- https://news.ycombinator.com/item?id=29935515
- https://news.ycombinator.com/item?id=32739950
If it wasn't obvious, cherry-picking bits and pieces from various jurisdictions isn't legal; PayPal deftly deflects any legal challenges to their various dispersed entities making them essentially untouchable if you don't have unlimited resources.
If anyone is interested, in the EU, this is their playbook:
- Ignore all communications unless it's a C&D from lawyers
- Deflect responsibility to PayPal Luxembourg.
- They have, or have had literally 90% of LU lawyers retained, meaning your case will not / cannot be accepted by the majority of LU law-firms due to conflict of interest
- Deflect onto the CSSF (Luxembourg Monetary Watchdog)
- Respond to the CSSF that the complaining company is not based in Luxembourg, which results in the CSSF concluding that they are not the competent structure to rule.
- Case closed, your funds have been stolen, and PayPal has artfully dodged the relevant regulatory bodies.
Luxembourg seems like an even shadier place than Switzerland for money laundering -- the "legal" kind. There is a stock exchange in Luxembourg that is used for all kinds of back door listings to avoid regulation in other jurisdictions. It is is /similar/ to money managers using Caribbean Islands (Cayman, BVI, etc.) for their business registration.
It took us literally a month of calling LU law firms until we finally found one that didn't have ties to / being the tentacles of PayPal.
Credit cards - yes you might lose 20% of your customers - but can u find a payment processor to handle your business?
EDIT: the story from your other comments is pretty hair raising!!
I disagree with first hand experience. LU is a money laundering state, simliar to Switzerland, or akin to Ireland for dodging corporate taxes. The EU would be a better place if it removed/cancelled all of this shitty economic behaviour!
Okay so before I say anything that ends up putting my foot in my mouth, lemme just check something real quick…
http://web.archive.org/web/20001018034024/http://paypalsucks... well, this won't work…
http://web.archive.org/web/20001206210200/http://paypalsucks... neither will this…
http://web.archive.org/web/20010215013627/http://paypalsucks... ah yes, roughly the first time it went online.
http://web.archive.org/web/20200707092456/http://paypalsucks... …aaand the last successful crawl before hosting expiration/domain reparking.
Well, I can now confidently say:
We've known that for literally decadeS.
Edit, in fact, come to think of it, that—almost certainly—means:
People've linked PayPalSucks.com in the comments on Slashdot _since before 9/11_.
NOT a criticism, more an observation.
And I thought the practice of scaring me with "unusual activity on your account", then locking me out until I am sending them all the required proof of identity (photocopy of ID, proof of postal address, ..., that they demand and as a private corporation will handle and store and review this very sensitive set of data some sort of way by who knows who.... ).
When I sent what they asked for and asked them about the nature of the "unusual activity" and if they reported it to the relevant authorities (possible breach of a monetary account) the response was a big fat nothing. I thought to ask them to provide the evidence on the "unusual acctivity" after this as I plan to contact local authorities myself to report the hacker of my account or whatever the "unusual activity" prompting strict measures required was - must be serious and illegitimate! - but decided not to. Does not worth the effort.
Rather I closed my account for good and not looking back. I will not rely on them this way, I thought. And from the above list I believe I was right. I did not regret this so far in the past ca. 5 years.
Bye Bye PayPal.
A society that rewards people and organizations for placing themselves above the law is a society on the way down.
In this instance the CSSF is rigorous, but ultimately rigid. They have clearly defined boundaries and protocols. The problem is that companies such as PayPal exploit this to their benefit - which means that they ultimately use the watchdog entities as peons to execute their illegal practices.
It falls under the CSSF's jurisdiction:
"PayPal has the status of a Luxembourg credit institution and is under the prudential supervision of the Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier (the "CSSF"). The registered office of the CSSF is located at L-1150 Luxembourg (Luxembourg)."
The terms of use for paypal have a mandatory arbitration clause that all disputes should be submitted to binding arbitration. This isn't necessarily bad. I've gotten clients money back every time so far. You just need to know what strategy you are pursuing. There are two ways you can go about it - File for arbitration or file in small claims court. One good thing about arbitration is that under the terms of use, and to a certain extent procedural rules, that paypal has to pay the costs of arbitration up front if you ask them. This means you do not have to pay anything for your claim to be heard. Here is the main problem at first - due to the procedural rules for arbitration, any party can have the action dismissed at their request if the claim is cognizable in small claims court where the plaintiff resides. Small claims court usually handles claims up to 5000 and there are certain types of claims excluded. To get around this, you need just to state your claim is worth more than 5000 to prevent your case from being dismissed . The small claims route works as well. Paypal is unlikely to send an attorney to represent them. You'll get a judgment but then will have to collect on it. Also you'll have to pay some costs up front. The reason this is typically so easy is because the reasons paypal gives for acceptal use policy violations are typically not grounded in any facts. The theft is so transparent that they are unable to defend the action in any serious way.
Any service could say that you’ll have to pay $2,500 for violating the TOS if they want to. Instagram could say it, but nobody would give the money to them willingly and since it’s a bullshit clickwrap contract they’d have a hard time finding a sympathetic court to inflict it on you.
The problem is that PayPal says it and then doesn’t just shut your account down unaccountably with no human recourse they take thousands of dollars of your own money when they do it, and you’d have to fight them in court for it. It’s a fait accompli situation.
No it’s not remotely ethical.
Stubhub has a similar policy where you automatically get charged the entire sale price as a penalty (which goes entirely to Stubhub, separate and in addition to them refunding the buyer) for cancelling an order. Even if you do it right after sale. Most platforms like eBay or Amazon will give you some kind of strike for that, but I'd never heard of anyone attempting to fine you money beyond refunding the buyer. I cancelled the credit card so they can't charge me, but apparently they send people to collections for this. IANAL, but I think I might be able to argue that it is unreasonable liquidated damages, especially since their help site refers to it as a "penalty." PayPal is clearly trying to use the right language here, calling it an estimate of hard to calculate damages.
I think these liquidated damages in consumer contracts are really a terrible idea and getting more and more common with online companies. Apparently Zipcar will charge a $50 late fee if you are even one minute late, whereas other rental firms charge something like $12 a day and wouldn't even think of counting minutes.
I agree.
> and getting more and more common with online companies. Apparently Zipcar will charge a $50 late fee if you are even one minute late, whereas other rental firms charge something like $12 a day and wouldn't even think of counting minutes.
I'd hope customers catch on, and competition takes care of this.
You mean they all realize it’s a great idea and implement same fees?
That is the last business Avis will ever get from me. And ideally from some of you guys reading this too.
Section 5 is new. It covers posts, content, etc that PayPal finds objectionable.
To understand this in context, say I’m a website based business that posts conspiracy theories about JFK and UFOs. People pay for exclusive content via paypal.
If I get labeled as misinformation on 300 posts, I could owe PayPal a minimum of $750,000 (300 * $2,500). I’m not saying PayPal will do that, but that appears fair game given the terms being provided here.
To me, this is what the document suggests.
They take the money, and there is nothing you can do. If you spend enough money on lawyers, eventually they would give you the money back, but you'd lose on that deal too.
Ethically and morally it's abhorrent, it degrades the power of the law, but they can get away with it. Fuckers.
If property is the subject of a reasonable dispute-- e.g. whether a contractual term applies-- whomever is holding the property has the upper hand. Especially if the amount of property/money is small compared to the probable cost of litigation and especially so if one is unlikely to recover legal fees.
In any case, I agree with https://news.ycombinator.com/item?id=33063096
> This is nonsense,
ORLY?
When PayPal closes people's accounts and keeps the money, in what percentage of cases do you think the people eventually get their money back?
My guess is far fewer than 10%.
They should rename themselves to PayUs.
The people it actually takes this steps against will be those who violate some secret internal policy, presumably. They don't enforce it against every violator because the number of violators means it would destroy their business.
Effectively, they can charge anyone using PayPal $2500 per incident of the following violation after Nov 3, 2022 (why the title was changed I don’t know):
> involve the sending, posting or publication of any messages, content or materials that, in PayPal’s sole discretion, (a) are harmful, obscene, harassing or objectionable, (b) depict or appear to depict nudity, sexual or other intimate activities, (c) depict or promote illegal drug use, (d) depict or promote violence, criminal activity, cruelty or self-harm (e) depict, promote or incite hatred or discrimination of protected groups or of individuals or groups based on protected characteristics (e.g. race, religion, gender or gender identity, sexual orientation etc.) (f) presents a risk to consumer safety or (financial) wellbeing, (g) are fraudulent, promote misinformation or are unlawful, (h) infringes the intellectual property rights or other proprietary rights of any party or (i) are otherwise unfit for publication.
So you're not allowed to sell a significant amount of art? I'm not talking about artistic nudes, I'm talking about a lot of Renaissance style works (e.g. Birth of Venus[0]) or Art Nouveau (e.g. By the River of Tuonela[1] -- which also isn't child porn), which I think everyone agrees aren't pornographic in nature.
> (c) depict or promote illegal drug use,
Are Snoop Dogg and Willie Nelson promoting weed? Cheech and Chong? Harold and Kumar? Do you incur a >=$2.5k fine for selling H&K Go to White Castle DVD to your friend?
> (e) depict, promote or incite hatred or discrimination of protected groups or of individuals or groups based on protected characteristics (e.g. race, religion, gender or gender identity, sexual orientation etc.)
Can we not sell old Disney cartoons collections? Or Loony Toons? What about more modern things like Django Unchained? Does this apply to books? That sure rules out a lot of important books.
I get wanting to be moral, but these rules are so broad it feels like PayPal is just saying "Don't use our service." You can make Nazis, fascists, Klan members, pornographers, and sex traffickers violators of your service without making people that sell historical art, popular music, and books violators. I can't imagine how someone approved this language. Is there context missing?
[0] https://en.wikipedia.org/wiki/The_Birth_of_Venus#/media/File...
[1] https://en.wikipedia.org/wiki/Art_Nouveau#/media/File:Gallen...
This one is truly outrageous - "depict"??? There goes 5/6 of human culture. I seriously doubt you can find much literature or cinema that doesn't "depict [...] hatred or discrimination of protected groups or individuals". Especially not in any kind of socially conscious writing. Goodbye, any portrayal of MLK. Goodbye, any movie about gay rights.
Of course the policy as written is outrageous, dumb, and silly even by clown world standards. You couldn't make Roots or many other thought-provoking works today with a proper reading of that policy.
However, the real goal of this policy probably isn't to dictate actual policy into stone tablets for the masses to follow. The real goal of the policy probably is to give PayPal carte-blanche to do whatever the hell they want to dictate culture and impact politics without getting sued.
If you become annoying or a political adversary of PayPal's management, they can find something to ban you and hurt you with.
If you technically violate the policy, but aren't their opposition, I'm sure you will be ignored.
Yes. The missing part is that when every customer is technically violating one or more policies, they can pick and choose who to target without further justification. Like discretionary traffic enforcement, they're not going to "fine" everyone who sells a Snoop Dogg CD, but they can keep the option in their back pocket as a pretext.
Say I run a UFO spotting website with 300 posts on UFOs. I have a steady stream of revenue of $5,000 per month from subscribers and use PayPal to collect payments; have been for a decade.
If paypal labels my website and all its posts as misinformation, given the terms as I understand them I could instantly have $750,000 frozen or withdrawn from my PayPal (and bank account? - unclear). That's 300 posts x $2,500 minimum fine.
By some measures, PayPal itself does. Should PayPal ban itself?
(for example, anecdotally from an acquaintance in Germany a few years ago, there are some flows that can and will, without the appropriate checks, lead to a customer ending up in a debt to PayPal, and they have some of the worst debt collectors in this regard)
If they ding 1,000,000 people with that who are more likely to pay than not, it's a sweet ~$2.5 billion.
Is this simply a new revenue stream tactic since they're arguably at their peak and aren't going to gain more market share? Maybe they're just trying to milk the remaining users for as much as they can while they see PayPal being a sinking ship?
> If you are a seller and receive funds for transactions that violate the Acceptable Use Policy, then in addition to being subject to the above actions you will be liable to PayPal for the amount of PayPal’s damages caused by your violation of the Acceptable Use Policy. 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. [emphasis is mine]
As I read this (not a lawyer) PayPal claims that any violation of their acceptable use policy will result in an a̶u̶t̶o̶m̶a̶t̶i̶c̶ charge of $2500 because that represents the "minimum estimate" of the damage your violation causes them.
On top of being completely a completely unacceptable policy, the idea that any violation costs them at least $2500 is complete fucking horseshit, if you'll pardon my explicitness. There is absolutely no way I would ever do business with PayPal as a seller under any circumstances, even if it was my customers' preferred method.