7 RISKS TAKEN WHEN STARTING USING PAYPAL PAYMENT SYSTEM

Updated: 08/01/2009 23:48
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As the time showed many things and ideas that for a long time were popular and respected eventually proved obsolete at best and adverse or destructive...

As the time showed many things and ideas that for a long time were popular and respected eventually proved obsolete at best and adverse or destructive at worst. Often people are too presuming to take into considerations the risks and dangers connected with the “stable” things they stake on. This can be seen everywhere and it is also very common for ecommerce. Today the largest online payment system is PayPal and as such it inspires much respect and confidence to Internet community. With largest turnovers and users base PayPal pose itself as the best choice you have when shopping and transaction online. While PayPal undoubtedly has many advantages over its rivals the use of this particular payment option implicates some serious risks customers need to consider before they decide to start any relations with PayPal. Here is what we found significant to mention for you about possible fall-outs in working with this payment system.

1. No litigation. When a new user agrees to the Terms of Service specified by PayPal it means that the customer abdicates from the rights provided to him/her under the credit card consumer legislation if he/she wants to use their services. While a user leaves his/her money in PayPal account like a bank actually the service isn't a financial institution subject to FDIC rules and as such it does not provide you this kind of protection. You are also not provided with FSLIC protection for Savings and Loans. Besides, PayPal is not also regulated like a credit card company. The agreement also constates that a user cannot issue a chargeback for an unauthorized use of his/her credit card and PayPal account. And in case you do it PayPal have the right to limit your account.

2. Underwater rocks in the fine print. When users start the registration procedure they are not explained some key conditions and rules accepted at PayPal when it comes in particular to security of your account. Thus, if a user's account is accessed by any criminal through phishing or counterfeit websites it is the account holder who will be liable for the breach. In the fine print of the agreement you sing when you join this payment system the company tells that your PayPal account can be closed for any reason whatever it may be, or no reason, at their own discreet and after this you will have to wait for 180 days before you will be able to get access to your funds.

3. PayPal is the only judge. If the payment system finds your actions questionable it may take measures whatever it finds appropriate. If you want to express your point of view it will never influence their decision. Besides, if they start the investigation they do not deign to provide you with any detailed information and surely you won't be able to access the documents they base upon when coming to conclusions.

4. Your reputation may mean nothing. Even if you are one of the best users of PayPal services with hundreds of successful transactions you might be at risk of implacable persecution. If someone pays you with a stolen credit card your account is immediately labeled as “criminal behavior” and all the money within that account is confiscated. If you try to dispute these actions you will have the same result as in our above 3d item.

5. Credit card-like fees. While PayPal is not a credit card company it charges its users with fees as if it is. PayPal charges you with the same fees even if you fund your account through non-credit card option. Charging customers for using credit card to fund PayPal account is reasonable as long as the company has to pay for the fees imposed by credit card issuers like Visa or MasterCard. But as many PayPal customers note internal transactions within the payment system are also charged with commission. When you pay from PayPal account to PayPal account, your money are clean, PayPal is not charged by credit card issuers, PayPal does charge you with a fee all the same! While no money moved in fact PayPal will charge you anyway.

6. Scammers have more rights than you. If you were defrauded by an unscrupulous buyer it does not mean that you will be surely protected by PayPal. In many cases it turns right opposite way. It happens this way. A scam buyer having won the auction pays with PayPal. Seller ships the purchased item to buyer. After this buyer files a fake complaint with PayPal slandering you with that the item is “not as described”. Then a buyer is instructed by PayPal to send item to the seller who in turn is required to send back buyer's money. Buyer keeps the item and sends an empty box to seller complete with tracking number. PayPal gets the tracking number from the rogue buyer and refunds his/her money from the seller's account. Buyer has the money and the item. Seller receives empty box and has nothing to do with the situation. Disputing PayPal's decision leads to nothing as the company relies on the tracking number. And there is a wide variety of such situations.

7. Neither buyer, nor seller protection, nor customer care. Many PayPal users report the failure of the company to protect both buyers and sellers. If you remember PayPal was fined $150,000 by the NY Attorney General for never honoring its guarantees. The NY Attorney General couldn't find a single person who had ever received their money back from PayPal, but he found thousands who had filed for the guarantee and been turned down. Besides, many users complain of the customer service which seems not to care about users' needs. After a number of lawsuits PayPal at last provided its phone numbers to allow customers to call to them. But the situation didn't turn to a better mode. Customers wait for about an hour or more on hold when they call. Even if you were so lucky to have got in tough with them over the phone users say that PayPal provides no distinct and constructive response. Instead they tell something in general and thus try to get rid of you as soon as possible. Faxes and email are bad job. When you send your fax over and over again they will tell you they lost your fax each time. As for your emails you will have just a standard response generated by the system bots.

As you can see without any prejudice to PayPal as such we showed you main problems you can run across when having a business with this company. These are not the slander or exaggeration, these are facts provided by the customers who have used PayPal for a long time. You need not to abandon using PayPal just because of the above factors, you should be cautious and take your decisions having considered all the pros and cons.


About the author

Lella Prior has been at HYIPNews for five years. She is an articulate, confident person who relishes challenges and working under pressure. Lella Prior has been taking much care about writing. The greatest strengths are the research, communication and writing skills Lella has. Thanks to the work at HYIPNews Lella Prior has an excellent opportunity to write good quality content.
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