, but $25M is nothing for them. Nowadays we have all our clients using Stripe for their CC processing, but back in the day, our clients could use anyone they want. One poor soul choose to use PayPal against our insisting he not. Three days before he had to give the security deposit to the convention center where his organization was hosting their conference, PayPal froze the account. I can't express the stress and despair this poor guy had in voice while talking to him, explaining there was nothing that I could do on my end and that he would have to contact PayPal and try to explain the situation and get the funds released. Ultimately the conference went on, but I never followed up to find out how, if he got the funds released, worked something out with the convention center or something.

aleksandrm 11y ago
Agreed, $25M is nothing and they should be slapped with a much higher penalty. PayPal is the scummiest company on Earth. A buyer opened a dispute with them, and PayPal robbed me of $2500, tried fighting them for 2 years but eventually gave up.
- coffeedrinker 11y ago
  PayPal has some serious issues with regards to what you say, but I used it last summer to transfer money from USA to Europe for my daughter and the fee was a fraction of what the bank wanted. Banks can be pretty scummy in their own way.
  - 1_player 11y ago
    Have you ever tried TransferWise? With customers and family around the world, I'm thinking of switching to them to handle transfers instead of Paypal/Stripe. They seem to have the most honest fees around. Disclaimer: not affiliated with them. Just genuinely curious.
    - dhimes 11y ago
      I use them. It's been great so far.
    - toomuchtodo 11y ago
      Bump for TransferWise. They're a treat to work with!
    - gav 11y ago
      I've used Xoom in the past as to send money to family in the UK, it's always been fast and easy. However they charge $4.99 up to $2999, with TransferWise there's no fee and slightly better rates (0.6346 vs. 0.6262). I'm going to try them out next time, thanks for the tip!
    - vezycash 11y ago
      About TransferWise. I checked their site based on your recommendation. However, something bothers me. There's a form on the Top-right corner. "You send," "You Receive." I tried checking how much would be received in dollars if I sent $1000. However, the form wouldn't let me. It doesn't allow comparison between the same currency. It felt shady to me. I've sent this message to them already. But wow! They do support a lot of countries - far more than Stripe. I'm surprised I've never heard of them before.

arbitrage 11y ago

PayPal is not a bank, although people seem to think it is, and they seem to be more than happy to let people think that. It's long overdue for some serious regulatory oversight.

true_religion 11y ago
Don't they have quite a bit of oversight since they're a monetary transmitter? What more oversight would be needed?
icebraining 11y ago
It is in Europe (registered in Luxembourg).
deleted 11y ago
[deleted]
dangrossman 11y ago
> It's long overdue for some serious regulatory oversight. It's hard to imagine there being more oversight than the over 200 governments regulating them currently, including ~55 separate agencies in the US. https://www.paypal.com/webapps/mpp/licenses https://www.paypal.com/webapps/mpp/licenses PayPal is a fully licensed and regulated bank in some regions including all of the EU, and is licensed and regulated by each US state it operates in. Many of the startup alternatives people recommend seem to be operating on a "try to grow fast enough that we can afford to operate legally when states start suing us" basis, as they aren't similarly licensed.
s73v3r 11y ago
Why aren't they a bank? Because they claim they aren't?
- dangrossman 11y ago
  Because federal regulators said so over 10 years ago. They don't accept deposits as defined by FDIC, engage in fractional reserve banking, or otherwise meet the definitions of a bank in the US. They're more like an escrow service, holding funds on your behalf in accounts at actual banks. They are a money transmitting entity, which means obtaining 54 state/territory licenses to operate in the entire US, and they hold all of those.

nvk 11y ago

Unrelated, but still a bit shady. They still try to trick me into using back account instead of credit card, even though I've set credit card as default... I know CC processing costs them more, but It's so annoying.

irl_zebra 11y ago
This is typical of them. To do my best to take a jab at them every time I can, when I am forced to pay with PayPal, I specifically select my AMEX to pay because it has the highest transaction fees for them.
- toomuchtodo 11y ago
  > I specifically select my AMEX to pay because it has the highest transaction fees for them. I thought I was the only one.
  - oddevan 11y ago
    Eenope. I also trust AmEx's fraud prevention infinitely more than PayPal's.
- rip747 11y ago
  with the volume that they do, they aren't paying the fees you think they are.

rlpb 11y ago

> The proposed settlement states that the company will set up a $15m fund to compensate affected customers and pay a further $10m fine to the bureau. Why must there be a fund? Paypal knows exactly who they gave the service to by default, and exactly what interest and other charges they received from them. So why can't they just be ordered to immediately return the full amount to each affected user?

aeturnum 11y ago
That may be possible in this case, but the laws are written for the general case. The fund is an approach that allows users with grievances to get relief over a variety of mediums and timescales. Even here, who knows what data paypal has retained about who used the feature and when?
- rlpb 11y ago
  > Even here, who knows what data paypal has retained about who used the feature and when? They will have records of how they get their income for accounting and tax purposes. If they don't, I expect they'd be in far more trouble with the tax authorities.

seiji 11y ago

Related: why doesn't anybody take down LinkedIn? They run consistently obviously illegal spam/marketing practices. Why do they get a free pass? Is the "mafia" part of PayPal mafia too strong? Too many cross-bred investor attachments all the way down making some services "untouchable" no matter what they do? We need something like the EFF but for out of control tech companies needing to be denounced for the public good.

arenaninja 11y ago
LinkedIn has some niche competition. I've seen at least two oil-oriented ones based out of Houston, and a few others elsewhere
- fs111 11y ago
  xing.de is bigger than linkedin in the German speaking world and has been a profitable business for years. They are way less spammy.
  - deleted 11y ago
    [deleted]
ohitsdom 11y ago
I'm missing the LinkedIn comparison. PayPal handles money. Their track record of horrible customer service has caused a lot of financial trouble for people and institutions. What are the complaints with LinkedIn? As far as I know, it's more of spammy contacting behavior. Which I get that's annoying, but not even in the same ballpark as PayPal.
- logicallee 11y ago
  The claim I heard is (from the perspective of the complaint), that they "use your gmail account [with your nominal permission] and get the names of your contacts, to whom they then 'impersonate' you." (scare quotes because I don't view it this way.) i.e. your contacts will get a message "from you" as though you were asking them to do something. Even though you have not actually taken that action. Personally this is not my perspective, and it doesn't bother me because when I receive these messages it's pretty obviously automated mail from linkedin, and it's pretty obvious that LinkedIn got it from the person's email contacts. It doesn't cause me to think the person actually necessarily took any action or sent that to me themselves. I also haven't been bothered by the volume of it. To me, it's the kind of thing that's a small price to pay for hacking a network of connections together, which is probably a benefit to everyone in it. we need more social networks, not fewer.

baliex 11y ago

I made use of PayPal Credit the other day to defer payment of an item for 14 days. Is this the same thing or something different? Having looked at my transaction history, I don't seem to have been charged anything for the service. Where might I check to be sure?

daj40 11y ago
The issue that they've been nailed with isn't so much that they over charged people, its that they signed people up without notifying them. If you are using the service intentionally, then you aren't affected. On another note, I have been using PayPal for years and haven't had any real issues with it. I mean it takes a while for eBay to get the money to me after a sale, but other than that its not bad. Have I just been lucky? Or is anyone else not experiencing problems that others are?
calinet6 11y ago
The main issue is that "PayPal Credit" and "PayPal Balance" are nearly indiscernible concepts to the end user, and could cause you to sign up for the "credit" when you really just meant to use your "credits."

hurin 11y ago

Many years ago I tried to sell a World of Warcraft account via. Paypal. I got lots of buyers -- all of whom tried to pay with stolen paypal accounts. After they made a payment I would ask for a photo-copy of their ID, or to wait 3-days to make sure the payment went through properly (Paypal's normalized way of handling this was to mark the Payment as confirmed leaving the seller thinking everything was okay only to reverse it say 3 days later, screwing the seller). If I recall one of the buyers even offered to try a different account when I told them the payment got flagged. In about a week's time I had received $5000 or so worth of transfers (all of them from stolen accounts!) Subsequently Paypal froze my account. I never was able to sell that World of Warcraft account either.

TorKlingberg 11y ago
Does PayPal even allow selling things like WoW accounts? Otherwise you don't really have a right to complain.
- hurin 11y ago
  PayPal isn't a merchant platform -- it's a payment service so yes you can accept personal payments, it might not be covered by seller protection if that's what you mean. That's no excuse for terrible security policies though. I mean literally every buyer had a stolen account!
  - daj40 11y ago
    How were you determining the accounts were stolen? Also, as much as we would love to say companies are responsible for the security of our accounts, losing credentials is also a user issue.
    - hurin 11y ago
      > How were you determining the accounts were stolen? About 3-5 days after each payment was confirmed Paypal would reverse it due to it being unauthorized. More so the payment would show up as confirmed/valid initially, at no point during the process did Paypal make you aware of the possibility of the payment being reversed nor to help you confirm/validate that it was in fact authorized by the account holder. > Also, as much as we would love to say companies are responsible for the security of our accounts, losing credentials is also a user issue. Of course it's a user issue at a certain scale, but when it's that prevalent I am inclined to say that company is primarily at fault. It was just a WoW account, so not a big deal for me, but I'd really hate to be a merchant or someone otherwise relying on Paypal day-to-day, that sounds absolutely horrible.

NelsonMinar 11y ago

This is the product PayPal advertises in every single purchase customers make online. I don't understand why any serious business uses PayPal for payments when the company is injecting an extra step (or two) into the purchase workflow. How many sales do merchants lose because of the interruption?

Osiris 11y ago
I sell a software production online. The purchase page has a simple credit card payment form, and off the side is a small "PayPal" button an an alternative payment method. Despite the fact that the PayPal button is tiny compared to the credit card form, a full 2/3 of customers use PayPal to complete the purchase. That's why people use PayPal, because a large percentage of customers prefer it over credit card payments. Also, I prefer PayPal disputes because they don't charge a chargeback fee like credit cards.
- sombremesa 11y ago
  For me, it's not that I prefer PayPal, it's that I don't want to give my credit card details to a business if I'm not sure they can keep it reasonably secure. And the fewer places I have my card the better. You might get the same results with Amazon Payments, unless you have an international audience.
  - jliptzin 11y ago
    You can use a virtual credit card number for such instances
    - fastball 11y ago
      What's a virtual credit card?
      - Domenic_S 11y ago
        Some banks will issue one-time use numbers for your cards, limited to a certain transaction amount and then they're gone. A pretty cool idea, but until they have an app that generates these numbers at the push of a button nobody really uses them. Too much of a hassle.

yc1010 11y ago

I think PayPal has been instrumental in illustrating to people that their money once it is in the paypal system is no longer THEIR money I had trouble before with paypal holding onto funds for months nearly killing my business, when I contacted the Financial Services Ombudsman, their reply was along the lines of "they are a private limited company in this country, they can do what they want"

Chinjut 11y ago

Wow, nothing but complaints about PayPal here. Interesting to keep in mind next time the Elon Musk hagiography starts up again...

JoeAltmaier 11y ago
Hey, he stopped having any influence on PayPal behavior years ago. Similar to how Apple decays into senescence when Jobs is not there running it.
- joosters 11y ago
  That would imply PayPal started out good...
- marcosdumay 11y ago
  When did he get out? PayPal is misbehaving since essentially forever.
  - myth_buster 11y ago
    Wasn't it Max who worked on Fraud detection/prevention?
  - azernik 11y ago
    Sometime in 2002: PayPal was acquired in September of that year, and he'd already founded SpaceX in June. So, more than a decade, which is pretty "forever" in this industry.
- FireBeyond 11y ago
  Maybe so. On the flip-side, let's not pretend PayPal was this once benevolent entity that's been corrupted since Musk departed. It has always been sketchy and the subject of much complaint.
dimino 11y ago
I've been very wary of PayPal given the vocality of those who've had issues, but I've used it a couple of times, in a couple of different ways, and have seen no issues. I've used PayPal to: * Buy/sell things from eBay (~$2k in transactions) * Send money/receive money from friends (~$5k in transactions) * Use their PayPal card abroad as a pair of primary cards (one in my name, on in my girlfriend's name) ($~2k in transactions in various foreign countries) I even had to settle a disputed transaction from eBay on a sale I made, and though they returned the ~$140 USD to the buyer, since I provided proof of delivery in the form of a tracking number, I was "covered" under their sellers protection policy, and didn't lose any of my money.

calinet6 11y ago

I've noticed and felt uneasy about their UX around Paypal credit. When checking out, the option is "Use Paypal Credit" or "Use Paypal Balance" -- in standard jargon, of having 'credit' or 'credits' at a payment site, to me those mean roughly the same thing. I've almost made the mistake a couple times, but caught myself. To others it surely could be deceptive, and probably did cause errors. Totally scammy. It's really bad. I complained but got no response, and it's not a surprise. I'm glad that this (among other things) didn't fly.

quadrangle 11y ago

!@(*#& I was one of those tricked by this scheme which is 5,000% obviously deceptive. There is ZERO chance that Paypal folks were unaware that people would accidentally use the credit product. I wrote them a complaint and changed the default but never heard back. FUCK YOU Paypal, you MUGGED me and stole money from me. I am CERTAIN they end up getting more than $25m out of this scheme. This settlement just means they have to share the profit with the UK Gov. We need a class action suit in the U.S. demanding they return the late fees they criminally charged people like me.

atourgates 11y ago
While I don't share your level of rage, I've used "Paypal Credit" and BillMeLater (before it became Paypal Credit) accidentally several times. For a long time I refused to add a bank account to my PayPal account simply so my credit card would be my default payment option. Then BillMeLater had an attractive promotion, so I used it 1x and paid off my balance before it accrued any interest. Since then, BillMeLater and now PayPal Credit are my default payment options. There's no way to change this, and it's a very consumer-unfriendly practice. I'm glad they're getting fined, and I sincerely hope this results in their allowing user-defined default payment settings.
- Einstalbert 11y ago
  The fact that "Paypal Credit" is my default payment choice bothers me to no end. If you explicitly select anything else, it demands you log in even after logging in on most sites. I never thought I'd be on the receiving end of the Paypal horror-stick, as I am a consumer and not a merchant, but wow.
pix64 11y ago
When I signed up they gave me an option for it to not become the default, but then gave me at least one other page trying to trick me into setting it as the default.
tim333 11y ago
> have to share the profit with the UK Gov. Actually not the UK govt. The fine was levied by the CFPB: "The Consumer Financial Protection Bureau (CFPB) is an independent agency of the United States government responsible for consumer protection in the financial sector."

jbrooksuk 11y ago

When I was much younger I was doing freelance work for some guy I was referred. He said he was using his girlfriends account because he doesn't use Paypal himself and this was a one off job. I thought, "yeah, that's fine, cool." Anyway, a while later he disputes that I didn't do the work for him (I did, with evidence) and Paypal take the money back, freeze both mine and his and that's that. They won't re-open my account because it's been associated with a fraudulent account. They tell me that this guy had been using someone else's account and that I should go to the police. The police say that the guy doesn't live at the registered address, never has. And that was the end of it. Even though Paypal knew it wasn't my fault they wouldn't unfreeze my account. That was about 8 years ago and it's only recently I've setup a new account to accept donations for my project. And I did that begrudgingly... I NEVER use Paypal for accepting payments online, it's always Stripe.

Domenic_S 11y ago
That's how these things work though. If you ran a brick & mortar store and some guy bought $1000 of items from you with his "girlfriend's" credit card (which turns out later was a stolen card), you'll eat the chargeback AND not get your product returned to you. Anyone who accepts payments of any kind is taking that risk. Stripe/Square/whoever operates the same way. Even cash is a risk - if you get passed counterfeits and don't catch them at first, the secret service will confiscate them and you won't be compensated.

chimeracoder 11y ago

It's ridiculous that Paypal is literally a bank at this point, yet somehow subject to none of the same regulations and consumer (or merchant) protections as one. > PayPal is accused of making the service the default option for new sign-ups without making clear that it was doing so. Different but related: No matter how many times I tell them that I want to pay with my real credit card instead of "direct bank transfer", it never persists. I must have set this as the default in my settings a hundred times. No luck.

hussong 11y ago
Funny, I had it the other way round. I wanted paypal to pull the money from my bank account, but the UI would insist on using my credit card (it would always jump back to credit card).

fonnesbeck 11y ago

I closed my PP account 2 years ago and would never consider using the service again. Once upon a time it was a necessary evil, now it is no longer necessary (just evil).

atourgates 11y ago
Doesn't this significantly impact your ability to use eBay?
- juliangregorian 11y ago
  Use what now?
- yc1010 11y ago
  Amazon marketplace is significantly cheaper and cleaner. Here in Europe a lot of eBay sellers are 100% not paying any VAT either it is only a matter of time before they or ebay endup in serious trouble over that.
- Karunamon 11y ago
  eBay's gotten pretty awful, too. Fees, awful CS... I've not used the site seriously since the asinine decision to not allow feedback for buyers. They've become downright hostile to people who don't intend to make a living on the site.

ajtaylor 11y ago

Any settlement which allows the company to only pay a fine and not admit wrongdoing is not a deterrent against future wrongdoing. The fine nearly always is far outweighed by the profit. It wouldn't surprise me to discover that the potential for fines are part of the product planning process.

vidyesh 11y ago
The fine is $10M the rest $15M is the fund to compensate affected customers.

railsisfails 11y ago

Right now, any other payment company could hold your money, kill your cat, fill your car with stinky waste, spoof rude emails to your friends and family, and finally blow raspberries at you, and it would still be heads and shoulders above the stinkfest of paypal.

nish1500 11y ago
I am paying my payment processor 10% - 15% of each transaction in processing and cross border fee, because, I am told: 1. They are small, and don't get good exchange rates 2. My location makes for a long money route, so I pay between 4% - 8% in cross border fee on every transaction The above fee doesn't even include the final transaction and conversion fee when I withdraw the USD balance to my home currency. From where I stand, I would be saving 3% - 5%, or more with PayPal, on every transaction. I am willing to take the risk.
- tim333 11y ago
  Transferwise when I just looked only charge 1% off interbank for USD to INR. Maybe use Stripe (2.9% + 30¢) for USD and then that?
  - nish1500 11y ago
    Stripe isn't available in my country.

JustSomeNobody 11y ago

Things like this amaze me. I really would like to be a fly on the wall just to see if this is incompetence or if they actively choose to deceive people. I would love to hear the conversations that occur around this. I've never worked for a company that was shady, so this really does fascinate me that companies do this and think they can get away with it (assuming, of course, that this simply was not incompetence).

joshstrange 11y ago

> The eBay-owned company has offered to settle the case, without admitting wrongdoing. I'm getting REALLY sick of this shit. Wish normal people could just pay off the government to avoid facing consequences for their actions...

benihana 11y ago
They can. It's called a fine.
- heynk 11y ago
  Yeah but you're still charged with something and it's still on your record. It would be more like if you could write the gov't a check to 'pretend this never happened', with nothing on your record, and probably a written promise from the gov't that they'll never say anything bad about you.
  - dragonwriter 11y ago
    > Yeah but you're still charged with something and it's still on your record. Not if its a civil settlement. > It would be more like if you could write the gov't a check to 'pretend this never happened', with nothing on your record, and probably a written promise from the gov't that they'll never say anything bad about you. The government says negative things about firms that enter into a settlement without admitting to guilt all the time, including about the specific conduct that led to the investigation that was settled. In fact, in this specific case, the CFPB said all kinds of negative things about PayPal and the actions that led to this settlement in the press release announcing the settlement. [0] So, its hardly at all analogous to "a written promise from the gov't that they'll never say anything bad about you". The consent decree also includes additional restrictions (beyond those in the law) on and oversight of PayPal's behavior going forward, so its also very much not analogous to "pretend this never happened". [0] http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-paypal-for-illegally-signing-up-consumers-for-unwanted-online-credit/ http://www.consumerfinance.gov/newsroom/cfpb-takes-action-ag...
11y ago

r2pleasent 11y ago

Paypal has so many things wrong with their company. The majority of employees, even in the business support department, have absolutely no clue what is going on. They will give you an answer to a question, you will call back later, get a new agent, and then you'll get a completely different answer to the same question. Half the time the customer support is clearly just improvising, because the system is such a mess that there are no clear processes for fairly common situations. Let me give an example. A customer on our website makes an order for digital goods. We collect photo ID, check their IP, call them. The customer then opens an unauthorized claim. We call in and outline the information we have. Half the time, the agent will tell us that the information we have collected is irrelevant to an unauthorized dispute. Let me clarify that. The photo ID documents, IP address on file, and phone number of the buyer are considered irrelevant in a claim where the buyer alleges they did not authorize a purchase. Absolutely ridiculous, right? Then magically, if you call back and connect to the right agent, they will actually look at your evidence and use it to help determine the case. These cases can be upwards of $500, and must be extremely common. And yet, somehow, there is no clear standard for what proof we need to collect in order to win an unauthorized dispute. The company is a headache to work with. Half our time is spent verifying and doing risk management in our business, simply due to the horror that is PayPal.

techaddict009 11y ago
Why dont you quite them and use service like stripe?
- troncheadle 11y ago
  Stripe isn't better. Dispute processes with digital goods are really hard. I'm fairly sure that the evidence that you submit (to paypal or stripe) is actually evaluated by the bank that the customer filed a dispute with. I don't think this kind of thing can really be held against the payment processor. Every bank probably has it's own processes and standards and every payment processor likely feels the same frustration that we do. It used to really frustrate me when we would get stripe disputes. Now I have a collection of materials I go out and get, and then just send it out hoping for the best. I try to look at it more like rolling the dice than a business process. It seems to be consistent (in that sending the same materials for similar disputes yields the same result) but it is not at all transparent or an exact science.

daj40 11y ago

Maybe a lot of these issues will be resolved when eBay spins PayPal off? Most of these issues seemed to have really started right around the same time they were acquired.

thewhizkid 11y ago

My account was permanently frozen a few weeks ago with no (valid) explanation. I have $2k sitting in their that I cannot retrieve for 180 days. I also bought an iPhone on Ebay using PayPal weeks before. It turned out to be stolen (i.e. it was killed) and returned it back to the seller immediately. The seller issued me a refund via PayPal using an e-check that not surprisingly bounced. Took me hours on the phone over a few weeks, being transferred back and forth between PayPal and eBay (both parties told me to take it up with the other), in order for PayPal to finally open a ticket to dispute the transaction and force a refund to me. Never again.

abalone 11y ago

"Our focus is on ease of use, clarity..." That's rich. PayPal's business has primarily been based on obfuscating the difference between card payments and bank drafts, and steering consumers to a choice that is not in their best interests. Bank drafts (ACH) are almost all profit for PayPal but much worse for customers, as the consumer protections are weaker, reward programs are nonexistent and there is a risk of overdraft and associated bank penalties. But every time you sign into your PayPal account that you've linked to your bank account, it defaults to paying by bank draft. Every time. There is no preference. They are just hoping that a percentage of their customer base won't notice or bother to switch to paying by card (which is not as easy as it could be).

colanderman 11y ago
At one point PayPal's website was so broken in the web browsers I used that it refused to let me log in. This had the brilliant side effect that I was able to use my credit card through them; I never could figure out how not to use ACH when I was logged in.

avarius 11y ago

Fun fact: PayPal's founding CTO, Max Levchin, has since then founded Affirm[1], a credit startup that directly competes with this product. Wonder what he thinks? [1]: https://www.affirm.com https://www.affirm.com

joering2 11y ago

People's lives have been seriously damaged because of this -- why no criminal charges?? This is no difference than being caught with $100MM bag of heist outside the bank and giving cops $1.5MM as a form of penalty. What is also very interesting, is that, yes PayPal is probably one of the most hated tech company in the world, right after Comcast, which I don't believe offers anything outside US. Then why we glorify those like Musk that made its initial fortune off of PayPal sale?? I never heard pointing fingers at PayPal founder, but ultimately should't those in charge be accountable??

tim333 11y ago
Ebay acquired Paypal in 2002. If anyone's held accountable it should probably be them rather than Musk.
- geomark 11y ago
  PayPal's evil ways predate that acquisition. My own bad experience happened before it was owned by eBay. It was the usual - arbitrary freezing of account due to unspecified suspicious activity that they would provide no response about and was going to take six months to resolve. I eventually got my funds out and never kept a balance there again. The "PayPal mafia" is such an ironically apt title for the group that founded it. So proud of their anti-fraud tech which is actually horrid - just sweep up anyone's account for whatever reason and call it successful fraud prevention.

DigitalSea 11y ago

This has been a long time coming in my opinion, but $25m is nothing for Paypal. I have had my fair share of troubles over the years, but none worse than the time I got paid for doing some freelance work into my Paypal account, I ended up with a balance of around $8k and it took me 3 months to get it released. I went through their ID process, sent them stuff and would wait a week only to be told to send it again. The problem with Paypal is they are too big to care. They've essentially become a bank, nobody knows what is going on, you get passed on from department to department when you need answers and they are always quick to freeze your Paypal balance when they want you to do something or want to insinuate you have done something wrong. I would have slapped them with a $100m penalty, $25m is just too little to make any kind of impact or different to Paypal.

random3 11y ago

PayPal said I can't change the country on the account but instead have to close it and open a new one. I closed the account and let them know I'm not opening a new and it's not (only) because of that inconvenience, but for all the crap that I keep reading they do to other users. It my mind it's a crappy company and the only impactful way you can express that is by not using it.

analog31 11y ago

This is only an anecdote, but I use PP to process payments for my side-business, selling a small gadget for a fairly specialized market. My experience has been overwhelmingly positive. And I closely monitor traffic on web forums for comments from customers, which are fairly frequent, so I think I'd know if PP had negatively affected their experience, or if they were hesitant to buy my product due to PP. Most of the complaints that I've read about, concerning PP, have to do with the eBay side of the equation. And it probably helps in my case that I sell a tangible good at a pretty modest price. I don't have an eBay store, but sell through my personal web page and hand-crafted web order form. Simply based on the my little corner of the market, it wouldn't break my heart if eBay and PP split up. Two benefits of PP for me, both are kinda weird: 1. I can just download the entire year's list of transactions, dump it into a spreadsheet, add some more columns, and it becomes my ledger. I spend no more than a few hours a year on accounting. 2. PP has a deal with the post office. You can generate a first class shipping label from your transaction, whereas the post office website only offers priority mail and above, so PP reduces my shipping costs. And I've also had fabulous service from the post office, so maybe I'm just a freak. ;-) With all this said, I can't discount the horror stories. It's useful information, since I certainly wouldn't want a decline in PP's reputation to affect the trust that people put into my own business.

atmosx 11y ago

Hm paypal. I used my account last month. I used paypal regularly to make online payments (never in order to receive money). I had no major problem, only strange thing is that... In order to un-subscribe from services (e.g. like the NBA league pass, which I wanted for a month, not lifetime) I need to follow a step-by-step tutorial because the subscriptions listing is literally hidden.