PayPal a standard bearer for the class of Out of Control online Service?

Posted on December 16, 2010

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PayPal (Owned by eBay) is symptomatic of the Achilles heel of online commercial ventures today that leave users in distressed states of helplessness. An innocent trust given in good faith by a user is not reflected back by the service provider, in fact it is abused and taken advantage of.

Don’t get me wrong, PayPal are not exclusive in this, Google and Facebook are amongst the more familiar in this pack. What makes PayPal stand out is they materially impact users at not just the data privacy level with their compromised cross sell status as part of eBay, but more vividly at a material financial level. 

Why do I say this? Read on…..

Following a recent client security engagement a member of the client’s team approached me on a private issue concerning PayPal, to see if I could help him. What lead me to reflect on this experience reinforces many of the themes I have written on concerning the unbelievable abuse experienced and tolerated by users from online ‘Big Corp’ that is seeing a bad theme and bodes poorly for the future of our online service interactions.

In summary the matter concerns what appeared to be a fraud on eBay/PayPal. In summary it appears that the PayPal / eBay system is itself open to fraudulent manipulation that favours fraudsters and leaves innocent users exposed to PayPal/eBay automated processes which results in funds being returned to the fraudsters at the expense of innocent parties. I am not going to reiterate the minutia of the case that highlighted this anomaly to me but needless to say there was little recourse my client had, and PayPal made their decision with no clarification, hiding behind a shadow of secrecy that they could not divulge processes on account of some woolly statements to the effect that they could not risk compromising their anti-fraud procedures!

This is a sad but not the first case of an online service with all the appearances of a mature and trustworthy system that when tested demonstrates poorly through through process and exercise and impose on end users automation where automation is woefully inappropriate in dealing with the subtleties of human interactions.

PayPal run and hide behind excuses and statements saying that they cannot disclose information due to Data Protection constraints. I am afraid the inconsistencies I also found on this point indicate that PayPal appear to be using this as a blanked reason not to provide users with a reasonable explanation for their actions.

PayPal and eBay demonstrate the epitome of the run and hide of online customer service avoidance as anyone who has attempted to get answer to PayPal or eBay complaints will testify from what is a labyrinthine exercise in futility.

If you are seeking direct numbers try This Forum which has some sterling work by third parties and unearthing real contact details.

My investigations revealed that this is by no means an isolated case, exposing a woeful tale of corporate arrogance echoed across the Internet as abused end users try to vent their frustrations and exercise some form of collective healing through websites such as:

www.paypalcomplaints.org

www.Paypalsucks.com

www.nopaypal.co.uk

www.screw-paypal.com

Any corporation of any worth would be aghast to read this, apparently not so PayPal!

The only recourse PayPal seem to volunteer is for users  to report the Fraud to the Police and in so doing offload the problem onto a Police force, who in turn are subject to the same stone walling trying to get any communication or sense out of PayPal when they are obliged to follow up the same lines of enquiry as the users!

This offloading of responsibility on a public service network like the Police needs to stop. The Police have better things to do with their resources than to clear up the impact of arrogant or maybe just ignorant business practices. In fact the Police should levy a charge on PayPal for the wastage of Police time if they find PayPal could have demonstrated a more effective response and resolved this without Police escalation. Which is sadly the case with my client.

My findings would indicate that for what is no more than an overblown shopping cart service, much of the responsibility for fraud and abuse is PayPal’s responsibility and creation!

The fact that users are left in a state of frustrated limbo as to reasons why PayPal take certain actions is tantamount to obstruction and subversion, which is blatantly aimed at commercial self-protection at the expense of the users. A user is entitled to know the FULL reasons for any reversal of transactions where it is clear that a user has acted honestly and transparently without malicious intent.

For many it would appear PayPal is a law unto itself, but at least for those users based here in the UK there is some recourse.  Users can get some satisfaction because PayPal ARE subject to FSA (Financial Services Agency) regulations complaints@fsa.gov.uk.

So users DO NOT underestimate the power of filing complaints. The FAS will get PayPal’s attention because they must be answered. If users file enough then maybe PayPal’s day of reckoning will come and they will have to amend their ways. But PLEASE build up a correct trail of evidence. The How to complain about PayPal in the UK article does a good job in guiding users through this.

Good luck!

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