PayPal to Fine Gambling, Porn Sites 279
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."
How productive. (Score:5, Insightful)
Ebay does have Adult items (Score:5, 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? (Score:5, Insightful)
PATRIOT act.. (Score:2, Insightful)
This is another victory in the 'war on terror', obviously.
What's Next? (Score:5, Insightful)
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 does have Adult items (Score:4, Insightful)
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.
down with paypal (Score:4, Insightful)
Feed your local e-diots. (Score:4, Insightful)
Don't Hate Paypal (Score:5, Insightful)
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.
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).
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 will be charged 20% more". Unless you are the insurance industry that is
Paypal hold YOUR money in trust (as someone else pointed out). It is not up to them to judge the right and wrongs of how that money is made, that is up to THE LAW.
If the TOS allows it... (Score:2, Insightful)
But on the other hand, I doubt PayPal is going to catch many people. As long as you don't include "Here's my $500 bet for the game tonight. Gambling Rocks!" I doubt they're going to check every transaction. As long as you aren't dumb about it, I don't really know what they're going to do. I'm not saying keep doing what you're doing, just be careful about it. Don't send money to 'Bets@GamblingOnline.com', or use comments that show it.
But really, if you don't like it, don't do business with PayPal. As long as they get you to agree to it when you sign up, it's fine for them to do it, it's up to read the fine print if you're going to be doing risky stuff like that. And there's a clause in there (like in everything) that says they reserve the right to update the TOS/AUP whenever they want, and that you automaticially agree to it.
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.
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)
What money? (Score:4, Insightful)
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 PayPal in terms of $ transferred in a relatively short time. The sheer bulk of what they are doing, plus the fact that the are the 'new kids on the block' (on an aside, why did that band have to ruin that saying?) will likely let them start a price war against PayPal.
This just might be good for the consumer in the long wrong. Paypal is making an opening into an otherwise global monopoly. Perhaps the new competing sites will even start up some sort eBay like related service if they do well enough.
Rob
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).
this is scary and heres why (Score:3, Insightful)
Re:If the TOS allows it... (Score:3, Insightful)
It's certainly their right to enforce whatever contract terms you agree to, but I'd consider it unpleasantly sneaky if they didn't warn you very explicitly first, at least when you're going to a known porn or gambling site. That is clearly, at the time you make the payment, not just in the fine print along with a hundred other regulations when you sign up. That's not a legal requirement, but if they're planning to use this as a source of significant income rather than an ass-covering gesture it would tip them into the Evil-Never-Use category for me.
Pissing off your Enemies for $10.00 (Score:3, Insightful)
Send someone you don't like $10.00 through PayPal (from an alternate email address, of course). Wait a week, then complain to PayPal that, despite sending the money and after "numerous attempts to settle the transaction", you still haven't received the copy of "The Olsen Twins Fuck a Goat Volume 3" (or the Canadian Viagra) that you paid ten bucks for.
Your enemy will be fined $500.00 for just $10.00 and a few emails. Not a bad return on investment, eh?
Re:Finally! (Score:4, Insightful)
Re:Finally! (Score:3, Insightful)
I think your statement is inaccurate. State govenrnments have chosen to either regulate or ban gambling outright. Through this mechanism, they can create a monopoly. I don't think a monopoly on gambling exists in Nevada, but it is highly regulated.
The situation with Indian Tribes is interesting. Since those tribes have sovereignty, I don't see how the states can regulate or ban gambling on tribal lands, but apparently those states with Indian reservations have done just that. Given the money flowing into gambling on tribal lands (the definition of which appears to be rather loose these days -- witness new casinos being built in the heart of the SF Bay area), I am surprised none of the tribes have challenges the States' ability to regulate gambling on Indian lands
you're on slashdot and (Score:2, Insightful)
Re:Don't Hate Paypal (Score:3, Insightful)
Do you understand the definition of a monopoly? It is not "mono." It is the ownership of at least 90% of a market -- that's how microsoft can be a monopoly in the PC market while Apple still exists. So, industry leader with 90% marketshare?
MONOPOLY.
Does paypal have 90% of the market? I dunno. But I think neither of us would be surprised if that were the case.
Secondly, Paypal has just as much right to fine a customer for violating its terms of service as your nearest video store has a right to impose a charge on your CC for $2.50 because you returned a video one day late. It's all part of the terms of service.
They may have that right, but that still doesn't mean it isn't abusive as all hell. Furthermore, if the fact that they are charging such fines is hidden in the fine-print legalese of some modified user-agreement that less than 1% of their customer base can understand without spending half an hour deciphering, then that is probably criminally abusive.
Finally, if they are able to get away with imposing such abusive, then that is one clear indication of monopoly power. In a competitive market, pulling that kind of shit would cause a mass exodus to another services provider -- mostly by customers who had never been fined but didn't want to take the chance.
With paypal, yeah there are other providers without that restriction, but their marketshare is so tiny that the only reason you would use one is for a service you know paypal won't do and for all the rest of your regular transcations, you'd still stick with paypal. I myself thought about cancelling my very long-standing paypal account in outrage, until I realized that 99% of the stuff I use paypal for there are no alternatives. I'm sure that I am far from alone in that reaction and subsequent realization.
The simple reason for the blacklisting... (Score:2, Insightful)
When did porn become illegal in the US? (Score:1, Insightful)
I don't get it. Unlicensed gambling and drugs, OK, they're illegal. But pornography????????
Since when is porn illegal in the US?
Re:When did porn become illegal in the US? (Score:1, Insightful)
Re:down with paypal (Score:3, Insightful)