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per year, and that is only if both the buyer and the seller in the US, the UK, or Canada. In addition, the seller has to have a verified business or premiere account, send to the exact address on PayPal, ship the item in seven days, have tracking information and get a signature upon delivery. When all is said and done, their seller protection policy covers an extremely small fraction of all PayPal transactions.

PayPal has been sued by its customers at least twice. In March of 2002, two account holders sued PayPal for being in violation of the EFT Act, mostly regarding dispute resolution service policies. In an out of court settlement PayPal gave the members of the class action lawsuit $9.25 million and agreed to change its business practices, but denied any wrong doing. In August of 2002, PayPal was sued again for having extremely difficult to follow arbitration practices and mishandling of accounts. The judge ruled in favor of the claimants against PayPal

If you ever want real customer service from PayPal, good luck. They hide their phone number on their website so that they don't have to pay as many customer service representatives. Instead they offer an email form that you can fill out to get help. Even if you do happen to find a warm body at PayPal, you won't get all that much help. If they think any of your actions are somewhat questionable, PayPal can do whatever they want with your money. They are the judge, jury and executioner. Even if you're a perfectly upright seller, and someone pays for one of your items with a stolen credit card, your PayPal account is flagged for "criminal behavior" and all the money in the account is confiscated.

When all is said and done, there are just too many red flags brought up by this company to consider doing business with it. If you're just a buyer, chances are you'll be fine most of the time. If you ever have a problem with the service, you'll probably be on your own. It might be one of the easiest ways to make payment online, but with terms of service like these, no thank you.

Learn more about this author, JQ Adams.
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