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Is Paypal defrauding consumers? Are they above the law? (photos)


Renta Mouth
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I recently had some trouble with paypal and their policy on fraud prevention.

 

My paypal account ceased working because I had reached a sending limit and to remove that limit I had to add a bank account.

 

I tend to err on the side of caution when making over my bank account to companies who have a reputation for defrauding consumers in fees and charges, but as I was committed to an eBay transaction I didn’t have much choice and this is what happened:

 

pp1.jpg

 

While that sounded reassuring that they actively to protect my bank account from fraud, I proceeded and I saw this:

 

pp2.jpg

 

So paypal can defraud people’s bank account and this seems to be legitimised by their terms of business, but there’s legislation that is designed specifically to protect consumers from fees being charged in this way. Its called The Unfair Terms in Consumer Contracts Regulations 1999, and under regulation 5,5 it says:

 

 

pp3.jpg

 

I have emailed paypal about this, asked them to confirm they have removed all my personal details from their system, but they ignore all my emails.

 

Comments?

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1. Possibly

2. No. I believe the OFT have put a ceiling limit on what they count as disproportionate.

 

It is not a case of companies being above the law, merely a case of someone having the resources, will and ability to demonstrate effectively (and defeating any defences the corporation may have) in a court that they have breached the law, and that breach is in the public interest to be prosecuted, and has a reasonable chance of succeeding. If that test fails, a prosecution will not proceed.

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What about their retaining of my bank details on their system? They are not complying with my request.

 

What steps can I take to safeguard against paypal taking money from my bank account.

 

Its all well & good having all these laws if they simply don’t work.

 

It’s all well & good having all these watchdogs - the Information Commissioners Office, the FSA, Consumer Direct, Trading Standards, the Banking Ombudsman etc - when they just pass complaints around to each other or won’t get involved in specific cases.

 

It seems that small issues such as this count for nothing – even it’s run by an organised institution such as paypal to systematically and routinely defraud consumers en masse - knowing the authorities will only act to a single case that has a sizeable amount of money that is being embezzled.

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Sometime in your life you are going to have to trust someone.

 

I have been with Paypal for many years, they have my bank details as all purchases come direct from my bank account.

 

I have never ever had a single issue with the way my account has been run.

 

You have read the terms and conditions, if you don't like them, then don't sign up.

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Sometime in your life you are going to have to trust someone.

 

I have been with Paypal for many years, they have my bank details as all purchases come direct from my bank account.

 

Ditto, but I use a credit card for the section 75 protection, Im well protected if I am defrauded.

 

I have never ever had a single issue with the way my account has been run.

 

Neither have I, until now, it seems paypal is trying to exclude itself from liability in the event of a section 75 reclaim. Its a known issue that paypal get shirty when someone does a chargeback after their internal disute procedure doesnt go in favour of the consumer. The law is there for good reason.

 

You have read the terms and conditions, if you don't like them, then don't sign up.

 

I agreed to the T&C's at the time of signing up, I didn't agree to the revised terms imposed afterwards.

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Hi RM - It's the last point that you didn't make before. If they have change the T&C then don't ask, demand, under threat of action if necessary.

 

I have read a lot of complaints about the way they operate their disputes and none seem to be in their favour.

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How do I get them to remove my bank details from their systems?

I really feel uneasy about paypal having unfettered access to my bank account, given the fact paypal uses terms of business to exclude themselves from liability under a point of law - and does so en masse knowing the authorities will take no action.

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i'm not sure if this is relevant, but, after purchasing something on ebay,

when it came to paying by paypal, i was asked to submit a secondary account as a backup!

 

i was surprised at this as they had my current account details, and i had used it many times before.

 

anyway, i couldn't complete the transaction without adding a second account. this i did using a credit card.

 

this then became my primary account.

 

when i contacted them to explain that i didn't want to use my credit card as a primary account, they told me that i could revert back to my original account, and delete the credit card account, which i did.

 

i still dont understand what prompted this. the purchase was for less than £20.

 

bartymuv.

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If you used a bank account - cancel the direct debit for paypal.

If you used a debit card as back up - paypal will remove - just call them.

 

I take it you have took action to close your paypal account?

 

Idax

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I'm afraid a customer request to remove details from will be ignored as under the money laundering rules, this takes precedence and all transactions, along with the numbers, codes and amounts have to be retained in case of an external investigation. Try writing to your ISP asking them to delete all the emails they hold copies of... the same holds true here too.

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2. No. I believe the OFT have put a ceiling limit on what they count as disproportionate.

 

It is not a case of companies being above the law, merely a case of someone having the resources, will and ability to demonstrate effectively (and defeating any defences the corporation may have) in a court that they have breached the law, and that breach is in the public interest to be prosecuted, and has a reasonable chance of succeeding. If that test fails, a prosecution will not proceed.

 

A Google search confirms your answer #2, but that ceiling is £12.00. It only applies to credit cards (and consumer credit act agreements) The above-mentioned fee is £14.

 

Sorry, guys, both answers are incorrect.

 

The OFT's report on credit card charges of April 2006 set a limit at which they themselves would take action against credit card providers, but also very clearly stated that this didn't mean that a charge at that level was lawful, and that only a court could determine what constitutes lawful or not.

 

Paypal's T&Cs do not supersede the law, but like the banks and other finance companies, they are still trying to squeeze the consumer for what they can, and if people don't know better, well, they won't argue, will they?

 

It is not necessarily fraud, but it is most certainly challengeable under the UTCCR and common law in Small Claims, but only if they have charged you those fees, in the same way that bank charges and credit card charges are.

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