The Truth About PayPal and Ebay...

[gosla]

Hello;

It seems that there's always lots of references on this board to Ebay. Why not? It's a great source for finding just about anything... I just read another "deal gone bad" article here and wanted to point out a few things to the uninitiated...

PayPal is bad news. Yes, yes, I know they are large and prominent in the online paying business but if you do some homework, you may be surprised...

First, as far as "protection" goes, did you know that Ebay has a $25 deductable and a $200 limit to their protection? Also, you need to wait about 60 days to request compensation after being ripped off. Beyond that, you'll have to be prepared for a lot of paperwork and a major pain in the ass... Get cheated on a 911 engine deal? Maybe, if you're lucky, after 2 months you'll get $175 back. That's it...

PayPal is really scary. They, like Ebay, make lots of comments about how you're "protected" if you use them, but in reality, this is like a gang of thugs in a dark alley telling you that you should feel safe and trust them. PayPal is borderline criminal and the craps about to hit the fan with them. If you're a seller, it doesn't take much beyond someone who knows the system to cause you're well earned funds to be taken back from you. If months later, 6-12 months later even, they buyer complains to PayPal or worse yet, their credit card company, PayPal will immediately apply a "pending reversal" to your account. They will hold the money, and if it's not in the account, you'll see a negative balance and they will persue collecting the difference from you. If you have a charge card or a checking account on file, they will take the money without your approval. Try to call them when this happens and you absolutely will lose your temper after dealing with their $10.00 an hour "professionals" who are about as bad as they come... Try to email and you'll recieve a canned email that likely won't have anything to do with your situation... Regardless, once you get that "pending" reversal, count your funds gone. - Even if you follow ALL OF THE FINE PRINT... They have a surprising history of hijacking funds to generate more profit for themselves. The user agreement lets them do whatever they want. Check it out yourself...

PayPal lost their endorsement from the Better Business Bureau because of their log of over 100,000 unanswered complaints... There are around 1,500 recent complaints on file with the BBB and several hundred have been examined and judged against PayPal... There are several large class action lawsuits filed against them for stealing funds. Several states forbid them to do business. New York State just levied a HUGE penalty on them for breaking all sorts of laws... They have some rules that make it impossible to collect money from them, even if you follow ALL of their own rules, which is nearly impossible anyway... Their massive user agreement gives them the power of god. A court ruling just found this agreement to be unfair in how it shields them from lawsuits. It makes it extremely expensive to use legal means to collect money from them, no matter what the reasons is...

Check out sites like paypalsucks.com for the facts. Since so many Pelican members use Ebay, I thought I may spare some of them a lot of unnecessary pain by bringing this to light. Do your own research. It's pretty scary to see what's going on with them. The point is, proceed with caution if you use them, whether you're buyer or the seller. Mark my words: within a year or two, they'll be another Enron...

Oh well, gotta put funds in my PayPal account so I can buy some Porsche turbo motors from Mexico now. lol







NSA - Hazleton, Pennsylvania

[McDaniel]

I had used Pay Pal in the past...with good results. Then they
were acquired/bought out/whatever by someone else.
Whole new game! They lock up several hundred dollars of
your checking account and it takes forever to get it released
even after you cancel the Pay Pal account.
I would advise staying away...

[gosla]

Exactly... And not only that, but there are over 100,000 people with stories like that who have taken the time to formally complain - only to hear NOTHING... This is according to the Better Business Bureau...

P.S. EBAY bought them - for $1.5 BILLION DOLLARS...

[RickM]

So, short of closing my checking account is there anything I can do to protect myself? It seem that if you cancel your Paypal account they still have the info to access your funds.

[McDaniel]

They did cancel mine, but there was a charge...and it took way too
long.

[atlporsche]

I never even opened mine with a checking account...if they went belly up, I'd never see my money, there's no FDIC on paypal...

sjd

[ChrisBennet]

Thanks for the heads up! I never signed up for Paypal but I would have at some point I'm sure.
You've done us a great service I think.
-Chris

[gosla]

From what I understand, no. The only thing that you can do is to change/cancel all accounts linked with them.

I just got burned for a transaction that happened back in July. Sold some stuff. Shipped. No problems whatsoever. No complaints. All was well. In November, they without warning or even an email, held $200 from this July transaction. For the next six weeks I called and emailed a few times a week, literally... They didn't know what happened and only kept promising to get back to me within a few days, etc. At 6 weeks, the transaction went from "pending" to "completed" - their reason was that I didn't provide a tracking number within the time stated by them. THEY HAD NEVER REQUESTED ONE AND THEIR OWN PEOPLE CONCEEDED ON THIS POINT... When I raised hell about that, they did formally ask for a tracking number. On Christmas Eve, that is... With 72 hours to provide it, MAX, according to their email. Being away, this didn't help. The really nice thing is that they had taken ANOTHER $200.00, for the same transaction.

Again, their people conceeded that their is a big problem. Two weeks of phone calls and emails later, I got the second $200 back. The first $200 is gone for good, without warning, without having a chance to provide a tracking number, which I actually did have. That's when I checked into it and found that I was one in a million with similar problems... It doesn't quite matter about the tracking number. They claimed that the account that I recieved funds from was "funded with a fradulent card", even though they were "PayPal Confirmed..." The user is no longer on Ebay and refuses to answer emails.

Like I said, all it takes is someone who knows the system. Whether verified or not, if they claim they didn't recieve the merchandise, PayPal will refund them your collected money, even if you provide proof... Worse still, if someone cheats you and you can prove it, PayPal will apologize and tell you that there is nothing they can do, if the seller simply closed their PayPal account first. So much for "buyer and seller protection..."

Here's another neat one. Say you win 10 auctions on Ebay, all from the same person, all for $25.00 items. You pay and you never recieve anything... Guess how much money Ebay will refund you through their "protection???" NONE... You cannot combine claims, even if they are from the same seller. There is a $25.00 deductable. Nice, eh???

Oh, the truth that lies hidden in the fine print.... Hope I helped save someone here... Spread the word...


CAUTION CAUTION CAUTION

Check out paypalsucks.com for more info including info on how to join the various class action lawsuits, etc. There's even a petition to get them shut down, linked from the site.

They may have my money, but I'll do whatever I can to spread the word about them to the few remaining users who haven't been burned, yet...

[gosla]

True - PayPal isn't FDIC insured. They are not a bank. They hold their funds in four different bank accounts which are in fact insured. All this means is that if those banks are robbed or go under, PayPal has access to THEIR money... If PayPal goes under, all bets are off... History repeats iteself. Think any other dot-com's may fail ever again??? PayPal has even admitted that they are at a high risk of internal fraud and cannot guarantee 100% that the money they hold is safe...

[gosla]

BTW - From what I have read, the safest way to transfer money is using a credit card, ideally American Express or VISA, and sticking with merchants who take the cards directly. Document everything and be careful about deals that seem too good to be true...

[rattlsnak]

I have been using PayPal quite alot for a couple of years and have had no problems whatsoever. I dont keep any money in the "their"account. Everytime I buy something, it is e- transfered right out of my bank account, and when I seel something, I transfer it right back into my account as well. I have no credit card on file with them.
What other forms of money transfer are you guys using?

[Dave Ploss]

Thanks for the info.....just closed my account.

I didn't use it for major things but I don't want to take the chance of someone playing with my $$$$.

Dave

[gosla]

I signed on with them when they were about two months old. I've done over 500 transactions with them before they "got" me. If you have a checking account on file, and say zero in your PayPal account, they will do an unauthorized ACH transfer if they "need" your money, without warning, without approval... Their expansive users agreement gives them the right...

So in this example, if you have nothing in your PayPal account and only fund it directly with a checking account, they will take money out of your checking account if you sold something to someone and months later they claim they never recieved it... Their requirements for "proving" that you sent something is ridiculous. A tracking number isn't enough. There is absolutely no way to satisfy their requirements using the US Post Office. With UPS, a signature is required...

Like I said, the Better Business Bureau retracted their endorsement of PayPal recently due to the over 100,000 UNANSWERED complaints filed with them. Several states have forbidden PayPal to operate in their state. New York has fined them a ton due to their involvement with internet casinos.

It's definitely best to do your own research. Read the user agreement on their website. Check out some of the sites that have sprung up about them lately...

I wish it weren't true, but I've read quite a bit about it all and am convinced that you're taking a risk if you use them. Eventually, the odds will catch up and you'll get burned. Just be careful...

[RANDY P]

It's cute how they constantly beat on you to get "verified" or whatever they call it, (giving them your bank account routing #'s) so they can eliminate the chargeback provision with a credit card. They never mention that this is a side effect of being verified. I gave them a low limit card, and it's about to expire next month. After reading this, don't think I'll use them again.

Like I need to "prove" myself if I'm giving them money.

[gosla]

Absolutely correct. Another "trick" of theirs...

[carnut169]

Wow. I have also used them without any problems, but this post makes me nervous! To think that they would be willing to screw up such a good thing by playing games... I may just have to cancel some accounts.
Also, worth noting is that if you send someone a personal check you have just given them enough info to remove all the $$ from your checking account. Fun stuff, huh.

[RallyJon]

PayPal is about convenience, not security. Like anything else on Ebay, it's up to YOU to do the due diligence on a seller or buyer.

I agree that PayPal is misleading and has ridiculous terms and the worst customer service around. But I use PayPal for small transactions all the time. It's so much easier than sending a $20 check, or going to the supermarket and buying a $20 money order. However, just like sending a check or money order to a seller who requires pre-payment, never send more than you can afford to lose. Don't throw a temper tantrum if you send some mook your money and get nothing in return--there are no guarantees.

If you're very concerned about a high value transaction, there are several on-line escrow services that you can use.

Don't slam the concept--it works great within an appropriate domain. Think about the fees they would have to charge if they had a huge call center which answered the phone on the first ring and if they instantly refunded your money the same day you filed a dispute. "You get what you pay for" applies here (as it seems to in most situations).

[atlporsche]

I set a rule for myself...If I wanted it and had the paypal dollars, I can get it. If I didn't have the paypal dollars to get it, I had to sell something to get the paypal dollars to get it...

My money never went into the account. I don't have a sellers account for the same reason...if I was selling something on ebay, I "brokered" through my brother. he set up a SPECIFIC bank account with just enough money to do the things he wanted to do, without risking his real accounts.

sjd

[jrdavid68]

Originally posted by RallyJon
PayPal is about convenience, not security. Like anything else on Ebay, it's up to YOU to do the due diligence on a seller or buyer.

Don't slam the concept--it works great within an appropriate domain. Think about the fees they would have to charge if they had a huge call center which answered the phone on the first ring and if they instantly refunded your money the same day you filed a dispute. "You get what you pay for" applies here (as it seems to in most situations).

I agree with Rally. I have been a member since early on as well and have probably been involved in 300-400 transactions with no problems so far (knocking on wood).

When I was required to become verified, I just happened to be in the process of changing banks. So, I went through the verification process and promptly closed the bank account - since I do not perform any transactions directly to or from my bank account - they are none the wiser. When I do withdraw my money from PayPal, I always do via a check - they do charge $1.50 per check, but to me, I am willing to pay that instead of giving them direct access to my bank account.

JrDavid68
1986 Carrera

[old_skul]

I have done well over $50,000 in business through PayPal.

I have never had a problem.

Although PayPal has issues that need to be resolved, there remains plenty of legal options should the need ever arise.

And this has nothing to do with Porsches. It also borderlines on troll ranting.