Quote:
Originally posted by Gemini
We've used it almost from its inception and moved alot more than 1k at a time many times. Never had a problem in all these years. (Although until the FDIC went in to effect, we kept our bulk in the regular bank and drew from that)
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PayPal are not FDIC insured - they use a bank that is to hold the funds - which means that up to $100,000 per person is insured if the bank fails.
If PayPal fails there would likely be a shitfight with creditors over who gets the money in peoples "accounts". Whilst you have money in your PayPal account you are a creditor of PayPal's, so in an insolvancy technically you line up with all the other creditors. Now they think their terms and conditions protect your money a bit and make you a sort of "priority creditor" but you can be your life that there would be a shitfight in the courts to see who eventually got that money - and you wouldnt see it for a long time.
Now having said that - I use PayPal and move a shitload of cash through it. Havent yet had a problem with it but you personally dont have to do anything wrong to have your account frozen - just receive a payment from someone dodgy and your account will be frozen too. This is all because PayPal initially lost a shitload to fraud (in one case over $7mil to one guy in one day).
And PayPal wont protect you from sending money to people who are dodgy, just the same as if you sent them a cheque and they never send the goods. Use your credit card and you can atleast charge it back - but you will very likely lose your PayPal account if you do.