posted on November 1, 2000 07:15:21 PM
I'm well aware of the verbiage to which you refer, uaru; however, there are a couple of significant differences, at least from my standpoint.
While Billpoint candidly includes the chargeback language in their TOS (which reference has remained unchanged since their launch, I believe), what does Paypal's say? The latest version of the oft-changed document says "We will never withdraw funds without your permission." (paraphrased)
Shall I post the links to some of the threads that prove this statement is a lie?
Secondly, while Billpoint honestly informs its prospective members about chargebacks, they have yet to implement the intrusive, insulting "verification" process, a la Paypal.
Could it be that the folks at Billpoint are bright enough to realize that users have nothing to gain (and everything to lose) by passing off someone else's checking account as their own? Duh.....
posted on November 1, 2000 07:17:31 PM"ExchangePath does not have my bank account number or my credit card number."
How to you plan to get money from your ExchangePath account? I wasn't aware they'd mail you a check. The only options spelled out that I've seen is they'd credit your debit or credit card or deposit into your bank account.
ExchangePath has my credit card number but it cost them $10.00. I sent $5.00 to a email address then canceled the transaction. Since I 'completed a transaction they gave me the $10.00 bonus. Then I had $15.00 in my account which I credited to my credit card.
posted on November 1, 2000 07:45:44 PM
[i]Could fraud prevention be a valid reason?[i]
This one is easy. No.
So you feel that a user should be able to just enter a bank account number and routing number (found on any check) and then PayPal or PayDirect should debit that account and if the information was wrong either intentionally or in error... that's just the breaks?
Okay... lets just deal with PayDirect, why are they requiring the deposit confirmation before they'll accept a electronic deposit from a bank account to a member's PayDirect account?
You don't believe there should be ANY confirmation on a members bank account before he starts telling PayDirect to start pulling funds out of there? What is PayDirect supposed to do to validate this withdrawal, call the bank? They aren't going to give that information.
posted on November 1, 2000 07:58:06 PMYou don't believe there should be ANY confirmation on a members bank account before he starts telling PayDirect to start pulling funds out of there?
Right on the money. Once PayPal verifies the user there is no need to verify the bank account in any way. The bank account was "verified" when it was opened because the user had to provide proof of identity with 2 forms of ID. This is the main flaw in the entire bank account verification as PayPal has schemed it up. Any decent crook can gain unauthorized access to a bank account and "verify" it. But only the true account holder can open the account. Once that account holder is verified with PayPal with a credit check, the account is verified as well in a meaningful way.
The only true verification can be that of the user with a credit check. When PayPal gets their act together and starts doing this (and they will when their losses become too large a burden to bear), then they will have a reliable verification system. Verify the user and you have automatically verified the bank account. Simple and effective.
Edited to answer your last question:
PayPal and PayDirect really have no business (or need) to do anything at all regarding verifying a user's bank account. This has already been done by the bank when the account was opened. As I said above, one the user is verified with a credit check, the bank accounts are verified too.
[ edited by abingdoncomputers on Nov 1, 2000 08:01 PM ]
posted on November 1, 2000 08:09:52 PMOf course if you give people interest, then you have to get their ssn so you can report it to the IRS
This is simply not true. I have incomes from a variety of sources paid into accounts which I specify and reported to the IRS on form 1099(various versions).
Not one of the 1099s contains my SSN for reporting purposes, they merely list the account numbers which are recipient of the funds.
Paypal may need a SSN in creating an account wiyth them, but can you not specify that any interest income be paid to an account of your choice?
Okay, divorce yourself from PayPal. Here's a PayDirect question.
PayDirect required a voided check before they'd allow deposits to your PayDirect account from your bank account. Why?
PayDirect then changed that to making two small deposits which the account owner verified, but they were doing basically the same thing as when they were asking for a voided check.
What is your theory on why they did this? Why request the voided check or the deposit confirmation. I've given up trying to convince you it was to verify that the bank account information was accurate and honest, you feel its for some other reason. Just tell me once and I'll go away a happy man.
Paypal never needed permission to withdraw funds from your bank account to verify you. Damon admitted it. But they insist on being given that before they will consider any customer 'verified'.
If they have the information to deposit funds, then they have whatever they need to do the bank account deposit verification. They just won't do it unless you give them permission to withdraw the funds.
I'm not sure what you are trying to say uaru. Damon said himself that a credit check would be sufficient in place of doing the bank account deposits to verify, but that the reason PayPal would not do credit checks is because customers were unwilling to give them their ssns on the internet. Apparently this was supposed to be the justification for insisting everyone give them permission to withdraw money.
My theory is that PayPal wants to be able to pressure or mislead customers into using their bank accounts to pay for items rather than their credit cards using vague and confusing payment screens. They wouldn't be able to do that if they didn't have the permission set up in advance. PayPal makes a lot more money off bank transfers, thanks to all the sellers who are blindly paying cc rates for all the transactions without really trying to understand how it works.
I don't think having that permission or not would change whether PayPal could or would reverse deposits. It might make a difference in PayPal being able to try to withdraw money in amounts other than prior deposits. At this point I do not know what legal basis PayPal would have to use to be able to do that, but the customer would be a very weak legal position if they had given PayPal this permission. PayPal has said they would not do this, but I see no reason for a customer to have to trust them not to. I also see a long history of PayPal directly reversing themselves on prior TOS promises.
Would PayPal go out and wholesale grab money from people's checking accounts? Probably not, but if you ever have a problem with your account, your checking account is now available to them as funds to put pressure on you. You may not like the decisions PayPal makes, since history shows that your financial health is not a concern of theirs.
posted on November 1, 2000 09:18:53 PM"I'm not sure what you are trying to say uaru."
Okay, first lets focus... we are talking about PayDirect. Focus on this P A Y D I R E C T. I don't want other issues clouding this question.
Originally PayDirect required a voided check before they'd allow funds to be transferred to your PayDirect account from your bank account.
Later PayDirect started making 2 small deposits that the account holder would confirm allowing them to fund their PayDirect account from their checking account.
Why are they doing this?
I hope I've made this as clear as possible, remember this involves "PAYDIRECT" not that other scum of the earth pay service.
posted on November 1, 2000 09:36:00 PM
Hi, all. There's just too many posts on this thread for me to take the time to read them all, so I apologize if this has already been brought up.
I think the major issue in the new money market option with PayPal is that you have the potential to LOSE YOUR MONEY. Why? Because it's a MONEY MARKET ACCOUNT. If the stock market goes belly up (which it most likely will not) then you stand the chance of losing your investment (the money in your PayPal account). PayPal states in their prospectus that this is a possibility. When you look at it this way, 5% isn't so hot (since there are other money market accounts that are actually pulling in a much higher interest rate than this if you don't go through PayPal). I personally am not going to make the switch to th emoney market option, not for fear that PayPal is lying, but because I don't know anything about this investment corporation and choose to make my investment risks with companies that I am more familiar with.
Bank account verification is much less reliable than a credit check for verifying a person's identity. There can be no debate about this. It's a given and Damon admitted as much.
The fact that PayDirect has chosen to follow PayPal down this dark and winding road is completely irrelevant to the issue at hand:
Why does PayPal think users will willingly supply their SSN in order to earn a few cents in interest if they refuse to supply it in order to be verified in a realiable manner (which is infinitely more important)?
This is like saying most people would willingly undergo major surgery just to remove a splinter but balk at open heart surgery to save one's life (it's the concept here, please don't take it literally, ok?)
The reasons that PayPal chose the bank account verification over the credit check are twofold:
1) A credit check is more expensive (Damon said this himself).
2) To give PayPal access to a bank account in order to confiscate funds.
[ edited by abingdoncomputers on Nov 2, 2000 05:01 AM ]
