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PayPal, the online payments unit of eBay, has agreed with attorneys general from 28 U.S. states to improve how it notifies users of their consumer rights, the company said Thursday.
Under the deal, PayPal will also pay $1.7 million to the states.
In addition, PayPal said it reached a settlement in a proposed class action lawsuit by PayPal customers in a U.S. federal court in Brooklyn, N.Y. PayPal agreed to set up a settlement fund of $3.5 million, less court costs and attorneys fees.
PayPal In Settlement Deal With 28 States [news.zdnet.com]
We never had a complaint 2 years if I would have had 1000.00 or any amount in the account it would have been frozen for months I had heard these stories about paypal so we always drained it so if this happened we wouldn't be hammered.
I say it's to cheap they need to pay more.
[edited by: bwnbwn at 3:44 pm (utc) on Sep. 29, 2006]
Thank god, pay pal needed to have this happen. We stopped using them a while ago because of their bad customer service and policies.
The AGs need to get together and file a suit on behalf of the merchants.
Any of you who have ever tried to close your PayPal account will have found that it's practically impossible to do. Years ago, I found the only place that explained how to close it on a site that also has forums that include testimonials from PayPal employees talking about how horrible some of the company's policies are. You can find the site by googling "no PayPal".
[edited by: Car_Guy at 4:58 pm (utc) on Sep. 29, 2006]
The customer service is horrendous, and they can freeze your account at any moment on a whim, and steal your money for six months if they want to. Anyone who relies on PayPal for accepting payments is at risk - they have no regulations like banks do, and don't care who they hurt - just google PayPal Sucks and you'll see many, many stories from people who have been victimized by them.
I can't wait until there are more lawsuits against PayPal on behalf of the merchants they've preyed upon. I think they should also be sued for their "protection policies" which are fake as well.
Life is SO much better now that we are using a real merchant account.
The worst thing I'd say is how long the "Dispute Resolution Process" can take. I'd rather they just made a decision in 24 hours and seller/buyer could move on. Waiting for weeks and not knowing how much money you have in an account makes bookkeeping stressful.
Re: the amount they settled for --- it's peanuts. Here's some numbers... (and don't forget that eBay owns PayPal... these numbers do not include eBay profits).
"...eBay's PayPal service fared well in the second quarter, generating $330.7 million, a 39 percent increase from the same time last year. PayPal ended June will 114 million account holders, a 44 percent increase from a year ago."
-Antique Trader, August 9, 2006
It is an unregulated so-called "financial payment services broker". Their TOS reads like a health insurance policy that can and alway is interpreted to Paypal's advantage.
With that said, Paypal is a great platform for in-house payment services for ebay members...and should be restricted to ebay. It is definitely not suitable for real ecommerce.
I wish the attorney generals stipulated in the settlement that Paypal put in bold letters on the home page..."caveat emptor"..."buyer beware".
I agree, paypal is indeed a problem to work with.I have used paypal for 5 years without problems, and then all of a sudden, they freeze your account for no reason, no problem. Hopefully lawsuits like these will improve CS issues there at Paypal.
To illustrate my attitude reflected in the above post...
Used paypal for a couple of years when it first came out...no chargebacks during that time until 3 occurred in one month. Proof of delivery by signature confirmation proved the customer did receive the product. We had allowed our paypal balance to grow to over $30,000.00. The chargebacks amounted to a culmulative total not exceeding $200.00. Our account was locked and it took almost $2000.00 in legal expenses and 8 months to get our money from Paypal.
How about doing daily sweeps of money from Paypal to your main account?
Because when Paypal first came out (and probably still is the case), the associated checking account could/can be debited by Paypal for any amount it sees fit...then lock your Paypal account. This is according to the Paypal TOS.
To circumvent this process you need to auto sweep your Paypal account, then transfer the funds from the associated bank account into another.
the associated checking account could/can be debited by Paypal for any amount it sees fit. [...] This is according to the Paypal TOS.
This is not the current PayPal policy. (I don't have older revisions of the User Agreement at my immediate disposal, so I can't speak to what the exact policy was "when PayPal first came out.")
According to the PayPal User Agreement, and specifically the Payments (Sending, Receiving, and Withdrawals) Policy (located at [paypal.com...] )
[1.3] Electronic Transfers. When you make a payment through PayPal that is funded by Instant Transfer or eCheck, and when you initiate an "Add Funds" transaction you are requesting an electronic transfer from your bank account. Upon such request, PayPal will make electronic transfers via the Automated Clearing House (ACH) system from your U.S. or Canadian bank account in the amount you specify. You agree that such requests constitute your authorization for such transfers. PayPal will never make transfers from your bank account without your authorization.
PayPal will not initiate a request to transfer money from your bank account without getting your approval. In the event that a transaction is put on hold, PayPal may cancel pending withdrawals from your PayPal balance to keep the funds from being released, but will not automatically debit your bank account. If your account has a negative balance, you will be asked to approve an additional amount to restore the balance the next time you attempt to send a payment or use the "Add funds" feature.
Paypal is probably an okay organization now, but it is a shame that it has taken merchants to fight its unfairness through legal action to get there. With this being so, IMO they have permanently tarnished their reputation with the more established ecommerce merchants.
I won't use them anymore except maybe for very minor purchases. With a charge card you can at least contest the charge if you get sold a defective product, but Paypal doesn't have any meaningful grievance procedure for customers.
Better way people!
I couldn't wait to close my account..!
PS: Don't go for it on Ebay..
It's easier to overnight a money order! Than HOLD YOUR BREATH waiting on funds to clear... whether your the sender or receiver!
FRAUD mean anything?
[edited by: Lexi_Lilley at 6:19 pm (utc) on Oct. 13, 2006]