PayPal Is Global Financial Fraud
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PayPal Is Global Financial Fraud


USA – April 6, 2019

In a recent interview with the Wall Street Journal, PayPal CEO Dan Schulman claimed that his company, which processed $578 billion in transactions last year, has partially outsourced the task of deciding which accounts to ban to the Southern Poverty Law Center. “There are those both on the right and left that help us. Southern Poverty Law Center has brought things. We don’t always agree,” Schulman said.

By incorporating the hard bias of SPLC into its business model, Paypal cuts off a major avenue for financing nonprofit groups and independent writers.

SPLC’s bias is not the biggest issue, however. The real threat from PayPal is the how the payment processor operates. PayPal is enough like a bank that they have your money in an account, but not enough like a bank that they have to play by banking rules. They can arbitrarily freeze your funds and you have little recourse but to wait until they decide what they want to do.

Any real bank or brokerage has strict rules they must play by. Imagine going into Bank of America and discovering they're holding your funds, without any notification, without explanation or recourse. Furthermore, they're very ambivalent on exactly why your account was frozen--some vague policy that you were never told about and can change at any time. That would never happen. Any "real" bank that would freeze an account (or shut down your debit card) does so out of a sense of security and usually wants to immediately talk to you to get it resolved as quickly as possible. Or they could immediately tell you why (IRS freeze, for example). And if they aren't playing by the rules, you have some real legal recourse to address that.

PayPal, on the other hand, is a very nebulous organization that makes it very difficult to talk to someone and get a straight answer, and they are wary to provide any sort of roadmap for problems or behave like a true financial agency. They've created their own category of finance that exists beyond banking and as a result, you're at their mercy if you ever have a problem.

One PayPal user from Biddeford, Maine shared his negative experience with the financial service on the Quora website: “I run an online retail store. We have private labels for several brands. We also have affiliates, partnerships, and drop-shipping agreements. So as our business grew we got a call from PayPal. They wanted me to explain the business to them and this person said that they would be my dedicated point-of-contact, etc. Nice, right? Nope! A few days later they hit our account with a 10%, 90-day ‘rolling reserve’. That means they will hold 10% of every amount received and then slowly release it back to me after 90-days. This was devastating to us considering our profit margin was generally only around 6%, and we had over $1k in sales each day.

“Called my ’dedicated point-of-contact’ back, who mysteriously disappeared. Paypal simply would not call me back or let me talk to anyone. I was forced to take a short-term business loan to help me get through this time of no profit whatsoever.

“But okay, so I thought, ‘Well, PayPal is just covering their Ass. I do have a complex business which they clearly don't understand, so they want to make sure they don't get hit with a ton of chargebacks.’

“So I let it slide. 90 days later, they upped the reserve to 15%. 90 days after that, they upped it to 20%. My ‘reserve’ account is now up over $20k.

“At this point at least I'm getting back the original funds which they had held, so the increasing amounts don't hurt as hard and I'm finally resigned to this way of doing business. I'm thinking, ‘Well, at least I got through the worst of it and PayPal is happy with us now that they have their cushion.’

“In fact, I'm almost liking having the reserve because I can take a few days off and still have decent income coming back from the reserve balance each day,” Joel Bailey wrote.

“All is good, right?” he asks. “I can trust PayPal now that we’ve been with them for over three years and they know we are a reliable business who doesn't screw-over their customers or anything. Right?? BIG FAT MISTAKE!!”

Joel continues his story: “Suddenly, another email. This time not about our reserve. Paypal has conducted yet another ‘review’ of our account. Guess what? They have just arbitrarily decided to PERMANENTLY limit not just my business account, but my personal account and the personal account of my wife and children! They write that they have decided that my business is ‘too risky,’ despite them having over $20k in a reserve account to cover their own asses!

“So I get on the phone. No ‘dedicated contact,’ no customer service - just a recorded voice message that my limitation cannot be appealed.”

Joel decided to get his reserve funds back. Sure - After 180 days!

“In the meantime I'm just lucky enough that I had some savings, because PayPal literally STOLE my money. Now I simply deal through my merchant account, and will never go back to anything else,” he wrote.

“Before any of you suggest that I may have done something wrong, let me say this. Nothing had changed regarding our business. We had an A rating with the BBB, and we had a 0.025% chargeback ratio. 99.8% of our transactions were 100% completed within the United States. We got no explanation from PayPal, and no chance to defend or explain our business.”

Joel summarized: “I am proof that PayPal can screw-over anyone they wish to, and I have zero legal recourse because their terms of service basically tell you they can screw you over at any time, for any reason. One day, I thought I had made a good business decision partnering with PayPal. The next, I wished we had never ever crossed paths…”

Here are some of PayPal’s unwritten rules which every user either existing or potential should bear in mind when using the payment processor:

  • PayPal is expensive, yet offers little protection to either buyer or seller
  • PayPal can claw money back from your bank account without consultation and without notice
  • PayPal is not interested in finding the truth in disputes
  • PayPal hangs on to your money for no good reason for long periods
  • PayPal’s customer service is non-existent
  • PayPal treats users disrespectfully

None of this matters much to large volume traders with an eBay presence. They are the reason that Paypal continues to expand … that and the fact that eBay forces sellers to accept PayPal.

Paypal can be a disaster for the sort of eBay user that made the company a success in its early days, namely the sort of user that used it as a superior garage sale.

All PayPal does is make it easier for eBay sellers at the expense of buyers. All that guff about the danger to the buyer of completing a sale outside Paypal or eBay is just nonsense. It is to protect Paypal’s and eBay’s profits and not for the benefit of either buyer or seller.

Another “happy” client wrote about PayPal’s customer service: “I’ve been on the phone on hold waiting to speak to someone for 100 minutes (previously was on hold for 95 minutes until I had to drop off). They don’t have a queue estimate. No callback feature. I’m sure there are hogs on top that never use their own product so how would they know. As a result, this problem bubbles up to the eBay ecosystem to compound the issue. In my case, I had no choice to apologize to the seller multiple times with each delay and cancel my order. It’s hate and contempt. Not very different from Sprint, but I can always go to another carrier. FTC should be investigating PayPal. 95 minute wait for managing your funds? That’s insane!”

There are little things like how PayPal decided one year to stop online eBook sellers from retailing legal books, infringing freedom of speech by freezing millions of dollars of author’s money as a way of forcing compliance.

The Barnes Review, which publishes books on history outside the mainstream (although backed up academically with full citations) was, a year or two ago and with a perfect record, dropped from their credit card payment processor. Simultaneously, after PayPal dropped them, other payment processors they contacted also refused them access. People like David Horowitz and Robert Spencer have already had their access to the marketplace restricted because of their criticism of Islam.

PayPal has allegedly and likely stolen uncounted millions from honest users by locking them out of their moneyed up accounts and refusing to let them have access again. PayPal insists on linking to your bank account. But if you don't link your account, they hassle you about it and eventually cut you off from using your credit card.

PayPal is also famous for their anti-2nd Amendment stance. The company prohibits all account holders from buying or selling any type of firearm and certain firearm parts and ammunition. This restriction is the result of an Obama era regulation known as Operation Choke Point. Operation Choke Point was a plot by President Obama’s Department of Justice, the Federal Deposit Insurance Commission, the Consumer Financial Protection Bureau, and other government agencies to cut off banking and financial services for small businesses and industries that fell out of political favor with the administration.

Some of these businesses included gun stores, ammunition shops, fireworks stores, small dollar lenders, and home-based charities. The net effect of what they are doing is making the legitimate business of selling firearms operate as a cash business only, all in a misguided effort to effectively ban the sale of firearms and related products from the marketplace. By disallowing firearms merchants to use their payment processors to enable the legal buying and selling of firearms, PayPal is violating the Unruh Civil Rights Act.

In his WSJ’s interview, PayPal’s Schulman said, “Our mission is to democratize financial access for all citizens so that managing and moving money is a right for everybody, not a privilege for the affluent.” Instead, Schulman has turned managing and moving money into a right for the left and a privilege for the others.

PayPal’s CEO claims to want companies to be a “force for good.” They could be a force for equality, inclusion and freedom, and could ensure that a marketplace of ideas remains competitive and open. Instead, they have become a force for exclusion, segregation, and the silencing of dissidents.

However, various scenarios of financial fraud seem to be a tradition for PayPal. If you look at what former PayPal founders have done since leaving in the eBay deal, it becomes evident.

Elon Musk founded Tesla, The Boring Company and Space X. Staunch libertarian Peter Thiel invested in a plethora of startups including Facebook, famous for regular data breaches, repressions against honest media outlets or common users. Reid Hoffman founded LinkedIn and invests in controversial technology companies like American Engagement Technologies and New Knowledge. In 2018, New Knowledge fabricated thousands of fictitious Russian troll accounts on Facebook and Twitter on behalf of the Democratic Party in the Alabama Senate race in 2017 to manufacture false accusations that the Kremlin was interfering in that election working to defeat Democratic Senate nominee Doug Jones. Two other former employees made YouTube.

As USAReally reported last September, PayPal suspended InfoWars’ accounts. The ban took place just weeks after the group Right Wing Watch (funded by George Soros’ Open Society Institute) published an article demanding that PayPal terminate its agreement with Infowars for “egregious violations of the platform’s own terms of service.”

Author: USA Really