FTC and State AG's Investigating PayPal's Business Practices
 

PayPal Probed for Anti-Fraud Efforts

WASHINGTON - Federal and state investigators are examining whether online payment service PayPal violated consumer-protection laws in its fight against online fraud, parent company eBay Inc. (NasdaqNM:EBAY - news) said on Monday.

PayPal sometimes freezes customer accounts while it investigates suspicious transactions, a practice that has generated complaints to consumer-protection authorities, the online auctioneer said in its annual report.

"As a result of customer complaints, PayPal has ... received inquiries regarding its restriction and disclosure practices from the Federal Trade Commission and the attorneys general of a number of states," the report said.

"If PayPal's processes are found to violate federal or state law on consumer protection and unfair business practices, it could be subject to an enforcement action or fines."

PayPal handled more than $12.2 billion in transactions in 2003 and has 40 million customer accounts, according to the annual report.

The rate of fraudulent PayPal transactions is less than one-half of one percent, eBay has said.

Hope they get fined a nice amount, so it hurts as much as it did for me when they froze my account and caused me to lose business! :mad:

What are some alternate PayPal options? Are there any?

About FUCKING time they did!!!!

:thumbsup :thumbsup :thumbsup

Was reading another article, paypal says they freeze 2,000 accounts a day. ouch.

http://www.emediawire.com/releases/2004/3/emw108796.htm

yikes

http://paypalalert.com/

yahoo paydirect will process adult stuff, but not sure how great their service is so far.

http://www.paypalsucks.com

So many horror stories, I can't believe it's been this long.

Ditto here

A few people have been touting Yahoo's Pay Direct. I had opened one of those also but never used it, but I think they were pretty stringent also and have limits as well.

AllResell.com is a variant of StormPay open to adult processing. But its brand new so be careful. Some people have had problems, others have had no problems at all with StormPay.

2,000 out of 40 million is not a big percentage of closures. I'm sure they get a lot of TOS violations, fraud, etc. in many of those cases.

There's only one worth using. In my opinion is easier and safer to use than Paypal. It's also backed by HSBC, which is one of the largest banks in the world. I have an HSBC account and money from my Paydirect account can get INSTANTLY added to either my checking or savings accounts.

http://paydirect.yahoo.com

YES!!

Completely worthless for anyone living outside the US.

Maybe it will actually make them better.

about time. :thumbsup

It's not completely worthless if you're not in the states. Anyone using Paydirect can pay you using what amounts to a Prepaid ATM card that can be replenished at any time.

Yeah, you can't open an account and use the services, but I could pay you from my account if need be.

If you're in the states, this is the ONLY alternative to Paypal.

yeah true, I didn't really do the math.

Amazing how huge paypal is now. I remember when they first launched their $5 signup bonus and then bought x.com.

Now there's a cool domain to own.