Who Killed PayPal?

• Author: Sloan, Jon
• Position: Letters - Letter to the Editor

Radley Balko's article on PayPal ("Who Killed PayPal?," August/September) or at least the book he was reviewing, The PayPal Wars--suggests that government interference, frivolous lawsuits, and then the elimination of competition once eBay acquired the company are to blame for its downfall.

As a former PayPal user who has dealt with the company's poor management and terrible customer service repeatedly, I--along with thousands of other former users--can attest to a different explanation. In PayPal's supposed "glory days," buyers using PayPal could dispute a charge and get a refund with basically no questions asked. After the $313,000 fine from MasterCard, the situation changed drastically. PayPal put stringent limits on disputing a charge and gave a buyer a maximum of 30 days to do so, after which all a buyer could do was make a complaint against the seller. No matter the reason for the dispute, no matter the amount of money, the money was gone after 30 days. Those policies are the reason for some of the lawsuits against PayPal, and they are still in practice today.

The article does mention one class action suit brought against PayPal for "mistakenly freezing the accounts of several users for up to a week while it investigated suspicious activity." The "several users" were actually thousands of users, and it was not "up to a week," but a minimum of six to eight weeks before they would even begin to review your case.

Besides myself, I have known five other people who have had their accounts frozen without warning and without a reason given. The funds were frozen for at least six months, at which time we could "ask for our money back." They would then, apparently, let us know if we could have our money.

Then there is PayPal's "innovative" customer service. Those not trying to glamorize the company would call it terrible. Forbes just called it one of the...