Well, I just had my first experience with PayPal customer service, and it was a real eye-opener.
It has been about a month since I used PayPal, and they have changed some of their forms. When I used the link e-mailed to me by E-Bay, funds were immediately withdrawn from my checking account. I NEVER use direct debit, always a credit card account (see below), but on this occasion I was not provided any notice of what they were doing, nor was I provided an opportunity to change the default.
When I contacted customer service, I eventually got a supervisor called Stephanie. Useless. Stephanie's approach to customer service is to provide some of the most asinine excuses I have ever heard to refuse to provide any service what-so-ever. For example, according to Stephanie, the vast majority of PayPal users prefer direct debit to credit card. Really? I can see why you would want money removed from your account before you have inspected the merchandise (in fact before it even ships) foresake independent third party protections and rights to dispute, and allow PayPal to enrich itself by charging the seller the same fees as a credit card transaction to add to Paypal's cash coffers. It makes perfect sense; If you are PAYPAL!
Eventually, I hung up. Calling PayPal Customer service is a waste of time. This was a very small transaction. Paypal had taken the money out of my checking account earlier the same day and transferred it to a PAyPAl account in the sellers name. They said they can't reverse it. Nonsense. It is entirely within PayPal's control. Fortunately the seller is a merchant, and unlikely to be scamming so hoefully everything will work out fine. I am probably lucky, as this serves as a warning and got me thinking about this PayPal account. Putting on my lawyers hat, this is my advice (I am licensed California Attorney):
1) Do not give PayPal access to a checking account where you make direct deposits. Set up a separate account just for paypal, and only keep a balance sufficient to maintain you paypal activities. This should be an amount that you could do without for up to 90 days in the event of fraud. Your bank can get your money back, but it takes time. In contrast, paypal isn't a bank and is not governed by banking rules and regulations. They are also uninsured.
2) Use credit cards to by-pass paypal entirely, or use credit cards through paypal rather than direct debit. The reason is simple. The credit card companies give you charge-back options and dispute resolution that admittedly can be poor with some banks, but is infinitely better than PayPal. I know that PayPal's TOS allegedly waives your right to charge-backs, but this is legally unenforcible. The credit card company has its own TOS with you that they must abide by. The rights provided to you under the credit card agreement can not be waived by paypal (or any merchant) through TOS clauses. The credt card company will make the charge back, and if paypal doesn't like it, they will have to sue you. They won't do that because they would lose and that would destroy the myth that is enriching them. What they might do is close your account. You lucky devil.
3) Always read payment options carefully. As a general rule never deal in cash (including money orders).
4) E-bay may not be a bank, but their activities are those of an agent for the seller (in taking money out of a buyers account to pay a seller and refusing to follow buyers instructions when paypal makes a mistake), or an agent for the buyer (on those rare occasions when PayPal attempts to initiate a charge-back). As paypal does not have a banking charter and is privately held, legally they have to be considered as acting as an agent for someone. This means that PayPal could be held jointly and severably liable with the merchant under state UCC provisions and Federal Law for any problems with the transaction, including non-conforming goods. If you have a merchant problem, sue both PayPal and the merchant in your local small claims court. Yes perfecting judgments is a pain, but all the costs can be applied to the debtor (PayPal), and if PayPal customers start exercising default judgments in Santa Clara against these deadbeats, maybe they will get the message. |
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