More PayPal news...

[Jeanco]

Thought it was worth a read: http://zdnet.com.com/2100-11-502663.html?legacy=zdnn

 

[GiantDomains]

Easier to paste here:


In the past three weeks, dozens of Yahoo! auction customers were cheated of at least $100 each by a scam artist selling computer hard drives.
Most had used a third-party payment company named PayPal, which advertises itself as the safe and secure way to make payments in online auctions. So the victims were shocked to learn that PayPal -- the largest auction payments system, with 2.6 million users -- offered them none of the built-in consumer protection familiar to credit card users.

The trouble started in late June, when a Yahoo! (yhoo) user identifying himself as "harddrives4sale" began auctioning off four drives every day for about two weeks. He urged auction winners to use the PayPal service, saying he would get his money faster and thus could deliver the hard drivers faster.




At least 50 sent the money via PayPal; none received the hard drives. Since there is no mechanism to stop payment or contest charges against their PayPal accounts, the victims have no prospects for getting back their money.

"This guy found a weakness in the system and exploited it," said Sam Johnson, who was cheated out of $418. Johnson has set up a Web page where victims of the scam artist have collected their complaints and discussed strategy.

A big part of their discussion: Why isn't PayPal offering victims some kind of relief? When asked for help, victims got this reply: "PayPal is not an escrow service, and cannot protect buyers from sellers with illegal or unsavory business practices."

PayPal, which began facilitating payments between auction buyers and sellers in November, has enjoyed stellar success, and was acquired by online banking firm X.com in March. Not only has the company signed up 2.6 million users, but it's even become the most popular payment service used on eBay Inc. (ebay), dwarfing the auction site's own rival service, Billpoint.

PayPal works like this: Users open an account and fund it with credit card deposits, personal checks, or by receiving payments from others. Then, account holders can pay auction sellers instantly with PayPal funds. That's a big advantage -- the most frustrating part of the online auction business for sellers is waiting for payments to arrive via snail mail and then waiting for personal checks to clear. What's more, the service is free, so merchants can accepts credit card payments without paying a transaction fee.

But while sellers love the speed of the service and the security of knowing a check won't bounce, buyers don't have the built-in safety net offered by credit cards. The company makes clear in its terms of service that it's not a bank or escrow service and has no legal obligation to help users who are cheated out of money.

 

[DomainQuay]

Did you notice the date, though - July 19, 2000.

Not sure how much of that might have changed since then...

For one thing, hasn't eBay owned PayPal for quite awhile now?

Joni

 

[GiantDomains]

Yea. It's not news. But they still operate the same way.

 

[freestyler]

Yea. It's not news. But they still operate the same way.

Totally Agree.

 

[Jeanco]

Yes I did notice the date. I just stumbled on this when looking for something else and thought it was still worth posting.

 

[Frontline]

Paypal is just like sending someone you don't know money via western union, its not safe and your not guaranteed anything. There are other more reliable companies like StormPay and EGold, unfortunatelly the masses don't/won't create accounts with companies they have never heard of.

 

[dax]

Paypal is just like sending someone you don't know money via western union, its not safe and your not guaranteed anything. There are other more reliable companies like StormPay and EGold, unfortunatelly the masses don't/won't create accounts with companies they have never heard of.

Infact, your comparison to Western Union is not correct. WU is different type of money transfer. Although i agree its not completely safe.
But for WU you need to identify yourself when receiving money and you need to have control number from the sender. Also you need to give your personal data to the sender if you want to receive the money, which means that sender has correct information (same as on the identity card, or you will not be able to receive the money) about the identity of the seller.