PayPal Freezes $275,000 Campaign Funds of Secure-Email Startup

http://thehackernews.com/2014/07/paypal-freezes-275000-campaign-funds-of.html

 

Using PayPal was a known risk. So it goes.

 

What do you mean? What was the risk? Do you have inside information that Protonmail was doing something illegal?

 

No, I've seen lots of public information about PayPal being jerks.

 

Using Paypal for anything is a risk for exactly the reason shown here. They are not a bank in the US so they are not bound by all the regulations banks are forced to abide by. Which means they can literally take over a quarter of a million dollars from you and claim you have to prove a negative (in this case, that your business doesn't break any laws.)

Just do a search for "paypal sucks".

Here's a story where they literally instructed an ebay customer to destroy a $2500 violin, leaving the seller out of her product as well as her money.

http://www.cbsnews.com/news/paypal-makes-ebay-customer-destroy-2500-violin-seller-left-empty-handed/

Why You Should Never Keep Money in Your PayPal Account

http://paypalsucks.com/
http://screwpaypal.com/
http://paypalsucks.org/
http://www.screw-paypal.com/

 

I believe (or rather it seems) that the Paypal account to protonmail has now been unfrozen see here
quote from Protonmail blog
'While the $275,000 ProtonMail has raised in the past 2 weeks is a large amount, it pales in comparison to many other crowdfunding campaigns that have raised sums in excess of $1,000,000 so we can’t help but wonder why ProtonMail was singled out. When we pressed the PayPal representative on the phone for further details, he questioned whether ProtonMail is legal and if we have government approval to encrypt emails. We are not sure which government PayPal is referring to, but even the 4th Amendment of the US constitution guarantees:'

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures….”

 

But they are a bank in EU and ProtonMail is a European company.

 

I would think that their actions are illegal. But if they are a European company, then maybe there truly is a real question about the legality of Proton. From what I have read, the Europeans don't treat encryption the way we do in America. They are required to give up their password or it's an automatic jail sentence, from what I understand. So is Proton legal in the EU? What are the laws about encryption there?

 

My ultra suspicious, paranoid side of me says that this whole story was staged to boost publicity/funds to Protonmail....../Slowly crawling back to my tinfoiled bunker.

 

I only heard about the UK who can force people to give their encryption key.

 

Okay. Maybe that's what I heard.

 

I thought you meant Proton.Yes Paypal has its faults.
And I do not think Proton had anyway of knowing that Paypal would freeze their accounts with out good legal reason.

 

Well, there's a HowStuffWorks page for it: http://money.howstuffworks.com/paypal7.htm

 

Reading up on some other 'PayPal account frozen' experiences, I see that on paypalsucks.com, the readers choice of money service on that site, is Merchant inc. link
Does anyone here on Wilders have any experience with that company?
I'd love to avoid being ordered to destroy violins or have my money stolen, if only temporarily. No need for ulcer-inducing customer service here.

 

PayPal has too much of a reputation of being crooked and of being too friendly with governments to be trusted with anything in my opinion.

 

@Baserk

One thing I noticed when researching myself was that a lot of their recommendations are outdated. Some of the selling points for some of those companies don't exist any more.

You'll need to keep in mind what country you're operating in, as that will make a difference.

Skrill is really big in Europe, but they're needlessly expensive for a lot of setups. Propay is another one that is explicitly endorsed by ebay. They seem reasonable...

http://pages.ebay.com/help/pay/accepted-payment-methods.html

There's also these:

http://www.techtoucan.com/paypal-alternatives-29996
http://frugalentrepreneur.com/2012/...ness-owners-online-sellers-the-self-employed/
http://merchant-account-services-review.toptenreviews.com/

Again some of that may be out of date, but as with any business decision, you'll want to do your research to find the solution that's right for you.

As bad as Paypal is, there's a reason they dominate:

-It is incredibly easy to set up an account (you can do it anonymously...staying anonymous takes more effort though)
-It is incredibly easy to send and receive money
-It's a well-known brand that people feel safe/comfortable using (which counts for a lot, which is why people still use it even though they screw so many people.)
-Even with all that, their rates are surprisingly competitive

Honestly I've never personally had any real issues to speak of with Paypal. And a lot of other sellers will tell you the same. If you're careful and diligent, and you pay attention to the horror stories and are conscious of what sort of land mines can create trouble, you can use Paypal without a problem. This is especially true if you only deal in physical goods (as opposed to services). And even more true if you mostly do business through eBay.

But if your business is anything outside of an ebay-type "customer places an order, you ship a product", you'd need to be really careful.

And no matter what, never NEVER keep more money in a Paypal account than you can afford to "lose" for at least 6 months. (Also on that note, you won't want to be tying any important debit cards or bank accounts to the Paypal account either. (Credit cards you don't really have to worry about, as then you've got a powerful third party involved and it's their money.) If you link the accounts to Paypal, you are authorizing Paypal to dip into those accounts at any time. I actually use a flow-through bank account that I keep almost no funds in, and use it as basically an air-lock between my funds and Paypal.)

 

https://torrentfreak.com/paypal-bans-bittorrent-vpn-proxy-service-130427/

https://torrentfreak.com/paypal-cuts-off-pirate-bay-vpn-ipredator-freezes-assets-130724/

http://torrentfreak.com/paypal-bans-bittorrent-friendly-vpn-provider-120622/

PayPal not good for privacy.

 

issue of paypal being the no1 and easy option to pay for..... bitcoins hardly anyone could donate due to unfamiliar !

 

Yeah. And they ban file sharing services too.

 

Once again, it's just business. They can afford to pick and choose their customers, so they do. You'd do the same thing. If you were looking at the potential risk and legal hassle associated with being a party to (or at least facilitator in) money laundering or allowing the financing of some sort of fraud or illegal activity (for file sharing, obviously think MPAA/RIAA mafia and other copyright trolls), you'd want to be choosy with who you allow to use your service, too.

Paypal is a business just like any other, and I would have to assume they're just as interested in collecting revenue and growing, just like any other. They have no natural incentive to turn down customers. They only reason I can imagine they'd do it is because they weighed the risk/reward, and determined it's just not worth it.

I guarantee you remove the govt red tape and pressure to basically be an extension of law enforcement, and Paypal along with plenty of other services would be happy to have VPNs and file sharing companies as customers.

So it's not that "Paypal is not good for privacy"...it's that govt has made privacy a risky business. Paypal just happens to be big enough to be able to afford turning down customers and avoiding it altogether.

 

No answers there
Basically Paypal does what it wants regardless of the legalities.

 

Sure. And I am mostly satisfied with Paypal. I have their debit card and have never had any problems with them personally. But I don't like the idea that they freeze people's funds like they do sometimes. It's not their money. It belongs to other people.