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PayPal to Fine Gambling, Porn Sites
Posted by
CowboyNeal
on Sat Sep 11, 2004 11:41 AM
scubacuda writes "Yahoo! reports that PayPal is taking an aggressive stance against gambling, adult, and non-prescription drug sites: anyone caught using PayPal for these purposes will be charged $500. Eric Jackson, a former PayPal executive and author of the new book 'The PayPal Wars,' calls the new policy 'draconian' and says it is likely a two-fold strategy to discourage certain behavior while heading off regulators."
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How productive. (Score:5, Insightful)
Re:How productive. (Score:5, Funny)
It says Paypal to "Fine Gambling, Porn Sites"
So if you want the good stuff, you need to use paypal...
Parent
The pr0n symbiosis (Score:4, Interesting)
Until 1995 the UUCP network had more nodes than the TCP/IP connected internet. What did the UUCP network carry? News and mail. That's it. That's all you could do with UUCP (modulo some half baked ftp by mail schemes). Before uu.net became the first commercial backbone, UUCP traffic was shuttled site to site by "some guy you knew" who gave you a feed, and at either 1200 or 2400 baud (no, I'm not kidding) but when uu.net came out you could BUY a DECENT feed and by Dod use Telebit Trailblazer modems at 19.2K. But who would pay $400 a month to get usenet?
Engineering managers addicted to porn, that's who. "We need it for technical reasons. We cannot do our work without it" always worked. As long as we found them porn, they'd pay for talk.bizarre.
Having created alt.sex by mistake one day I really think uunet's Rick Adams, uunet's founder, should have given me some sort of profit sharing.
Oh well, that's how you can tell internet pioneers, they're the ones with the arrows in their feet.
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How? (Score:5, Interesting)
Re:How? (Score:5, Interesting)
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PayPal holds the money in a Trust (Score:4, Interesting)
So, PayPal holds your money in a Trust.
So, normal Trust Law rules apply.
With the caviet that you told them what they could do with your money when you signed the "Terms of Service" contract.
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What money? (Score:4, Insightful)
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Re:How? (Score:5, Insightful)
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Re:How? (Score:4, Interesting)
I think that they shouldn't be the ones to judge what is right and wrong morally. If it was illegal activity then locking the account might seem a reasonable measure once notified by someone with authority (as a normal bank would lock an account if a judge ordered it, etc). But otherwise they should not be doing this.
It's simply retarded. It looks like theft. Since when do companies have the right to fine their customers? They aren't a court of law.
And why a lot of people will never consider using Paypal at all. What next?
Parent
Re:How? (Score:3, Informative)
Re:How? (Score:5, Insightful)
Remember credit cards are YOU borrowing money from someone else.
Paypal is YOUR money.
Most bank charges and fees (they are not called fines) occur when YOU start eating into THEIR money, by being overdrawn, etc. You don't get fined because some of your money in your account came from you doing something illegal or immoral (according to the bank).
Parent
Re:How? (Score:4, Insightful)
It's called "regulatory pressure".
The US is currently trying very hard to push online gambling off the Internet (with a few exceptions for US sites with licenses, I assume). It tries to do this by targeting any US company that indirectly benefits from gambling sites: banner ad buyers, ISPs, and now PayPal.
PayPal's situation is complicated because they operate in a field that is strictly regulated (banking) and haven't got banking licenses in all US states. PayPal basically has no choice to comply with law enforcement suggestions at this point if they want to continue business.
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Re:How? (Score:4, Informative)
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Re:How? (Score:3, Insightful)
You get fined for taking out more money from the CC company than it wants you to.
You get fined for keeping hold of a store's property longer than they allowed you to.
You get fined for breaking a contract which most likely included a $200+ mobile phone for free as part of it.
Terms of Service aren't legally binding if they are unfair, immoral, etc. You can't have Terms of Service saying "If you are black, you w
Ebay does have Adult items (Score:5, Insightful)
Re:Ebay does have Adult items (Score:4, Insightful)
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Re:Ebay does have Adult items (Score:5, Informative)
I don't think so.
No, like the article/summary says, I think this has something to do with regulatory pressure. I really don't understand all the fuss, but I think it has something to do with the fact that PayPal isn't a bank, and thus has a different set of regulations/laws it has to abide by.
Offhand I don't see why PayPal should be restricted in this manner, and why they should feel compelled to levy these fines, but IANAL or anything.
Parent
Re:Ebay does have Adult items (Score:5, Informative)
Well I did some *research* on this topic just now.
Ebay hides all adult items in a catagory called "Mature Audiences". There is all kinds of stuff in this catagory. Sex toys. Elargement pills all kinds of stuff.
However not ONE single auction in this catagory allows paypal as a method of payment. My guess is that the forbid it entirely...even on ebay
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Finally! (Score:4, Funny)
Now if we could just get our government out of the gambling business...
Re:Finally! (Score:4, Interesting)
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Re:Finally! (Score:4, Insightful)
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Re:Finally! (Score:3, Insightful)
Modded funny, but the fact is the US government (at least state governments) have a *monopoly* on gambling. They share it with Native Americans as a form of compensation (Indian casinos), but note that no private entity is allowed to run a lottery, for example. State lotteries are a significant source of income (aka voluntaru taxes) for state governments.
Re:Finally! (Score:3, Insightful)
How is this going to work for ebay? (Score:5, Insightful)
Ebay does have a whole adult section where you can buy movies, toys etc etc...so will this effect it?
Fined by the same company that your buying adult things from.
Sounds too me like a double standard in the works. I don't think Paypal is trying to discourage this behavior that it finds objectionable...because if it did, then ebay would remove the entire adult section from it's site also.
Just and observation
Re:How is this going to work for ebay? (Score:3, Interesting)
Re:How is this going to work for ebay? (Score:5, Insightful)
This is due to the extremely high dispute rate for these types of payments, most often due to husbands claiming the charge is fraudulent when the wife discovers it. As you might expect, Paypal does not want to be in the middle of these disputes, and banning said usage is, in their opinion, the best way to avoid being put in that position
I'm curious if anyone's tried to sell memberships to a porn site on eBay, however...that could be an end run around the policy if eBay permits it.
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I'm sure they are just being practical. (Score:5, Interesting)
But it was a practical, not moral cut in my opinion.
The fact of the matter is that in the gambling, adult and I suppose the drug business, you get way too many people who purchase the "product" and then get buyers remorse, and raise all kinds of hell at the card provider, saying it was never them but nefarious internet hooligans who gambled with their Paypal account, or bought that porn subscription to Fatchicks.com.
It became so bad at least in the gambling world that Paypal said the hell with it, and left. Now we have similar providers, but more personal responsibility, too. I actually like it that way.
This is terrible news! (Score:5, Funny)
Re:Pissing off your Enemies for $10.00 (Score:5, Informative)
This is not an issue of fining just websites, it is an issue of fining users, as has been pointed out in other comments.
This is what makes it unacceptable and is why I have chosen to discontinue my use of PayPal.
K
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E-Gold (Score:4, Interesting)
Use e-gold [egold.com] instead.
Feed your local e-diots. (Score:4, Insightful)
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Re:E-Gold -- screw that (Score:5, Interesting)
Man I hate that... not to mention the ads and pop-ups.
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What's Next? (Score:5, Insightful)
Re:What's Next? (Score:5, Insightful)
Paypal and credit card companies couldn't care less about your personal moral character. What they *DO* care about is making money, and certain classes of purchases have a much higher rate of fraudulent activity than others. Online purchases in general and especially online pornography in particular has an absolutely _huge_ level of fraudulent use compared to most other credit card activities. They are only trying to avoid the chargebacks that would follow such fraudulent uses as these radically cut into the amount of money they are going to make.
I can say one thing though... your CC company will not ever try to stop you from making a purchase in person, regardless of the nature of the item (barring credit limit issues, of course). According to a representative at VISA that I spoke to when I was talking to them about a merchant account, CC fraud incidence is lowest in transactions which expect a physical signature (and if you don't actually _check_ those signatures, you could end up losing your merchant account).
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Financial (Score:3, Interesting)
Fines for legal businesses? (Score:4, Insightful)
And last I heard, on-line drugs are legal in general, if there is a real doctor on staff..
Sooo. how can pay-pal *fine* these people? Its not their job to play moral police...
Sure they can just refuse to do business with them, if they don't agree with the morality of the business, that is their right.. but FINES???
No I didn't RTFA, it wouldn't load..
ebay is starting to show it's true face (Score:4, Insightful)
It's no longer allowed to add a surcharge to ebay auctions to cover paypals 3% fee when you have a merchant account. Thus, you not only have to pay for listing your actions on ebay, you also have to pay to get your money.
I wish ebay had a little competition.
Re:ebay is starting to show it's true face (Score:3, Insightful)
If they do it fast, they can cash in on some free press as PayPal bans the activities.
The fact that the porn and gambling are probably some of the biggest money makers online, they could concievably overtake
misleading title (Score:4, Interesting)
However PayPal is actually fining the PayPal user, not the sites.
Should read: PayPal to Fine Users for Gambling, Porn Sites
It's a restriction of freedom. (Score:3, Informative)
It's a violation of our freedom. I've never, ever liked Paypal for their ability to screw the consumer without answering to anyone for any reason. There's a lot of discontent out there... just search for Paypal sucks sites... there are a lot of them. Thank god I don't have an account.
down with paypal (Score:4, Insightful)
Don't Hate Paypal (Score:5, Insightful)
Re:Don't Hate Paypal (Score:5, Interesting)
Ah, so they want the easy part of the business but not the hard part. I can understand that.
But in turn, I think we need to ask if Paypal is a monopoly. Just how much of all e-commerce passes through paypal? How much of the under $100 market? How much of the person-to-person market? I wouldn't be suprised if paypal had acheived monopoly status in at least one of those markets.
If they are a monopoly, having successfully squeezed out competition, only to begin with-holding sevices, they need a kick in the ass from the FTC because that's abusive.
By the way, it has already been pointed out once so far, and that post got a +5 rating, but the point really needs a +11 rating.
PAYPAL IS FINING THE CUSTOMERS TOO!!
So, if there ever was a time make sure that you had a dummy, empty bank account linked to your paypal account, now is it. All you need is for paypal to arbitrarily decide that you are the kind of customer that they don't want, and poof! there goes $500 from your bank account that you will probably never see again. Maybe even multiples of $500 depending on just how much customer abuse paypal thinks they can get away with since they are unregulated.
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Paypal shutsdown romance novels and gay literature (Score:4, Informative)
http://66.102.7.104/search?q=cache:lfrekzaQLGAJ: ww w.likesbooks.com/184.html+&hl=en
Some interesting quotes:
"PayPal can be used to buy and sell pre-1980s issues of Playboy, Playgirl, and Penthouse. On eBay, these can be categorized as "Collectibles" rather than as "Mature Audiences.""
"Books classified as "romantica" - ie. books about people falling in love and making love are not allowed - but who is to say what is romantica and what is just hot romance? Print romances seem to get a pass. Readers can go onto eBay and find print erotic romances such as those published by Kensington's Brava line. They can also find books far more explicit than erotic romance novels for sale, and their PayPal payments will be accepted. The Claiming of Sleeping Beauty, one of Anne Rice's BDSM novels, is one obvious example of this."
"According to Brenna Lyons, when the new policy went into effect, many people noticed that the adult content guidelines were vague. For that reason, many publishers of sensual and erotic books asked PayPal to check out their sites. PayPals adult content guidelines are open to interpretation and so changes can be made. PayPal did, in fact, assure the publishers that their sites were acceptable.
Early in 2004, almost a year after the announcement of the new policy, PayPal began freezing the accounts of publishers, writers, and even readers of erotic romance. Brenna herself knows of four publishers, five self-published authors, and two review sites that had their accounts frozen by PayPal.
What happened to warrant such drastic action? PayPal was investigating them for violations of their Terms of Service (TOS). When an account is under investigation it can be frozen for up to 180 days.
Though those under investigation often disagree, Amanda Pires says that the investigation is "not an invasive process." PayPal doesn't contact the vendor until they've decided it's violating the Acceptable Use policy. They will, however, investigate sites on the basis of a single complaint. According to Amanda, this is because PayPal "encourages people to let them know because the Internet is so large." She adds, though, that while a single complaint is enough to start an investigation, that single complaint isn't enough to get PayPal to take action against a vendor. As part of this investigative process, PayPal staff review both the sites and the content. In the case of an electronic publisher, they might ask for downloads of the books. In a case like that, the process could take longer because they have to evaluate books rather than just evaluating a web site.
The evaluation process involves trying to determine "whether or not the sexual content is a small or insignificant part of the book." Ms. Pires adds, "We allow PayPal to be used to sell a book, not based on length or number of loves scenes, but on the topic or intent of the book. If the sexual scenes or content is part of the story line but not the primary purpose of the book, then PayPal can be used to sell the book." Staff members performing this evaluation must decide whether the books adhere to the Acceptable Use policy. When performing these evaluations, the staff members "try to be as fair as possible."
Many authors and publishers of erotic romances who have been investigated disagree that PayPal treated people in their industry fairly. According to Brenna Lyons, no warning was given to small publishers and self-published authors that they were about to be investigate. Their PayPal accounts were suddenly frozen. "Just wake up one morning and have your account frozen. If you happened to have most of your working capital in there, you were screwed. Pardon the frank language. Here's the cute part. When they started going after the big boys, they gave them
Who cares? There are other services out there. (Score:5, Informative)
F Pay Pal.
Re:Who cares? There are other services out there. (Score:5, Informative)
"FirePay [firepay.com] is a Web-based cash account that can be used by anyone who has a U.S bank account." Woops, I'm in the Netherlands and I need to accept payments in euros. <sigh> Next...
Their site [netteller.com] is so utterly content-free and/or badly designed I cannot even find a sign-up link or terms of service, so I have no way of knowing if they'd even accept me. But I doubt it since there's no reference to international accounts anywhere. Also it seems they cater to financial institutions and not mere mortals like me.
Seems PayPal is still the only choice I have. But if anyone has any other suggestions I'd appreciate them.
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Closed (Score:3, Informative)
They can have whatever policy they want, but they are not going to impose fines on me for breaking it.
Incidentally, the "Mature Audiences" category includes "items that you have to be 18 or over to purchase", which would seem to include any 18-rated film whether pornographic or not.
K
Probably an unenforceable penalty clause. (Score:5, Informative)
(Truck Rent-A-Center, Inc. v Puritan Farms 2nd, Inc., 41 NY2d 420, 425 [1977]; see Fingerlakes Chiropractic, P.C. v Maggio, 269 AD2d 790 [4th Dept. 2000]; Benderson v. Poss, 142 AD2d 937 [4th Dept. 1988]; Pyramid Centres & Co. v Kinney Shoe Corp., 244 AD2d 625 [3d Dept. 1997].)
It's up to a court to decide whether $500 is proportional to the actual loss incurred by PayPal. You usually don't get to count administrative time as costs in contract disputes; it has to be an outside expense.
this is scary and heres why (Score:3, Insightful)
Re:I don't get it... (Score:5, Insightful)
Paypal sees that porn, gambling, and viagra sales generate a lot of customer complaints. People tend to claim they didn't want the item, it wasn't them, somebody stole their identity, etc. Like any business, they're trying to limit their losses.
Those transactions are all very spammy. Add hot stock tips and Nigerian crown princes and you've pretty summarized my 'caughtspam' folder.
Paypal doesn't want to be in the liability loop for kiddie porn, illegal gambling, and illegal drug sales.
Paypal wants to keep a clean image, and genuinely don't want those transactions. I kind of doubt this was a factor, but there's always hope.
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