posted on April 25, 2001 04:33:39 PM
This is going to be a bit difficult to follow, but the unmarked parts are my original questions, Damon's replies are in parentheses, and my replies to Damon begin and end with arrows.
(2) Do you really expect us to believe that the FBI performs background checks for private unregulated pseudo-banks, when they barely have the resources to investigate high-level government appointees?
(Yes, we do perform background checks. I supplied my fingerprints and all so that this could be performed.)
>>>Before you said these were FBI background checks; now they are performed by Paypal. Most likely the checks are done by an independent contractor, but almost certainly not the FBI. <<<
(3) Please post the language from the withdrawal authorization that a user is required to accept in order to vbecome verified, and tell us how that does not constitute a blanket authorization.
(Verification is for identification.Here are the terms of use regarding bank account withdrawals and you can check it on the web site on your own---Item 10)
(PayPal will never make electronic transfers from your checking account without your explicit permission. Furthermore, PayPal provides you protection against unauthorized withdrawals from your checking account under the terms of Article III below. )
>>>Note that I asked for language from the ACH authorization form; Damon gives me the TOS instead. Evading questions is no better than ignoring them. The authorization form, which is what governs your bank's conduct, contains no such provision, right, Damon?<<<
(4) Please cite the language from the TOS which states that Paypal's right to unilaterally modify the TOS does not extend to the prohibition on unauthorized withdrawals.
(Same as item#3-PayPal will never make electronic transfers from your checking account without your explicit permission. Furthermore, PayPal provides you protection against unauthorized withdrawals from your checking account under the terms of Article III below. )
>>>Again, note that I asked for restrictions on Paypal's right to modify this clause; Damon again evades the question. Paypal used to say always free to sellers & buyers; now it says no withdrawals without permission, but it always retains the right to change these provisions at its whim. So, Damon, can you provide any language in the part of the TOS governing amendments that says that Item 10, unlike every other part of the TOS, cannot be unliaterally changed by Paypal?<<<
posted on April 25, 2001 04:39:54 PM
Hi booksbooksbooks,
How would the background check without us gathering the information and giving it to the appropriate parties (background checks)?
In addition, the information I have provided is correct and I actually find it moderately "conspiracy-theory" in nature. We are a company providing a payment service for users.Verification is used for identification purposes, which allows users the ability to lift their spending limits (or pay with a bank account if they desire). All transactions are trackable and all transactions are done at customer request. If you send me a check, you send the exact same information to me. It doesn't give me the right to do transactions against you bank account.
3) Please post the language from the withdrawal authorization that a user is required to accept in order to vbecome verified, and tell us how that does not constitute a blanket authorization.
(Verification is for identification.Here are the terms of use regarding bank account withdrawals and you can check it on the web site on your own---Item 10)
(PayPal will never make electronic transfers from your checking account without your explicit permission. Furthermore, PayPal provides you protection against unauthorized withdrawals from your checking account under the terms of Article III below. )
>>>Note that I asked for language from the ACH authorization form; Damon gives me the TOS instead. Evading questions is no better than ignoring them. The authorization form, which is what governs your bank's conduct, contains no such provision, right, Damon?<<<
What are you looking for? If a user has their bank account on file, their bank account will not be accessed without their initiating said request.
I'm sorry- I didn't mean to appear impatient, but this question has been asked several times before, and I've yet to see a reply which answers it. Maybe you can understand my frustration.
Verification is for identification purposes and we do require customers to have a current, active bank account that can be verified.
If verification is for identification purposes only, what possible reason is there for requiring a current, active account associated with a PayPal account once a user is able to prove that he has access and control of that account?
You aren't suggesting that having the ability to prove control of an account by verifying random deposits is a reasonable method of identification while having the ability to close that same account is not, are you?
Or, in the case of XCOM, you wouldn't be suggesting that the decision by XCOM to close its doors should reflect negatively (as in- well... having an account with another business "downgraded" on any of its customers, would you?
If, on the other hand, verification is for purposes other than identification, what are they?
posted on April 25, 2001 05:00:24 PM
Excellent questions, everybody. It's always amusing to watch the dancing that ensues.
booksbooksbooks, could you post the BBB link you referred to earlier? I'd like to add it to my standard "Important Reasons to Avoid Paypal" list (which I provide to all my customers who inquire *why* I don't take Paypal).
posted on April 25, 2001 05:07:45 PMIt's always amusing to watch the dancing that ensues
Yeah, but kind of pathetic to watch the gang tackling that ensues. I wonder why more company reps don't field questions on open message boards. Go figure.
Asking for a reason why my account is being changed from "Verified" to "Unverified", even though I have done nothing to effect this change hardly seems to be "gang tackling".
I would think that any competent business would have anticipated the problems a change like this could cause for its customers, and have in place a system for dealing with the issues raised.
I guess I should just be quiet and do as they say, huh?
I wonder why more company reps don't field questions on open message boards. Go figure.
The U-PIC rep is here regularly, and doesn't have nearly the trouble that PayPal seems to. But then, they don't change their policies weekly and they seem to address their customers' concerns in a more upfront manner than PayPal does, so it's probably not a big surprise that their posts are not as controversial as PayPal's.
posted on April 25, 2001 05:47:52 PMYeah, but kind of pathetic to watch the gang tackling that ensues.
This verification question affects me directly and I've been trying to get an answer to it ever since I received notice that I will become unverified due to the closing of x.com. (Yes, the same notice received by booksbooksbooks. I received that notice last November.
I've asked the question on these boards and others several times since then.
I think 5 months is plenty long enough for PayPal to formulate an answer.
The blind loyalty some have to this upstart service never ceases to amaze me.
posted on April 25, 2001 05:49:02 PM
My apologies MrPotatohead, you have a valid point. Yes there are valid questions presented in a proper manner. There is also some pure and simple heckling and taunting also. Myself I'd never manage to function in such an envoirment, Damon does deserve some credit for operating in very difficult conditions.
posted on April 25, 2001 05:54:51 PM
Hi mrpotatohead,
I did advise that I am handling your question. I didn't devise the policy and I am waiting for my answer.
I tackle 4 large forums, the newsgroups, and answer nearly 100-300 emails daily (in addition to the information I post). information I post. While I can appreciate your persistence, following me around on the threads with the same question is not going to get your answer any quicker.
Why don't you, for the simple sake of letting you voice your opinion, tell me why you think Verification is nefarious? How much more information are you giving us than you provide to some unknown party when you send a check? How many more times can I state that we will not withdraw funds from your bank account without your permission? How many times can I state verification is for identification purposes?
posted on April 25, 2001 06:48:32 PMHow many times can I state verification is for identification purposes
Damon, why does PP feel their new method of "verification" (i.e. requiring access to users' checking accounts) identifies its users any better than their previous system of sending snail mail notices to home addresses?
Sorry, the rote repetition of a stock answer doesn't make it sensical.
posted on April 25, 2001 08:05:55 PM
Verification is one of the reasons I ended up dropping PayPal. It really got my goat that after using them for several months--with total customer satisfaction & giving PayPal absolutely no problems--suddenly, I wasn't "verified." Oh, really? They even went out of the way to tell buyers that sellers such as myself, who hadn't been "verified" by them (ie give them access to my bank accounts) were in all probability rip-off artists. Yeah, yeah, PayPalDamon, those weren't the exact words, but that was their gist. Gee, PayPal had been sending checks to me for several months with no problems at all, & none of my customers had been ripped off (what a surprise, given my untrustworthy "unverified" state, ya know), but suddenly I might not be who I said I was and a potential thief as well. Such a nice compnay to do business with...
Verification is part of our anti-fraud efforts and it is important that the system can't be gamed (by adding, and then, removing verification). In order to be verified, the verification must be done with an active bank account.
I realize the concerns users have about submitting their bank account, but you are submitting it to a corporation that offers protection against unauthorized access and we do not access bank accounts without the user's permission. You are far more likely to be defrauded sending information to someone you do not know than you are submitting it to a company.
Bank account information is encrypted and is not viewable by employees (bank account numbers, save a few numbers, are blanked out and the routing number is viewable).
The one case that some posters keep referencing has been explained, but I will explain it again here:
1. User, by knowledge or not, admitted to being part of a potential money-launering scheme.
2. We noticed the issue and placed a reversal on the funds while it was still in our system. In other words, the request was made before the information was to be submitted to the bank account.
3. A clerical error, however, did not stop the transaction from clearing through to the bank (current technologies in place do not allow this to happen.
4. The reversal request still was submitted to the bank and the bank honored the request.
This was a one-time occurrence and a valid explanation was offered to the degree allowed. I can't discuss customer cases as in-depth (as some would like) on the boards because of proprietary issues.
PayPal will NOT access your bank account without your permission and verification is an identification measure to deter fraudsters from entering the system. This information is encrypted and is more secure than sending a check to someone you do not know.
posted on April 25, 2001 08:42:04 PM
paypaldamon says: Why don't you, for the simple sake of letting you voice your opinion, tell me why you think Verification is nefarious?
First of all, I do applaud Paypal for providing someone to get down here in the trenches and fight these wars of words. It's far better than we get from most other services.
That said, here is my read on this discussion. I think people have something bigger than this specific question of verification. It is really an objection to your/Paypal's selective answering of questions.
Imagine things from our side of the fence. Paypal continues to change and evolve policies at a very rapid rate, and most of these policies are becoming user-hostile AT BEST. Fees getting instituted and raised, draconian "verification" policies, tortuous process to follow for "buyer satisfacton" guarantees. Wild stories of people getting accounts frozen for months or completely shut down. News items appearing in national press about BBB complaints regarding paypal.
Of course, how could I fail to mention the fundamental policy change regarding "always free".
In nearly all cases, Paypal has no explanation for these changes other than they "improve service" or "increase fraud protection". And hardly ever is there an confirmation/denial of the wild stories due to "confidentiality".
I presume that PaypalDamon is a person paypal has specifically placed here to be a spokesperson. When legitimate questions are asked, and they go unanswered, or you dance around the question, what else are we to think? It certainly sounds nefarious to me!
We (or at least I) have no idea how candid you are being, what answers are really correct and what answers have been sanitized or even outright suppressed. It really lends an Orwellian quality to some of these discussions.
To paraphrase something I once read on AW, Paypal does not have the Bill Clinton charm, and we know when we're being lied to.
While I can appreciate your persistence, following me around on the threads with the same question is not going to get your answer any quicker.
This is the only thread in which I have requested information regarding PayPal's policies (at least, in the last several months- before that, I'm not sure). I don't know who's following you around, but it's not me.
Why don't you, for the simple sake of letting you voice your opinion, tell me why you think Verification is nefarious?
I never said nefarious, but be that as it may... because you say verification is an identity check, when clearly, that cannot be the only reason (unless the people making policy decisions at PayPal are not thinking clearly). And there has yet to be a disclosure of what the other reason(s) are.
How much more information are you giving us than you provide to some unknown party when you send a check?
None, but I already gave you that information, and have been verified. If you answer but one question, answer this:
How does XCOM's decision to go out of business cause me to go from being Verified to Unverified?
How many more times can I state that we will not withdraw funds from your bank account without your permission?
I don't know- your company's past actions are to blame for the fact that people don't trust you.
How many times can I state verification is for identification purposes?
How many times can I ask how, after I have been "identified", I can suddenly become "unidentified" because your company decided to close your bank? What exactly did I do to cause my account status to change? I'll answer that one for you- nothing.
There is also some pure and simple heckling and taunting also.
I'd have to agree. I have, in the past, posted here in support of PayPal, which makes the situation all the more frustrating.
I can't remember the last time I dealt with a company where asking a question resulted in so much bobbing, weaving and spinning as it has with this particular company.
I have answered this concern, specifically to the same posters in many circumstances, about what verification is used for and what verification will not do (give us unilateral access to your bank account).
This question has been in existence since the verification program began and the concern seems to be the same:
"Will you withdraw from my bank account?"
The answer is, "No".
I realize that many of the policy changes over the past year have been confusing at times and they have also inconvenienced some users at times. However, many of the changes were made to increase the level of fraud protection (something that all users ask for and something that is actually a barrier to more people using ecommerce sites--like an auction site).
I can appreciate the concern as a valid one (from an emotional level), but I have stated the same thing several times on the matter. Verification is a fraud-deterrent measure and the verification can only be in effect with an active verification tied to a bank account (to prevent gaming of the system).
If a user, or even a non-user, of the service would like, I would invite them to open an account and verify it. You don't even have to use the account, but as long as I am present, I will be the personal steward for the account and you can report back to me if unauthorized transactions that take place without your consent. You can even check with me daily if it would help. Transactions, regardless of nature, require the user inputting the information and logging in (password protected) on the site.
posted on April 25, 2001 10:30:20 PMVerification is a fraud-deterrent measure and the verification can only be in effect with an active verification tied to a bank account (to prevent gaming of the system).
Really? Now, instead of "verification", it's "active verification"? I guess it sounds more impressive, but you still haven't explained why a person who has been verified should become unverified because of the actions taken by your company, and not the individual himself.
Since I can become unverified without taking any actions of my own, why should I believe that, were I to go through your verification process a second time, you won't just unverify me again when it suits your purposes?
edited... spelling
[ edited by mrpotatoheadd on Apr 25, 2001 10:33 PM ]
posted on April 25, 2001 10:41:30 PM
Hi mrpotatohead,
It is, as I have stated before, an anti-fraud measure and verification does require
an active bank account for active verification. X.com, the bank, is no longer in business and I can apologize for that change to you, but it is not going to change the verification status issue that has been the debate of this thread.
If you wish to remain verified, you will need to have the verification tied to an active bank account (for the reasons stated previously). I will even be the personal steward for your account if it alleviates any concerns you have, but I can't change the policy regarding verification. I realize that the change impacted you (from the X.com side), but what difference, from a conceptual standpoint, does it matter which bank account was verified? The same standards still apply---
1. Your bank account will not be accessed without your permission.
2. The account is insured against unauthorized access.
3. The verification supports your identity and prevents gaming issues (to deter fraud for the user base, the company, and individual users). The more positively users are identified, the lesser the probability a fraudster can enter our system.
I think I have stated all I can on the matter and probably fairly in-depth. The decision to verify is yours and yours alone, but my promise is that your information will not be accessed without your permission.As a note, being verified is one of the measures of our Seller Protection Program, which helps sellers eliminate liability for charge backs (because they have identified themselves in our system).
posted on April 26, 2001 06:26:59 AMIt is, as I have stated before, an anti-fraud measure and verification does require an active bank account for active verification. X.com, the bank, is no longer in business and I can apologize for that change to you, but it is not going to change the verification status issue that has been the debate of this thread.
I still don't see how X.com's going out of business somehow changes my identification.
Isn't my social security number enough?
Good grief, I've been with PayPal since almost the beginning. You've never had a problem with any of my business dealings.
My eBay feedback is almost 2,000 positive (nearly 1,000 of those unique) -- I have many, many satisfied, repeat customers.
Once you've pried our social security numbers out of us, why do you need a bank account number for "verification"?
Why do you need a checking account linked to an account at all? Seems to me the money market fund and debit card make a bank account useless. I'd never fund a PayPal purchase with my checking account. I only use a credit card for that. It's the only way to truly have "buyer protection."
It is, as I have stated before, an anti-fraud measure and verification does require an active bank account for active verification.
If verification is an anti-fraud measure, and if being "Verified" is somehow a more secure and trustworhty status than "Unverified", why do I go from being trustworthy to less trustworthy because XCOM decided not to keep its doors open? What did I do to make myself a greater risk for fraud? Obviously, nothing. Why then does XCOM's closing make me a greater fraud risk?
I'm not asking you if you require an active bank account to be verified- I'm asking you why, once I have been verified, you require an active account to remain verified.
And using the "because it's an anti-fraud measure" argument is just circular logic- all you're saying is...
"We require an active bank account as an anti-fraud measure because it is an anti-fraud measure".
Suppose I open an account specifically to use with PayPal, and keep no money in it. How exactly does this provide any greater measure of fraud protection for anyone? I've already been verified- what's the difference between having no money in my new open account and having no money in my closed XCOM account? Where's the protection?
You keep saying that verification is used for identification only, yet you refuse to explain how a person, once "identified" by you becomes "unidentified", having done nothing more than choosing as their online bank one which closes up shop when they decide they can't make a go of it.
If you can't see why people want the answer to this question, you might want to get assistance from some of the other customer service people there at PayPal- your customers have been asking it for quite some time now, and dancing around it is not going to do anything to improve the distrust a lot of people have about your service.
edited... ubb
[ edited by mrpotatoheadd on Apr 26, 2001 07:32 AM ]
posted on April 26, 2001 10:01:42 AM
Hi potatohead and vargas,
The question has been answered. In order to remain verified, the verification must be tied to an active bank account (for the fraud reasons explained). I am not going to cover the issue more in-depth than I already have. Verification is used as a fraud deterrent and that is the best, and correct, answer that I can give you.
That is my answer. I have also advised that I will be the personal steward for your account if you think something bad is going to happen by being verified. You can email me daily to see if your bank account has been accessed without your permission (provided you didn't request the transaction or click on a link that brought you to a spoof site where someone could create a transaction against your account---if you compromised your password). I will be more than happy to direct it to the fraud team for investigation.
The question hasn't been answered. It is not your place to decide for me when I have received the information I am seeking. If PayPal's corporate response to a customer's concern is "like it or lump it", fine.
I would respect you a lot more if you would just come right out and say that you are not going to answer the question, but you won't do that, will you?
posted on April 26, 2001 10:45:34 AM
No, Damon, you haven't answered the question. All you've said is that this is how Paypal does it, and if users don't like it, they can take a flying leap. We have repeatedly asked you to provide a logical explanation, and all you give back is "We make the rules. Nyah. Nyah. Nyah."
And that is precisely why we believe that verification is not designed to identify users (because Paypal is now unverifying users who have established their identity) but to coerce users to turn over their bank account info.
I have nothing against verification, but I am very much against verification being used to serve a hidden agenda of a corporation, particularly one that cannot even maintain a satisfactory record with the pro-business BBB.
One more deceptive comment of yours to respond to: When I send someone a check, I give them my account and routing numbers. But I don't give them written authorization to initiate withdrawals from my account. That's what Paypal asks for when a user verifies, and it's very different from what happens when I send someone a check. And the TOS protection against Paypal-initiated withdrawals can be withdrawn at any time, also according to the TOS.
Your "personal stewardship" offer has got to be one of the silliest things I've seen on this board. But I'll offer you a chance to make it a bit more real:
Damon, are you willing to personally guarantee, in a legally-binding written document, that you will be personally liable for any transfer from users' checking accounts that the users do not initiate, for the duration of Paypal's existence.
In other words, Damon, if, next year or whenever, Paypal changes its TOS to allow it to recover chargebacks and allegedly fraudulent funds from users' bank accounts, will you agree to personally reimburse those users for the funds withdrawn?
If you won't, don't BS us with all this personal stewardship talk.
You will note that Paypal's TOS already allows it to recover chargebacks and allegedly fraudulent funds by initiating charges against users' credit cards. The only reason, IMO, that they don't do the same for bank accounts is that they want to grab up everyone's bank account info with the promise of no unauthorized withdrawals before quietly changing the TOS down the road.
This would be precisely consistent with Paypal's past behavior, where it promised "always free" in order to manipulate users into signing up for the service, then changed the TOS to impose fees once it had the user base it wanted.
Back then, Paypal wanted a user base, and it promised free service in order to get it. Now Paypal wants bank account info, and it promises "no unauthorized withdrawals" in order to get it.
So, Damon, when you say:
"Will you withdraw money from my bank account? The answer is no."
it has exactly as much credibility as when Paypal said:
"Will you charge fees? The answer is no."
But I'm always willing to be convinced otherwise. Damon, can we have that signed personal guaranty from you?
posted on April 26, 2001 11:08:45 AM
Damon has made a number of references to one particular case, in which Paypal and a user were both involved in a credit card theft/money laundering scheme. (No, Damon, it wasn't just the user; she couldn't have laundered a penny without Paypal's active participation.)
(From what I can tell, neither Paypal nor the user was a knowing participant, but both behaved in an incredibly stupid manner in facilitating the Romanian's crimes. There was an excellent article about Paypal's security philosophy several months ago, explaining that they chose to have minimal security on the front end, freely allowing criminals to sign up and defraud honest users, then slamming the door on the back end, frequently re-victimizing the honest users in the process. How else do you explain that a Romanian could set up dozens of accounts using U.S. credit cards, with no questions asked by Paypal? Is that really any less stupid -- or culpable -- that a user who believed a Romanian fraudster's story that he was receiving funds through her for actual merchandise.)
The account that Damon is now giving is consistent with what the user reported on these boards months ago. I have no reason to believe that it is not the truth. But, at the time the issue first came up, he issued blanket denials of everything the user said about the removal of money from her account.
"Reversals" are supposed to take place only before funds reach a user's bank account. A "reversal" which occurs a month after funds are sent -- whether by clerical error or not -- is an unauthorized withdrawal.
Paypal promised that they would not do that. For months, Damon said -- in response to this specific user's situation and with full knowledge of the actual facts -- that Paypal would not do this. Now, finally, Damon admits that they did do this, if only by clerical error.
IOW, it has taken several months of challenges from people on this board to get a simple, accurate, and believable explanation, rather than "it doesn't happen because it doesn't happen". Wouldn't it have been easier to start out this way?
Had Damon given this explanation -- just as you are now stating it on the boards -- when this situation first hit the fan, his credibility -- and Paypal's -- would have been much higher, and users wouldn't feel like they have to beat the truth out of Paypal (via Damon) on these boards.
I'd prefer that, and I'm sure Damon would as well. But until we receive logical, complete, truthful and non-evasive answers the first time around, I suspect what someone referred to as "piling on" is going to continue.
posted on April 26, 2001 11:46:32 AM
Hi mrpotatohead,
Just because the answer isn't what you want to hear doesn't make it any less valid. As far as I am concerned, it has been answered and I am not going to continue to respond to the same question over and over when it has been addressed.
If you think verification is going to impact you in a negative way---that is your right. I have explained how it won't and I have explained why verification is a tool in our anti-fraud measures. The choice is yours and I can't make you.
However, after nearly a year of being out here answering questions, I am a little (on a personal level) tired of being called a liar when the answer doesn't suit your feelings as to what the answer should be.
I offered to watch over your account like a hawk for you. I'm putting my mouth (and the company's) on the line to prove what I am stating.
Verification, again, is an anti-fraud measure and it is important that the information is current.
You still haven't really addressed my questions:
1. How is this any different than the information you provide on a check?
2. How is your bank account going to be tapped if you don't initiate it? (terms of use and federal laws).
3. How is verification a bad thing, when it can help identify the user base, thereby protecting you and other users from fraudsters?
4. Why is verification bad if it helps eliminate liability for charge backs (throught the Seller Protection Program)?
You are looking for something bad, when there isn't.
Don't you think it's interesting that when I say that you haven't answered my question, your response is:
Just because the answer isn't what you want to hear doesn't make it any less valid. As far as I am concerned, it has been answered and I am not going to continue to respond to the same question over and over when it has been addressed.
But when you are doing the asking, it is perfectly fine to respond with:
You still haven't really addressed my questions
What's good for the goose is not good for the gander, apparently.
From this, I gather that PayPal's official stance with regards to their customers is that you reserve the right to determine what information (if any) a customer will be allowed to have in answer to concerns about their account, while also reserving the right to request additional information from that same customer when you feel it is necessary.
Although I do not have the information I was seeking, I believe I do have enough to make a decision regarding online payment services.
posted on April 26, 2001 12:17:38 PM
What we're being handed is the PayPal version of what generations of parents have told their kids when they don't want to go into detail or answer a question: "Because I said so!"
It shuts up kids. But it doesn't build trust.
Trust is a commodity PayPal desperately needs to survive and thrive in the long term --- when the investor money runs out and it has to rely on profits derived from customers/accountholders to earn its keep.
posted on April 26, 2001 12:23:32 PM
Yesterday, I noted several questions I had asked where Damon posted a completely non-responsive answer.
(1) I asked for the language regarding changes in the Paypal TOS. Here it is:
"This Agreement is subject to change at any time without prior notice, by posting of the revised agreement on the PayPal website and you may review the current terms of use prior to initiating a transaction at any time at our Terms of Use page."
Now, Damon, am I correct that this clause allows Paypal to change Paragraph 10 (which says it will never initiate withdrawals) at any time without prior notice? (That's a yes or no question, Damon.) If you say no, please cite the language in the TOS that exempts Paragraph 10 from being changed.
(2) The other question that Damon side-stepped was a request for the language regarding authorizing bank withdrawals that the user agrees to when he is verified. As I recall, this language -- the wording that actually goes to the user's bank -- contains no provisions prohibiting Paypal from initiating withdrawals.
Unfortunately, I can't access this language without actually going through the verification process, and Damon won't post it.
But this language is the major difference between sending someone a check and giving Paypal blanket authority to take money from your account. No check contains the type of language authorizing additional withdrawals that Paypal forces users to sign in order to be verified.
That answers your questions #1 and #2 to mrpotatohead.
(1)A check is authorization for a one time debit; Paypal requires blanket authorization to your bank.
(2) Because of Paypal's right to change its TOS without notice, the TOS provides no protection whatsoever. By the time I finish writing this message, the TOS protection may no longer bo there.
As far as federal law, I've never seen you cite the number of the statute or regulation that you are referring to. Please do so (and tell me if Paypal has been prosecuted for making the withdrawal in the case we've discussed here).
My understanding is that merchant accounts typically initiate withdrawals to recover chargebacks, and that direct deposit systems allow the employer to initiate a withdrawal if someone receives a double paycheck. What federal law is it that allows these practices but would not allow Paypal to initiate withdrawals if it changed its TOS to permit it?
As far as #3, an honet verification system is a very good thing. Paypal used to have one of those, and I was verified under it. Verification used as a subterfuge to grab bank account info & blanket withdrawal authorization is not a good thing.
At the time Paypal switched to bank account verification, it was one of several moves designed to wean users off of credit cards and onto payment from their bank accounts. In order to do this, Paypal had to coerce users to turn over their bank info, and it did this by implying that users who didn't do so were dishonest.
It also knew that users would be reluctant to turn over their bank info if Paypal could initiate withdrawals, so it issued a temporary -- subject to change without notice, under the TOS -- promise that it would not do this. Because Paypal wanted to discourage credit card usage, there was no comparable protection for credit cards; Paypal's TOS allows it to initiate unauthorized charges to your credit or debit card in order to recover debts it claims are due it for chargebacks or fraud.
As for #4, the Buyer and Seller Protection programs are more illusion than reality. The loopholes are bigger than the protection.
#4 is rather irrelevant, since the question here is not whether verification will be used, but whether it is being used for a proper purpose. Removing verification because X.com's bank collapses does not serve a proper purpose of establishing identity, since my identity is already established and X.com's demise did not affect it.
Damon's only explanation of the requirement for an active bank account requirement is to avoid "gaming the system." The only one gaming the system here is Paypal: I was verified under the mail verification system. Then I became unverified because Paypal changed its system in ordfer to grab bank account info. So I was re-verified. Then Paypal's parent company closed its bank, and I am notified that I will become unverified, because Paypal wants to grab some new bank account info.
My identity has not changed throughout this process, but Paypal is gaming the system, verifying me, unverifying me, verifying me, unverifying me, to serve needs unrelated to security, but having everything to do with their ability to get funds from my bank account.
Apparently, some companies (one, at least) feel that their customers should be seen and not heard.
Until just the other day, I have not commented on PayPal for quite some time, except for a few posts in their support. I won't be making that mistake again, and I will be sure, whenever possible, to tell any and all who ask (either on the message boards I read or in email correspondence) about my experiences in dealing with them.
edited to add...
If anyone wants to see an example of a truly professional company in action, take a look at the current U-PIC thread. You will find people asking questions, and a company rep responding with answers to those questions, not with "As far as I am concerned, it has been answered and I am not going to continue to respond to the same question over and over when it has been addressed."
And those are questions from people who are not even customers. A company that actually cares that even potential customers get answers to the questions they are asking.
Imagine that.
[ edited by mrpotatoheadd on Apr 26, 2001 01:00 PM ]