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Electronic Frontier Foundation The Almighty Buck

PayPal Shuts Down Long-Time Tor Supporter With No Recourse (eff.org) 152

Posted by BeauHD from the explain-yourself dept.
An anonymous reader quotes a report from the Electronic Frontier Foundation: Larry Brandt, a long-time supporter of internet freedom, used his nearly 20-year-old PayPal account to put his money where his mouth is. His primary use of the payment system was to fund servers to run Tor nodes, routing internet traffic in order to safeguard privacy and avoid country-level censorship. Now Brandt's PayPal account has been shut down, leaving many questions unanswered and showing how financial censorship can hurt the cause of internet freedom around the world.

Brandt first discovered his PayPal account was restricted in March of 2021. Brandt reported to EFF: "I tried to make a payment to the hosting company for my server lease in Finland. My account wouldn't work. I went to my PayPal info page which displayed a large vertical banner announcing my permanent ban. They didn't attempt to inform me via email or phone -- just the banner." Brandt was unable to get the issue resolved directly through PayPal, and so he then reached out to EFF. [...] We found no evidence of wrongdoing that would warrant shutting down his account, and we communicated our concerns to PayPal. Given that the overwhelming majority of transactions on Brandt's account were payments for servers running Tor nodes, EFF is deeply concerned that Brandt's account was targeted for shut down specifically as a result of his activities supporting Tor.

We reached out to PayPal for clarification, to urge them to reinstate Brandt's account, and to educate them about Tor and its value in promoting freedom and privacy globally. PayPal denied that the shutdown was related to the concerns about Tor, claiming only that "the situation has been determined appropriately" and refusing to offer a specific explanation. After several weeks, PayPal has still refused to reinstate Brandt's account. [...] EFF is calling on PayPal to do better by its customers, and that starts by embracing the Santa Clara principles [which attempt to guide companies in centering human rights in their decisions to ban users or take down content]. Specifically, we are calling on them to: publish a transparency report, provide meaningful notice to users, and adopt a meaningful appeal process. The Tor Project said in an email: "This is the first time we have heard about financial persecution for defending internet freedom in the Tor community. We're very concerned about PayPal's lack of transparency, and we urge them to reinstate this user's account. Running relays for the Tor network is a daily activity for thousands of volunteers and relay associations around the world. Without them, there is no Tor -- and without Tor, millions of users would not have access to the uncensored internet."

Brandt says he's not backing down and is still committed to supporting the Tor network to pay for servers around the world using alternative means. "Tor is of critical importance for anyone requiring anonymity of location or person," says Brandt. "I'm talking about millions of people in China, Iran, Syria, Belarus, etc. that wish to communicate outside their country but have prohibitions against such activities. We need more incentives to add to the Tor project, not fewer."
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PayPal Shuts Down Long-Time Tor Supporter With No Recourse More

PayPal Shuts Down Long-Time Tor Supporter With No Recourse

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  • Paypal is a censor (Score:5, Insightful)

    by whereiswaldo ( 459052 ) on Wednesday June 02, 2021 @06:01PM (#61448668) Journal

    Paypal did the same thing to Rebel News:

    https://www.rebelnews.com/save_rebel_news_paypal_censorship_and_deplatforming_ezra_levant" [rebelnews.com]

    Obviously Paypal cannot be trusted to be an unprejudiced payment processor.

    • Re: Paypal is a censor (Score:4, Insightful)

      by cfalcon ( 779563 ) on Wednesday June 02, 2021 @06:15PM (#61448708)

      Slashdot has a bunch of low quality cryptocurrency news stories- here is one of the few cases where cryptocurrency an obvious solution and the story is all about paypal using their powers on someone without an Approved Political Reason. Meh.

      • Re: (Score:2)

        by harrkev ( 623093 )

        Cryptocurrencies are literally evil. They consume vast amounts of resources to make them. A paper $20 bill only costs pennies to make. How much electricity to mine most cryptos? And how much CO2 does that make? How much is this contributing to the silicon shortage? Have you tried buying a graphics card lately?

        • > A paper $20 bill only costs pennies to make.

          We're just going to ignore the cost of the military necessary to maintain Kissinger's petrodollar's value. Smart accounting there.

          • Re: (Score:2)

            by harrkev ( 623093 )

            Yeah, because we wouldn't have a military if we didn't have our own currency. Wow, that is one of the dumbest things that I have heard all year. Please let the adults talk here. Come back once you graduate middle school.

        • All cryptocurrencies consume vast amounts of energy to make them?

          Do burstcoin, storj, and chia?

          How about the various proof of stake currencies, like stakenet, and eventually even ethereum (supposedly)?

          I think proof-of-work provides scarcity by tying the cost of ruining a network by a bad actor to physical commodities, but if you hate the idea because of energy use, why arenâ(TM)t you busy promoting one or more of the many many cryptocurrencies that offers scarcity without proof of work?

    • Paypal did the same thing to Rebel News:

      I would point out that Rebel News isn't exactly a reliable source: https://mediabiasfactcheck.com... [mediabiasfactcheck.com]
      This matters because PayPal could be found liable an accessory to a site that runs afoul of Canadian misinformation/disinformation laws.

      Obviously Paypal cannot be trusted to be an unprejudiced payment processor.

      All businesses are prejudice. They will do what will make them the most money, even if their actions seem counterintuitive to you.

      • The Guardian is "left-center". What a joke. mediabiasfactcheck has no sense what is far left.

        • Comment removed based on user account deletion

          • The problem is that the media shifts its discourse to the left with occasional mild self-criticism, people fail to recognize the shift and instead they shift the definition of center, and conservatism sounds farther. But my problem is even bigger: Guardian is nowhere near center when talking about anything outside of UK-USA hegemony.

            If you actually start doing your own research you will find that Guardian frequently misreports, gaslights and consistently censors and willfully misrepresents those who are not

            • Comment removed based on user account deletion

              • I guess you missed this part:

                Guardian is nowhere near center when talking about anything outside of UK-USA hegemony.

                Left or Right are terms created for your system. In the objective world Guardian promotes destruction of systems that doesn't fit its agenda is thus pretty fucking far on the left.

          • Re: (Score:2)

            by malkavian ( 9512 )

            Interestingly, that's an out of date viewpoint. The Guardian _used_ to be center left (and I used to read it along with a few other rags across the political and geographic spectrum).
            However, I've increasingly found them subject to huge amounts of misinformation (a tendancy to roll out 'Experts ' on their political cause of the day, but when you chase credentials, some of their real headline items haven't been with experts in the actual field, they've been from lawyers associated with it, and on an opinion

      • Re: (Score:2)

        by jlar ( 584848 )

        Paypal did the same thing to Rebel News:

        I would point out that Rebel News isn't exactly a reliable source: https://mediabiasfactcheck.com... [mediabiasfactcheck.com]
        This matters because PayPal could be found liable an accessory to a site that runs afoul of Canadian misinformation/disinformation laws.

        Canada sure has some insane laws if a payment processor is liable for the content of their customers business. Is the postal service also liable if they deliver mail to a site that runs afoul of Canadian misinformation/disinformation laws?

      • Re: (Score:2)

        by cfalcon ( 779563 )

        > PayPal could be found liable an accessory to a site that runs afoul of Canadian misinformation/disinformation laws

        That's absolutely false. Providing banking services and utility services does not count as *publishing*, so even if Rebel media somehow were subject to government censorship, paypal and banks would not be.

        And pause for a moment to think about how monumentally scary it would be, if a conservative news site was at risk of not just being thrown in jail, but actually everyone who did any busin

    • Rebel news seems even less newsworthy than The Daily Mail. Color me shocked that Paypal doesn't want to be associated with them.

    • Obviously Paypal cannot be trusted

      In other news, man discovers water is wet.

      Seriously the entire financial industry is not to be trusted, and PayPals ranks in the industry at the bottom, just below a Bitcoin money laundering scheme run by JP Morgan executives who drink the blood of children to stay young.

      I wouldn't trust Paypal with an ebay sale much less financing my daily operations.

    • Paypal cannot be trusted to be an unprejudiced payment processor.

      Cash. That's it.

  • Uhm (Score:3, Insightful)

    by Aighearach ( 97333 ) on Wednesday June 02, 2021 @06:11PM (#61448690)

    Just because he did a thing doesn't mean he gets a Get Out Of All Trouble card.

    There is no reason to believe his paypal ban has anything at all to do with Tor. Just because he did a thing, doesn't mean he gets special treatment. Lots of people get banned on paypal every day, and we don't know anything about why it happened.

    • Lots of people get banned on paypal every day, and we don't know anything about why it happened.

      You say that like we should just accept it because, "that's just the way they are."

      • Re: Uhm (Score:5, Insightful)

        by reanjr ( 588767 ) on Wednesday June 02, 2021 @07:09PM (#61448830) Homepage

        My first thought when I hear PayPal isn't honoring their customers' expectations isn't "PayPal is doing this to get you". No, it's more "yeah, PayPal has a storied history of this shit and will refuse processing payments for no reason with no visibility or recourse and that's why you shouldn't be using PayPal in the first place; I hope you've learned a lesson here"

      • Well, yeah, it's just the way they are and they usually take a lot of people's cash with them when they take their ball and leave.

      • Lots of people get banned on paypal every day, and we don't know anything about why it happened.

        You say that like we should just accept it because, "that's just the way they are."

        No, you should fucking wait until you know what happened to decide if they did something wrong.

        All the cases I've ever heard of with paypal bans have been either mistakes that they didn't correct in a timely manner, or typical stuff that banks close accounts for. Their history is not of spiteful and irrelevant attacks on people due to their politics. This is just idiots bleeting because they forgot that The Man isn't all the same person.

    • Re:Uhm (Score:5, Insightful)

      by Mitreya ( 579078 ) <mitreya.gmail@com> on Wednesday June 02, 2021 @10:40PM (#61449268)

      There is no reason to believe his paypal ban has anything at all to do with Tor.

      That is true.
      But PayPal should not be able to ban someone without an explanation and an opportunity to appeal properly.
      Given that they handle money, the amount of leeway they have is amazing. I have seen more oversight for collecting and processing personal data for a research project than PayPal gets for handling lots and lots of money (plus the PII).

      • They're a business, of course they can end their relationship with somebody. You want the government to tell me who I must do business with? That's fucking stupid.

        What would be more useful is for you idiots to fight for something like Postal Banking to compete with them, because then you'd have a place to go for the services that does have to treat you in a consistent way.

        • Uh, they should get involved when it's a breach of contract or the contract terms are interpreted in an unreasonable manner. Which terms of service did he violate that they can just kick him off the platform? Did they notify him the terms were changing? If you go for a haircut, the barber can't cut half your hair and then quit saying they no longer want to be your barber? Paypal started being his payments provider and then suddenly dropped him even though he had told everyone to send him money via Paypal ..

          • Re: (Score:2)

            by bsolar ( 1176767 )
            Technically in PayPal's User Agreement [paypal.com] they reserve the right to terminate the agreement at any time at their sole discretion:

            PayPal, in its sole discretion, reserves the right to suspend or terminate this user agreement, access to or use of its websites, software, systems (including any networks and servers used to provide any of the PayPal services) operated by us or on our behalf or some or all of the PayPal services for any reason and at any time upon notice to you and, upon termination of this user agreement, the payment to you of any unrestricted funds held in your PayPal account.

            • > "upon notice to you"

              Which is the crux of the story. They didn't give him notice, they just terminated his account.

              I wonder if they returned the", unrestricted funds". Given they couldn't be bothered to tell him his account was going bye-bye, I wouldn't be surprised if they have his money as well. Of course, he can't log in to see if there is any...

            • Re: (Score:2)

              by Kazymyr ( 190114 )

              Paypal seems to exercise that right to terminate often when there's a significant amount of money in the accounts involved. And then that money cannot be accessed by its rightful owner anymore. It effectively becomes the property of... I wonder whom. Very convenient for paypal.

          • You're a complete moron if you think ending your business relationship is a breach of contract with a retail service.

            If the contract terms are unreasonable, that leans towards ending the relationship, not preserving it.

            You're just throwing shit at the wall.

        • Re: (Score:2)

          by bsolar ( 1176767 )

          The government already does: you cannot refuse business unless you have a legitimate reason to do so. If you refuse service and get sued for that, the legitimacy of your reason will have to hold up in court.

          • The government already does: you cannot refuse business unless you have a legitimate reason to do so

            That is stupid-sauce you just made up your very own self. It does not imply you're a big boy, though.

            I can tell from what you wrote that you're a shy racist, pretending that you don't understand.

        • Comment removed based on user account deletion

          • "You paraphrased, nowhere did they say it that way"

            Who cares. Cry about something substantive.

            Or are you arguing

            You'd have to read it. The funny thing, you can't comprehend it when I paraphrase, but you also can't tell the difference between your own hyperbole and what I actually said. "Did you say up is down?" Do you really think I'm going to spoon feed you?

            Start with thinking, with understanding. If you didn't get there... why are you arguing?

      • I used to work in PayPal some 10 years ago. They handle money but they don't claim to be a financial service, thanks to lax laws of USA. What they do is not possible to do in any other country of notable imporance.

        The price of handling money but not being a financial institution is that they have to adhere to some strict requirements imposed by the banks, which causes them to be overtly cautious with parties that are transacting on its platform. Their risk model rejects something like 60% of all attempted t

      • But PayPal should not be able to ban someone without an explanation and an opportunity to appeal properly.

        Dude that ship sailed, hit an iceberg, sunk, and had a movie made about it 20 years ago.

  • If only (Score:3)

    by ArchieBunker ( 132337 ) on Wednesday June 02, 2021 @06:12PM (#61448696)

    There was a way to transfer funds without banks or meddling from third parties, you know like those tulips people here are always talking about.

    • Running relays for the Tor network is a daily activity for thousands of volunteers and relay associations around the world. Without them, there is no Tor -- and without Tor, millions of users would not have access to the uncensored internet."

      I remember noting when my router had Tor as an option. So it's easy to join.

      • That sounds like something the NSA puts on the router to infiltrate the TOR network.

        Not saying it is. But it absolutely sounds like it.

    • If I was a florist, I would create a tulip-backed blockchain token called Tulip (TULP/XTUL ticker). That shit would meme to the moon.

    • Comment removed based on user account deletion

  • Tips For Dealing With PayPal... (Score:5, Informative)

    by IonOtter ( 629215 ) on Wednesday June 02, 2021 @06:14PM (#61448704) Homepage

    1. DON'T USE PAYPAL.

    2. If you have absolutely, positively, no other alternative whatsoever, in any form, such as SquarePay and even up to and including using cryptocurrency, then send your customer a BLANK invoice, and uncheck the boxes for "items delivered" or anything like that. No mention of anything, at all. No words like "services rendered" or "artwork" or anything at all. You are just sending them a straight bill, exactly as if you walked up to a random stranger on the street and handed them a piece of paper saying, "Pay $200". That's it. Nothing else.

    Keep in mind, this requires the customer to trust you, not the other way around. The customer has no recourse if they suddenly decide to file a claim, because there's nothing on the invoice to specify what was paid for, and no indication of any kind of goods being delivered, electronic or otherwise. Also, if you have absolutely no other choice than to use PayPal, do the following...

    1. Set up a checking account that is for nothing else other than PayPal.

    2. Set up a deposit-only savings account. Not a third checking account, it's a deposit-only savings account. This is important. If your bank offers it, set up the PayPal-only checking account to immediately transfer any incoming funds into the deposit-only savings account.

    3. Pay STRICT attention to your PayPal account. Enable all the notifications, so that the precise second money hits the account, you get notified.

    4. Stop whatever it is you are doing. Pull over to the side of the road, hang up on the customer, don't wait any longer than it takes to get someplace safe, so you can take out your phone and get this done. You have to do this immediately, because PayPal doesn't have any option to automatically transfer money into your bank account. At least they didn't when I was using them, anyway.

    5. Log into your PayPal, and immediately transfer the money into your PayPal-only checking account. Again, if your bank offers this service, set it up to immediately transfer any incoming funds into the deposit-only account. Otherwise, do it yourself the moment it hits your account.

    6. NEVER LEAVE MONEY IN YOUR PAYPAL ACCOUNT. EVER.

    If the customer turns out to be a scammer, or files a dispute, PayPal will try to claw the money back from your checking account, but because it's no longer there, and because it went into a deposit-only account, they can't get it.

    Now, here's where things get interesting.

    PayPal will claim that your PayPal account is now X dollars in the negative. This is not your problem. It is PayPal's problem. Remember, you have your money, they do not. If you fuck up, and leave money in your PayPal account, or don't move it out of the checking account, then they will have your money, and they'll keep it during the so-called "investigation", which can take up to 90 days. That's three months of you not having rent, paying bills, buying food.

    So don't screw up and leave the money in your PayPal account. Screwing up is bad. Don't do it. I mean, it can be argued - legitimately - that doing any business at all with PayPal is screwing up, but if you're going to screw up, do it in a way that doesn't leave your butthole bleeding.

    Anyway. PayPal is going to bark, snarl, hiss and hurf-blurf about your account being in the negative. Again, not your problem. Just reply to their email and say, "Please contact me when the investigation is completed. If you determine that the customer's claim is legitimate, I will consider the possibility of resolving the negative balance."

    Then go on with your life.

    • Like you say DON'T USE PAYPAL. I did what you wrote and what happened was a permaban. Having burner linked accounts is a good idea.

    • Re:Tips For Dealing With PayPal... (Score:5, Interesting)

      by Tom ( 822 ) on Wednesday June 02, 2021 @07:32PM (#61448884) Homepage Journal

      At least over here in Europe, you can also withdraw their permission to take money from your bank account. The option is hidden, and they will claim on the phone that it doesn't exist, but it does (and they'll admit it if you press them). Just did that for the wife's account, because she grew tired of the PayPal antics and asked me if she can do something about it.

      I've been dealing with PayPal for almost 20 years. My primary account is linked to a bank account that doesn't exist anymore. Whenever there's more than a hundred bucks or so in it, I transfer it to a secondary account, which has a working bank account linked, but no permission to take money from it.

      • Re: (Score:2)

        by Mitreya ( 579078 )

        At least over here in Europe, you can also withdraw their permission to take money from your bank account.

        It is my understanding that in Europe PayPal is classified and regulated as a bank. So I imagine that in Europe you can get some handle on them.
        According to Wikipedia, in US PayPal is classified as a "money transmitter" on a state-by-state basis. Awesome.

  • Join the club (Score:5, Interesting)

    by cliffjumper222 ( 229876 ) on Wednesday June 02, 2021 @06:48PM (#61448784)

    I've been permabanned from PayPal. They gave no explanation and when I called, the rep could only read a stock answer which could be summed up as "we no longer want your business". He did not say anything about me violating any T&C's (I had not) and I could tell from the stress in his voice (he sounded like a really nice older guy) that there was probably something on the screen he wasn't allowed to tell me, or he knew this was happening to others and there was nothing he could do about it. I suspect that every so often there is a sweep of undesirable accounts - those that either don't make them enough money or are linked somehow to something they don't like, maybe purchases or sales through certain websites, chargebacks, etc., and those accounts are frozen and the users banned. Insidiously, they also ban all the associated cards or bank accounts that have been linked with the account so you are well and truly shafted if you ever what to use them again for anything. It completely destroyed my side gig of selling software (that I wrote). All the money in the account was frozen for 6 months and after that time I was able to remove it, which I did. It left a really bad taste in my mouth and I recommend no one use PayPal ever.

    • You are lucky that you were eventually able to withdraw it. Not infrequently they simply end up seizing it. Sure you can try to sue them but they will bury you in lawyers so there is no way you can recover any of it, even if you could win the case.

      And, yes, they will never give any explanation.

  • Paypal IS regulated (Score:5, Interesting)

    by bferrell ( 253291 ) on Wednesday June 02, 2021 @06:51PM (#61448800) Homepage Journal

    They operate under the regulations for automated clearing houses, at least in the US.
    I found this out a number of years ago when I irritated a supervisor into dropping that tidbit when they were being VERY slow to process a refund.

    With that knowledge, I was able to look up the regulations and find the exact violation of the regulations. Once I advised them of the exact violation, within a very few hours, the refund was processed.

    I know. The legal (quasi or official) process seems to be anathema these days. People want to "appeal" to better natures (those exist?!), but it does seem to work.

    "They" like it less than we do (if it goes "for real" they'll be actually held to account) and a knowledgeable showing seems to get results where "principals" get's a belly laugh. I'd expect the EFF to understand that and am surprised it hasn't happened already.

    I'm guessing this happened due to the squeeze going on around anonymous funds transfers... The US has been identified at the number one money laundry:

    https://www.ft.com/content/cd7... [ft.com]

    As deep throat said, "follow the money"... Wanna know how Solarwinds happened? Wanna chase the bucks that are driving the whole fleet of hack we've seen in the past few weeks? So does someone else and following the money has become... Difficult.

    As the security folk have been telling us "A backdoor can't be restricted to just the good guys. If it exists, the bad guys will use it too". We like that when it's to our advantage.

    • Re: (Score:2)

      by Mitreya ( 579078 )

      They operate under the regulations for automated clearing houses, at least in the US.

      They are not regulated enough to prevent them from banning your account and taking your money. If your money is frozen, it is on you to try and fix it.
      As far as I know, a bank in US would have a lot of explaining to do if they froze or took your money without a very good reason.
      In Europe they appear to be regulated as an actual bank.

      • As a bank or a house they have to answer.
        Most people however, give up when they find they aren't a bank and don't know the right way to go about raising the issue.

    • Re: (Score:2)

      by dargaud ( 518470 )

      They operate under the regulations for automated clearing houses, at least in the US.

      So, what's the summary of the differences between a bank and a clearing house (I don't even know what that is) ?
      Or more specifically, there are probably drawbacks and advantages to us of dealing with a clearing house instead of a bank. I'd be curious to know what the latter are ?

      • Bottom line is that a clearing house isn't a depository. Money is only allowed to pass through.
        A bank can take money in and hold it with no target destination.

    • > Once I advised them of the exact violation, within a very few hours, the refund was processed.

      Can you share the details or strategy?

      • I would, but it was like 10 years ago.

        The broad brush stroke is that they were telling me it could take months to complete the refund and in the course of arguing with the line manager he dropped that Paypal wasn't a bank but an automated clearing house and THOSE were the rules they operated under and I could suck it.

        So I went and looked up the federal regulations for automated clearing houses and found rules relevant to the situation, called them back and started quoting chapter and verse to them.

        It took l

  • paypal (Score:2)

    by Tom ( 822 )

    I've had my oldest Paypal account for nearly as long as he does. In this time, so many stories about their misconduct and intransparancy have come and gone, that the #1 rule of using Paypal should clearly be to use them strictly as a payment service and consider any money in your account there as something that can go poof at any moment. In other words: Take it out as soon as possible.

    They are shitty when it comes to account handling, and we all know that.

  • you can't depend on PayPal, so you definitely don't want to build a business on it.

  • Paypal Never Explains Permanent Bans (Score:5, Insightful)

    by crunchygranola ( 1954152 ) on Wednesday June 02, 2021 @10:20PM (#61449228)

    When your account has a permanent ban slapped on it they are very aggressive about not telling you anything and giving you no options at all. The ban notice implies you are doing something quite terrible that endangers other PayPal customers, but won't say what.

    You cannot appeal, and they take pains to make it clear that they will never give you a reason or tell you why they did it, so you will never find out what they think your are guilty of doing. If you still try to ask they will link you to a page that states that the only way to find out is to sue them in court. And if you Google around you will find that suing them in court is futile.

    Also this ban can drop from the blue even if your account has been inactive or rarely used or anything for a couple of years. It appears they have algorithms (or maybe people, but it is probably all automated) searching through past transactions looking for patterns they deem evidence of nefarious behavior. I suspect simply buying something entirely innocuous (under the law and PayPal terms of service) from a source that is later black-balled will get you black-balled too, years later.

    It is unfortunate that PayPal has become an effective monopoly for easy payment methods that does not expose you bank account or credit card information to third parties. Lots of places take PayPal, and many on-line sites that offer classifieds and the like offer no other means of payment to use. As a near monopoly PayPal feels free to abuse its customers.

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