[HN Gopher] PayPal faces lawsuit for freezing customer accounts ... ___________________________________________________________________ PayPal faces lawsuit for freezing customer accounts and funds Author : I_am_tiberius Score : 629 points Date : 2022-01-14 12:08 UTC (10 hours ago) (HTM) web link (www.engadget.com) (TXT) w3m dump (www.engadget.com) | rpaddock wrote: | They did this to my late wife's account. They demanded that I | prove she was dead, as if I didn't already have enough grief. See | the documentary Pain Warriors about that saga. | | How do I sign up to be part of this suite? | navbaker wrote: | Did they ask for something more than a death certificate or | something similar? That should have been enough, right? | datavirtue wrote: | Why doesn't this fall under the CFPB? The money is held in a bank | account which ultimately belongs to the PayPal customer. | | When I was in the prepaid card industry we held money for people | in our bank account just like PayPal does. The bank held us to | account for each of our customers. We accidentally prevented some | people accessing thier finds for a few days due to a software | glitch and had our asses handed to us. As we should have. | | One lady was prevented from accessing her $200 for a few days and | her lawyer extracted our maximum arbitration amount of $8000 from | us. | dragonwriter wrote: | > Why doesn't this fall under the CFPB? | | Who said it wouldn't? Government action to vindicate consumer | rights is generally complaint-based and not exclusive of | private rights of action, so a private class action isn't | evidence that a thing is not also within the enforcement | jurisdiction of a government agency. | anm89 wrote: | Hard for me to understanding how this is only happening now. It | feels like this one has been ripe for 5-10 years. | YXNjaGVyZWdlbgo wrote: | I went to visit the US and transferred just 500 Dollars to a | friend for our shared Airbnb. The account got suspended because | of "unusual activities" I called them and told them it was myself | transferring funds and it still took them two weeks to reinstate | the account... | lkxijlewlf wrote: | I had a CC lock my account once when I went on a trip to | several places in a quick amount of time. I called them and | worked it out. Their algos thought it was someone had stolen my | card. | | Now, before I go on vacation or make a large purchase, I call | them and tell them what I'm going to do. I've never had a | problem since doing that and it's a very quick call, actually. | | I wonder if anyone has tried same with PayPal. | consp wrote: | With my bank I explicitly have to announce in advance if I am | going to use my card abroad and can enter specific dates and | times online. It's quite easy to do. You can also call if you | forgot but then you will have to go online and add days if | you want to use it for more than one/a few if I recall | correctly. | Cthulhu_ wrote: | I mean that's fair enough because that (payment methods being | stolen) happens frequently enough, but it should be just as | easy to clear it up again. | | Over here, banks have set things up so that by default you | can't get money from foreign ATMs - you have to activate that | first. Because lots of people got their bank card stolen and | PIN code skimmed, only for the card to pop up again in | eastern Europe or wherever to drain the account. | nitn wrote: | These "unusual activity" detecting algos are a menace. If I | use a VPN to access my account, blocked. | | Had this issue with Paypal & Digitalocean. Reddit shadowbans | accounts made with VPN. | sstephant wrote: | At least the 'unusual activity' should block the | transaction not ban the account and you get notified on the | spot. | thewebcount wrote: | I have had a situation where I called my bank to let them | know I was traveling overseas so this wouldn't happen, and it | still happened. It's utterly ridiculous. | FireBeyond wrote: | I paid my PayPal credit card with my PayPal balance (which was | "cleared funds"), $700 or so, and that triggered a three week | hold on both my card and my balance. | datavirtue wrote: | They hold people's money a lot. Very profitable as they are | essentially free overnight loans. Fuck PayPal. Anyone who | does business with them is captive. | politician wrote: | When a bank places a hold on a transaction or account for | compliance review, the law state that those funds are to be | held in an interest-bearing escrow account to be returned | to the owner when the hold is lifted. | | It's illegal for PayPal to treat held funds as an overnight | loan-- that's a gross misunderstanding of what is going on. | iwasakabukiman wrote: | As many others have pointed out, PayPal goes out of their | way to make sure they are _not_ a bank. | politician wrote: | It doesn't matter. If they aren't holding your deposits | then the underlying bank would place the hold and they | must follow the banking regulations. | | If PayPal isn't holding deposits and doesn't forward the | hold to the underlying bank, then go get your funds from | the underlying bank or sue them. | | FinTech is a stack of companies operating as veneers on | the underlying, heavily regulated banks. | oauea wrote: | Good luck with that. Any links to stories of people who | have successfully done that? | politician wrote: | https://www.paypalobjects.com/marketing/ua/pdf/US/en/sync | hro... | | Look through the disclosures and agreements you signed on | account opening and find out which banks PayPal is using | for your account. The linked one above is for a deposit | account at Synchrony Bank. | oauea wrote: | Never signed anything. | politician wrote: | Do you have a PayPal account? If so, I assure you that | you signed an agreement. The complaint in this class | action lawsuit says that the agreement is a 65-page PDF. | You would likely have signed it electronically by | clicking an "I agree" checkbox. | jjoonathan wrote: | They sure didn't give me a penny more when they froze | _my_ account. | tootahe45 wrote: | Governments need to ban 'shotgun KYC', which is where they let | you put funds in the account before they freeze it and make you | do KYC, rather than making you do KYC directly on sign-up. You're | effectively forced to give away your info or lose the funds. | Sites like Paypal don't want this to happen because registrations | would drop off majorly if you had to KYC on sign up. | Sargos wrote: | Governments encourage and are the ones pushing shotgun KYC so I | would maybe phrase your comment more like "Citizens need to | rebel against 'shotgun KYC'. | bastardoperator wrote: | This has been happening to folks for ages. I'm looking forward to | understanding why Paypal thinks it can steal from it's customers | without facing repercussions. I wouldn't do anything serious with | Paypal for this exact reason. | kragen wrote: | Because they've been doing it since last millennium, and the | competing services that didn't steal from their customers went | bankrupt because of fraud and reversed payments. | umrashrf wrote: | It sounds like these lawsuits are used to bring the confidence | back into the company (PayPal) to keep their unicorn status so US | government can benefit from this. I might be paranoid or just | crazy to think like this. | nerbert wrote: | Surprised it hasn't happened before. | throwaway2474 wrote: | In my (quite extensive) experience with the company, one should | only ever use PayPal as an extremely temporary means to accept | payment for clients who can't pay any other way, and then | _immediately_ withdraw the funds to a real bank account. | | The company absolutely cannot be trusted, and will do everything | in their power to take your money and not give it back. I do not | know a single person who uses PayPal regularly for a business who | doesn't absolutely hate the company, because they do this type of | thing so regularly. | | Recently, when you log into a business account, there is a giant | alert that looks like an important warning, that actually says | you're "eligible for a business loan". You have to dismiss it | every single time with the little non-default no thankyou button. | And then beg them to give you access to your own money, because | apparently _you_ can't be trusted. | | I for one would love to see a lawsuit like this land. | [deleted] | danlugo92 wrote: | > and then immediately withdraw the funds to a real bank | account. | | If you link your bank account, you're at risk of them pulling | funds from your bank account due to [reasons]. | | There's been such cases. | tehwebguy wrote: | I would add that folks should have a bank account connected to | PayPal (etc) that is separate from your day to day accounts. | | Not only will it localize any problems[0] but it will limit | snooping[1]. | | [0] If PayPal wrongly deducts money from an account that has | basically no funds in it you'll be able to deal with the | problem without having your actual funds locked up. | | [1] Seems like basically every non-bank is switching from ACH | deposit verification to a service called Plaid that requires | your bank username & password, which then screen scrapes your | financial details. There's no reason to hand over your real | life financial data when you can just use a dummy account. | RHSeeger wrote: | > Seems like basically every non-bank is switching from ACH | deposit verification to a service called Plaid that requires | your bank username & password, | | Why would anyone EVER do this. That has to be the most | insecure and possibly catastrophic possible way to verify | information. | mnd999 wrote: | Handing over your bank username and password to anyone | would be a breach of the banks terms. So no, never do this. | jrochkind1 wrote: | I've been wondering about this as more and more services | are asking me to do it via this same "Plaid" service. (I | don't do it. I can't use some services. Cashapp _mobile_ | didn 't want to let me withdraw cash without it; I | figured out a way to on cashapp desktop). | | Plaid is a company/service literally built around asking | people to supply their bank username and password to a | third party. (who then stores them (in cleartext, right?) | for continued use!) I find it pretty astonishing. | | (It's also literally training users to be phished, no?) | | I'd be curious to see an article about it, with some | details and context. | RHSeeger wrote: | Here's a StackExchange discussion on it, and what a | nightmare it is | https://security.stackexchange.com/questions/198005/is- | plaid... | | I see a link to a lawsuit against Plaid in that | discussion, but it's from 2020. | | Interestingly, this page has someone claiming it's | possible to register on Plain using ACH info | https://teslamotorsclub.com/tmc/threads/for-those- | hesitant-t... | monkeybutton wrote: | >service called Plaid that requires your bank username & | password, which then screen scrapes your financial details | | That is hefty accusation. Wouldn't doing that be illegal? | | Edit: Looks like they have an entire controversies section on | their wiki page and banks are suing them over said sketchy | practices. Classy stuff. | TheNewsIsHere wrote: | Not if it's not otherwise illegal and disclosed in the | terms you agree to. As part of a settlement they now have a | "privacy-centric" portal so you can manage what they know | about you, ostensibly. But it's difficult to find, and I | would wager that most people who use the service don't | understand what they're getting into. | | Everyone seems to use it now, and it's increasingly | difficult to link accounts using ACH micro deposits because | Plaid can be configured to disallow manual linking if the | routing number corresponds to a bank they support logging | into. | | I simply don't do business with companies that use Plaid in | that manner, it's a hard stop for me. My bank's customer | agreement specifically prohibits disclosing user | credentials to any other party, and when support is | confronted by that, they typically have no idea what to do | with that other than say "Plaid is secure". | lief79 wrote: | I've never heard of this before, who's everyone? Which | country are you talking about? | TheNewsIsHere wrote: | I'm not sure if they're in other countries, but I'm | referring to the US. As for who uses them: off the top of | my head, for well known services: PayPal, Coinbase, YNAB, | Truebill, Acorns, Venmo, Stripe has an integration, I | think Mint?, the list goes on. | | More often than not I encounter them when trying to link | bank accounts to anything now, except with other banks. | | They have a history of imitating bank login screens and | not disclosing that they're not your bank. They settled a | few lawsuits about that in the past few years and are a | little more upfront, but I wouldn't expect the average | user to reasonably understand the situation. | | Visa tried to acquire them back in 2020 but dropped the | plan. | diggernet wrote: | Visa probably got a look at their infrastructure, and saw | liabilities that could expand to consume all of Visa. | patio11 wrote: | Prior to going to work for a direct competitor (which I was | also a heavy user of), I fed my family out of a Paypal account | for approximately 10 years, and had good experiences | throughout. Total processed through Paypal on order of $X00,000 | mostly in $30 chunks; I don't own the business anymore so can't | SQL the breakdown by processor. | | The one time my account was limited was after moving $3k | immediately following a new apartment move in Japan. Total time | to resolution: 2 minutes after calling them. | | There, now you know one. | effingwewt wrote: | two good anecdotes vs over a decade of non-stop abusive | practices. | | 2 white sand grains on a black beach count for very little. | emaginniss wrote: | Honestly, it is almost certainly the opposite. The vast | majority of people use PayPal on a regular basis to pay for | things they buy online without handing over a CC number. | Those people generally have a perfectly fine experience and | they never post about it. When people do post about their | experience with a company, they are far more likely to post | negative experiences than positive. | | Putting that aside, I think PayPal should absolutely get | reamed for this behavior. Even if they're only fucking over | one out of 100k customers, it is still completely | unacceptable and I hope they suffer for it. | effingwewt wrote: | I don't believe PP taking money is the outlier here. I | know far too many people in real life who have had funds | seized and never returned. I imagine it's happened to | more people I know but who haven't spoken to me about it. | I have had PP close one of my early accounts and keep the | money. | | As much as I hate Visa/MC/Amex et al they have never just | stolen my money, or even left me holding the bag if | someone got ahold of a number (as opposed to banks which | have always left me hanging a la PP). | PaulDavisThe1st wrote: | Very similar position here. $X00,000 for 10 years or so, | payments generally in the US$1 - US$50 range. No specific | complaints other can a couple of API breakdowns over the | course of a decade. | | So now they know two. | acomjean wrote: | "using PayPal to buy and sell clothing on eBay, to exchange money | for a poker league she owns and for a non-profit that helps women | with various needs. " | | I can see one of those things causing an issue (poker league) | | We use PayPal for membership fees for our nonprofit. This year | they're limiting us to 2000 a month transfer out which is | annoying to us, but we're small enough to get by. | Cederfjard wrote: | So they're preventing you from accessing your own money? | acomjean wrote: | For a time they are limiting our ability to transfer money | out. We talked to support so we'll see what happens . We only | open registration once a year for a month. With our event | being canceled (pandemic) we did have a lot of refunds. But | we've been using them 10 years prior without issue. | Cthulhu_ wrote: | Well if that's in their T's and C's that's fine, to a point, | but they can't just silently close an account and take money | from people. They need to return the money - it's not their job | to play police and judge and seize illicit gains, a court has | to decide whether it IS illicit and what happens to it first - | and to give an explanation as to why they no longer want to do | business with them. | | I mean not wanting to do business is every business and | person's right. But taking someone else's money without a court | order or mandate is theft. | salawat wrote: | You should look into OFAC. They'll freeze your account for | withdrawals, but not deposits, and no one is allowed to tell | you it was an OFAC hit. | | Make no mistake, financial service in the United States is | heavily tilted against the consumer, and your service | provider should be considered an actively hostile entity. | CaptainZapp wrote: | If they don't like that their service is used for poker | activities they are free to dump the customer. | | What they are not free to do is to freeze his account and just | keep his money. | tw04 wrote: | >What they are not free to do is to freeze his account and | just keep his money. | | If the poker league is being run illegally, not only are they | free to freeze it, they are required to. | kevingadd wrote: | Are they required to steal money that was generated by a | crime instead of handing that money over to law | enforcement? How does that make sense? | mikro2nd wrote: | Illegally in what jurisdiction? Paypal's? This client's? | These details matter. | [deleted] | ryandrake wrote: | It's not PayPal's job to investigate whether a particular | game of poker is legal or illegal. That's why they just ban | all transactions peripheral to gambling. If you're going to | use PayPal for poker night, just don't mention that word | anywhere in your use of the application. | | A lot of PayPal's complex enforcement algorithms seem to be | merely word matches. Someone I know as a joke said "Kim | Jong Un" in the message when he paid for his half of dinner | and got his account insta-locked for weeks just like that. | tzs wrote: | For two of the three cases mentioned, I'd tentatively agree, | but in that particular user's case they probably are free to | keep the money for several months to a year after they freeze | the account because she was running a business in a field | that has a high chargeback risk. | | _Someone_ has to pay for the high level of consumer | protection that people who pay with credit cards receive. | Every entity that is in the chain between the issuer of the | credit card user and the merchant that receives the payment | arranges it so that responsibility of this falls on someone | farther down the chain than them. There is no one farther | down the chain that the merchant, so the merchant ends up | being the one who has to pay for chargebacks. | | There is nothing further down the chain than the merchant so | it ends up on them. But a merchant that ends up incurring a | lot of chargebacks often also is a merchant that ends up not | having the money to pay for those chargebacks, and in that | case the entity that the merchant was dealing with for | accepting payments ends up having to pay. | | Thus that entity will almost always have in its contract with | the merchant that they can keep some of the funds the | merchant earns in reserve to cover chargebacks. I doubt any | court will find such terms invalid. They have a legitimate | purpose of risk mitigation, the companies will have the data | and actuarial analysis to show that the amounts held in | reserve are reasonable for the level risk, and the ultimate | purpose is to support the strong consumer protections that | credit cards provide. | deathanatos wrote: | > _Someone has to pay for the high level of consumer | protection that people who pay with credit cards receive._ | | I, the consumer, does, every step of the way. If I | understand their fee structure, Paypal takes about 3.5% of | any transaction I make with them. (They show this to the | _merchant_ , but any merchant is going to have to consider | this part of their costs. Some just directly pass it back | to the customer. The point is: they make money from the | good transactions, and should plan appropriately to deal | with the bad ones. And there is CC & interchange fees, too, | at those levels...) | [deleted] | leviathant wrote: | Every time I've read about someone making a fuss about PayPal | freezing their account, as you get into the details of their | business, it quickly becomes apparent that knowingly or | otherwise, they're doing something risky enough that it | triggered something related to terms and conditions that they | didn't bother to read. I realize that's just my anecdote, but | when you're working with money, there's a lot of boring reading | you should do. Quickly becomes apparent why that opportunity to | fill a seemingly obvious hole in a market isn't the opportunity | you thought it was. | anovikov wrote: | Good answer to people who ask what is the point of crypto... | gossamer wrote: | Yay! It is about time. | basher wrote: | PayPal refuses to let heirs access, or even know if there is a | balance on accounts after people die, regardless of death | certificates. I wonder how much money is being held by this | tactic? | salusinarduis wrote: | I don't have anything to add other than to say Paypal stole $1800 | from me this way. | carlsborg wrote: | Bitcoin (and others) solve this. | johnboiles wrote: | Great to see this! Not to the same scale as seizure but using | buymeacoffee.com for OSS donations PayPal would lock my account | every month or two until I uploaded a bunch of documents (which | were always the same docs each time). Each time it was a little | uncertain if I'd be able to get my money out or not. Meanwhile | PayPal would happily continue to receive money in my name that I | didn't have access to. | mraudiobook_com wrote: | ddtaylor wrote: | PayPal closed an account of mine after 20 years without | explaining anything because I logged in one day while still | connected to my VPN. | ComodoHacker wrote: | We should legitimize using VPN like we legitimized and then | adopted e2e encryption. | vmception wrote: | Apple iCloud Private Relay is attempting to do that | ddtaylor wrote: | I'm all for it, but my overall experience so far has been | that if something happens to a small percentage of users - | like 1% or less - then overall it won't gain traction or | matter much. I am interested if this class action gets an | support because I will for sure join it out of spite for how | poorly they handled the situation and how they kept my money | locked up for 6 months. | Mezzie wrote: | Depends on which 1% and how good that number is at | mobilizing. | | I promise you'd hear a ton about anything that only | affected trans or gay people, for example, or any issue | that only impacted the top 1% of customers based on money | spent. | | If we found a population with a social microphone in that | 1%, then it can gain traction. | joejohns wrote: | I resorted to using another payment gateway to prevent freezing | accounts and funds; this is great news. | creshal wrote: | I've been battling dumb Paypal problems both on the end user and | the merchant side so often that I'll never again use it if at all | possible, especially in shops. It's just not worth the time and | effort to try and trick them into doing their job. | mdavis6890 wrote: | This is devastating to those users affected by this, but I | believe that the blame doesn't lie solely with PayPal. | Unfortunately there are many laws they must comply with that | delegate enforcement to private companies like PayPal rather than | where is belongs - the government. | | From the article: PayPal allegedly sent his wife a letter that | says she "violated PayPal's User Agreement and Acceptable Use | Policy (AUP) by accepting payments for the sale of injectable | fillers not approved by the FDA." | | If PayPal DOESN'T freeze the account and hold the money, they can | get in far larger trouble with the government. Why should PayPal | be involved in this enforcement at all? If the FDA doesn't like | what this seller is doing, let the FDA themselves go after the | seller and leave PayPal out of it. But the law doesn't work that | way. | | I had $10k's in an account with BofA that was frozen and nearly | killed the closing on a house I was buying at the time. Because | they had a mailbox address on file for me, rather than my home | address. It was horrible for me, but that's what the says that | they had to do, and if they didn't the could end up in trouble | with the feds facing huge penalties. | | Let's try to empathize with all parties and think rationally | about the incentives and constraints that they face. | kweks wrote: | I have (almost) no issue with accounts being frozen. At the end | of the day, it's a private company, they can chose if they want | to do business with you or not. Likewise, holding for 180 days | is aligned with most credit card chargeback limits, so they | protect themselves. (There are other ways to go about this, | which most other processors handle in a frictionless fashion, | ie Stripe). | | Having an account frozen is more than annoying, but it's their | choice. | | However seizing (stealing) funds is completely unacceptable, no | matter how it's dressed up. Hell, even if they gave seized | funds to charity it'd be slightly more palatable than lining | their pockets from proceeds they deemed as "risky". | shkkmo wrote: | > It was horrible for me, but that's what the says that they | had to do, and if they didn't the could end up in trouble with | the feds facing huge penalties. | | Except that most likely isn't true. The law does not require | banks to have your home address. The law does require banks to | verify your identity, but there are many ways to do this | without requiring a "home address". | | The "home address" rule is self-imposed by banks and is yet | another way that our country makes life unnecessarily difficult | for homeless or itinerant people. | | Edit: This is regarding USA law, and I realized I am not where | you reside. I assumed USA because of the FDA mention but I | realized that was referencing the article so may not be a good | clue. | throw10920 wrote: | > think rationally about the incentives and constraints that | they face | | The incentives never justify unethical behavior, ever. | stronglikedan wrote: | No sympathy here. They've been steali..err..seizing funds for | decades, and dodging the lawsuits by leveraging their clout. | Sure, maybe they have some regulations to follow, but they | willfully choose to ignore the folks they're stealing from, | instead of helping them to understand the process of getting | their stolen money back, and prevent money from being stolen | from them in the future. I hope they're squeezed hard on this | one. | logicalmonster wrote: | The thing that's surprising to me isn't that big corporations | will do their damndest to rob people blind, it's that within | minutes/hours/days after reading this thread, there will be a | horde of people who read this article and smugly decry crypto | saying there's no use case or purpose for it. | finiteseries wrote: | Seizing funds without explanation or restitution is a well | known use case for cryptocurrencies at this point. | miohtama wrote: | The problem is that usually anti-money laundering laws give the | operator and the compliance officer an infinite protection even | on a suspected money laundering. As long as the compliance | process is followed, no matter how stupid the process is, there | is no legal basis to go after account freezer and the company is | protected. Thus, the company has no incentive to be reasonable | with account freezes. | johnebgd wrote: | PayPal has worked hard to not be a "bank" so they are long | overdue for being sued about this. I know countless vendors who | have had their funds stolen. | [deleted] | [deleted] | winter_blue wrote: | It's really and outrageous that this open stealing of | customers' _hard-earned cash_ for minor perceived user | agreement violations is so freaking rampant, with PayPal. I | wouldn 't be surprised if it turned out that this literally | was a strategy cooked up by the higher-ups at PayPal to buff | up the company's gross profits. | rdtsc wrote: | I was thinking of that too. It's gotta be quite profitable | for them. | | It's probably one of those things which is never explicitly | written down. Like, the CEO says 'we have to double down on | our "fraud" account seizures' and they smile when they say | "fraud". | | Or simply those that understand and play along get promoted | and those that start asking questions are pushed out due to | "restructuring". | manbart wrote: | Freezing the account or booting the user from the service is | one thing, but seizing the money as a result without any due | process seems pretty messed up IMO | notch656a wrote: | AML/KYC laws are a travesty to a free society. Wealth transfer | shouldn't be illegal. Prosecute the underlying crimes and let | the judicial process seize proceeds of crime after due process. | In the meantime, various electronic systems continue to provide | adequate avenues for those seeking minimized exposure to | KYC/AML. | matheusmoreira wrote: | AML/KYC is just the financial version of global mass | surveillance. They're bad for society and freedom for exactly | the same reasons. I truly hope that some cryptocurrency like | Monero will succeed. | nyolfen wrote: | ZKs, bulletproofs etc are going to be working their way | into btc and eth in the next year or two and i would expect | to be ported to competitors. it will be impossible to | prevent strong anonymity in transactions on any of the | major chains in short order. even LND offers very good | privacy advantages. | matheusmoreira wrote: | Yeah, that's totally cool. I'm doubtful that something | like this will ever make it into Bitcoin but I'm really | hopeful for what Ethereum could achieve in the long term. | If these solutions prove to be better, I hope Monero will | adopt them as well. | nyolfen wrote: | yes, i didn't mean this in a way that was dismissive of | monero, only trying to convey my excitement about privacy | tech becoming an intrinsic part of crypto as a whole | mschuster91 wrote: | > Prosecute the underlying crimes and let the judicial | process seize proceeds of crime after due process. | | At least a basic identity check (that's the "KYC" part) must | be part of bank account onboarding for that to work though. | Otherwise, how would a government be able to seize the bank | account of a convicted criminal if they had no way to tie the | bank account to a criminal? | | As for the anti money laundering regulations: these are a | _very_ fine line to balance. Personally, I 'd like for these | to go away the earlier the better since I agree with you that | the potential for dragnet-style abuse is way too high, but on | the other hand, terrorism financing _is_ a present and clear | danger worldwide. | notch656a wrote: | I'm supposed to give up my anonymity because of an entirely | different person's crime? No thanks, I'm not a criminal. | I'll keep using monero or whatever other systems limit my | exposure to these unreasonable search without probable | cause/warrant of my identity. I believe KYC is violation of | 4th amendment, and that the government's ability to seize | proceeds of crime is a lower priority than civil rights. | boring_twenties wrote: | On top of all that (with which I fully agree), it's not even | effective, in any plausible sense of that word. | | If this analysis[1] is to be believed, AML laws recover less | than 1% of estimated laundered funds, at an explicit cost at | least an order of magnitude higher than what is actually | recovered. | | That's not even including the implicit costs, e.g. when | innocent people get caught up and lose their accounts or even | their funds. | | Travesty doesn't even begin to cover it. | | [1] https://www.ledgerinsights.com/anti-money-laundering-has- | les... | FabHK wrote: | > an explicit cost at least an order of magnitude higher | than what is actually recovered. | | The goal is not to make money with AML laws, but to deter | and prosecute crime (which has huge externalities itself). | Is it effective at that? Your comment doesn't address that. | edoceo wrote: | If it's only capturing 1% of the dirty money it's not | effective at deterring nor is it an effective part of the | prosecution. | nulbyte wrote: | That poses the potential problem of circular reasoning. | How do we arrive at this estimate of 1%? Maybe it is more | than 1% of the actual value because the estimate is | wrong. | mistrial9 wrote: | agree with the overall conclusion, have to ask for some | reason in the expression of it. That is, there are legitimate | reasons to Know Your Customer, yet, those the least in | control are unendingly required to jump through ever more | hoops. It is easier to exert control on the defenseless, and | they do it. Meanwhile, professional money handlers are | seriously considering negative interest rates, since there is | just _that much money_ being moved around. A requirement for | cell phone numbers closes the connection graph, and a | reporting requirement of "every transaction USD$600 or | greater" (less than one month rent in most places), to my | mind, is the straw that breaks the camels back. | notch656a wrote: | I consider KYC violation of 4A. It's an unreasonable | compulsory search to ascertain my identity devoid of | probable cause or warrant of a crime. | Seattle3503 wrote: | KYC laws are a tragedy that perpetuate the unranked I the | digital age. without an ID you don't exist to the global | financial system. Nevermind that some countries are too poor | or lack the infrastructure to provide all of their citizens | with IDs. Not to mention poor citizens in wealthy countries | who don't have ID. | lotsofpulp wrote: | I agree, which means electronic money transfer should be a | utility offered by the federal government. | notch656a wrote: | That reminds me on how ironically the shipping company with | lowest exposure to having your package snooped on is | probably USPS. Since they are bound to 4th amendment, | generally probable cause is necessary to open your package. | Covzire wrote: | I hate paypal's shady business practices almost as much as I hate | facebook. | sys_64738 wrote: | Paypal threatened to cancel my account because I closed the | linked bank account and canceled the linked credit card. OK, go | ahead. | stevespang wrote: | kingcharles wrote: | If you're a big enough customer they give you your own personal | account manager and he'll make sure your account stays open and | running whatever happens. I had millions coming through PayPal | when I was running a private tracker and I could speed dial our | PayPal man if I needed. | JRGC1 wrote: | Good | vmception wrote: | Use P e r m i s s i o n l e s s systems | | It's been 13 years guys. They use way less energy and cause way | less carbon emissions than these behemoths. | kweks wrote: | We are Europe's largest site for RFID and pentesting hardware | (lab401.com) | | We are in the exactly the same situation. PayPal has conducted a | personalised, manually executed war of attrition against our | company and shareholders. | | Eight months ago, PayPal froze our account, seizing 15kEU. They | refused to give any justification for the action, despite | discussions with C-level staff. | | After the 180-day "withholding" period, we were informed that | they would not release the funds, for undisclosed reasons. | | We immediately engaged legal counsel. PayPal refused to interact | with our counsel, and so a C&D was issued. Within one week of the | C&D, PayPal did the following: | | - Froze the account of our sister company (in Hong Kong), seizing | 35k EU | | - Froze the personal accounts of all shareholders of the EU and | HK corps (~1,5k EU) | | - Froze the business accounts of all shareholders by name search | (different corporate entities, different businesses) - 5kEU | | - Froze the business accounts that the shareholders held (again, | different corps, different businesses) - another 5kEU | | Our policy is to empty accounts on the 28th of each month. PayPal | froze and seized funds in all accounts on the 27th of the month. | Based on the time-stamps of the emails, and the order in which | the accounts we closed, it's obvious that it was a targeted, | manual process (2 - 3 minutes between closing each personal | account, 15 minutes to find the next company account, 3 - 5 to | close the personal accounts, and then 10 - 15 minutes for the | next company accounts). | | We engaged secondary legal counsel in Luxembourg (PayPal's EU | headquarters). Again, PayPal refused to disclose any reason, | justification or proof, replying with typo-ridden copy-pasted | document from a low-level legal peon, concluding that no funds | would be returned, the businesses and personal accounts were | deemed 'illegal', and as such, PayPal would confiscate all funds. | | All KYC was performed. All accounts had been "audited" by PayPal | (when you reach the 5k, 50k, 100k+ processing tiers). | | Needless to say, operationally - we have shipped 50kEU of | hardware to customers, and face losses of the hardware, and costs | of replacing stock. I agree with the standpoint: this is purely | racketeering - an online equivalent of Civil Forfeiture. | | For extra context, as the points have been raised in other | comments: | | - In a perfect world, no merchant would use PayPal. In our | experiments, disabling PayPal cuts revenue by ~30% in our | industries. | | - Pentesting products could include illegal products: keyloggers, | etc. We sell no such products for obvious legal and compliance | reasons. All the products we sell are sold by countless other | resellers that use PayPal. We have processed Visa/MC with Stripe | for over 6 years with no problems (legal, chargeback, etc) | | - We empty accounts regularly, to minimize fallout. However, you | have to keep a healthy minimum in accounts when dealing with | large volume, or accounts get limited automatically (presumably | to avoid merchants pulling cash to avoid chargebacks / refunds) | | - We have already 'invested' over 20k in legal fees. I justify | this cost in (perhaps falsely) believing that we could establish | some case law that could benefit other merchants. | | It's unfortunate that we cannot join the class action in the US, | or we'd be into it. With that said, if anyone merchant in the EU | has similar issues, it could be interesting to investigate if a | similar action can be mounted in the EU. Feel free to reach out: | simon at sn dot cm (not a typo). | throw10920 wrote: | > - Froze the business accounts of all shareholders by name | search (different corporate entities, different businesses) - | 5kEU | | > - Froze the business accounts that the shareholders held | (again, different corps, different businesses) - another 5kEU | | _Shareholders?_ Not execs, but shareholders? | | If true, this is one of the worst things that I have ever seen | a company do, and this should probably be the top comment. | kweks wrote: | For clarity, we are not a publicly held company, the EU corp | is owned by two entities 50/50. | | The business accounts of the shareholder companies (in | unrelated industries) were frozen, the personal accounts of | the owners of the shareholder's companies were frozen, and | any other account related (via email, name, passport, credit | card, bank account, domain or corp name) were frozen. | | We woke up to 6 "you can no longer do business with PayPal" | emails, sent over the space of 30 minutes. You can clearly | see the trail: corp one, shareholders of corp one. Corps of | each shareholder. Accounts with the same email domain. | Accounts of permutations above. | kmlx wrote: | > We immediately engaged legal counsel. PayPal refused to | interact with our counsel, and so a C&D was issued. Within one | week of the C&D, PayPal did the following: | | - Froze the account of our sister company (in Hong Kong), | seizing 35k EU | | - Froze the personal accounts of all shareholders of the EU and | HK corps (~1,5k EU) | | - Froze the business accounts of all shareholders by name | search (different corporate entities, different businesses) - | 5kEU | | - Froze the business accounts that the shareholders held | (again, different corps, different businesses) - another 5kEU | | how can any of this be legal? aren't there laws prohibiting | such actions from PayPal? | nerbert wrote: | When you don't need to justify your actions and are allowed | to stay vague, everything is permitted. | kweks wrote: | Based on the advice given from our French, Hong Kong and | Luxembourg lawyers, it's not legal. But the barrier for | _proving_ that it's not legal is very high. | | PayPal don't reply to account holders, and they don't reply | in any tangible form to lawyers. PayPal forced us (and our | lawyers) to sign three rounds of paperwork before they would | even acknowledge correspondence from our lawyers, despite the | fact that our lawyers were obviously retained and | representing us. | | Likewise, the delay between each step averaged 1.5 months. | | At the end of all of the hoops, they gave a copy-pasted | letter that said _exactly_ the same thing that their initial | "You can no longer do business with PayPal" emails said. | | They know that legal representation is expensive. They know | that you'll have to get representation (at least in the EU) | in multiple jurisdictions. They know that by drawing out the | affair over months, you'll bleed money, and at some point, | you'll end up saying: We've lost more money on lawyers than | PayPal seized, and you'll give up. | | The only recourse that appears to remain for us is actually | going to court (and our claims won't fit in the small claims | court). At which point, while they'll possibly return the | stolen money, they won't re-open the accounts, so we still | lose. | | In any case, I feel we have a moral obligation to force them | to court, with the hopes of establishing some case law for | other merchants. | bluGill wrote: | > how can any of this be legal? aren't there laws prohibiting | such actions from PayPal? | | laws are only as good as the legal enforcement. | jackson1442 wrote: | > In our experiments, disabling PayPal cuts revenue by ~30% in | our industries. | | I'm curious- have you considered adding other third party | gateways (Apple Pay/Amazon Pay/something else)? I personally | try to avoid entering my card number, so my general order of | precedence is Apple Pay > Amazon Pay > Paypal > card entry. | kweks wrote: | We have Shopify's "Pay" and Apple Pay, crypto and regular | Visa / MC gateways (Stripe). We haven't tried Amazon pay - | I'll try it as an experiment to see what happens. | | However, the fact remains that removing PayPal means losing | business. Consumers are shielded from (most) PayPal's | horrors, and just see the advantages: ease of use, ubiquity | and "guaranteed win" claims against the merchant. | jackson1442 wrote: | Dang. I try to avoid PayPal as a consumer because I'm | familiar with these practices (I use services like Venmo | but always withdraw immediately upon receipt). But if the | only other option is sending my card number on a less | reputable site, I'll pick PayPal over card entry every | time. | | Google Pay might be another gateway to consider as well. | While I prefer to always use Apple Pay, it's not available | in Chrome, even on a Mac or iOS device. | pdimitar wrote: | So why not use (Transfer)Wise, I wonder? | Kaze404 wrote: | Enterprise Wise accounts are not available worldwide. | ranger_danger wrote: | Payoneer. | ianhawes wrote: | Payoneer is objectively worse than PayPal. | Kaze404 wrote: | I received $50 last year through Payoneer for a quick | freelancing job and completely forgot about it. | | A year later, last week, I remembered and decided to | withdraw it only to find out that I was deducted $30 for | not using the account. Shitty, but I decided to just | withdraw the rest and be done with it, only to be faced | with the fact that they have a minimum withdraw amount. | | I then proceeded to send them an e-mail requesting | immediate termination of my account as they literally stole | money from my account. I do not recommend this service to | anyone. | pdimitar wrote: | Can you clarify, please? I am legitimately interested. | | What stops a big company to have a normal business account? | eliseumds wrote: | Each country has different compliance laws. | Kaze404 wrote: | If you're a company and wish to use Wise, you need to | create an Enterprise account. When doing so, not every | country is listed in the dropdown. I've personally been | waiting for Brazil to be added for almost 2 years at this | point. It's a great service that would help me out a lot. | pdimitar wrote: | Interesting. Is it based on a number of employees, annual | profit, or something else? | | I did have to scan some documents and send it to them to | prove that my company exists but nobody has called me for | anything else. | Kaze404 wrote: | As far as I know it is simply not allowed to make any | sort of business-related transaction on a personal | account, regardless of the size of your business or | anything else. I asked them if that was a possibility | when I saw it wasn't possible to open a Business account | for a brazilian company, and they very clearly said no. | pdimitar wrote: | I see, so it's literally a regional lock. :( | | Sorry about that. I opened a business account in Eastern | Europe just fine. | | Tried Paysera? Never used them, just heard of them. | Kaze404 wrote: | Never heard of Paysera. Thank you, I'll check it out :) | voltagedivider wrote: | Yeah, I don't get it either. Never had any problems with Wise | and their rates seem fair. Maybe people use PayPal just for the | escrow service? | c7DJTLrn wrote: | PayPal and Ebay are like toxic waste. I've had both accounts | frozen. Most recently my Ebay account for a reason they will not | explain and will not allow me to appeal. | b8 wrote: | I'm happy that this is happening. Small buisness owners, Twitch | streamers etc. can get their PayPal account locked pretty easily | for "suspicious" activity (i.e chargebacks or a few thousand | dollars). Then PayPal locks their account for 180 days with | little to no recourse. The big Twitch streamers register an LLC | which PayPals gives more leniency to AFAIU. | foxfluff wrote: | Yeah... I've been hearing these horror stories about paypal for | a very long time now and it makes my blood boil knowing that | nothing's ever been done about it. I _really_ hope that a big | change is about to happen. | johndough wrote: | "AFAIU" stands for "as far as I understand". | | (So those who have never seen this acronym do not have to | google for it.) | MeinBlutIstBlau wrote: | antux wrote: | When they freeze customer accounts they're essentially taking | away people's livelihood and right to live. In a way, it's like | killing someone, but slowly and non-violently. This is definitely | unjust and deserves a class action lawsuit. | theplumber wrote: | Recently I've been suspended from an "online bank". It's a | traumatic experience, especially if you need the money held in | that account. | | Fortunately the amount I had there was not that big but the | abusive procedure is trumatic. I can't imagine how someone would | feel like to have all his rent money blocked in an online bank. | | Basically you are told that unless you provide whatever | documentation they want you loose the access to your own funds. | Of course providing them documentation is no guarantee they will | lift the restrictions. The support is via email only. The | boarding and verification process it's really just a bite and | switch scheme. I don't know how someone would feel safe to keep | money in such a bank after they put your account/transactions on | hold for days. | | I start to like the "crypto currency" concept of owning your | money more and more. | clusterfish wrote: | Your "online bank" does not sound like an actual bank (much | like PayPal isn't one). | theplumber wrote: | Revolut, Monese and others claim to be online banks...can't | tell you exactly what makes an "online bank" an "actual bank" | but they provide you individual bank accounts (unlike | paypal). | jedberg wrote: | When I worked at PayPal, some of the execs would say "we don't | make money by giving it back to people". These were the execs | that worked directly with Theil and Musk and I'm sure they're | long gone, but it was definitely Theil and Musk who pushed for | these types of policies right from the start (well Musk agreed | when he showed up, he wasn't a founder of PayPal despite what he | wants you to believe). | vamega wrote: | Hearing the stories in this thread makes me wonder if anyone has | ever tried to get a decree that PayPal owes them the money, and | if PayPal refuses to pay show up to confiscate their property. | | I know things like this have happened to banks[1]. That would | probably get them to start paying attention. | | [1]: https://abcnews.go.com/Business/bank-america-florida- | foreclo... | AniseAbyss wrote: | The concept of directly paying someone from your bank account | seems completely impossible in America. There always has to be | some middleman parasite- who conveniently charges a nice | transaction fee for the privilege. | cuteboy19 wrote: | A UPI like system would completely solve these problems. | patio11 wrote: | The payment volume over Zelle, which is instantaneous, free, | bank-to-bank transfers, was about $307 billion in 2020. For ACH | transactions, it was about $62 trillion (not a typo). Wire | transfers are also a thing. So are, for that matter, checks, | which by ancient custom are free for all parties but the banks | (at least for retail users). | | That the payment industry exists when all of the above is true | is a fascinating topic. I should probably cover it in a | newsletter sometime. | skeletal88 wrote: | Yes, why doesn't the US have something like our SEPA where we | can just transfer money to someone's account? | salawat wrote: | Because the U.S. financial system, and access to it is a very | powerful tool in terms of international diplomacy, and a | crucial source of evidence/intelligence for law enforcement. | | Trivial abilities to move money around and an inability to | lock out financial endpoints would completely neuter it's | utility as sanctioning measure. | ahefner wrote: | The funny thing to me is that you can't always even pay money | to the government itself without involving some middleman | parasite that takes 1 or 2% for themselves. | caseysoftware wrote: | I've also seen scenarios where they undo bank account transfers | without notice to clawback funds they're suspicious of. | | I finally created a separate bank account that I connected Paypal | to and never leave more than $30 with them and zero in the | account. Trusting them is a quick route to losing everything they | can touch. | dm03514 wrote: | I'm so happy to see this. I am working on publishing a book on | leanpub, and leanpub disburses payments using paypal. Yesterday, | I logged into my paypal account and I remembered that this | happened to me and my funds and account were frozen since 2010 | (something I must have put out of my mind :p). | | I was searching for this issue and found this lawsuit and cannot | wait to be part of it. | | Dealing with Paypal during the time was borderline abusive and I | felt helpless every step of the way. In 2010 when they froze my | account they mailed me a physical letter with an activation code | which took weeks, and when I called to confirm my account I was | told that the code was incorrect... | | I had very very little money in my account < $100 and I can't | imagine how frustrating it would be for someone who needed paypal | for their income. | | I'm happy to be in a position where I can choose to never use | paypal again and I hope they are punished for the way they treat | their customers. | mcv wrote: | For over a decade I've heard tons of stories about PayPal | freezing accounts for questionable reasons. I've heard of | events that were cancelled because the organizers suddenly | couldn't access the money people paid to the event, and PayPal | wouldn't release the money until they could prove they'd | organized the event for which people paid, for which the | organizers of course needed that money. | | I will never ever use PayPal. Everything I've heard about them | makes them sound like an extremely unreliable payment | provider.They're not an organization you should trust with your | money. | amelius wrote: | They even created this website, back in the old days: | | https://paypalsucks.org/ | | Worth mentioning in this context is this page: | | http://paypalsucks.org/paypal-frozen-accounts.shtml | kmlx wrote: | > leanpub disburses payments using paypal | | generally speaking, is it more complicated for these kinds of | payments to be done via wire/swift/etc versus paypal? | bluGill wrote: | I've used Zelle and it was easy. My bank is suggesting them | (they have first class support), but I have no idea if they | are otherwise better/worse than paypal. Most of the time if I | owe money it is either credit card or I used my bank's bill | pay (which sends a physical check if they don't have an | electronic arrangement) | | I did a wire transfer once, $15 in fees, but since the amount | was from a house sale (to get from the bank where the money | was deposited to my mortgage bank - they couldn't do this | direct which was annoying). I wouldn't do it for normal | things, but with that much money involved I don't blame the | banks for some friction and the cost wasn't much. Hopefully I | never do one again, and also I hope I'm an oddity for even | doing it at all. | kevin_thibedeau wrote: | Zelle is window dressing on top of ACH. | wiml wrote: | Which is exactly what I want, most of the time -- I want | to write a check, but without the hassle of paper, or the | recipient having to explicitly deposit it. | pc86 wrote: | Wire transfers have borderline predatory fees unless you're | moving thousands of dollars, and there's still the issue of | "oh you entered one of the numbers incorrectly, hopefully | they give you your money back!" | ratg13 wrote: | I wonder how Wise (formerly TransferWise) accomplishes | this. | | They seem to be able to send money to bank accounts | anywhere for extremely reasonable prices. | Scoundreller wrote: | They have bank accounts everywhere. They just avoid | transferring money between them in the first place. As | long as an even amount of money is going in each | direction, they won't have to. | | Only if flow gets too out of whack but that means their | rates are too one-sided. | | That's the forex business in a nutshell. They don't | convert money, they just exchange it. | Xylakant wrote: | This is a distinctively US feature. SEPA transfers cost | (next to) nothing, and the IBAN has a checksum, so entering | a single digit wrong will get the transaction rejected. | maccolgan wrote: | It's not a US feature, the US has ACH. | vorpalhex wrote: | Try shopping banks. My wires are free in most cases and I | am not a big customer or anything. | designium wrote: | Don't worry. | | You won't have that money after they've implemented the | inactivity fee last year: | https://www.paypal.com/be/smarthelp/article/what-is-the-inac... | savolai wrote: | Wow. Notably receiving money does not make the account | active. | | Notifications to inactive accounts begins 15 November 2021 | and advise simple actions to take before 15 December 2021 to | avoid the fee: | | - Log-in to your account; or | | - Shop wherever PayPal is accepted; or | | - Send money to friends & family, or vendors for goods & | services; or | | - Withdraw money from your account; or | | - Donate to a charity with your account | tintor wrote: | Good to know. I just transferred out my PayPal balance. | m-p-3 wrote: | I chose the option to close my account. | malka wrote: | I chose the option of making a bot that logs in every | 150ms. | | I think everyone should do this. It is the best way to | keep your money safe | Red_Leaves_Flyy wrote: | Did you publish your code? | [deleted] | CryptoBanker wrote: | PayPal will limit your account soon enough for security | concerns. I would _highly_ recommend not doing what you | are proposing | chias wrote: | > Accounts with zero balance won't be impacted and this | charge won't result in any negative balance. | | How gracious. | Bilal_io wrote: | Yeah, very nice of them. | tananaev wrote: | Inactivity fee is such a disgusting practice. It doesn't cost | them anything to keep the account. | Trias11 wrote: | It's an attempt to legalize theft. | muzika wrote: | This. Skype has been doing the same for years. | kgermino wrote: | That's not strictly true. It doesn't cost them _much_ but | holding and tracking other people's money has a cost. | | That said, I think the better answer is to send it to the | state as unclaimed property. | halpert wrote: | Is there really a marginal cost to holding more money? | Presumably they can buy treasury bonds and earn some | interest off the holdings. In terms of data storage, is | it really more expensive to store a positive number vs. | zero? | mmanfrin wrote: | Holding other peoples money has a _profit_ , not a cost. | That float is valuable. | vasco wrote: | Presumably it costs more to keep the money and process | login attempts. Since logging in is enough to keep the | account at zero fees, this seems like a money grab. | pengaru wrote: | > holding and tracking other people's money has a cost. | | When you have as many users as PayPal does, in aggregate | those non-zero balances are a mountain of money to play | with. It's not a cost, it's opportunity for profit. | stjohnswarts wrote: | This is why I use antiquated banking. At least I have someone to | contact if something goes wrong. | alfalfasprout wrote: | I refuse to use paypal for any nontrivial amounts of money for | this exact reason. I once had $10k frozen for no reason at all. I | really needed that money back then. Was an absolute nightmare and | took weeks to unfreeze. | | The only thing I now trust for "quick" payments of larger amounts | of money is bank wire. | | Cryptocurrencies don't exactly solve this problem since you need | to convert back to the fiat currency and you then have exchange | rate volatility + withdrawal delays (and crypto exchanges also | are notorious for freezing withdrawals). | gk1256 wrote: | PayPal has the fraud problem. Every next payment platform who | aims to become the next PayPal also suffer from it. | libertine wrote: | IF they choose the path of not having humans interact with | their customers, and give bot replies, then yes, such platforms | will suffer from it. | | If they want to invest in proper human customer service, at the | cost of decreasing their margins, then maybe part of that | problem will be solved. | pizza234 wrote: | That a problem of any banking institution. | | Differently from Paypal though, the last time that there was a | suspected fraudulent transaction in my bank account, I had a | physical and factual meeting at a bank branch, rather than | having my account frozen and given a stock answer. | chris_wot wrote: | And this is the problem for PayPal. They seem to freeze | accounts for arbitrary reasons, and way more frequently than | banks. | | If you are a business, the ability to transfer money without | getting all your funds locked up is important. I genuinely | believe they are doing it for reasons other than fraud and | money laundering. | MeinBlutIstBlau wrote: | [deleted] | rad_gruchalski wrote: | Sure, but it's not up to paypal to decide what's legal and | what's not legal. Definitely not their responsibility to seize | money from locked accounts. That's plain theft. | ckastner wrote: | > _Lena Evans, one of the plaintiffs who 'd been a PayPal user | for 22 years, said the website seized $26,984 from her account | six months after it got frozen without ever telling her why._ | | Wait, what? They're _actually taking_ the money? I thought the | article was just being careless with the terms "frozen" and | "seized". | | On what power are they doing so? It's understandable when the | relevant authorities (be it a tax authority, or a financial | supervisory authority, or a court, or whatever) seize money, but | they are not an authority. | | Furthermore, if the money in question actually _were_ illicit, | then by what fantasy argument would they be allowed to keep it | themselves rather than having to hand it over to the goverment? | The entire point is that the money is dirty and _nobody_ may keep | it. | gruez wrote: | >They're actually taking the money? I thought the article was | just being careless with the terms "frozen" and "seized". | | but that's also the plaintiff's claim, so I wouldn't exactly | call that reliable. | sam0x17 wrote: | > if the money in question actually were illicit, then by what | fantasy argument would they be allowed to keep it themselves | rather than having to hand it over to the goverment? The entire | point is that the money is dirty and nobody may keep it. | | I don't know what fantasy they operate under, but back in the | 2010s I observed Google doing this numerous times with "seized" | click fraud revenue -- one of my sites was a victim of a click | fraud attack as an attempt to get my AdSense account banned, | and my friend's site at the time was advertising on my domain | via AdWords and he didn't see any kind of refund despite the | $800 that was taken from me (which was the entirety of my | revenue for that month). Google just keeps funds they seize I'm | pretty sure, or at least they did back then. | kweks wrote: | See my comment below: they just seized (not frozen, seized) 50k | EU from us in a targetted attack against our company and | shareholders because we took legal counsel when they froze the | accounts. | ckastner wrote: | At the risk of arm-chairing this too much: did you contact | the CSSF, who seems to be the supervisory authority | responsible for AML enforcement in Luxembourg? | | To highlight how insane this sounds: let's assume, for the | sake of argument, that your 50K is suspected to be cocaine | money. There exist exactly two outcomes: either you are | exonerated and you get your money back, or you're eventually | found guilty of something, and the government takes the | money. | | But Paypal? They have zero claim to the money, and they could | be in hot water even for merely holding on to it. | | But to seize it? There is just no way that any bank involved | in AML enforcement can keep funds for themselves, and any | supervisory authority who's handed evidence to such a | practice would tear them apart. | kragen wrote: | They could plausibly return it to the people who paid it | in, if their excuse is that it's believed to be fraudulent. | Six months of float is enough to make a significant amount | of money, too, especially if it's in an inflating currency | (like the dollar over the last year). | loceng wrote: | Indeed, their behaviour should be criminal if it somehow | already isn't. | kweks wrote: | I definitely appreciate the arm-chair assistance: I'm | unfamiliar with the Luxembourg jurisdiction, so your | pointers are great - we will discuss with our lawyers. | | From what I understood, Luxembourg's consumer laws are more | loosely defined than that of other EU jurisdictions - which | makes the type of T&C that PP has established easier to | maintain. | effingwewt wrote: | Good. I love when companies are so big they do as they please | and retaliate when brought to task. | | Hopefully it's one more nail in their coffin. | | All the best, hope this is the beginning of their end. | shoulderfake wrote: | the only way this stuff will change is if the fines are | SUBSTANTIAL | bigjimmyjohnson wrote: | It's theft in great amounts of money. Fines are necessary | but not sufficient. There should be prison time. | andrepd wrote: | This applies to a great deal of white-collar crime. As | long as there aren't serious PERSONAL consequences for | wrongdoing, just a fine that the company coffers will pay | as the cost of doing business, nothing will change. We | need to start to put CEOs in actual prison and to forfeit | their fortune. | effingwewt wrote: | Agreed, _that 's_ the only thing that will stop this | garbage. | | Between companies and banks doing this, our own | government allowing civil forfeiture, and the penalties- | of there even are any, are a monetary slap on the wrist, | what recourse do we have? | | We can't even change the laws because money lobbies and | always wins. | | I really hope this is the tide changing. | tedivm wrote: | PayPals parent company, Ebay, is not exactly innocent | either. | | > Federal prosecutors have said the harassment included | anonymous deliveries of items like live insects, a funeral | wreath, and a bloody pig face Halloween mask to the | couple's home. The employees also sent pornographic | magazines with the husband's name on it to their neighbor's | house and planned to break into the couple's garage to | install a GPS device on their car. | | https://abcnews.go.com/Business/wireStory/couple-ebay- | harass... | mdek wrote: | FYI Ebay no longer owns Paypal, and hasn't for several | years. Per | https://en.wikipedia.org/wiki/Timeline_of_PayPal | | > _September 2014 onward: It is announced that PayPal | will be split off eBay. The split will be completed by | the second quarter of 2015._ | Scoundreller wrote: | EBay is actively de-integrating PayPal. E.g. sellers are | being required to provide their banking info to eBay for | eBay to deposit payments directly. | | It was dumb to see eBay send two verification payments to | "authorize" my bank account, of 1 cent and 3 cents, and | after confirming, they let me know that they were going | to take their 4 cents back. | nradov wrote: | There's nothing dumb about it. This is common practice | when linking accounts throughout the financial services | industry. Like my stockbroker did it when I linked my | bank checking account. By verifying the amounts on two | small payments you give them reasonable assurance that | you actually control the account. This protects against | both fraud and accidental account number data entry | errors. | Scoundreller wrote: | It was the clawback of the hilariously low amount that I | found dumb, not the verification technique. | | In my experience, it's 2x double digit amounts, not two | single digit amounts. I guess if they're clawing it back, | maybe my low sums are out of randomness, or maybe they've | really lowered the cap on the test deposits (less | float/fraud loss but less security?). | mthoms wrote: | I suspect it's because they want to verify they can | withdraw from the account, not just deposit. Maybe they | have deposit-only account links but IIRC the default is | two-way. That's because, for example, you can subscribe | to various services using PayPal (if you have no funds in | your PP account they will withdraw it from your bank | account). | Scoundreller wrote: | This makes a lot of sense. Lots of advice in the early | days of PayPal to have a separate account for them and | keep nothing in it. | colanderman wrote: | ACH fees almost certainly mean it's not "worth" it to | pull back the 4 cents. | | But I can see people being frustrated by verification | payments throwing their bookkeeping off, especially by a | (literally) random amount. | Scoundreller wrote: | I couldn't tell if the numbers were just randomly low or | decidedly low. | | I'm used to the amounts being larger and thinking "hey, a | free dollar almost", but if they are random, 1 cent and 1 | cent are entirely possible. | bluGill wrote: | random under $1 in every bank I've had do this. It better | be a good random algorithm, if it isn't you can defraud a | lot of people fast. (I won't say how, but I think anyone | here can guess quickly) | mdek wrote: | Per the article, Paypal is seizing the money as damages: | | > _It also said that the money was taken from her account "for | its liquidated damages arising from those AUP violations | pursuant to the User Agreement._ | ckastner wrote: | Indeed, this is an important point that I missed. So if I get | this right, this isn't about actually AML activity, but a | civil claim under something like ToS. | | So I looked up the AUP, and indeed: they claim $2,500(!) | liquidated damages per violation of the AUP, which is on | average a ridiculously high amount. Selling 10 individual | bottles of wine without approval will incur $25,000 damages | under this scheme. | | Given these terms, you have to be absolutely _nuts_ to sign | any agreement with Paypal. | nikanj wrote: | On what power? "We are big and have money. You are small and | have no money". | | This has been a reliable source of power for at least a century | edoceo wrote: | Longer than that. | ckastner wrote: | I meant on what official authority. | | I understand what you meant to say, but realize that this is | like some random bully stopping cars on the highway and | issuing speeding tickets. Victims might play along for a | while, but when actual law enforcement shows up, the bully is | going to have a very bad time. | erichocean wrote: | > _this is like some random bully stopping cars on the | highway and issuing speeding tickets_ | | LOL, I've paid that _exact_ "fine", the "bullies" were | official, uniformed Mexican police. They were literally | just flagging everyone on vacation at a specific resort, | along the only road from that resort into town (with a big | chain across the road to collect everyone) and taking $200 | to be allowed to continue on. Nice work if you can get it I | guess. | | I've also paid bribes to bullies in Yugoslavia ("people | with machine guns standing in the road") in order to pass | by. I don't think they were official though. | technothrasher wrote: | I had to pay an extra $90 when crossing the border into | Zimbabwe. I was a little slow and asked all innocently | why I had to pay more then the official entry tax when | the guy in front of me paid the normal amount. The guy | just shifted his AK-47 a bit and repeated the request. I | figured it out at that point and forked it over. | anonAndOn wrote: | I don't know if this is still true, but years ago if you | wanted to board your plane in La Paz, Bolivia everyone | had to hand the police officer at the gate $20 USD cash | (no substitutions) to board the plane. It didn't matter | your nationality or where the plane was headed, just hand | over $20 bucks or GTFO. | hallway_monitor wrote: | Yes, rental cars stick out like a sore thumb so keep some | cash on you. It is usually easy to negotiate them down by | 50% though! | hnov wrote: | You can tell them, "dame la multa" (give me my fine) and | most of the time they'll wave you on. | dobs_bob wrote: | Imagine an Elon Musk company being total douchebags! | aasasd wrote: | I've heard about their 'freeze and seize' business model in mid- | late 2000s, so it's been going on for almost fifteen years | already, maybe more. | | Meanwhile Paypal's early top execs are icons of US business and | techbros. This Musk is probably a really solid guy, what's not to | like! | Jiro wrote: | Link to actual lawsuit: https://aupdamages.com/wp- | content/uploads/2022/01/PayPal_Fil... | | (I had to Google this and find it in a Reddit thread, so it's not | directly from the court's website. If anyone can find that it'd | help) | kingcharles wrote: | It took a bit to find it because PACER's search is awful. Plus | you have to PAY for every search. | | I bought all the current docket entries and added them to RECAP | so you can download them for free: | | https://www.courtlistener.com/docket/62596200/evans-v-paypal... | | EDIT: From PayPal's AUP in the Complaint.. yowch! "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." | Ekaros wrote: | That took way way too long... How is it possible that this | happens only now and not shortly after PayPal launched? | toast0 wrote: | I can recall reading many PayPal horror stories, but as I | recall, they were all accounts frozen and then usually closed | and paid out 6+months later. This story and others in comments | suggest PayPal has decided not to pay out the frozen accounts | anymore. Damages from freezing the money for 6 months are real, | but may not be realistically legally actionable; damages from | not paying the funds are clearly actionable. | thebiss wrote: | Before Paypal launched, only companies had relationships with | payment processors and could directly accept major credit | cards. Individuals had basically nothing. | | Paypal was a huge catalyst for online auctions and small | business, and it took took time for behavior like this to | develop. And as others have said, they worked hard to not be a | bank. | pizza234 wrote: | Very good news, especially the potential class action. | | Something that I find very interesting is how the individual | lawsuits will end. I remember (but can't find) a David vs Goliath | case from some time ago, where a user brought Google to the small | claims court. He won the case in that venue, but subsequently | lost when Google followed up an brought a huge amount of | documentation and won. The guy's conclusion was that Google knows | _a lot_ of stuff and can leverage it; I think that the events | could play similarly, here. | durnygbur wrote: | Tightening of mobile phone policies some years ago locked me out | of few paypal accounts, also they seem to completely disregard | and abandon security questions created long time ago. | lvl100 wrote: | Are they still using pandemic as an excuse for not having live | customer service? Paypal is simply the worst. I've once had to | reach one of their execs to get a problem resolved only they | couldn't get it resolved. | LgWoodenBadger wrote: | Fwiw, I closed my family's PayPal accounts just now in response | to this. Enough is enough. | antihero wrote: | Thing that amazes me is that people leave huge amounts of money | in their PayPal instead of withdrawing it regularly. Why not just | withdraw it, and then PayPal has nothing to seize! | boring_twenties wrote: | In the past at least, PayPal has also been known for simply | taking funds from your linked banked account. | | So maybe it's better to not link a bank account at all, which | means leaving funds in your PayPal account until you can spend | them (since you have no way of withdrawing). | ceejayoz wrote: | Or link a bank account in the middle, between your primary | one and PayPal, that exists solely to receive and pass along | your funds. | TheNewsIsHere wrote: | I do this, but not specifically for PayPal. I have a | checking account solely for using with third parties, | writing checks, debit card transactions, account linking, | etc. It has overdraft protection disabled. All my bank | funds are in a "private" accounts that aren't linked | anywhere, don't have checks, etc. | chris_wot wrote: | Surely dropping PayPal would be way easier? | ceejayoz wrote: | On the consumer side, I'd much rather use PayPal than put | my card number into a potentially dodgy site. Protects me | quite a bit, and with a easier UI. | | If I can't PayPal or Apple Pay, I've at times gone | elsewhere. | datavirtue wrote: | You have zero risk in this situation so I'm not sure why | you feel protected. | ceejayoz wrote: | It's not zero risk; changing my card numbers after a | compromise is an annoying process given the number of | places I have to do it. Not having to provide that number | to the random e-commerce site I'm trying to buy something | unusual from is helpful, and reduces the risk of me | having to spend an afternoon making sure I switched | cable, internet, Github, Patreon, Heroku, kids' school | lunches, music lessons, and fifty other recurring | payments over to a new card number. | | (I also get to skip entering card and billing details | every time. Given the number of sites that see fit to use | a special non-standard widget for the state field, that | saves me time and annoyance on every transaction of this | nature, too.) | ranger_danger wrote: | My credit card provider allows me to create unlimited | virtual card numbers with any expiration date I want, | that way every transaction can be its own number and any | fraud is extremely easy to detect and prevent. | ceejayoz wrote: | Cool, but mine doesn't. | alex_sf wrote: | Check out https://privacy.com/. Pretty neat and gives | similar/better features. | ceejayoz wrote: | Tried it, but I'm giving up serious credit card points | that way. | AlfeG wrote: | All banks I've using have strong 3D secure. One of the | banks require biometrics approve with installed phone | app. I have no issues directly use credit card on random | merchant sites for years. Especially when most of them | use one of the popular payment aggregators. | ceejayoz wrote: | > All banks I've using have strong 3D secure. | | I've yet to see any bank in the US implement such a | thing. | | Citi, Discover, American Express, Chase, and my local | credit union all lack such a two-factor setup for | charges. | sebzim4500 wrote: | That is crazy to me. Could you at least link PayPal to an | account which you do not leave funds in? | boring_twenties wrote: | Yes, that seems like a good option, provided you can find a | bank account that's free with no hoops to jump through. | KeyBank offered one at some point, not sure if they still | do. | ashwagary wrote: | Might need to use a credit union instead of a traditional | bank. | zaarn wrote: | I'd just go to my bank and tell them to reverse the transfer. | Thanks to SEPA for that one. | greedo wrote: | Paypal will issue physical checks if you want to withdraw | funds. They charge $1.50 for this service, but I use it since | I refuse to link any of my bank accounts directly. I have a | credit card linked, but that's a safer (in my mind) way to | deal with any PayPal shenanigans. | cuteboy19 wrote: | Wait so merchants can just pull funds out of accounts without | user authentication? This seems tailor made to facilitate | fraud. | TheNewsIsHere wrote: | Not universally but a lot of the ACH agreements you consent | to have a clause allowing drafts to be initiated on-demand | until you revoke that consent. This isn't necessarily bad | and can often be desirable, but then it's often up to you | and the withdrawing party to settle your disputes about | what is authorized and what is not. | tootahe45 wrote: | They offer the worst currency conversion rate imaginable when | you go to withdraw to your non-US bank, so some people prefer | to keep it in PP as a USD spending account i guess. | MikeDelta wrote: | True, if I have to pay in a foreign currency I let Paypal | charge my cc in that currency, so that the cc company | converts my currency instead of Paypal. | | I don't recall the difference, but I believe the cc company | gave me more than an order of magninude tighter spread on the | conversion, perhaps even two. | genocidicbunny wrote: | Sometimes PayPal institutes transfer limits on accounts, so its | entirely possible that they don't let you transfer out the | money fast enough. | sharemywin wrote: | If you move 50k a week it could still be a problem. | Cthulhu_ wrote: | If you move 50K a week you can engage a payment platform to | accept other means of payment in addition to Paypal, then | reorganize how people pay so that paypal is de-emphasized in | favor of more secure, lower cost, etc means of paying you. | | Hell, for that kind of money you can hire an accountant or a | full dev team to do it for you. | creshal wrote: | Paypal still makes it hard for you to automatically transfer | out money, so you have to remember to do it manually every so | often. And then they'll block you anyway because you tried to | transfer out | | - too much | | - too often | | - too seldomly | | - too little | | Or any combination thereof. The only winning move it to not use | it in the first place. | PaulDavisThe1st wrote: | It's trivial set to up automatic payout. The only issue with | it is that you can only get _daily_ automatic payout, which | for some of us is not desirable. | | I manually move $15-20k out of PayPal on the last/first day | of every month, and never have an issue with this. Could be | because it's a merchant account. | shiftpgdn wrote: | Merchant accounts have a feature called auto leveling to | automatically move money to a bank account that can be | enabled with a phone call. | [deleted] | jliptzin wrote: | Exorbitant punitive damages please, this is long overdue. ___________________________________________________________________ (page generated 2022-01-14 23:00 UTC)