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Why does PayPal want an Social Security Number?

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  #1  
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Why does PayPal want an Social Security Number?


What can PayPal find out about you if you give them your SSN and why do they want it?



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  #2  
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Credit report?

  #3  
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Anything they want if someone wants to be malicious, but theres only a few ways to get info like that, and those are monitored heavily because of the potential for abuse.

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  #4  
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So they can report your PayPal income to the IRS.

http://www.nytimes.com/2006/04/12/te...erland&emc=rss

20% of 27 billion is a lot of money to overlook. With penalties for non reporting the government could match that 27 billion.

  #5  
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That's one of the many reasons I don't use paypal for my business. Imagine if your Pay Pal account is hacked. There goes your identity.

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Quote:
Originally Posted by WHC - Travis View Post
That's one of the many reasons I don't use paypal for my business. Imagine if your Pay Pal account is hacked. There goes your identity.
Have a credit card, a cell phone?
There are various other business entities that require or say that they require your SS# that could also be hacked.

  #7  
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Quote:
Originally Posted by HH-Mike View Post
Have a credit card, a cell phone?
There are various other business entities that require or say that they require your SS# that could also be hacked.
Yeah but none of them quite like Pay Pal because all a pay pal account requires is one password. It's like having the root password to someone's server... there's no safeguards in place.

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  #8  
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Quote:
Originally Posted by WHC - Travis View Post
Yeah but none of them quite like Pay Pal because all a pay pal account requires is one password. It's like having the root password to someone's server... there's no safeguards in place.
Looking at my paypal account I can not find the ss# displayed anywhere.
I did run across Paypal's Security Key which look interesting. It does cost $5, but they send you this little device that generates a new 6digit number every 30 seconds.
So email address, password & 6 digit number to log in.

  #9  
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Firstly, your identity cannot be stolen simply if your PayPal account is compromised. Worse case scenario, the attacker would be able to wipe out your PayPal and any accounts linked to it, which although can definitely be a pain, it isn't something that can't be fixed with a few phone calls. PayPal will usually always be willing to help in these kinds of situations, and even if they aren't, your bank will almost undoubtedly be able to help recover any stolen funds.

Regarding the OP's question, the main reason PayPal would be interested in having your SSN is for credit reporting purposes, for example if you somehow go into negative account balance, PayPal wants to be able to put delinquent account marks on your credit report, as well as turn that information over to their third party debt collection agencies. (Usually, I.C. Systems and/or NCO Financial)

Since it's completely possible to verify your PayPal without providing a social security number, I'd advise against it, as PayPal is known to have some horror stories in regards to chargebacks against sellers, or unfairly siding with the buyer in the case of a dispute.

  #10  
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When you are getting a merchant account - you are somewhat borrowing money from the merchant account provider.

Let's say you get a merchant account from Chris at CDGCommerce. You then start to "sell" real Gucci bags for $50. Wow - that's a deal, so people will be buying a lot from you. Now, this has gone on for a month, and you sold $50,000.

Now you are gone - and the money is not in the bank. The customers will be calling their issuing bank to get their money back. And they will - possibly reason code 51. And guess who will be out all that money? Chris at CDG will.

Having that SSN will help Chris track you down and get his money back.

Of course, I am not saying you are doing this, etc but I am trying to give you a good example on why merchant account providers and Internet Payment Service Providers want your social security number.

  #11  
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Thanks Offshore and Corey, those were good explanations. I was able to get varified without giving the SSN to PP. But it is good to know how this stuff works. I have always tried hard to be in compliance with various regulations and laws. There is so much fraud going on that even when you are an honest seller, the payment service providers have a tendency to view everyone as a risk. But I guess if I were in their shoes, I would too.

  #12  
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Glad I could help Ron and glad that it all worked out for you. Good luck with everything!

  #13  
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Quote:
Originally Posted by Ron View Post
What can PayPal find out about you if you give them your SSN and why do they want it?
The reason why they ask for Social Security number is because of the Patriot Act.

Many of our merchants questioned the same thing, and it's the government that requires it.

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  #14  
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Just keep in mind that merchant account providers and PayPal have been asking for SSNs long before the Patriot Act was ever enacted. Asking for SSN is a way for a lot of credit providers to help idenfity an individual.

The SSN is being abused by some companies asking for it (and using it in some IDs). The number was created to help track people in the Social Security program not for some of the purposes that it is being used for today.

  #15  
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Sure. Aside from Patriot Act, for instance, merchant companies use the SS# to pull credit to see if there are any open BKs and to see overall standing of the merchant.

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