[Jukebox-list] Bad seller on ebaY

[Ray Finch]

I have used Paypal for years - mostly to pay ebay sellers but also to
receive money as well.  I have never had any problems with Paypal.

The site does make some legitimate accusations about Paypal, namely that 
it is not a bank and does not _legally_ have to follow federal banking 
rules.  Thomas correctly points out that this site is trying to sell 
credit card merchant accounts and so they likely are not completely 
objective in their views about Paypal.

Over the years the feds have tried to classify Paypal as a bank.  Each 
time Paypal managed to avoid being forced to become a bank.  Paypal well 
knows that with how big they have gotten, if they screw over a bunch of 
people the feds may very well step in and "fix" things.  They really want 
to avoid that.

What this really comes from is a few years ago, before ebay bought them, 
Paypal did screw over a bunch of people.  Nothing big or really sue-able 
but it got a lot of people upset enough to swear off Paypal forever.  It 
seems that Paypal was having some financial difficulties.  So, as I recall 
what they did was to take $2.00 or $3.00 out of about 1,000,000 random 
bank accounts.  This gave them a nice chunk of cash that costs them 
nothing but their reputation.  Illegal, yes, but it's not like you can 
really do much if a company steals $3.00 from you.

Some basic facts:

    Although Paypal does a number of banking-like functions, Paypal is not 
bank and so is not regulated by the feds.

    Paypal can deposit and remove any amount of money from the bank account 
that you have registered with them at any time.  This is really not a bad 
thing, in order for Paypal to function they have to have this capability.

    When ebay bought them there were a number of changes made and Paypal 
haven't been doing anything shady since.  If they did this would directly 
affect ebay.

    Paypal cannot tell how much money you have in your bank account.

    The feds regulate the bank but not the third party.  If the third party
does steal from you, short of closing the affected bank account there is
not a lot you can do unless your bank has policies in place to protect 
your account.

    One of the ways that Paypal makes money is by charging a 3% fee for any
transaction that evolves a credit card, but a good portion of the fee goes
to the credit card company and not Paypal.

    Unless you need to physically process credit cards (like in a retail 
store environment) many businesses can have their customers process credit 
card payments through Paypal and so really don't need an actual merchant 
account.

    Although it is rare that an account will get unauthorized access, when 
you give out your bank account number (Paypal, pay by check, etc.) you 
basically give free and complete access to that account to a third party.

    With any financial transaction, at one point or another, there has to 
be a certain amount of trust.  Dealing with Paypal is no exception.

Although, like I said, I have never had any problems with Paypal I do have 
a separate bank account just for on-line transactions.  At any one time 
there is only enough money in that account to cover the on-line payment I 
am making.  That way if someone did try to empty out the account they 
would get very little or nothing.

Ray




On Sat, 9 Dec 2007, kegmaster wrote:

> On Fri, 7 Dec 2007 09:50:06 -0500 Roy Dean <roywdean at cox.net> wrote:
>> Hi Gang: Just alittle issue about "EBAY" and "PAYPAL" Take a look at this
>> site in the link and read the horror stories and all the info about "PAYPAL"
>> and I think it is getting worse.
>>
>> http://www.paypalwarning.com/
>
>
> Roy, I looked at the link, and I also know that there are legitimate complaints against Paypal, but this link looks little more to me than a blatent advertisement for a certain credit card service than anything else. Too many "name witheld" stories to give the stories any credibility. Give me a break- If a company screws me  out of my money, I will proudly give out my name as well as all other contact info (including phone #) for others to reach me so I can tell my story. This website kinda smells like misleading at best...
>
> Thomas
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