Paypal steals users' money. Sad, but true.
If everything works well, the receipent gets 4,8 or 12% less than what was transferred. But it can get much worse than that, and everyone using paypal is at risk (by accepting the paypal user-agreement).
Unbelievable? No, just Paypal.
When you agree to paypal terms of conditions (essential to payment or withdrawal), according to Paypal you agree
- that Paypal can take away your money any time without any explanation other than Paypal found it "suspicious". No referral to actual chargeback that happened (because none happened) or any fact other than they just don't allow you to withdraw money from the account (in other word, they keep your money - sometimes "just" for 180 days, but often forever.). In legal terms, they just pick a sentence like "Receipt of potentially fraudulent funds" from [account closing policy] that is part of the [25 pages of terms of agreement] and feel that they acted legally.
- you agree that you will not file suit against paypal. See [Paypal's way to make users sign the New User Agreement] that prohibit users from filing suit against Paypal for any dispute under $10,000. Unbelievable? No, just Paypal.
- [hear Paypal's explanation from Paypal's mouth] for taking away user's money - it talks for itself (note: this is not our case, just one of the thousands or millions suffering from Paypal's daily theft practices). Unbelievable? No, just Paypal.
Everyone thinks that it only happens to others - until it just happens to him / her
We thought http://www.paypalsucks.com/ is not serious. Unfortunately we had to find paypal is worse than one would imagine.
Paypal has unbelievable number of dirty tricks to rip off paypal users (sooner or later you, if you use paypal).
Tricks in short
One would think some of the stuff is just "processing error" or "well, expensive", but when it gets obvious that
- PAYPAL uses a simple trick to push up transaction cost of one transaction to 12% (from 8%). The transaction cost is 4% + 4% (hidden in currency rates) when one currency conversion is involved.
- Example: 1000 USD is paid. The recipient keeps his balance in GBP (the only he can withdraw from). The recipient is offered to accept the sum in a different currency, like EUR !!! Than he loses another 4%. Finally on his balance he receives 12% less GBP than was sent in the first place
- PAYPAL fraud through the card-gateway: we contracted with verisign to operate our card-transaction gateway. We never contracted with paypal. We invested in setting up the system, and verisign operated it well for years. Unfortunately PAYPAL acquired it (without our consent of course). PAYPAL intentionally let's through fraudulent 0.01 USD transactions despite our several written requests. Even if we can "void" the transactions manually through the transaction terminal, this causes lots of problems, work and transaction costs and extra fees. Also some angry phonecalls from cardholders who blame us because paypal intentionally letting through these obviously fraudulent transactions (it would be easy for them to filter 0.01 USD: eg. make it possible to set lower limit so we can filter less the minimal fees or appr. 1 USD)
- Paypal artificially makes it almost impossible to withdraw money to an bank account via IBAN (the international standard for money transfer). They deliberately provide a textfield where IBAN number does not fit (14 characters or so. should be 34). This happened to a friend from Denmark in 2004. This trick might not be used nowadays.
- Paypal artificially makes it almost impossible to reach their support (no telephone number, email, just webform with "Page not found")
- Paypal just closes the account and take away 1000s of Euros when someone report eg. that the IBAN withdrawal does not work
Planned Actions ("the time is out of joint"...)
- We are thinking about a few % extra fee for paypal payments to cover such losses (or discount if payment is not via paypal) before eliminating the paypal option completely. Fortunately there are many other supported options. See WebShop.
- tell about paypal to many users, link this page or http://www.paypalsucks.com/ to pages dealing with payment options
- compose mails about experienced theft by paypal
- send above mails (printed) to attorney general and customer protecting agencies.
- helping http://www.paypalsucks.com/ to build a database of theft done by paypal (much more useful than the forum), categorized and options to provide evidence (database based on ofbiz).
- We will find the way to sue paypal. Probably with some help from customer protection agencies and http://www.paypalsucks.com/. As there are millions others ripped off by paypal the same ways, a class-suit is probably the best. Easier to finance, and the database makes it easy to provide evidence for thousands of cases.
Artificial Trick's List - there is no excuse for
- paypal has a method of "flagging" an account which is approximately taking the money from the flagged account and the amounts tranferred from the flagged acount. This happens not just because of chargeback (chargeback means the credit card payment that topped the account was withdrawn).
- Paypal applies exchange rates when it shouldn't: eg. Paypal decides on it's own to change money to foreign currency back and forth (!!!) apply exchange rate commissions twice when withdrawal from Paypal account fails due to Paypal's fault. See IBAN trick below.
- paypal has too short field for IBAN number (the best representation of the bank account) used for withdrawal. IBAN standard allows up to 34 characters, but the paypal webform does not allow to enter an 18 character long IBAN number. It is possible to enter the shorter form of account number, which still routes perfectly with the help of the bank name and address (given in separate fields). Paypal simply rips 6% from the account as a conversion to X currency, a fee for a failed transfer (remember: the account number is absolutely correct together with the bank details!!!), than fee for conversion back to original currency (smart, isn't it?). Guess: paypal does not even attempts the money transfer.
- support telephone number is hidden on paypal webpage (even for authenticated users)
- support email address is hidden on paypal webpage (even for authenticated users)
- When you report them via the only "supported" way, webform (after going over their dirty "page not found" tricks regarding the support form!)
- they just take the easy route and close your account, taking away several thousand Euros from you. Unbelievable? No, just Paypal.
Many hidden charges - could be OK without the Artificial Trick's List above
- horrible paypal => paypal transfer fee (10* of domestic bank transactions). The fee on credit card payments could be justified by chargeback-based-frauds, but for transfer between paypal accounts the only way to experience fraud is paypal itself
- Paypal adds significant amount of extra commission when receiver or sender is not from US
- Paypal applies unrealistic exchange rates
- http://www.paypalsucks.com/
In short, paypal is the worst partner to handle your money. Very said, but this is the truth.