PSA About PayPal

Some of you may know how much I don’t like PayPal.  I hate that they can be in control of your money but not be subject to US banking laws and regulations.  I find that mad sketchy and I think some of their practices are downright criminal.  And YES, I have had some really fucking bad experiences with them – and I’m actually quite the upstanding citizen.  I think PayPal is a piece of shit organization and wish Google Wallet would hurry up and become mainstream already so we can pull some Facebook-on-MySpace action on their asses.

Now that I’ve given full disclosure, I wanted to make sure everyone was aware that in their new, updated Terms of Service, PayPal has managed to slip in a stricter forced arbitration clause.  This class action lawsuit against eBay from earlier this year may be a reason why.   The clause reads as follows:

Here’s why this mandatory arbitration clause is bad.  First of all, arbitration is binding, so the arbitrator’s outcome is final, with no room for appeal.  The clause eliminates the user’s option to go to court and prevents class action suits, which means PayPal can screw over everyone and if you wanna sue, you gotta get in line behind every other user to be individually heard through a process that PayPal sets the rules for.  Although you have the option to do arbitration over the phone, PayPal uses American Arbitration Association, which is the most expensive way to arbitrate in the United States.  It can cost you over $200, not including additional fees.  I read somewhere that the majority of PayPal disputes are under $500.  When you add up all the costs, you may actually be seeking monetary rewards that are less than what it would cost to arbitrate your fee dispute through PayPal.  This sham of a company knows this and knows that in this case, it’s not worth it to most people.  Arbitration may not even be a speedy process – it could take ages for you to get your case heard.  Essentially, the process is the legal version of trying to get in touch with PayPal’s awful fucking customer service.  (And by “awful,” I mean “completely fucking non-existent.”)  Essentially, the entire purpose of having the arbitration clause is to wear the petitioner (you) down and force them to give up.  Have I mentioned how much I HATE PayPal?

You can opt out within 30 days of accepting the new Terms of Service.  You have until December 1.  I use PayPal so infrequently nowadays and the fact that they aren’t subject to US banking laws and regulations is a major factor in this.  I don’t trust a company that operates solely in legal shades of gray to hold onto my money.  I have no bank accounts or cards on file on my account anymore and only use it when I have no other choice.  If you do want to opt out of this arbitration clause (I will if I still can), then check out this post from Consumerist – they have a downloadable template for doing so.  I believe you can only opt out via snail mail.  Godspeed.  Don’t let the bad guys win!

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