I have never had problems with Paypal.com, but a client of mine sent me some disturbing links. Does anyone know if these situtions are true?



From http://www.superscripts.com/dsstoday/index.html

Paypal is over $500,000,000 in debt. Under investigation by numerous government agencies and now a class action lawsuit filed Feb 2002. Paypal is NOT FDIC insured and has SCAMMED MILLIONS. DO NOT USE THEIR SERVICE. If you have purchased ANYTHING from paypal.com CHARGE IT BACK. They can do NOTHING. For more information to destroy this evil empire see this site. PAYPALWARNING.COM Also see PAYPALSUCKS.COM

Paypal has worked great with me in the past, allthough they charged me $40 one time for trying to transfer money into a bank account, which didn't work. That could have been my fault though.

I have been w/ PayPal for about 2 years now and I've never had a problem.

I went to paypalwarning.com and read some of what they had to say. One of the lawsuits is complaining that PayPal's phone number is hard to find.

That is totally ridiculous. Like any business, they're trying to save money by keeping people from calling their toll free number each and every time they have a question, encouraging them to first look for the answers on their site. Many people are simply too lazy to read or look for the answer... I know I usually am. ;)

I just called PayPal 2 days ago. It took about 5 clicks to find their phone number, but it's there and their customer service people are delightful folks and they handled my query professionally.

They also claim (in the lawsuits) that PayPal will freeze their accounts "for anything" ... I'm assuming "anything" implies some sort of suspicious or illegal activity?

Some interesting stuff I did find out, however...

The SEC has a number of interesting documents regarding PayPal on their site... this one (http://www.sec.gov/Archives/edgar/data/1103415/000091205701533855/a2059025zex-10_16.htm) states a settlement between PayPal and their CFO after they fired him... on August 8, 2001. Interesting.

He signed the agreement on August 29, 2001, just shy of 2 weeks before Sept. 11, which probably kept any shake-up of that company out of the news, especially w/ all the Enron crap going on as well.

They also canned one of their founders in March of 2001...

click here for details (http://www.sec.gov/Archives/edgar/data/1103415/000091205701533855/a2059025zex-10_15.htm).

I don't know if this is suspicious or not - but on Sept 10, 2001, they loaned 1.35 million dollars to one of their employees... wow. Is that normal for a company to issue those types of loans to employees? Click here for the document (http://www.sec.gov/Archives/edgar/data/1103415/000091205701533855/a2059025zex-10_10.htm) . Seems fishy to me, but maybe this is nothing.

According to this document (http://www.sec.gov/Archives/edgar/data/1103415/000091205701533855/a2059025zs-1.htm), their assets climbed from $12million in December 1999 to nearly $250million on June 30, 2001... so it doesn't look like they're going out of business any time soon... but after Enron, we know anything is possible. At least they didn't use Arthur Andersen as their consulting firm... the independent accounting firm they use is PricewaterhouseCoopers LLP.

For now, I'm sticking w/ PayPal - it's fast & convenient... but if anyone here has had some bad dealings w/ them, I would like to hear about it so I can make a more informed decision.

The statements made on the linked page are entirely bogus. Paypal is not $500M in debt -- unless you have a really bizzare definition of debt -- it hasn't "scammed millions" from anyone, Paypal deposits are FDIC insured (Paypal isn't a bank, but user accounts are deposited with FDIC-insured banks)... oh, and paypal certainly can do something if you issue a fraudulent chargeback.

Just making a clarification here - I'm assuming (you know what happens when you "assume") that

The statements made on the linked page are entirely bogus.

Refers to the original post and not to the links I provided.

The Securities and Exchange Commission is a U.S. Governmental entity - links to their site are NOT bogus.

While the paypalwarning.com site and others of that ilk are certainly indicative of our litigious society, they do bring up a valid point -

FDIC insurance only protects customers if the BANKS fail, not if PayPal fails. As with all things, caveat emptor.

For now, I'm still a PayPal.com customer/user. I am not one to gasp in shock and start spreading rumors the moment I read some tidbit on-line, but I do wonder why PayPal has not had the anti-paypal sites shut down. Legally, I believe they'd only have legal recourse if the sites were engaging in libel and/or slander. Just food for thought. If a financial empire like Enron can collapse under bad management, it can happen to any company and we know from Enron's creative bookkeeping that no matter what the books say, weird stuff can still be going on behind the scenes.

The potential for abuse is staggering. According to the SEC documents I read (again, on the SEC.GOV (http://www.sec.gov) site, not on the anti-paypal sites), PayPal has offices in the U.S., but they are not a U.S. company.

I agree that the anti-paypal sites are litigious and alarmist - but all of their claims should not be idly dismissed as just bad propaganda. It never hurts to be critical.

Just my 2 cents.:D

The one thing I do know is that if someone submits a "fraudulent transaction" report on you, your account will be frozen. I've had this happen a couple of times (when I've sold some of my personal items on ebay). Even though I was able to produce the required documentation to show that I did indeed send the items to the person, my account was still frozen for more than 24 hours each time. I would never use Paypal for my business because of this. I cannot afford to not be able to accept payments just because some whacko "fraudulently submits a fraudulent transaction report" on me. Besides that, I don't like the idea of being guilty untill proven innocent.

Anyway, it's something to think about.

I have used Paypal and never encountered any problems. However, I don't use it in place of a merchant account. Rather, I use it for auctions, and I use it to pay contractors who do design and other work for me from around the world. It does those things very well.

Its a bit like purchasing a Miata....nice car....fun to drive, but don't try to use it to pull a tandem of trailers....it just isn't designed to replace a tractor.

Originally posted by CROMAG
I just called PayPal 2 days ago. It took about 5 clicks to find their phone number, but it's there and their customer service people are delightful folks and they handled my query professionally.

When I read that about the phone numbers I logged in to see. I actually found their phone numbers on the main page... right above my account activies. So it is very public now, who knows if it was harder to find before, but now it is right there.

I use PayPal.com as an options for my clients. I have my own merchant account, but people like to use paypal. I have about 6 clients that regularly pay me through paypal.. they always pay me on time... so i'm not going to complain.

I think that with any big business, dealing with thousands, probally close to millions for paypal, there will be bad incidents. The questions would be, what is the ratio of bad incidents to good incidents.

I've lost $312 from using PayPal. It was going to be $512, but luckily my bank was able to retrieve some back from Paypal.

Can you please enlighten us on more of the details? This is very helpful if we know the circumstances. Did they take the money out of your bank account? Was your PayPal account frozen or did they confiscate your funds? What happened?

I had unauthorized funds taken from my account. $512. They said they would do nothing about it because I had shared the password with a friend.

Now I wonder how hard is it to reverse funds when they know, and I know, that a hacker (aka BAD person breaking the LAW) took $512 from my account?

I offer Paypal, people use it, probably 1/4 of the time. Since Oct of last year when I started Dixiesys we've done over 2400 transactions (of all types) and no problems whatsoever.

I love the debit card, I do roughly 95% of my day-to-day activities with it, eating out, shopping, etc, that 1.5% cash back (into my account) is nice when you make a big purchase! (tires for my van, new stereo in my van, rims on my van, my van...).

I'm sure if they ever screwed me up like I've read about I'd sing a different tune, but after 2451 transactions and over $28,000 in money flowing through my account I feel like they're doing an OK job.

Originally posted by CROMAG
Refers to the original post and not to the links I provided.
Yes, the point was that the information on the superscripts site is (and has been in the past) quite ummm... welll... search the forum regarding past experiences with this site from our members. Not only wouldn't I ever buy anything from this bunch of ... , I surely wouldn't bother reading anything on their site (let alone assume any of it was in any way factual).

Originally posted by mpope
The one thing I do know is that if someone submits a "fraudulent transaction" report on you, your account will be frozen. I've had this happen a couple of times (when I've sold some of my personal items on ebay). Even though I was able to produce the required documentation to show that I did indeed send the items to the person, my account was still frozen for more than 24 hours each time. I would never use Paypal for my business because of this. I cannot afford to not be able to accept payments just because some whacko "fraudulently submits a fraudulent transaction report" on me. Besides that, I don't like the idea of being guilty untill proven innocent.

Anyway, it's something to think about.

More info on PayPal's over zealous freezing of accounts and problems arising from it can be found in this thread :
http://www.webhostingtalk.com/showthread.php?s=&threadid=38218

Our User Agreement does specify that you are not to share account passwords. You may be extremely diligent with your password, but another party may not be (entering it at a spoof site,etc.)

Hi mpope,

Procedure for a disputed transaction (over the past 1.5 years or so) is to isolate the transaction in question, then wait for the seller to provide the details of the transaction. Generally, an account restriction will occur if one of the items in the User Agreement are found to take place. In these forums, I am aware of two account restrictions that were mistakes on our end ( I resolved both as quickly as I could. In one circumstance, I had a great deal of difficulty getting the user to supply me with their account email address0

Did you have outstanding chargeback/buyer complaints that were not resolved?

Hi Djimpact,

I am going to assume that you are an international user because of the fees you mentioned. International users are charged for items returned to us from the bank they directed the payment to (rejections of withdrawals occur because the bank receiving the payment had an issue with it). The general causes:

a) routing transit number incorrect
b) account number incorrect
c) name on the PayPal account did not match the name on the receiving bank account (international banks are fairly picky about this matching exactly)

I would recommend that users check with their banks to see what information they should be using to accept transfers. The charge for a returned deposit is 20.00, so it could be worth your while checking.

Paypal is nice for a small bussiness but eventualy (like me) you will move onto a merchant account e.g propay or 2checkout.com (2checkout.com preffered)
:)

Originally posted by pattox
Paypal is nice for a small bussiness but eventualy (like me) you will move onto a merchant account e.g propay or 2checkout.com (2checkout.com preffered)
:)

We've had a merchant account before we found Paypal. Once we added it as one of our payment options, many peole have opted to use it. We have about 25-35% of our costumers using it, some with subscriptions and others just pay when they get their invoice. I think it works great as another options for payment.

Just remember to remove your money from your account on a regular basis. There have been many cases where users accounts have been frozen, you wouldn't want to be that percentage that has that happen.