Caveat emptor
Posted : Wednesday May 7th, 2008

One fine day I stumbled across this site in Google. As the name PayPalSucks.com would imply the site is a collection of "horror" stories about various peoples experiences with PayPal.

Sadly, the site like many "negative" sites, is filled with misinformation, half truths and alot of people seeking to avoid responsibility for their own problems. By way of example about 1/2 the horror stories consist of users with a story like

"I bought item X on eBay, paid for it using PayPal and after two-three weeks got item X but it was defective/broken/a fake and now PayPal won't give me my money back because they say the other person cleaned out their account and has vanished."

Now while it is perfectly possible to sympathize with a story like that, someone getting defective merchandise and then not being able to obtain a refund, the fact of the matter is that at the end of the day the blame for this situation is squarely in the lap of the purchaser. There is an inherent risk in buying products sight unseen from someone you have never met and may not exist. And of course there are solutions. You can not buy things off eBay. You can purchase buyer protection (insurance) from PayPal. You can make use of eBay's escrow services where you only pay for the item once you have recieved it and verify the item is what you paid for.

But of course the people with these stories didn't take any steps to protect themselves and they got burnt. Now they want someone else to pay for their naivety?

The other type of story is about frozen PayPal accounts for people selling goods and/or services. Funnily enough PayPal is not the only company that has "horror" stories circulating about it regarding the "freezing" of accounts, another one for example is Google and it's AdSense program. Now as a holder of a PayPal account and as a holder of an AdSense account I am course are interested in such stories and how they might affect me so I did some reading into many of the stories. Of course the truth turns out to be far different then the story tellers want you to really know. For example AdSense accounts are deleted because the user clearly violated one or more of the AdSense policies, like they employed an automated link tracker or page loader, or their site has illegal or otherwise unacceptable content. So essentially many of these stories actually consist of

"I was engaged in unethical/illegal business X and I made a bunch of money through PayPal/Adsense but then PayPal/Google had the termerity to freeze my account. What can I do?"

It is to laugh.

Another thing that is worth noting is that PayPalSucks.com is plastered with ads for a company that provides merchant card services through FirstData. As it happens I had a very bad experience with a FirstData merchant account but what is most interesting to me is that despite all the ads on the site there is nary a discussion to be had of what the risks of a merchant account, which is presented as a better option to PayPal are to the merchant. The fact of the matter is that there are considerable risks that are otherwise borne be PayPal that you take on by being your own merchant.

My negative experience with FirstData provided services which consisted of higher than expected ongoing fees and service charges and unreachable "customer service" reps was brought to an end by me after a nuisance client complaint was bungled by FirstData and I had to defend my company against possible fraud charges and having the credit score of the company demolished. In the end the situation was resolved by my spending about 12 hours on the phone with First Data and my "customer service" representatives and another 12 hours writing and sending letters and documentation. All of it because a customer who had made a $50 purchase wanted a refund and instead of contacting my company directly, who would have been more than happy just to issue a refund, initiated charge back proceedings through their credit card account and FirstData and my service provider company failed to notify me as according to their own service agreements they are bound to do.

At that point I decided that I and my company did not want to continue to put our credit and reputation at risk and a merchant account was not the best way for us to go. But will you find such a warning on PayPalSucks.com? No of course not. I have to wonder why.

Tags

beware  buyer  horror  PayPal  stories 

Categories

Internet  Business 

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