PayPal Still Threatens $2500 Fines for Promoting "Discriminatory" "Intolerance" (Even if Not "Misinformation")

Yahoo! Finance (Adam Sabes) reported yesterday (as did many other sites):

A new PayPal user agreement that threatens to fine users up to $2,500 if they use the service to "promote misinformation," was sent out "in error," a PayPal spokesperson tells FOX Business.

The updated PayPal Acceptable Use Policy effective Nov. 3 included an expansion of "prohibited activities," which includes the "ending, posting, or publication of messages, content, or materials that meet certain criteria."

According to the updated PayPal user agreement, the company states that each violation could result in "liquidated damages of $2,500.00" per violation, which would be withdrawn directly from their account.

One of the violations listed, according to the agreement, is that … "[users] may not use the PayPal service for activities that … involve the sending, posting, or publication of any messages, content, or materials that, in PayPal's sole discretion … promote misinformation."

But it appears that the policy continues to be in effect for other speech, according to PayPal's official Acceptable Use Policy, last updated Sept. 20, 2021:

Violation of this Acceptable Use Policy constitutes a violation of the PayPal User Agreement and may subject you to damages, including liquidated damages of $2,500.00 U.S. dollars per violation, which may be debited directly from your PayPal account(s) as outlined in the User Agreement (see "Restricted Activities and Holds" section of the PayPal User Agreement).

Prohibited activities

You may not use the PayPal service for activities that … relate to … the promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime ….

And the cited "Restricted Activities and Holds" policy makes clear that "Actions We May Take if You Engage in Any Restricted Activities" are determined based on PayPal making the decision "in our sole discretion," if Paypal "believe[s] that you've engaged in any of these activities."

So if PayPal "in [its] sole discretion" concludes that you're using PayPal "for activities that … relate to transactions involving … promotion of" "discriminatory" "intolerance"—presumably including distributing publications, or for that matter buying publications (since that's an activity related to transactions involving the promotion of certain views)—it can just take $2500 straight from your account.

Might you, for instance, be sharply criticizing a religion? Or saying things that sharply condemn, say, government officials (police, FBI, etc.) in ways that some might say involve "promotion of hate"? Or praising people who have acted violently (e.g., in what you think is justifiable self-defense, or defense of others, or even war or revolution)? If PayPal thinks it's bad, it'll just take your money.

Sounds like a good reason to think twice about using PayPal. I've just withdrawn the $1000+ I have in my PayPal account, and I'm starting the process of disentangling myself from the service to the extent possible.

Comments

[Mr. Bumble]

Does anyone know of a good alternative to PayPal and Venmo?

[M L]

Cash App is a big one, I don't know if it's any good. Is venmo doing any woke corporate fascisms yet?

[M L]

Never mind, i see venmo is owned by paypal.

[Longtobefree]

"Signs point to yes"

Venmo is an American mobile payment service founded in 2009 and owned by PayPal since 2012.

[AmosArch]

PayEnemy alone accounts for about half of all internet payment processing and all the other major apps are also from the same SJW Sillycon Valley mafia cartel. Thats the problem.

[DaveM]

Stripe is typically lined up against PayPal as a payment processor. It's a private company, based in Ireland, if memory serves.

[Bubba Jones]

For what?

Zelle works fine for personal cash transfers.

[MatthewSlyfield]

Zelle advertises itself as a way to send money to friends and family, not payments to businesses.

[Finrod]

There's Gabpay.

[Longtobefree]

" . . .and I'm starting the process of disentangling myself from the service to the extent possible."

Never used Paypal, because of the older terms of service;
but what would make disentanglement impossible?

[Á àß äẞç ãþÇđ âÞ¢Đæ ǎB€Ðëf ảhf]

Updating periodic payments?
Updating payment info at various websites (amazon, hulu, ...)?

Have to find them all.

Have to wait until current payments are finished.

Have to select and enter replacement account info.

I've had to do it when credit cards are scammed or stolen. It's a pain in the posterior.

[Social Justice is neither]

And all of that is if you've just got money going out, if you're receiving money through it you've got customer conversion and retention to consider.

[F.D. Wolf]

In the last few years, this generation of "woke capitalists" have done more to undermine faith in free markets than Mark, Lenin, and their disciples did with 150+ years and millions of pages of theoretical musings.

[Rev. Arthur L. Kirkland]

Whining, disaffected, awaiting-replacement clingers are among my favorite culture war casualties.

[Macy's Window]

The Left made complaining about imaginary oppression a virtue and practically an Olympic sport.

When it actually wields the whip, it says the rest of the world should tiger up.

[Sarcastr0]

No, that’s the right’s new mania for hatred of every institution out there.

[BravoCharlieDelta]

Every institution has earned our loathing. They are filled with subhuman vile Leftists.

[Eugene Volokh]

BravoCharlieDelta: You're not really strengthening your case by calling people whom you disagree with "subhuman."

[Gandydancer]

It doesn't hurt his "case" with me. Obviously they're genetically human, but "subhuman" has its proper place as an epithet just the same.

[nekit2010g]

The advantage to using terms like “subhuman,” “animals,” and “savages” is that when the time comes, it’s easier to round up support for exterminating them. People don’t want to exterminate other humans, even vile ones. But convince them they’re irredeemable vermin, and it’s much easier.

[Rev. Arthur L. Kirkland]

This is the audience you have cultivated, Prof. Volokh.

The consequences will continue to be predictable . . . but that's no problem replacement will not solve.

[Brett Bellmore]

I agree the rhetoric isn't productive, though the sentiment is sort of understandable.

[Rev. Arthur L. Kirkland]

. . . to the bigoted, antisocial, on-the-spectrum, disaffected, delusional, conspiracy-consumed audience.

Which seems to be most of the Volokh Conspiracy's following these days.

Carry on, clingers.

[Greg J]

Now tell us about "Trumpists"

I'm sure you never engage in bigoted, antisocial, on-the-spectrum, disaffected, delusional, conspiracy-consumed commentary on them.

/sarc
Because you're often too stupid to figure things out, otherwise

[Winnie SC]

He's 100 per cent correct and I would say that his language is effective and appropriate in this case. The only good leftist is a dead leftist.

[Brett Bellmore]

"Liberals" are starting to cut their enemies off from basic financial and communications services, essentially they're gradually rolling out a 'private' sector version of China's social credit score system, via collusion between large quasi-monopolistic companies. They're seeing how far they can go in creating a police state, while nominally not using government. Nominally because we've learned that the government IS calling the shots, much as it did during Operation Choke Point.

That escapes being "subhuman" only because humans can get very bad indeed; I object to the terminology because it whitewashes humanity. Not because what's going on isn't horrific.

[Mr. Bumble]

Words and their meaning. A recurrent problem in the law and and most human intercourse.

What does "subhuman" mean to EV? Is the lack of respect for ones opinion by PayPal and the use of their power to control it less than what we should expect from "humans"?

[Social Justice is neither]

You're right, he should follow the Left's lead and call them terrorists, that better? Sorry if insulting the ideological descendants of Stalin, Lenin, Mao and even Mr Mustache is offensive to you but some thoughts and their adherents are offensive to all of civilized society.

[Sarcastr0]

Well, what a great set of responses.

Truly lack of moderation has lead us to a land of pleasing and productive discourse.

[Brett Bellmore]

Indeed it has. I suppose you'd prefer the moderation at left-wing sites, where each comment is previewed and never shows up if the moderator disagrees with it. Leads to a very friendly conversation going to a predetermined conclusion every time.

[bevis the lumberjack]

What, you’re saying this is ok? Holy hell.

Will calling someone a Karen count as promotion of hate and intolerance? Oh, of course it won’t. To people like the sort that run PayPal tolerance is a one way street.

[Sarcastr0]

Did you read the comment I was replying to? No, I don’t think faith in the free market is threatened, just a lot of commenters here are whinging about it just like they do every institution from schools to the media to churches.

[bevis the lumberjack]

I don’t see that person’s posts, if I’m following the line correctly.

[Michael P]

To the contrary, the "woke capitalists" are making restrictive regulations of business popular with the political right. You might not see it from your far-left perch, but the behavior of the FAANGs has undermined belief in the free markets.

The general trend is not really disposable (e.g., https://www.washingtonpost.com/opinions/2021/01/12/republicans-usually-revere-free-market-now-theyre-cursing-it/ and https://www.the-american-interest.com/2020/07/06/should-america-still-believe-in-free-markets/) -- the only serious question is how much is due to "woke capitalists" versus Marxist indoctrination or other causes.

[Brett Bellmore]

The basic problem here is that free market theory relies on most businesses operating as pure profit maximizers. Once that assumption becomes invalid you no longer have the sort of "free market" the right understood themselves to be defending.

[Reallynotbob]

You mean the kind of "free" where people make choices?

You can strip choice way from more and more "common carriers" if you want--payment processors, social media, etc. But that's just admitting markets require government curbs and correction. Why didn't you say so in the first place?

[Brett Bellmore]

The conservative, theoretical argument for a free market being categorically better than a regulated market isn't based on libertarian ethics. If it were you might have a point.

It's based on the assumption that demand will generate supply, and that businesses will be responsive to customers, better matching the actual preferences of the market participants, because the businesses don't give a damn about you, but DO want your money. So the most efficient way to satisfy everybody's actual preferences, consistent with their resources, is a largely unregulated free market.

Once you have quasi-monopolists dominating sectors of the industry, who will not only refuse to satisfy demand from a significant part of the market, but will actively work to frustrate it, even if it costs them money, that case is a lot weaker.

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

But we're here discussing where the butcher views it as "their own interest" that you starve, the brewer that you go thirsty, the baker, that you have no bread, and they will work to see it happen. A motivation entirely alien to Adam Smith's imaginings.

[Reallynotbob]

"It’s based on the assumption that ... businesses will be responsive to customers, better matching the actual preferences of the market participants, because the businesses don’t give a damn about you, but DO want your money."

I agree that is usually how it's formulated. But note that the stated goal is preference-matching and responsiveness to customers. It's still a free market if the customers insist on responding to something other than price.

"Once you have [market actors]... who will not only refuse to satisfy demand from a significant part of the market, but will actively work to frustrate it, even if it costs them money, that case is a lot weaker."

This was precisely the situation in Jim Crow years. Discrimination at the Woolworth's counter was cloaked in "free market" rhetoric then also. One can argue that discrimination was required to keep the Whites' business, but then again that's non-monetary behaviors influencing market actors. It's still the free market, even if we don't like it.

The question is when should government inhibit certain types of freedom. My critique of the libertarian approach is that libertarians (in my experience) like to posit that actors' desire for money is sufficient to guide all decisions to the optimum social state. They tend to discount other types of motivation because then one (a government) has to make value choices about what to permit (ESG movements?) and disallow (Whites-only counters?) in the marketplace.

[Brett Bellmore]

"It’s still a free market if the customers insist on responding to something other than price."

But I'm pretty sure none of PayPal's customers are demanding to be fined for speech that PayPal disapproves of. And very few would be demanding that PayPal fine other customers. This is being driven top down, by management who see that the company has achieved enough of a position of market dominance that they can abuse their position doing things to please themselves, not the customers.

"This was precisely the situation in Jim Crow years."

Right, with the rather important addition of legal mandates for discrimination. I've commented that we never paused to see what the companies would do if freed of those mandates, we went straight from mandating discrimination, to mandating non-discrimination, which gradually morphed into mandating discrimination again. If nothing had changed with the mandates being lifted, the case against anti-discrimination laws would have been a lot weaker.

Now, that may not actually be a difference between Jim Crow and what we're seeing today, the only difference may be that the mandate is covert; Operation Choke Point was, and I've heard talk that Biden restarted it and expanded it.

But be that as it may, the conservative case for a free market is premised on most businesses only caring about the color of your money, and to the extent that's not true for whatever reason, the conservative case for a free market is weakened. Because that case isn't based, as the libertarian case is, on the moral rights of business owners. It's based on assumptions about how markets work.

As Michael P said above, this sort of behavior is weakening conservative support for free markets, I was just explaining why it actually makes sense for conservatives to trust free markets less in the face of this sort of behavior.

Again, companies like PayPal are starting to roll out a nominally 'private' version of China's social credit score system, and it is HUGELY important for the survival of liberty in this country that they be stopped, and stopped fast. Monopolists in general are almost as well placed to create a police state as governments are, and these monopolists in particular are in a position in that regard that most governments could only dream of having.

[Brett Bellmore]

Regarding covert mandates to discriminate,

Lawsuit details sprawling Biden administration program to censor online speech

"Mr. Schmitt and Mr. Landry recently updated the lawsuit after subpoenas to the tech companies revealed scores of officials were communicating with them about their content.

Meta, which operates Facebook and Instagram, disclosed at least 32 individuals — including top officials from the White House and Food and Drug Administration — communicated with the company about removing content. Google’s YouTube revealed it was in contact with 11 officials, including senior State Department officials."

Wanna bet they haven't been talking with PayPal, too? That the credit card companies weren't pressured to make that recent change to identify credit card transactions having to do with guns?

Yup, Operation Choke Point is back, on an expanded basis.

[Social Justice is neither]

Funny how choices are only allowed to reflect the preferences of marxists like you. The same crowd that demanded Hobby Lobby should be forced to provide the health insurance coverage they dictated are now saying companies can choose to bar people they don't like. The nexus of choice always sits with the authoritarian left's wishes.

[David Nieporent]

The basic problem here is that free market theory relies on most businesses operating as pure profit maximizers.

No, it doesn't. (Also, your conspiracy theorizing doesn't change the fact that businesses have always operated this way and always will.)

Once that assumption becomes invalid you no longer have the sort of “free market” the right understood themselves to be defending.

I mean, yes, that's kind of true, though that says much more (and all bad) about "the right" than it does about businesses. I don't want to sound all Kirkland here, but on most of the issues that have gotten "the right" so upset, you lost. So you're having a collective tantrum, because you don't think that you should be allowed to lose even though you're in the minority. (Of course, I am not saying that losing means you're necessarily wrong on any given issue, but in a democracy when you're in the minority you don't get to keep making the rules.)

[Toranth]

Ok, I have to ask:

on most of the issues that have gotten “the right” so upset, you lost.

What issues are you thinking of?
Guns and abortion seem to be going the Right's way, and affirmative action has been creeping that way for a while with another potential big step lined up. "Freedom of religion" has been doing pretty well, too.
They lost on same sex marriage. They're losing on "free speech". I'm sure I'm missing some, but what else are you thinking of?

[Reallynotbob]

I hesitate to answer for anyone else, but I understood David to be referring to national public opinion.

[Ed Grinberg]

To people like the sort that run PayPal tolerance is a one way street.

https://www.buzzfeednews.com/article/josephbernstein/twitter-wont-suspend-louis-farrakhan-for-tweet-comparing
But they censored the snarky “learn to code” tweets aimed at laid-off journalists.

[bevis the lumberjack]

Exactly my point. That’s generally a barb from people on the right aimed at laid-off journalists on the left who had previously expressed scorn for flyover folks who watched their manufacturing jobs move to China and Mexico.

Think they’ll fine people for “Karen”? “White fragility”. Those are racist terms that are probably used by PayPal execs. They gonna fine themselves.

How about folks like those who claimed early that the vaccines didn’t prevent you from getting the disease. That was obvious misinformation until it turned out to be true. Would those people get their money back with interest?

[Greg J]

Here's a friendly hint, "sarcastro":
If you're giving blowjobs to everyone in power, you're not part of the "counter-culture", you're not a "rationalist", you're not an "individualist"

You're just a tool

So, why don't you be honest, and change your name to "suckupstro"?

[shawn_dude]

The "market" responds to all sorts of information, some of it real and rational and some of it just trends associated with public perception. This has always been the case. As society grows ever more sensitive to racism, the market is responding by investing more in non-racist businesses. In what way does this "undermine faith in free markets" more than people who came right out and stated that the free market (aka: capitalism) is itself evil? Who's faith is being undermined here? If the market is responding to a market trend, it must represent enough capital that it needs to be taken seriously. If one finds themselves outside of that trend and feels that their faith is undermined by it, perhaps it isn't a problem with market mechanics but one's lack of connection to the ongoing trend.

[Brett Bellmore]

I stopped using PayPal over a decade ago, when they first started down this path of deciding what legal transactions they'd allow users to engage in. I knew it was only going to keep getting worse, once they started thinking they were entitled to do that.

Mind you, I started using Xoom in part because they WEREN'T PayPal, so what happened? PayPal bought them. It can be hard to escape this idiocy, it's taking over everything.

[Reallynotbob]

Shhhh, there there... the invisible hand will fix it. Just give it time.

[shawn_dude]

This isn't a new thing. Credit card providers and web hosting firms and other providers have always limited services based on certain ethical or moral rules. Probably the most obvious being avoiding business with adult services.

For folks who believe a business should be allowed to refuse service to anyone, PayPal's choices shouldn't bother them much.

[bevis the lumberjack]

Denying business and stealing people’s money thousands at a time are totally different things.

[shawn_dude]

If it's an illegal taking of money, they'll get their day in court. But I think by "stealing" you mean they're being unfair, which isn't theft at all. Customers, myself included, agree to the terms of service when we contract with a company for services. If you think PayPal's $2500 fine is bad, you probably haven't been paying attention to what your own bank has been doing to you for years now. At least PayPal takes its pound of flesh all at once rather than squeezing its customers at both ends. Regardless, people can always choose a competitor. If PayPal loses a lot of customers over its behavior, it'll change. That's how the market works, right?

[Brett Bellmore]

"Credit card providers and web hosting firms and other providers have always limited services based on certain ethical or moral rules. Probably the most obvious being avoiding business with adult services."

I question that "always". There's a lot of presentism in your assumptions. These firms being cut off never would have gotten started if the rules had been in place from the start.

[Toranth]

Yeah, I'd like to see some support for that claim, too.
Porn sites, for example, once required a credit card number as a "proof of age" - and in the UK, I think it is still legally required.

Yet porn sites are one of the largest targets of credit card refusals, and there are many that push for ever widening bans.

[Rev. Arthur L. Kirkland]

" Sounds like a good reason to think twice about using PayPal. I've just withdrawn the $1000+ I have in my PayPal account, and I'm starting the process of disentangling myself from the service to the extent possible. "

How many more revelations concerning John Eastman, the Proud Boys, the preparations for Jan. 6, Jeffrey Bossert Clark, the events of Jan. 6, Ron DeSantis' mislead them in Texas-stopover in Florida-dump them in Massachusetts project, abortion absolutism, and the like can it take for you to reconsider your entanglements with the Republican Party?

[Mr. Bumble]

As my late father was fond of saying when encountering a blow hard:
Blow it out your ass!

[Macy's Window]

Abortion absolutism? You mean like sticking a pair of scissors in a baby's head with its feet and body already born?

[Seamus]

Of course not, silly. That's "reproductive health care."

[Greg J]

"abortion absolutism"?

You mean like claiming that abortion should be legal up to crowning?

[Reallynotbob]

Does the father's duty to pay child support begin at crowning?

[shawn_dude]

That depends. Is he running for a federal congressional seat currently held by a Democrat? Because if so, he could probably shoot one of the lesser Trump siblings on 5th avenue and still get elected. He could pay for his girlfriend to get an abortion, lie about it, be presented with hard evidence, lie again, and still get elected.

[DaveM]

Acceptable use policies are a legal fiction. Here’s what I mean.

The idea that our posts, comments, memes, links, etc. are being measured against a set of carefully crafted and reviewed legal standards is certainly what Big Tech outfits like PayPal want us to believe. But when we are dinged, the one thing they’re not going to tell us is precisely which part of what we said crossed which line. They’re not going to tell you because there is no identifiable reason.

Electronic monitoring on a massive scale has to be done using AI pattern-matching algorithms. Pattern matching is not cognitive, it is mechanical. It does not involve reasoning or understanding, it is not based on logic or cause and effect, it is based on AFFINITY.

Is X “close enough” to Y to trigger it as being the same as Y? If the answer is “yes, close enough”, then censorship is triggered. There is no rationale, you can’t point to what exactly it was that moved the affinity needle past the trigger point.

AUPs are legal fictions because the configurations that drive the pattern matching — the part of the system where they define what they looking for — don’t have to be necessarily derived from the AUP. They can be based on whatever the Big Tech company wants. That could be anything. As Zuckerberg of Facebook admitted, that usually IS anything.

Yes, they may tell you you’re being censored because you failed to follow the AUP, but that’s the fiction. It’s a legal fiction, of course, and a very good one. But it’s still a fiction.

[Gandydancer]

I don’t think there is a “massive pattern” of $2500 “fines” Is there even one case of them enforcing this?

There was the case of GoFundMe announcing it would steal money donated to support the Canadian Trucker protesters, but they backed off on that. Mt impression is that the only thieving that went ahead was by the Trudeau regime and some Canadian sub-tyrannies.

[Brett Bellmore]

Apparently it's widely complained about in small business circles. Businesses have been fleeing PayPal since they announced the original fine policy back in 2020. Mainly over long holds and lack of a reasonably quick and objective review. Generally advised that if you do use PayPal as a business, you routinely empty your account to limit exposure, since they have no practical way of "fining" you if you have no balance.

[Gandydancer]

The type of avoidance you suggest takes place would, in the nature of things, often fail to take place. Absent a cite to a case I'll remain dubious that such a "fine" has ever happened, except in rumor.

[Brett Bellmore]

https://topclassactions.com/lawsuit-settlements/money/paypal-unlawfully-seizes-account-funds-class-action-says/

I'm going to guess you don't know any small businessmen of the sort who would use PayPal.

[DaveM]

To be clear, I didn't say there was a "massive pattern of fines". I said in order to tell if a fine is to be levied, you have to monitor a massive amount of information to find the problematic ones. And if you have as many users as PayPal does, you're not going to dedicate humans to find that information for you, you're going to use a pattern-matching algorithm.

Hopefully cleared that up.

[Brett Bellmore]

Actually, if you're PayPal, you're probably going to rely on unpaid snitches, and reports from outfits like the SPLC.

[Davy C]

Do they have any explanation on how this "error" occurred? Do they give all their interns access to alter the user agreement? Did a cat walk across the keyboard and just happen to type that series of letters?

Or was it that they saw a huge backlash and decided it wasn't worth it anymore?

[vaadu]

This was a test shot from the elites. Their goal is a CBDC that replaces all currencies and does precisely what PayPal threatened.

Comrade Trudeau showed their hand when he shut down the trucker protesters' financial access.

[M L]

Treasury Secretary Janet Yellen says a central bank digital currency must support the US dollar's global dominance

https://markets.businessinsider.com/news/currencies/dollar-vs-crytpo-janet-yellen-central-bank-digital-currency-dominance-2022-4

[Stephen Lathrop]

There is an unmet need for a service to facilitate non-trivial commercial transactions online. PayPal with its vague terms of service and too-broad discretionary insistence has never been a businesslike way to conduct multi-thousand dollar transactions among strangers who cannot meet face to face. Politics has not previously had much to do with that. If political judgments are now to be added to the list, that just makes it worse.

[Don Nico]

Indeed, I will search for an alternative, and immediately reduce my use of PayPal

[Rev. Arthur L. Kirkland]

Eventually, clingers will be painted into a vanishingly small corner of America (which will feature a Chick-fil-A, a faith healer academy, an off-brand liquor store, several tobacconists, an evangelical megachurch, what's left of Hillsdale, a huge used pickup lot, Street Pills R We, and nothing else.)

[Brett Bellmore]

They were actually pretty reliable in the early years, before they got enough market penetration to start thinking like monopolists.

[Reallynotbob]

Careful that that "M" word. People will start thinking you support the FTC and pre-merger review by bureaucrats. Don't let Kirkland see you.

[jorgyusa]

I just removed the link to my credit card in paypal. I guess that means Imade my last purchase on ebay earlier today.

[Gandydancer]

I've bought on eBay without using Paypal so, no, that doesn't follow.

[Brett Bellmore]

Ebay has cut their ties to PayPal, and by the end of 2023 it's not even going to be a payment option anymore. It's not the default option anymore, as it was at one point, but they're just going to remove it completely soon. Apparently too many vendors on Ebay were pissed off at PayPal.

[subpatre]

Let me get this straight. PayPal sends an advisory to thousands of users, saying they'd be fined for spreading misinformation --per offense. Then PayPal claims the advisory itself was misinformation.

Where do I collect?

[Social Justice is neither]

You misunderstand, they are allowed to lie to you with impunity as long as it supports the regime narrative, you are not allowed to speak truth if it does not. Perfectly consistent with a free and tolerant society according to the leftists among us.

[Reallynotbob]

Are we talking about the police now?

[subpatre]

Eugene - so what if your agreement with PayPal is different than what PayPal thinks it is?

In the real world this is done all the time. Mortgages, hospital agreements, bills of sale, etc are changed at signing, from strikeouts, additions or notes, to corrected spelling.

Let's say theoretically when the agreement webpage is presented to me on my computer, on my desk, and on my property, I alter it. It can be as small as a change from "Agree" on a button to "Disagree", or as complex as changing a paragraph and then my agreeing to the amended contract.

Then PayPal accepts this changed agreement after I've saved a copy. Disregarding legal costs, what's the fallout from this?

[Eugene Volokh]

subpatre: I'm not quite getting this -- how do you persuade PayPal to accept your changed agreement?

[subpatre]

Eugene - How? Edit the hypertext to what I find acceptable, then click the "Agree" or "OK" button.

The only communication really sent to PayPal is "on_click". When the webpage is served, the button_text is "Agree", but that text is not checked "on_click".

[Gandydancer]

But PayPal just gets the "Agree" click and you ought to know this. This doesn't just apply to TOS, but to most online sigs, I would think. Sounds like a fraud on your part, to me.

Not that I don't think that PayPal's TOS ought anyway to be unenforceable, in this respect. But no doubt some crazy kritarch might do something crazy. It's not like that doesn't happen with great regularity.

[Gandydancer]

,,, *attempted* fraud.

[subpatre]

It's not fraud. This is common and acceptable with in-person paper contracts or agreements; to alter details, correct spelling, or other usually minor changes. Had an example the other day with a realtor's agreement, an ambiguous phrase where they could charge an additional 2% if another realtor's client bought the house. Probably no intention to do it, just bad wording.

[Brett Bellmore]

But there's no mechanism for doing this with online agreements. Sure, if you're signing a contract, you can initial in minor changes, which the other party then agrees to by signing after you've done it. But what you're suggesting is more like making a private copy of the contract, altering it, and then never showing it to the other party.

[Not Unreasonable]

Agree with the above. You would just be proposing modifications to the agreement IF you sent it to them. They would have to affirmatively accept, as you do when you continue using the service. First year contracts.

[subpatre]

Well, I click "Agree", it's their problem they don't configure a server to accept the agreed-on page, don't have a person to verify the verbage or signature, etcetera. Not my problem.

OTOH, before you jump the gun, my bank does this. It keeps every 'agreed-on' or signed record. It reviews them for any changes made, compares signatures, [diff software] and if acceptable proceeds.

Storage is cheap, so why not? PayPal could do this, but it requires a software investment and an extra American employee or two to monitor the software results.

The tech's been here for years. Not my problem they don't use it.

[subpatre]

"But there’s no mechanism for doing this with online agreements."
Ah, but there is. It requires software to process the returned agreement, an employee to oversee results, and storage. No doubt a great hardship for companies like PayPal.

You'd think if a podunck two-branch bank can routinely do this, tech giant PayPal would as well. You are right about the mechanism being important, and there are ways of doing it. It's a choice PayPal makes.

[shawn_dude]

This won't fly. (IANAL)

PayPal sends you hypertext. Included in that hypertext is a form element with a submit button of some sort. When you submit, you are agreeing to the terms as presented by PayPal. If you edit the HTML, it's no longer the terms as presented by PayPal so someone at PayPal would have to agree to the change. When mortgage documents are modified, for example, all signatories must agree and initial the changes. The HTML form has no means to support this two-way agreement. PayPal only lets you agree or entirely opt out; it's a binary choice.

[Malvolio]

This is a contract of adhesion. If they actually enforce this on anyone, would it really hold up?

[Michael P]

They're relying on them holding your money to implement it, and hoping that you'll decide it's not worth spending the money to sue them over it (for some value of "you").

[Eugene Volokh]

A lot of adhesion contracts are enforceable; whether this particular one would be, I can't say. But, as Michael P suggests, I don't want to have to argue about it in court after they seize my money.

[phoqueue]

Is there uncertainty? Absolutely.

But this term tilts heavily toward being unreasonable, unexpected, and punitive. And I'd love to get the discovery on whether PayPal actually performed any serious analysis about its potential damages when it snatched $2,500 out of the air for its liquidated damages sum. (Predicted spoiler: They didn't.)

[Michael P]

How does the expected return on that litigation work out? Would PayPal appeal cases that they lose, or just suck a few of those up as a cost of doing business? Or would a class action be viable (mostly in terms of class recognition -- I think PayPal would argue that their process means that users are all individually situated)?

[ChrisC]

I suppose you get a state attorney general or conservative legal foundation on your side?

[Brett Bellmore]

I believe PayPal generally avoids seizing amounts that are small enough to allow their victims to use small claims court, so as to deter litigation through the expense of it.

There's a class action that's just been filed in California, I linked to it above. Their most serious abuses only started a few years ago, it really hasn't had time for the legal system to react.

[shawn_dude]

The small claims limit in California is $5,000 or $10,000 (depending on who files and few other conditions.)

[nekit2010g]

Most states require that liquidated damages be a reasonable approximation of expected damages. I don't see a court upholding this, especially given that it is a contract of adhesion.

[Brett Bellmore]

But PayPal gets the money up front, you only get it back after the fact if you prevail in court. Will you get court costs, too, and compensation for all your losses due to being short on capital and locked out of conducting transactions, and damages for the unreasonable action?

I think PayPal probably sees this as a profit center, on average.

[nekit2010g]

The other question is, are they only going to take money from a PayPal account (no one should ever be leaving money in PayPal) or are they actually going to ACH pull from people's banks? If the latter, that's much more of a problem.

[Brett Bellmore]

I think if they tried to pull from people's banks, the result would be a lot of disputed transactions, and they would swiftly get cut off from bank transactions. I've never heard of them attempting it, anyway, and doing so would be extremely perilous to their business model.

[shawn_dude]

This.

No one should leave a balance in PayPal.

[Not Unreasonable]

I don't have a PayPal account, but I would be surprised if PayPal doesn't have an arbitration clause in the agreement, with a prohibition against class actions in the arbitration forum. And those clauses are almost always enforceable. That takes away the incentive to pursue aggressive legal actions.

[Homple]

Credit card companies have already shut out some people for their political views. What do libertarians think about this trend? Do their principles still suggest if you don't like it, develop your own payment processing system?

Should the regulated banking industry be a little more regulated to prevent this type of thievery, or should we start our own banks?

If grocery chains start doing it, should we let the N.A.P. take care of the problem?

Seriously, libertarians, is this a problem? If so, will the free market and capitalism solve it?

[Gandydancer]

What free market?

[nekit2010g]

Libertarians don't generally have an issue with laws regulating monopolies or common carriers. PayPal, Twitter, Facebook, Amazon, eBay, and the like are clearly common carriers.

[Martinned]

Based on my experience at VC for the last 20 years, libertarians definitely do have a problem with regulation of natural monopolies, unless the company in question has done something to displease them.

[nekit2010g]

No, that's not true at all. Most libertarians I have spoken to would be okay with forced gay wedding cake baking if there was only one place from which to get a cake.

[Brett Bellmore]

In the very unlikely event that there was only one place you could get a cake. I'd be very curious how that came about, given how many cakes I've baked at home over the years.

[nekit2010g]

Exactly. It's not a situation like in the Jim Crow South where every single business would refuse to do business with blacks, even if they wanted to, because they were afraid of reprisal from whites.

At this point, public accommodation laws are merely a means of bullying people who don't comply, with the full power of the state behind them.

[subpatre]

LOL. (wedding cakes, refuse to do business with blacks)
How to say "Ima Yankee" or outsider without spelling it out. Segregation was awful, but easily 90% of the baked goods --and 99.9% of the truly fine baked goods-- were made by black men and women. So much so they could turn away business, ie. pick and choose, and refuse to do business with some people.

[David Nieporent]

They are not in any way, shape, or form common carriers. They share nothing in common with common carriers. Not in what they do, nor how they do it.

[Reallynotbob]

Can you help me with that? The argument seems to be that the social platforms want to be "not publishers" for libel purposes. If they're washing their hands of publication responsibility, doesn't that bring them closer to the notion of a "common" carrier that doesn't bear liability for delivering the goods shipped?

(Insert digression about potential to enforce indemnity provisions in the terms of use... let's skip that for now.)

[David Nieporent]

Everyone wants to evade liability for their business model; desiring that doesn't make one a common carrier. (Firearms manufacturers have the PLCA act to limit their liability, but that doesn't make them common carriers.)

All websites, from the biggest like Facebook to a pretty small one like Reason/The Volokh Conspiracy, to a blog you set up to chronicle your bicycling trip through North Dakota, are immune from liability for user generated content. That's not because they're all common carriers, but because Congress passed a law saying that all of them are immune from liability.

[Reallynotbob]

Can you elaborate on why they are clearly common carriers in your view?

Most common carriers rely to some level on: (i) government-created goods such as eminent domain rights-of-way; and (ii) scarce resources such as rail, pipelines, or telephone poles. Those criteria seem absent from social media platforms. Unlike ISP infrastructure (for which the argument is better) the social platforms are neither creatures of government grant nor limited by scarcity.

Compare with UPS which is not a common carrier; and FedEx which appears to be both a common and contract carrier. Other trucking companies elect to be either common or contract carriers. I'm curious why you assume the social media platforms are automatically common carriers when even in trucking there are both common and contract variants.

[nekit2010g]

They're much more akin to rail lines, pipelines, and telephone poles, as they have a quasi-monopoly on providing data a certain service a certain way. They've become that way over time, based on the "customer base" effect.

[shawn_dude]

Paypal's primary service is not taking credit cards. Its primary service is providing a very simple method for merchants to set up credit card processing with little to no technical knowledge. PayPal's real customers are businesses and not the average Jane that spends money on Ebay or wherever. Google "PayPal alternatives" and you'll get lists of them that vary a bit but there's several to fill any need.

So there are plenty of competitors, they use similar technology in similar ways, and their customer base (or their customer's customer base--buyers) can use the system without regard for whether they also have a PayPal account or not. They're not a monopoly, or a quasi-monopoly, by any stretch of the imagination. Any of the other providers that don't already match PayPal's general feature set (and a number of them do) could easily add similar features.

[David Nieporent]

Not that it changes your argument, but as a minor point, you don't even need a credit card for PayPal; you can link it to a bank account.

[David Nieporent]

None of the businesses we're discussing are akin to rail lines, pipelines, or telephone poles. (Or, more to the point, to businesses that use rail lines, pipelines, or telephone poles.) They do not have monopolies, legal, formal or informal. There are no barriers to entry for competitors. They do not transport goods or people. They are broadcast rather than point-to-point. They do not hold themselves out as offering their services indiscriminately.

[Rick]

One has to wonder whether PayPal has removed any funds from accounts at Berkeley Law.

[Doug Huffman]

I left PayPal years ago when they became intolerant of firearms related transactions.

[Brett Bellmore]

That's exactly what triggered my departure. Not that I had made many such purchases, but just the idea that they thought they were entitled to do it was offensive, and you knew they weren't going to stop at that.

[nekit2010g]

They also prohibit confederate flags and other things they deem "hateful."

[Ben_]

But the specifics don’t matter. They get to decide anything they want at their sole discretion. If they want your $2500, they take it and tell you you violated their policy. You can say it was someone else that did it and they’re confused, and they can ignore you (or report you to Google or Twitter or your employer or whomever for harassment for contacting them about it).

[Mr. Bumble]

So I ask again. Since PayPal has turned into a "Karen" who can steal your money on any pretext, does anyone know of a good alternative?

[Rev. Arthur L. Kirkland]

Why don't conservatives vindicate their ostensible principles and address a perceived market failure by creating a conservative-leaning payment system.

My charitable nature inclines me to offer some candidates as names:

ClingerPay

BigotBucks

ConfederateCash

Chick-fil-Pay

WhiteWay

[Rev. Arthur L. Kirkland]

After some reflection, I have concluded that WhiteWay is the one clingers should choose.

[shawn_dude]

TrumpPay : 3% of every transaction funds Trumps legal battles/re-election/Mar-a-Lago hurricane repairs/hair spray.

[ThePublius]

I might try GabPay.

http://gabpay.com/

[shawn_dude]

"This solution allows you to spend your processing dollars with companies who share your values rather than major monopolies who've hijacked our payment processing sectors. We must first begin to vote with our dollars to cripple these "woke" processing companies while we continue to explore new payment methods that don't contribute to causes we directly oppose. "

Even has a Pepe-the-frog sorta logo. On your 20th transaction you get a free tiki torch.

[Rev. Arthur L. Kirkland]

Watching these clingers flail can be amusing.

[Martinned]

This is why we need vigorous antitrust enforcement. So that anyone who doesn't like a policy from a company like PayPal has somewhere to go.

[Mr. Bumble]

Unfortunately the modern business model is to create a new company and as soon as it achieves a certain amount of success sell it to on of the large existing companies. Anti- trust has been dead for decades.

[Rev. Arthur L. Kirkland]

Right-wingers who contend

(1) taxpayer-funded hospitals should be able to deny important medical treatment because of silly, childish, ignorant superstition

and also that

(2) Twitter, PayPal, and Facebook can and must be compelled by government to associate with racists, insurrectionists, gay-bashing bigots, and other low-lifes

are doomed to be losers in America's culture war, and deservedly so.

It's about time that strong mainstream schools stopped imposing these clingers on students. I would not fire the strident movement conservatives already on legitimate faculties, but the time to stop adding new wingnuts to faculties has arrived.

[nekit2010g]

Abortions are not "medical treatment." Neither are gender assignment surgeries or other things you deviants do.

[Rev. Arthur L. Kirkland]

You are precisely the audience the Volokh Conspiracy attracts, cultivates, and deserves.

[Reallynotbob]

They literally are.

By the way, so are procedures to separate conjoined twins after delivery. Those occurrences sometimes require the mother and medical team to choose whether to sacrifice the less viable twin. Thank God those were post-birth infants so the laws of self-defense could apply!

https://journals.sagepub.com/doi/full/10.1177/0885066618791953

I'll wait while you organize mass protests and propose legislation.

[nekit2010g]

No, they literally aren't.

[Jacob Grimes]

How would this even be enforceable as a liquidated damages clause? What damages does PayPal when a user violates the user agreement and how is $2,500 a reasonable estimation of them?

[Brett Bellmore]

In particular, how does PayPal suffer any legally cognizable "damage" if a user buys a Confederate flag, or perhaps an "Ultra-MAGA and Proud Of It" T-shirt? Even if it WAS a violation of their vague terms of service, where are the damages?

[Reallynotbob]

Probably about the same amount as if your neighbor pirates your WiFi to download pedo porn. Or worse, the Daily Beast.

[nekit2010g]

Especially given that no one will know that you used PayPal to buy it, which seems to be the crux of their "reputational harm" argument.

[shawn_dude]

Their logo would be on the website selling the items. Have you not used a PalPal vendor like Eventbrite or something similar before? PayPal's branding would be next to the Confederate flag or whatever else was being sold. PayPal gets to choose if their branding sits there or not, don't they?

[nekit2010g]

But that's not what they're talking about. They're talking about two people using PayPal to make payments they don't like, not as part of a store front.

[David Nieporent]

Their logo would be on the website selling the items. Have you not used a PalPal vendor like Eventbrite or something similar before? PayPal’s branding would be next to the Confederate flag or whatever else was being sold. PayPal gets to choose if their branding sits there or not, don’t they?

And presumably that's who it's actually aimed at: a merchant who accepts PayPal, not an individual who buys or sells something with it. But the $2,500 still seems pretty arbitrary and unjustifiable.

[John F. Carr]

If you have to go to arbitration you're screwed.

If you go to a real court this could be struck down as an illegal penalty clause. Private contracts can have liquidated damages but not penalties. Liquidated damages have to be reasonably related to the harm. The case that sticks in my mind involved a Connecticut rental car company that fined renters $150 every time a car exceeded a certain speed. The amount was so disproporationate to any conceivable harm that it was an illegal penalty. American Car Rental v. Commissioner of Consumer Protection (Conn. 2005). (The state stepped in on behalf of consumers because it didn't get a piece of the action. If you want to make money off of traffic violations you need to be a government contractor.)

[Jacob Grimes]

I was thinking the same thing. The damages from any breach of this by the user would be practically non-existent, making this a penalty.

[ThePublius]

I closed my PayPal account this morning. I had been with them 21 years.

I JUST NOW received this email:

GabPay - The PayPal Alternative

In October of 2018 Gab was banned from Paypal. The email we received from PayPal said that the company had opted to pursue its decision as part of its “right to terminate your account for any reason and at any time upon notice to you.” Just like that a major source of our revenue was cut off from our business. From that moment forward we decided that we would never allow something like this to happen again. Not to Gab and not to anyone else who shares our values.

An alternative to Paypal has never been more important now that the ADL will be combing through your financial transactions and ruining people’s lives for financially supporting people and organizations they don’t like. This week Paypal caught tremendous backlash after it was announced that their new terms of service had a clause that would fine users $2500 for "misinformation." Paypal later claimed that this was a "mistake" and changed course.

We don't believe them, and neither should you.

Meet GabPay
The Paypal Alternative

http://gabpay.com/

[shawn_dude]

Huh... so the whole "quasi-monopoly" and "common carrier" claims from (other) posters above was all a bunch of hooey? Here you go! Someone set up a competitor aimed at the sort of people who think Jan 6 was a Antifa false flag. Buy your bison horns and face paint on the "parallel economy."

[Chip I. Alhazred]

(Responding to ThePublius' message on an email from GabPay)
"...now that the ADL will be combing through your financial transactions..."
In this context, does ADL stand for Anti-Defamation League? If so, was that an off-the-cuff choice or does GabPay have a history of problems with the Anti-Defamation League?

[David Nieporent]

Without doing any research, I'm assuming that GabPay is associated with Gab. And let's just say that Gab's ownership has a history of problems with the people that the ADL was formed to protect.

[John F. Carr]

Babylon Bee: PayPal Automatically Pulls $2,500 In Reparations From All White People's Accounts

[AtR]

I'm with you on this, Eugene.

[TiddlyBlinx]

Soon they will be fining Christians for spreading the gospel because in their athiest/buddhist/muslim/etc minds the Gospel is "misinformation".

[Yogis_dad]

Absolutely no one with an IQ over 80 does business with PayPal.

[Darth Buckeye]

I’d better warn my synagogue’s men’s club not to use PayPal. It is a very progressive shul, but intent does not matter. What about the concept that silence = violence?