Re: [CR]PayPal Sucks!

> This is just the tip of the iceberg. eBay, which of course owns PayPal, is
> conducting a massive operation of consumer fraud and consumer abuse, not to
> mention a flagrant violation of anti-trust laws.
>
> I signed up for PayPal again just a couple of months ago after a couple of
> years of not using an old account. eBay had bought them in the meantime and
> began by fraudently inducing me to sign up. Their story was, just link a
> credit card and make online purchases with no fee. What they fraudently
> failed to disclose was that the credit card only works for a cumulative
> couple of thousand dollars for all of eternity. Then you have to "get
> verifiied", meaning you must let them access your bank account directly. So
> after a couple of months I found my purchasing limit dwindling to nothing
> until I was "verified". I called them and was outraged at their demand to
> link to my bank account. I strongly objected to this, but it was that or be
> denied service, so I reluctantly complied. eBay has used their illegal
> monopoly position to develop PayPal into another illegal abusive monopoly.
> Nearly every auction now has a PayPal button. Many sellers only accept
> PayPal, especially when foreign currencies are involved. So buyers are
> coereced into accepting PayPal's abusive conditions.
>
> Now eBay/PayPal is on a crusade to even further inflate their profits by
> eliminating their costs while maintaining their outrageous fees to sellers.
> This is the point of the "get verified' fraud. PayPal justifies their fees
> by citing the fees they pay to the credit card companies, but now they are
> trying to eliminate those costs by withdrawing funds directly from your
> account. Every time you make a payment, the default funding source is
> direct transfer from your bank account, eliminating all costs to PayPal.
> You have to go to another screen to change the funding source to credit
> card. Then you get a screen telling you how much better direct transfer is
> (yeah - better for PayPal, not you) and you have to confirm that you REALLY
> want to pay with a credit card.
>
> On top of this I recently began hearing reports of PayPal looting customer's
> PayPal accounts, and even their bank accounts, then claiming that their
> abusive, illegal Terms & Conditions allowed them to deny the customer any
> legal recourse for this. Check out:
>
> http://www.paypalsucks.com and
>
> http://www.paypalwarning.com
>
> I'm taking no chances. I went to my credit union and told them I wanted to
> remove all overdraft protection on my checking account linked to PayPal.
> However, they could not assure me that the routing and account number which
> PayPal has would not also allow them to access my savings and money market
> accounts. I could have removed my current account from PayPal and substuted
> a new one, but they have the number, and from what I have read, they might
> well fraudently use it anyway. I therefore had to set up entirely new
> separate checking, savings and money market accounts and order new checks
> and a new ATM card. I've transferred the funds and closed the old savings
> and money market accounts. As soon a I get the new checks, I'll transfer
> the money to the new checking account, leaving the PayPal linked account
> with only a $25 minimum balance. That way they can't steal more than $25
> from me.
>
> If anyone is using PayPal and hasn't gotten "verified" yet, I'd urge you to
> set up a separate checking account with a different account number, no
> overdraft protection, and a minimum blance for linking to PayPal. That will
> save you all the trouble I just went through. If you already have your
> accounts linked to PayPal, you might consider changing your accounts as I
> just did. It is a real pain, but it could save you some bigger financial
> pain later. Of course, it goes without saying that you should never leave a
> balance in your PayPal account itself.
>
> Regards,
>
> Jerry "eBay Sucks" Moos
> Houston, TX
>
>
>
>
>
>
> ----- Original Message -----
> From: "Steve Neago" <questor@cinci.rr.com>
> To: "classicrendezvous" <classicrendezvous@bikelist.org>
> Sent: Saturday, January 03, 2004 7:13 AM
> Subject: [CR]Paypal insurance coverage warning on bike parts
>
>
> I saw this on local TV last night...
>
> This is a warning about Paypal's supposed "insurance" coverage. This
> warning about Paypal may affect CR member choices about using Paypal to
> insure bike part purchases off ebay and from other sellers on the Internet.
> I wonder if any CR members used Paypal "insurance" with purchases from
> Carsten and what the result was...
>
> Paypal offers an added fee "insurance" to be sure you receive a package you
> ordered from a seller. However, the coverage is not clear to most Paypal
> buyers. The insurance will only cover if a package is delivered, not the
> completeness or condition of the contents.
>
> It seems that some Paypal buyers have been scammed where an empty box is
> mailed to them or a container that contains incomplete or unrelated items to
> what they thought they had purchased. Paypal insurance has declined
> coverage for affected buyers by claiming that a package was received by the
> buyer which satisfies the insurance requirements.
>
> So the bottom line is that Paypal insurance is not what it is cracked up to
> be... E CAVEAT EMPTOR
>
> Regards, Steve Neago
> Cincinnati, OH
>
> BTW, in a related search for info, I came across this CNN Article dated
> 3/26/03 that describes other related Paypal fraud concerns...
>
> PayPal draws ire of stranded customers
>
> March 26, 2002 Posted: 8:42 a.m. EST (1342 GMT)
>
> By Tom Mainelli
>
> (IDG) -- While most of PayPal's 15 million customers are blissfully buying
> and selling with the online payment company's handy service, a small but
> vocal group is questioning the firm's commitment to customer care.
>
> PayPal's online payment service has earned a well-deserved reputation for
> exceptionally low fraud. The company claims that only 0.42 percent of its
> transactions in 2001 ended in fraud, well below the 1.3 percent fraud rate
> average of online credit card transactions measured by Gartner Research.
>
> But some customers who experience account problems because they are
> mistakenly caught in PayPal's fraud prevention programs, as well as those
> who experience the rare case of actual fraud, say the company's e-mail and
> phone-based support are sorely lacking. IDG.net INFOCENTER
>
>
>
>
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>
> IDG.net INFOCENTER
>
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> Related IDG.net Stories
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> b.. Trusting your money to strangers
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>
> Take Sheila Stawicki of Woodville, Alabama, who sang the service's praises
> for more than two years -- until in January someone fraudulently accessed
> her PayPal account to the tune of nearly $3,000. After almost 45 days of
> repeated phone calls and e-mail, she says PayPal had offered her little more
> than long phone wait times (which often ended in disconnects) and canned
> e-mail responses.
>
> However, PayPal executives say Stawicki's experience is far from the norm.
> Most PayPal customers receive prompt and satisfactory help within 24 hours,
> according to the company.
>
> Degrees of service
> "This represents one of the more atypical inquiries we get," says Vincent
> Sollitto, vice president of corporate communications, of Stawicki's
> situation.
>
> Premier and business-class customers (who pay per transaction) get access to
> a toll-free help line, and they usually reach someone within 9 seconds, he
> says. These paying accounts make up about 20 percent of PayPal's customers,
> but make more than 90 percent of payments, he says.
>
> Owners of a free personal account, like Stawicki, aren't supposed to call.
> They're supposed to contact PayPal's customer service center only through a
> Web-based e-mail form. In fact, PayPal lists only toll numbers on its Web
> site (on its terms of use and privacy policy pages) in order to encourage
> free-account users to communicate by e-mail. Even so, Sollitto says 85
> percent of problems with personal accounts are resolved within 24 hours; 99
> percent are resolved within four days. And if a free account user calls
> instead of using the e-mail form, PayPal will serve them, he says.
>
> PayPal contends most delays occur when the company needs more information
> from the customer. Sollitto says the company handles an impressive 200,000
> transactions per day, and moved about $3.5 billion in 2001. The company
> launched its service in October 1999, and it began in 2000 with about 10,000
> customers.
>
> Conflicting numbers
> Despite PayPal's rosy customer service statistics, Stawicki certainly isn't
> the first PayPal customer to complain loudly about bad customer service.
> Message boards on auction and auction-related sites such as AuctionWatch.com
> and AuctionBytes.com are filled with complaints. And disgruntled former
> PayPal customers have launched their own gripe sites, such as
> PayPalWarning.com and AboutPayPal.org, where users trade stories and reveal
> the company's hard-to-find phone numbers.
>
> Several unhappy customers have even sought legal help. PayPal faces several
> class-action lawsuits, including one filed last week in San Jose,
> California. That suit, by attorneys at Girard Gibbs & De Bartolomeo in San
> Francisco, claims, among other things, that PayPal provides poor customer
> service.
>
> "PayPal places barriers between itself and customers, resulting in customers
> criticizing PayPal for its lack of access, poor customer services, and the
> burdens imposed on those who need assistance when a problem arises regarding
> a transaction," the complaint alleges. The suit also contends that PayPal
> goes overboard in its fraud prevention measures, sometimes freezing or
> closing customer accounts for "suspicious activity" that turns out to be
> erroneous.
>
> "PayPal intentionally makes its customer service phone numbers difficult to
> find," the complaint alleges. "Customers complain that when they do manage
> to find a phone number to call, they are placed on hold for long periods of
> time, need to make multiple calls before they are actually able to speak to
> a live person, and are transferred from one PayPal representative to
> another."
>
> Customer service representatives are often "rude and combative" and
> sometimes "hang up in the middle of calls," the complaint alleges. Overall,
> a lack of customer service at PayPal has frustrated many users, says Eric
> Gibbs, the attorney behind the complaint.
>
> "There are a lot of people out there who feel that they have been wronged by
> PayPal," he says.
>
> PayPal's official response to the class action lawsuits is that they are
> "without merit," Sollitto says.
>
> Conscious decision?
> It's a PayPal business strategy to treat paying and nonpaying customers
> differently, says one industry analyst who closely monitors the company.
>
> "They are an agile company, and they have made a decision that they are not
> going to provide top-notch service to anyone who is not a business-class
> customer," says Avivah Litan, vice president and research director at
> Gartner Research.
>
> PayPal's Sollitto denies Litan's charge. "I take issue with the statement
> that we've made a decision not to provide top-notch service," he says. "We
> provide excellent customer service to all of our [customer] classes." PayPal
> has 400 customer service staffers, nearly two-thirds of its employees, he
> says.
>
> Hacker Proof?
> PayPal and some of its critics also spar over security. The company is known
> for its homegrown security protocols, including several patent-pending
> processes designed to root out fraud. But former customer Stawicki says
> she's convinced someone broke into her account.
>
> "I believe their system was hacked," Stawicki says. "They say I clicked on a
> link I shouldn't have, or that I gave out my password. That's not true."
>
> Sollitto says PayPal's systems have never been hacked. A fraudulent purchase
> usually occurs because the cheated customer used an insecure password, he
> says. "Or it could be that they received an e-mail from a fraudster trying
> to draw this information from them," he says.
>
> "We use military-grade encryption," Sollitto adds. "This just speaks to the
> need to safeguard one's password with as much care as possible."
>
> Gartner's Litan sides with PayPal on its security.
>
> "Their fraud protection program is the difference between life and death,
> and they probably have the best out there," she says. After thwarting
> Russian hackers who tried to use PayPal's system for fraud, the site's
> security has become truly formidable, she says.
>
> "They learned the hard way, and now their fraud is way below the industry
> average." Most of the time, that means happy customers, she adds.
>
> In fact, a recent Gartner survey finds PayPal enjoys remarkable brand
> recognition and trust. "Customers and noncustomers see them as most
> trusted," Litan says. Its February initial public offering was the first
> from the technology industry in months.
>
> Most PayPal users seem happy, agrees Rodrigo Sales, chief executive officer
> of AuctionWatch, which maintains active message boards regarding online
> auctions. PayPal is a frequent topic of discussion.
>
> "From what we see, the majority of people who are using PayPal are very
> happy," Sales says. "But when they have problems, they get nervous, and
> rightly so. Given the nature of the product -- people's money -- when there
> is a problem people scream loudly."
>
> One happy ending
> Customer Stawicki's situation with PayPal has been resolved. After
> PCWorld.com contacted PayPal, and nearly 47 days after her first e-mail, the
> company took action to refund her money.
>
> Stawicki stopped payment on $1500 of the theft. The other $1450 was
> successfully withdrawn from her bank account by debit card, and her bank
> refused to replace her money. PayPal refunded her money last week.
>
> "Apparently it wasn't our best hour," Sollitto admits. He cites some
> confusion over obtaining Stawicki's affidavit, initially sent to her by
> postal mail and later electronically. PayPal requests affidavits from
> customers who allege an unauthorized payment; it now handles everything
> electronically. "She got caught in a brief transition process," Sollitto
> says.
>
> Transition or not, Stawicki is glad to have the issue resolved. But the
> company's eventual support hasn't won her back as a customer.
>
> "Now I'm using strictly money orders," she says. "I will not go with any
> online payment service again."