Paypal is a Bank: Paypal’s Weird Complexities & Secretive tricks to avoid Laws – The successful 2004 Class action against them!

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[While I’m on the topic of big companies breaking the law. Paypal is definitely breaking certain laws.

However, when I began digging into taking Paypal to court, I found that these are cunning bastards. They operate in places without having offices there, so you can’t take them to court! These are clever devils.

I also have noted, for weeks on end, that Paypal is sending out a constant stream of emails about making changes to their agreements with people. Its unbelievable.

There was one organisation, a watchdog that monitors financial organisations like Paypal. I went to them and complained about Paypal. To my utter amazement they told me that I was the FIRST PERSON TO COMPLAIN! WTF? Well, apparently so. But, because of Paypal’s slippery ways, even they can’t nail them!

It seems as if Paypal is financially dependent on eBay. This is most fascinating.

I discovered a website which actually seems to have some really serious information about Paypal and what slimeballs they really are.

I’m going to post some of its content. It looks pretty solid to me. It seems as if Paypal was hit by a class action in 2004 that really sent them reeling. Ever since, they’ve been as slimy as hell.

Paypal is another company, along with Youtube and Google Adsense, that needs to be hauled in front of Congress.

A pal of mine with international banking experience, told me an interesting thing about Paypal that nobody brings up. He said that Paypal can move monies faster than the banks. I can’t remember the finer detail of what he explained to me. But he said that there is something really weird about Paypal for it to be able to operate on the scale and speed that it does.

This friend of mine, I might add, had tried to take on a Central bank in another country, and had tried to form his own Paypal-type competition about 20 years ago, when he ran into various brick walls. He knows a lot about banking. He basically indicated that there is something really weird that allows Paypal to do business faster than the banks. But like I say, I can’t remember the technical details.

These big companies also hide details of when people go after them legally. I don’t think people realise how many legal actions are really taking place. Youtube for example, must be the No 1 company in the world when it comes to being hit by legal issues, and yet you would not know about it normally. But Paypal must also be up there.

I went and checked, and what I’m telling you about Paypal is true. Paypal is really a BANK. In various ways it functions exactly as a bank, but it seems to be a bank that has no competition, a monopoly of some kind in fact.

Here’s a quote from a website that discusses Paypal:-

PayPal is not just a fintech company, it’s a revolution in the digital money market. PayPal, though not a bank, provides features which are not less than any bank. Money transfer, Debit cards, credit cards, loans, payment gateways, and digital wallet are few of the many services provided by PayPal.

Source: https://www.feedough.com/how-does-paypal-make-money/

If Paypal is a monopoly, and Youtube in its own right is a monopoly, then strictly speaking the US Govt can break them up since monopolies are NOT allowed to operate inside the USA. Both Paypal and Youtube, for all practical purposes are monopolies. AT&T was broken up by the Govt for being a monopoly. Anglo-American, is prohibited from trading in the USA because it is a global diamond monopoly. So why can’t Paypal and Youtube be broken up by the Govt?

And what is so very special about the Paypal and Youtube models that there is no competition for them?

Below, is a most important piece of info: Paypal’s IRS number!

Another really weird thing about Paypal is that it can issue credit cards and charge you no interest for 6 months! How is that possible? 

Just as interesting, is that Paypal can freeze your monies, as they did mine. They tell you that officially they can freeze your money AT THEIR OWN DISCRETION, for up to a “maximum of 6 months”, but they actually froze mine for 7 months and I had to phone them to see if I could get my monies out. In the end I chose to refund all the monies I had received because of Paypal’s really nasty conditions that they set!

Is Paypal earning interest on our monies? If it seizes and freezes your money for 6 months, it does not pay you a cent of interest on it!

Their conditions that they make are pretty arbitrary for an organisation that, technically carries out banking functions. Take its “censorship” example, whereby it shuts and bans Paypal accounts as it sees fit. No bank is allowed to do such things, yet Paypal does it regularly on an enormouse scale.

I really think Paypal needs to be hauled before Congress for a hearing. Ditto for Youtube. 

I want to show you some points from a fascinating, angry website that has many things to say about Paypal. It makes for some interesting reading.  The link to the entire site is on the bottom. Jan]

Here is an example of a question on the Paypal community site. This shows you that Paypal makes money when it puts massive freezes on our accounts:-

Hello all, I’d like to reach out to everyone who is tired of PayPal’s sick policy and sketchy business. Here what lead me to this: I was paid by 2 friends money as friends and family. When I went to withdraw the first payment to my bank they said there was a 72 hour delay plus the 1 day to withdraw if they didn’t find a issue. The second one I withdrew to my debit card and they also placed a 3 day delay. I have already talked to an attorney and it appears it isn’t the first time PayPal is sued for placing unjustified holds on funds. It appears PayPal is only holding funds to gain interest from the money. Also: it states in PayPal’s policy’s that holds are randomly placed to a very small percentage, yet both of mine in different days were placed on hold. Fun fact: PayPal has already been sued in 2015-16 for these same unjustified practices.

Source: https://www.paypal-community.com/t5/My-Money/Class-action-lawsuit-against-PayPal/td-p/1442455

Some quotes from screw-paypal.com:-

DISCLAIMER: The following information is taken for Security and Exchange Filings written and prepared by PayPal Inc. The following information is all public record — public record buried deep where the general public would not find it (S-1 Filings, 10K-405 Filings, 8K Filings, 10-Q Filings, 424-B1 Filings, etc.).

One Example: PayPal is a Hypocrite

PayPal has gone on record as saying they believe their service is subject to the Electronic Fund Transfer Act and Regulation E of the Federal Reserve Board. Here is an official quote from PayPal:

“… we have assumed that our product is subject to the Electronic Fund Transfer Act and Regulation E of the Federal Reserve Board.”

That was before PayPal got sued. In 2004, when PayPal settled the California filed class action lawsuit against it, they admitted no wrongdoing and said the following:

“PayPal believes it did nothing wrong. In fact, PayPal disputes that the EFTA, originally passed in 1978, applies to its business.”

BEFORE PAYPAL WAS SUED: We are subject to the EFTA

AFTER PAYPAL IS SUED: We dispute the fact the EFTA applies to our business.

The EFTA is one federal regulation that protects you and me from companies that do not want to give their phone number out, that want our money but don’t like to give it back, that want our business but then limits our accounts.

PayPal you asshole.

PayPal: A Delaware Corporation

PayPal operates out of San Jose, California, but is a Delaware registered corporation. Instead of supporting their home state of California, PayPal chooses to opt for Delaware’s secretive and anti-consumer corporate laws — corporate laws that favor the corporation and not the general public.

Example? Let PayPal provide you with one: “As permitted by the Delaware General Corporation Law, we have adopted provisions that limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director.”

PayPal’s IRS Employer Identification Number is: 77-0510487.

Take note of this particularly weird and creepy Paypal structure of “complexity”. It is as if Paypal is designed to BYPASS Laws so that nobody knows exactly what Paypal is! read this:-

PayPal Tells US What it Would Take to Change Them

PayPal’s business model is so purposely complex to avoid having to comply with as few state and federal regulations as possible. Here are PayPal’s own words: ” Our status under state, federal and international financial services regulation is unclear. Violation of any present or future regulation could expose us to substantial liability, force us to change our business practices or force us to cease offering our current product.”

OUR STATUS UNDER STATE AND FEERAL LAW IS UNCLEAR.

How convenient. PayPal goes on to say, ” We currently are subject to some states’ money transmitter regulations, to federal regulations in our role as transfer agent and investment adviser to The PayPal Money Market Reserve Fund and to federal electronic fund transfer and money laundering regulations.” Okay, so what happens, PayPal, if you are found in violation of these laws or any future regulations that might apply to you that you are found in violation of.

PayPal tells us:  “If we are found to be in violation of any current or future regulations, we could be: exposed to financial liability, including substantial fines which could be imposed on a per transaction basis and disgorgement of our profits; forced to change our business practices; or
forced to cease doing business altogether or with the residents of one or more states or countries.”

That would be unfortunate! So PayPal tells us the only way we are going to force them to change their evil ways is to make them change.

More of Paypal’s weird structure:-

PayPal is licensed in the United States as a Money Transmitter in 36 US States

There are a lot of people out there who deny PayPal is licensed to operate on a state-by-state basis. You guys are wrong. PayPal is.

PayPal is currently licensed and regulated by the following U.S. States:

Alabama, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nebraska, New Hampshire, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wyoming.

PayPal was put into business by these states, they can be put out of business by these states.

Residents of all these states have been victimized and defrauded by Paypal. Go to our RESOURCES area and find out how you can file a complaint to your state’s appropriate agency for this.

Paypal may be making money out of your money that they froze:-

PayPal Comments on Frozen Accounts

Here is one thing PayPal has said about frozen customer accounts: “Measures we sometimes take to combat risks of fraud and breaches of privacy and security, such as freezing customer funds, can damage relations with our customers.”

So why do they keep doing it? First, to get your money. They make money off of your money. Second, there are always more new customers to fleece!

That’s right, PayPal made those comments when they were trying to build their business and get more customers.

Now that they have eBay and a large and growing customer base, they can afford to “damage relations with customers” because they can always get more customers that have NOT HEARD OF YOUR PROBLEM.

You need to get out there and complain.

More on Paypal using your monies:-

PayPal Uses Customer Funds

Your money, when with PayPal, is not YOUR money. PayPal uses your money. Corporate accounting allows companies to fudge their numbers and play tricks with the books. Who knows WHAT they are really doing with your money.

PayPal tells us a little bit. Here is a quote from PayPal: “We reinvest customer funds in the PayPal system…”.

WE REINVEST CUSTOMER FUNDS IN THE PAYPAL SYSTEM

PayPal goes on to explain that while they invest customer funds in “high grade securities,” the securities may lose value.

PayPal has your money and PayPal can gamble it all away. And what can you do about it? Your money is stuck with them for 6 months!

PayPal Sources of Revenue…You Guessed it!

PayPal outlined exactly what their sources of revenue are. Let PayPal tell you:

“We earn revenues from three sources: transaction fees, interest on funds held for others and investment management fees. The following describes these revenue streams.”

INTEREST ON FUNDS HELD FOR OTHERS

Still wondering why PayPal freezes customer funds for any reason they can think of? You guessed it. They make money off of your money to this very day.

What’s that PayPal, you have something more to say? Let’s hear it:

“We invest the balances in most of our customers’ accounts in short-term money market and money market equivalent securities..”.

PayPal also pools customer funds in bank account under PayPal’s own name.

“Interest on Funds Held for Others.  Revenues from interest earned on funds held for others increased…”. No shit. Really? I hope the $40,000 of my money that you have helped you a little.

PayPal NEEDS Ebay

“We depend on online auction transactions for a significant percentage of our payment volume. We generate a significant portion of our business on eBay…” Those are PayPal’s own words. Should real competition be allowed on eBay (such as Google Checkout), PayPal would loose enough business to endanger PayPal’s business as a whole. Almost 70% of PayPal’s cash flow is generated through eBay.

PayPal Cannot Make a Profit…So They Take Your Money

“We have not reached profitability to date. We have accumulated net losses of $231.0 million…”. PayPal continues to say, ” We intend to continue to make significant investments in our systems, infrastructure and customer service operations.” So they are operating at a loss, but continue to invest funds into their company. Where do you think that money is coming from? Why to they hold on to YOUR money for so long? Is it a Ponzi scheme? Freeze millions of dollars of customer funds for 6 months, use those funds, then pay back those people by freezing the funds of other customers for another 6 months? Let PayPal PROVE otherwise!

PayPal Protects Their Own Interests While Lying to YOU!

PayPal likes to treat its customers like they are God and you are an ant. But PayPal is not God — in fact they have real fears. Here is what PayPal had to say about this: “We incur charge-backs and other losses from merchant fraud, payment disputes and insufficient funds, and our liability from these items could have a material adverse effect on our business and result in our losing the right to accept credit cards for payment.”

Since PayPal is incapable of preventing fraud on their network (they “verify your account” and “verify your credit card” yet somehow they still cannot protect its users from unauthorized use of their cards or spot a real fraudster from a thousand miles), PayPal lies and tells you that they can, and they offer great buyer and seller protection.

But that is a lie: PayPal makes you pay for their mistakes so their business is not “adversely effected.”

PayPal Claims to Protect Your Privacy, but… (IRS)

PayPal is the ultimate hypocrite. When you experience account problems, the ask you to fix it, but then refuse to give your information citing “third party privacy concerns.” PayPal claims to protect your privacy from third parties.

That is a lie. In fact, not only does your private information end up in the hands of other companies that are NOT PayPal (read the TOS you agreed to), PayPal reports you to the IRS!

Here are PayPal’s own words: ” We are subject to regulations that will require us to register with the Department of Treasury and to report suspicious activities involving transactions of $2,000 or more.”

There are no clear definitions as to what constitutes a “suspicious transaction.” So PayPal reports ALL transactions over $2,000 to the Department of Treasury (which administers the IRS).

Want to try and close your PayPal account and there is more than $2,000 in it? PayPal will report you.

I don’t remember seeing that in the PayPal User Agreement either!

PayPal Gives Us Another Tip on How to Beat Them…

“Customer complaints or negative publicity about our customer service could diminish severely consumer confidence in and use of our product.”

Thank you PayPal. So let’s get going on those complaints!

From India…With Love

Ever wonder where those maddening customer service emails come from? The ones that never answer the question that you really asked?

America made PayPal the success that it is today. How does PayPal reward America and the customers that it has? It sends jobs to India.

PayPal sends your PERSONAL CUSTOMER information to India. Here is what PayPal has written on the subject:

“Our outsourced New Delhi, India customer service team provided through Daksh eServices Private Limited, responds to the bulk of our initial email customer inquiries.”

THE BULK OF CUSTOMER SERVICE EMAILS TO PAYPAL ARE HANDLED THROUGH OUTSOURCED INDIAN COMPANIES.

When you send your private information to PayPal, along with your plea for help, PayPal does not read one word.

Some 22 year old making $300 per month is typing in what he was trained to type in. Meanwhile, in America, PayPal claims customer complaints are resolved “quickly.”

So think twice when you write that email to “PayPal.” That email just might come back, “From India, with love…”.

Source: http://www.screw-paypal.com/did_you_know.html