Forum Moderators: buckworks
PayPal acknowledged that the settlement included an injunction mandating certain changes to the company's procedures, but maintained that the modifications had come about independent of the litigation.
I'd like to know what changes are mandated by this settlement.
Paypal Settles (news.com) [news.com.com]
And in my books, anyone -even if they are lawyers- deserves to make good money fighting corporate excess.
PayPal may have done something wrong, but $3 million goes to the lawyers!? (out of $9 million) Tell me that's not true evil...
That's about 35% which is the normal average contingency rate for lawyers. Some even take 50%. It's not so bad when you think that they are taking all the risk and putting all over there time and investment funds into the case upfront whether it wins or not. If they loose the case it's the law firm that looses all there investment into it. The client(s) don't loose anything if they don't win because they did not invest in it. They got someone to take all the risk for them.
It's not much different then any partnership or affiliate marketing really. The affiliate marketer takes the risk of there time and money to get sales to you, so they get a good percent from what they make you.
It is Pay for Performance business model. Same as cases on contingency. Same as having a partner in your business who takes all the risks with you and only makes money (a percent) if the company makes money. You could always hire employees instead but you are taking the risk and up-fronting huge yearly salaries not knowing if you will succeed or not.
On those class action lawsuits there are tons of people who would never be able to afford to upfront pay for an attorney or did not loose enough to justify the expense and risk. So while you can hire an attorney outright for maybe 50k and take the risk yourself, that does not always work best for a lot of people. Contingency gives everyone access to the legal system. So I'm glad those firms are out there...
Hopefully this loss teaches PayPal a lesson. The 5 Million dollars they were trying to steal and gain turned into over a 9 Million dollar loss instead! Plus bad publicity.
It's also nice to hear that there are still court hearings where the outcome actually makes sense. Those are rare these days.
Just the fact that they can do this at anytime and can make it a huge hassle to do anything about it makes me feel they are too much of a risk for my business. I would have to hear that there are not anymore stories of this or other things happening with them from other members before trusting them again. There have been so many people that had there businesses ruined because Paypal froze all there money while they had thousands of orders to fullfil and made it where they could not pay there suppliers and get the orders fulfilled along with very angry customers who they could not even give refunds to because they had no access or control to that money anymore. Sets yourself up for lawsuits against your own company. Possibly even criminal fraud charges against you for not shipping the products.
I heard the things that made them flag people's accounts were just getting one chargeback or even just getting a Repeat customer! So you can't have repeat business with them? At least with your own merchant account you have a certain percent of chargebacks that you are allowed and still be on good grounds with them. I don't even think PayPal really matches people's credit cards with there exact billing and phone info.
There are other problems though. The fact that they have such lax hiring standards with very little pay to the mass amount of there employees and these employees have complete access to ALL of your sensitive data. Most of the fraud has been commited internally from there own employees. Many have been fired for that reason. They won't prosecute them though because they don't want the publicity or for everyone to know there internal security problems.
Do you think people care about companies internal security problems like that? Do you think it would really hurt Paypal for that to be public knowledge like if there were articles on it?
Paypals main success has been the volume of "little guys" not transfering that much cash anyways so I don't know if it would really hurt them...
What do you think?
1) according to PayPal spokeswoman, it "didn't really change the way PayPal has been operating",
Of course not. Nothing will until they are shut down or all indicted.
2) PayPal and eBay are good places to work and attract very high caliber and honest employees
Yeah right. They could only attract very high caliber employees if they paid them decently. I've heard many complaints from ex-employees.
I've also seen the same thing claimed all the time from this company that I know, and I know that they have hired a few ex-cons that work there for years with full access to all data. Paypal is not even honest TO there employees.
Why then with over 45 MILLION members do they have a large part of there customer service dept. out of India? Cheap, Cheap, Cheap.
and 3) if PayPal beleives an account has been compromised, the only thing it can do is limit funds going out of the account pending assurance that things are OK. This usually entails authenticating the account owner and changing passwords.
Except that they don't work with the account owner to resolve anything. They usually just give them the run around and try to wear them down, constantly lying about not receiving there information or handing them off to different people who read the same script to them etc. There customer service sucks!
And except that they Freeze OVER 2,000 PER DAY! I don't think 2,000 a day would really be validly compermised. But since they have no real criteria for what they flag accounts for they can do what they want. Someone buys from you more then ONE time and bam, you are "Compromised"!
They grew too fast....
Who do you think gets that $125k? :)
Why don't they just do a rolling reserve like most other 3rd party processors to cover any possible chargebacks? It is usually about 10%
That's what CCbill does and they are in a High-risk market unlike paypal who doesn't even do adult.
Why don't they just do a rolling reserve like most other 3rd party processors to cover any possible chargebacks? It is usually about 10%
Because of the insane amounts of interest they make on holding the money and not giving the user an option to transfer it out - that's why :)
Why don't they just do a rolling reserve like most other 3rd party processors to cover any possible chargebacks? It is usually about 10%
Because of the insane amounts of interest they make on holding the money and not giving the user an option to transfer it out - that's why :)
