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By Bernd Schneider
I wouldn’t say that PayPal as a company is needed. But a service of the kind PayPal is providing certainly is.
Most of the payments I received on my PayPal account were site subscription fees. PayPal would be a suitable payment processing option, if only they would be more reliable and could be trusted to function as one expects.
There are some fundamental flaws in the way PayPal operates, and I actually believe that because of these flaws, PayPal’s operating modus is unethical.
It’s extremely easy to sign up with PayPal. Just fill in the forms, and ready you are.
It’s extremely easy to sign up, and extremely easy to channel money into their system. The hard part comes when one wants to take out an amount of money from their system. According to my own experience, they will request that you register a bank account and a credit card, and that you fax to them a copy of your driver’s license, a statement of account, and a utility bill.
Because they already hold your money, they can be pretty sure that you will comply with all their requests and requirement, even if they seem rather outlandish (I have never been asked to produce a copy of a utility bill in order to withdraw money from a bank account).
In my opinion, their approach of letting everybody sign up and channel money into their system is deceitful. You typically don’t know beforehand that you will have to fax in these documents, and that you may have to wait for weeks until the funds on your account will be released to you. Or that you will be told that they have permanently locked your account, as it happened to me. If you would know all this, you would probably not sign up with them in the first place. Many people sign up because they have been kept unaware of what would happen later on.
I do not think that it is sound for any financial institution to accept money in an account in your name before confirming to you that these funds are indeed accessible to you. I really do believe that such a practice should be stopped by federal regulation. Furthermore, I do believe that it would be justified if PayPal were required to indemnify those businesses and persons, which they have enticed to sign up accounts with them, which they then locked for investigation.
Posted: April 20, 2012 at 12:34 pm