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ALBANY, New York (AP) -- The nation's largest online payment service,
PayPal, is paying New York $150,000 in penalties after misrepresenting
to consumers its policy on repayment when merchandise doesn't arrive,
the state attorney general said Monday.
PayPal, which claims 40 million customers worldwide, had specifically
stated that it provided the same rights and protections of a traditional
credit card transaction, said Attorney General Eliot Spitzer. But
consumers were often denied those rights, he said.
For example, consumers who didn't receive merchandise purchased through
PayPal were often denied reimbursement from either PayPal or American
Express or Discover credit cards. A spokeswoman for Spitzer said
consumers complained they were being bounced between PayPal and their
credit card companies and there was no prompt action.
The credit card firms agreed to properly credit consumers in an
agreement with Spitzer late last year. |
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PayPal creates accounts for buyers and sellers using the Internet,
including PayPal's parent, eBay, the Internet auction site. The service
lets buyers and sellers exchange money through e-mail.
Besides the penalties, PayPal will pay New York state the investigation
costs. The online payment service also will clearly describe consumer
rights including conditions or limitations on their rights and refund
policies.
Without the agreement, consumers using their credit cards through
"e-payment" systems like PayPal would lose their protections under the
federal Fair Credit Billing Act and similar state laws.
"Protecting consumer rights in online transactions is the best way to
establish and maintain confidence in electronic commerce," Spitzer said.
PayPal has clarified that it will investigate any claims about a deal as
long as the complaint is made within 30 days of the purchase.
Charge.com is a great alternative to Paypal. Not only do you get your
own merchant account and the ability to accept credit cards real time on
your website, but you can also process face to face or offline
transactions. You can't do that with PayPal.
Charge.com even has better rates than PayPals standard
program and you get your money in 48 hours directly into your Business
Checking Account. No volume limits like Paypal. Benefits to having your
own merchant account and not a PayPal account:
* No chance of PayPal freezing funds or holding money because they don't
understand your business. When you sign up for an account with
Charge.com, we
underwrite your account so our banks know exactly what you are doing
therefore, lessening the chance for you to have your funds held
erroneously and hampering your cash flow.
* Merchant can take both online and offline orders at their home, store,
office, tradeshow, etc. You can't do that with PayPal. With PayPal you
can only take orders from your website. Though we believe your website
sales are important, it is also important that you make sales face to
face and via other marketing methods.
* Merchant gets funds automatically in 48 hours to bank account of their
choice.
* With your own Merchant Account, your customers will not be required to
open up a PayPal account just to do business with you.(This is a huge
inconvenience to put your customers through just to make a one time
purchase from you.)
* You can do recurring billing transactions for regular customers.
Automatically bill a customer $100 per week or per month. You set it up
once and don't have to worry about it ever again.
* Pay Pal does not make their phone number available to its customers.
Call our office anytime and you'll get a live person during business
hours. Main Difference between Pay Pal and a Merchant account:
The main difference between Pay Pal and a merchant account is that funds
are not processed through the merchants own merchant account. All
transactions are processed through one or more large bank accounts that
the merchant needs to access to get his funds. They are not directly
deposited into the merchants checking account.
The accounts where these funds get pooled are typically too large to be
FDIC insured. The method of clearing and settling transactions skirts
the rules established by Visa and Mastercard as well as state and
federal bank regulations. illusion |
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