PayPal Bans Talking Bad About PayPal

Paypal has just sent out it’s Notice of Policy Updates for 2017.  Among the standard raising of rates, one new clause in the agreement caught my eye – the “non-discouragement” clause which makes talking bad about, or discouraging customers from using Paypal or promoting another payment method over Paypal, a violation of the Paypal agreement which could lead to your account being closed and/or your funds being “held”.

Paypal Non-Discouragement Clause

  • In representations to your customers or in public communications, you agree not to mischaracterize PayPal as a payment method. At all of your points of sale (in whatever form), you agree not to try to dissuade or inhibit your customers from using PayPal; and, if you enable your customers to pay you with PayPal, you agree to treat PayPal’s payment mark at least at par with other payment methods offered.

The first part of the non discouragement clause is a little confusing to me: “you agree not to mischaracterize PayPal as a payment method“.  This means that by calling Paypal a “payment method” you are wrong (mischaracterizing it) and violating PayPal’s rules.  What I don’t understand is, if Paypal is not a payment method, WTF is it? I’m sure there is some wording buried in the service agreement/terms of service/legal mumbo jumbo that names Paypal as something other than a payment method, but to me, if people use Paypal as a method of paying for stuff, it is a payment method.

Paypal non-discouragement clause
Paypal’s new “non-discouragement clause”

The second part of the non discouragement clause is the kicker and where Paypal can ban you for talking bad about, or not treating it the same as your other payment methods – or even trying to push people to using another payment method instead: you agree not to try to dissuade or inhibit your customers from using PayPal; “…and, if you enable your customers to pay you with PayPal, you agree to treat PayPal’s payment mark at least at par with other payment methods offered.”

This means that if you, for example offer both Paypal and Square, but you prefer people to use Square because they don’t gouge you as hard as Paypal, you can’t say anything about it, you can’t ask customers to use Square instead, you can’t offer an incentive to use Square instead of Paypal – you can’t do anything.  You can simply display a Paypal button/logo and a Square button/log next to each other. You can’t even make the Square logo bigger than Paypal’s button. The PayPal button must be “at par” with other payment methods.  Who decides if the way you placed Paypl’s payment mark is “on par” with your other payment method? Well, Paypal does of course.. But don’t worry, you can trust Paypal.. Right?

Unfortunately, because currently there really is no other payment method as large, easy to use, and as widely accepted as Paypal they have a virtual monopoly on the online payments market and can pretty much make up any rules they want, and still ban whoever they want.

 

Paypal Class Action Lawsuit

Notices are now being sent to claimants for the Zepeda v. Paypal class action lawsuit. This lawsuit affects anyone that PayPal tried to screw over from April 2006 and November 2015. Here is the notice and link to file a claim:

A settlement has been reached in a class action in which the plaintiffs allege, among other things, that PayPal improperly handled disputed transactions on PayPal accounts and improperly placed holds and reserves on accounts or closed or suspended accounts. Plaintiffs also allege that PayPal failed to provide annual error-resolution notices and monthly account statements under the Electronic Fund Transfer Act.

You are a member of the Settlement Class if you had an active PayPal account between April 19, 2006 and Nov. 5, 2015. Certain Settlement Class Members who had a hold or reserve placed on their account and/or who had their account closed or suspended by PayPal are eligible to receive a monetary payment upon submission of a valid claim form.

This notice summarizes the proposed settlement. For the precise terms and conditions of the settlement, please see the Settlement Agreement available at http://www.accountholdsettlement.com/, by accessing the Court docket in this case through the Court’s Public Access to Court Electronic Records (PACER) system at https://ecf.cand.uscourts.gov, or by visiting the office of the Clerk of the Court for the United States District Court for the Northern District of California, 1301 Clay Street, Oakland, CA 94612, between 9:00 a.m. and 4:00 p.m., Monday through Friday, excluding Court holidays.

PLEASE DO NOT TELEPHONE THE COURT OR THE COURT CLERK’S OFFICE TO INQUIRE ABOUT THIS SETTLEMENT OR THE CLAIM PROCESS.

Success! Getting Money Back From Paypal

Another Paypal success story, as a followup to Rand’s post from 2008 here: How I Got My Money Back From Paypal.

I was able to get my money back from Paypal after losing an unauthorized purchase dispute. I had two charges come through my Paypal account that triggered an automatic withdraw from my bank account since there wasn’t any money in my Paypal. My bank account was the first backup funding source. My bank would not dispute the charges because it was not a charge made on my debit card using the “credit” feature. Only debit card purchases made with the “credit” feature are covered by fraud protection. All other transactions, you are just out of luck. Not sure if this is true for all banks, but it is for Bank of America. I’ve always known about using the “credit” Continue reading