PayPal to Levy Fines for Gambling, Porn

[clevfan]

PayPal to Levy Fines for Gambling, Porn
Fri Sep 10, 2004 05:16 PM ET

By Lisa Baertlein
SAN FRANCISCO (Reuters) - PayPal, the online payments arm of eBay Inc. (EBAY.O: Quote, Profile, Research) , on Friday said it will soon fine people up to $500 for uses related to gambling, adult content or services, and buying or selling prescription drugs from noncertified sellers.

The new policy, which takes effect Sept. 24 and applies to both buyers and sellers, marks the first time PayPal has imposed fines for violations of its use policy, spokeswoman Amanda Pires said.

In addition to fines that could be applied to each violation, PayPal may take legal action to recover losses in excess of the fines, Pires said in an interview.

PayPal processes transactions on the Net and at one time had received almost 10 percent of its revenue from online gambling. But it halted the practice under regulatory pressure after its acquisition by eBay in 2002 and now prohibits the processing of gambling and adult transactions. Now it has decided to enforce that policy with fines.

"What you're seeing here is an evolution of our program. We're trying to deter people who would offer PayPal as a way to pay for anything in these categories," said Pires in an interview.

Under the new policy, prescription drug sellers who do not have Verified Internet Pharmacy Practice Sites certification from the National Association of Boards of Pharmacy, and the people who buy from them, also face fines and possible legal action if they do business using PayPal.

Pires said the changes were not in response to any sort of pressure from regulators.

Eric Jackson, a former PayPal executive and author of the new book "The PayPal Wars," had a different view.

He called the new policy "draconian" and said it was likely a two-fold strategy to discourage certain behavior while heading off regulators.

"I can only surmise that PayPal is coming under increasing regulatory pressure and has no choice at this point but to take an aggressive posture," Jackson said.

"I think they're making an emphatic statement that they're making a clean break from gambling in particular," he said.

[Billy Ricard]

Do they have a right to levy fines that substantial? What do they do - reach into the bank account that is linked with them to take out the $500? It seems if they do that, they will get sued by the user!

[Onasoapbox]

That's why I closed my PayPal account 2 years ago. They are just a political puppet. Sell you down the river!

[hockeystl]

Sounds like grounds for another class action suit down the road.

[blacksheep]

I hope the US Government doesn't decide to target Neteller next. Now that would be a total pain in the ass, if they cave in to the government like Pay Pal did. Hopefully other options are on the way, in case they decide to crack down on Neteller preventing access to the best source available for online transactions.

[Onasoapbox]

blacksheep--I worry about the same thing. Just because Neteller is on foreign soil makes little difference to the US.
The State of Md. and Neteller parted a while back. They said it was because of fees.

[Onasoapbox]

"Porn" "adult Content" I thought the US Supreme court said just a short while ago that it was up to the community standards.

PayPal---Stepping Right out there!


Is there any site which might become a rival to Ebay. If so --I think it would be a great statement to support such a company.

[the giambino]

paypal isnt very pro-gun either...

[biggame]

Since when did commerical entities start legislating morality? I will be cancelling my Paypal account very soon.

[Onasoapbox]

Whenever companies become Extremely large--they become beaucrazies and make their "own internal laws". In the case of gambling sites---I don't think they have any problem, because I don't know anybook that is taking funds through their card anyway. I may be wrong on that, but they have the government on their side.
However, when it comes to "porn", unless it's child porn which Is ILLEGAL everywhere that I know of; I can't quite figure that one out.
But--I know one way to get their attention. If you use Ebay-Don't use PayPal to pay for the purchases. (I don't even know if Ebay only accepts Paypal ---but there must be other Visa or Master Cards to buy from Ebay).

I don't know about Ebay--but they are PayPal's -Bread and Butter!! Of that I'm sure!

[Billy Ricard]

Ebay owns paypal, bought them about a year ago or so

[So Cal Baseball]

Originally posted by: Onasoapbox
Whenever companies become Extremely large--they become beaucrazies and make their "own internal laws". In the case of gambling sites---I don't think they have any problem, because I don't know anybook that is taking funds through their card anyway. I may be wrong on that, but they have the government on their side.
However, when it comes to "porn", unless it's child porn which Is ILLEGAL everywhere that I know of; I can't quite figure that one out.
But--I know one way to get their attention. If you use Ebay-Don't use PayPal to pay for the purchases. (I don't even know if Ebay only accepts Paypal ---but there must be other Visa or Master Cards to buy from Ebay).

I don't know about Ebay--but they are PayPal's -Bread and Butter!! Of that I'm sure!

Onasoapbox - eBay owns PayPal, purchased them almost 2 years ago. Until eBay/PayPal get some competition (which doesn't seem like anytime soon) the restrictions are only going to get tighter. However, Just like eBay runs PayPal... Visa/Matercard greatly influences eBay. It was Visa/Mastercard that made PayPal not accept purchases of adult items and to not let anyone use their service to fund their gambling accounts.

[Onasoapbox]

I don't use Ebay either--so I don't know. I know Ebay owns PayPal. As for gambling---I don't know and don't care to know which online books or casinos take PayPal. I only know ONE thing---No Ebay--what good is PayPal??

I have come across a few adult sites on the web that state they no longer use PayPal as a Payment option. That's been going on for some time. But I do know for a Fact!!! This much. A company called e-ponies.com sells their horse racing picks (the ones that are not free and most ARE Free--Liam, the owner seems a good guy, uses PayPal as a payment option for the picks which he does sell from time to time.)

Exactly where is PayPal going to draw the line. Especially on porn?? I would think that could be very tough. So--I say to EVERYBODY--Don't use Ebay or PayPal for ANYDAM thing!!!!