TOS: Not the best thing in the world!PayPal User Agreement Exposed

Finally, the PayPal User Agreement EXPOSED (a.k.a. Terms of Service Agreement)! is the ONLY anti-PayPal site to provide a complete analysis of the PayPal Terms of Service Agreement.

From the first sentence to the last, we uncovered all the details for you! Since PayPal became a major player in the online payments market, PayPal's user agreement has been modified hundreds of times -- and unless ordered by a court or a regulatory body -- the terms are NEVER in our favor.

Read the entire PayPal User Agreement along with our line-by-line commentary; you will be shocked by what PayPal expects you to "agree" to.

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Did you actually read PayPal's User Agreement before you clicked the "I Agree to the Terms" button? Well, I didn't read the stupid thing. If you did read it, did you click to agree to the terms anyway because you had no other choice?

Most people, when signing up for something on the internet never read the user agreements. Why? They are long and boring and normally don't cause us any problems. We use whatever service we signed up for and never encounter any further problems that should even make us concerned about the user agreement we agreed to.

Millions of people signed up for PayPal accounts only to encounter serious problems with the PayPal service later. When these customers complain to PayPal, the first thing PayPal points out is: " YOU AGREED TO THIS when you approved our user agreement."

Note that PayPal can change the agreement anytime they want -- what you see here today, may not be there tomorrow. Or there could be additions to this agreement in the future not covered here now. When that is the case, this website will keep you up-to-date on any user agreement changes!

If you don't want to read through the whole agreement along with the commentary that has been attached, you can find a highlights section of what you gave PayPal permission to do in the gray area on your left. Also, you will find other helpful user agreement information there.

If you are lazy like me and do not want to read all this, you can get the bottom line by scanning through our "TOS HIGHLIGHTS SECTION". You can get the facts fast in bullet format. TAKE ME THERE NOW...CLICK HERE!

The PayPal User Agreement that is being used here is the one last modified on June 7, 2007. It contains 15 sections and is over 24,000 words long. You can read the whole agreement along with the commentary I've provided, or you can skip down to sections that interest you.


This Agreement is a contract between you and PayPal and applies to your use of PayPal’s Services. You must read, agree with and accept all of the terms and conditions contained in this Agreement. We may amend this Agreement at any time by posting a revised version on our website. The revised version will be effective at the time we post it. In addition, if the revised version includes a Substantial Change, we will provide you with 30 Days’ prior notice of Substantial Change by posting notice on the “Policy Updates” page of our website. We last modified this Agreement on June 7, 2007. (Notice PayPal may amend the agreement "at any time." This means if you have a PayPal account and are using your PayPal account to accept payments on eBay, PayPal can, for example, change their user agreement to place your product on its "restricted items" list. Your PayPal account will then become limited without warning leaving you high-and-dry. PayPal can change the agreement at any time, making changes that could endanger your money! PayPal modifies their agreement very often, but without telling you what they have modified. They only tell you the agreement HAS BEEN modified and the date of the modification).


1.1 PayPal is only a Payment Service Provider. PayPal helps you make payments to and accept payments from third parties. PayPal is an independent contractor for all purposes, except that PayPal acts as your agent only with respect to the custody of your funds. PayPal does not have control of or liability for the products or services that are paid for with our Service. We do not guarantee the identity of any User or ensure that a buyer or a seller will complete a transaction. (PayPal is NOT only a service provider. PayPal is implying here that all they do is transfer money from Point A to Point B. PayPal involves itself in all aspects of your business: PayPal will limit your account if they do not agree with the content on your website, limit your account if it does not like the product you are selling, tell you how to run your business, invade your personal privacy and freeze your funds. PayPal claims to act "as your agent only with respect to the custody of your funds." PayPal implies here they are a neutral holder of your money, with no rights to it. PayPal freezes customer funds and holds their money for long periods of time. PayPal claims to have NO control or liability for the products or services that are paid for with its service. This is an outright lie: PayPal's own user agrees bans certain items from being bought and sold using the service. Again, PayPal will freeze your account in an attempt to punish you from buying or selling items they do not approve of. PayPal cannot guarantee the identify of any user...then why have customers fax over copies of identification, bank statements, utility bills and credit card statements? If they checked this information out, they could guarantee the identity of a person to a reasonable certainty)

1.2 Your Privacy. Protecting your privacy is very important to PayPal. Please review our privacy policy Privacy in order to better understand our commitment to maintaining your privacy, as well as our use and disclosure of your Information. (When you open a PayPal account, by default your information is automatically available to PayPal to distribute. Unless a user reads the PayPal Privacy statement he or she would not know that they must log into their account and choose the option for turning off the sharing of your personal information)

1.3 Privacy of Others. If you receive Information about another PayPal User through the Service, you must keep the Information confidential and only use it in connection with the Service. You may not disclose or distribute a PayPal User's Information to a third party or use the Information for marketing purposes unless you receive the User's express consent to do so. (If you got scammed by another PayPal user and you publicize this user's information outside of PayPal, you risk PayPal limiting, freezing, or terminating your account -- with zero consequences to the person that scammed you. If you give PayPal user information to law enforcement or another third party because you got scammed, you risk account limitation or termination. Only PayPal -- according to PayPal -- can share user information with 3rd parties)

1.4 Intellectual Property. "," "PayPal," and all related logos, products and services described in our website are either trademarks or registered trademarks of PayPal or its licensors. You may not copy, imitate or use them without PayPal's prior written consent. In addition, all page headers, custom graphics, button icons, and scripts are service marks, trademarks, and/or trade dress of PayPal. You may not copy, imitate, or use them without our prior written consent. You may use HTML logos provided by PayPal through our merchant services, auction tools features or affiliate programs without prior written consent for the purpose of directing web traffic to the Service. You may not alter, modify or change these HTML logos in any way, use them in a manner that is disparaging to PayPal or the Service or display them in any manner that implies PayPal's sponsorship or endorsement. (If you have a PayPal account, then your risk having your account limited, frozen or terminated if you use their logos to criticize them. I hope PayPal sees this site and closes my limited accounts and sends me my money back)

1.5 Assignment. You may not transfer or assign any rights or obligations you have under this Agreement without PayPal's prior written consent. PayPal reserves the right to transfer or assign this Agreement or any right or obligation under this Agreement at any time. (PayPal is allowed to do something while you are not. Typical of PayPal policy)

1.6 Notices to You. You agree that PayPal may provide notice to you by posting it on our website, emailing it to the email address listed in your Account, or mailing it to the street address listed in your Account. Such notice shall be considered to be received by you within 24 hours of the time it is posted to our website or email to you unless we receive notice that the email was not delivered. If the notice is sent by mail, we will consider it to have been received by you three Business Days after it is sent. You may request a paper copy of any legally required disclosures and you may terminate your consent to receive required disclosures through electronic communications by contacting PayPal as described in section 1.7 below. PayPal will charge you a Records Request Fee (per section 8) to provide a paper copy. PayPal reserves the right to close your Account if you withdraw your consent to receive electronic communications. (If PayPal sends you anything and it gets lost, it doesn't matter. PayPal will consider the item received after a certain period of time. PayPal does not let you run your business that way however: PayPal will hang you if you mail something to a buyer and it gets lost in the mail. I encourage all eBay users to place such a statement in their seller policy: Items sent by mail WILL BE CONSIDERED RECEIVED after three business days. If it is good enough for PayPal with their dealings with you, PayPal should accept that policy for its sellers as well. If there are any legally required disclosures that PayPal must make to you, and you request a paper copy, PayPal is going to charge you money for that. Great service.)

1.7 Notices to PayPal. Except as otherwise stated below in section 12 (Errors and Unauthorized Transactions) and section 14 (Disputes with PayPal), notice to PayPal must be sent by postal mail to: PayPal, Inc., Attention: Legal Department, 2211 North First Street, San Jose, California 95131. (If you want to sue PayPal in court, or make legal threats to them, this is the address where you would serve them or send your threatening letters to)

1.8 Transaction History. You may access your transaction history and Balance by logging into your Account and clicking on the "History" tab. (Why is this in the user agreement? If you access your transaction history through any other means that what is stated here, you risk sanctions from PayPal?)

1.9 Regulation E Disclosures. Our commitments to you in this Agreement related to liability for unauthorized transactions, stop-payment rights and procedures, error resolution rights and procedures, Fees, contact information, our Business Days, limitations we may impose on transfers, and your rights to statements of your transaction history, constitute disclosures under the Electronic Fund Transfer Act and Federal Reserve Board Regulation E, 12 C.F.R.§ 205.1 et seq. (The very law that PayPal violates on a daily basis by freezing funds arbitrarily and holding customer funds hostage for long periods of time)


2.1 Eligibility. To be eligible for our Services, you must be at least 18 years old and a resident of the United States or one of the countries listed on the PayPal Worldwide page. This Agreement applies only to Users who are residents of the United States. If you are a resident of another country, you may access your agreement from our website in your country (if applicable). (PayPal states the service is for users 18 years of age or older, but does nothing to verify the ages of its users upon signup. PayPal will then limit or freeze an account then asking for further documentation. When the underage user cannot provide it, PayPal keeps the money)

2.2 Personal, Premier and Business Accounts. We offer three different types of Accounts: Personal, Premier and Business Accounts. You may only hold one Personal Account and either one Premier or one Business Account. By opening a Premier or Business Account and accepting the terms as outlined in this Agreement, you attest that you are not establishing the Account primarily for personal, family, or household purposes. (PayPal SAYS you can have two accounts, but if ONE account becomes limited or frozen, the other account will become limited or frozen as well! If you fail to resolve one issue with one account, PayPal will not release the funds in your other account until the first account issues have been resolved. One trick PayPal uses to keep your money is asking you to verify your social security number. However, PayPal will only accept your SSN ON ONE ACCOUNT. That means you cannot verify your SSN -- as PayPal requires -- on the second account. That means BOTH ACCOUNTS STAY FROZEN until you complete this impossible task)

2.3 Identity Authentication. You authorize PayPal, directly or through third parties, to make any inquiries we consider necessary to validate your identity. This may include asking you for further information, requiring you to take steps to confirm ownership of your email address or financial instruments, ordering a credit report and verifying your Information against third party databases or through other sources. (You give PayPal the right to ask for what ever information it wants from you. This includes ordering a credit report which can be used against you later -- AFTER YOU OPEN YOUR ACCOUNT. Instead of doing the required checks first, PayPal lets you open an account, lets you put money in your account and then limits your account claiming you are a "risk" based on the results of a credit check. Your money is then frozen -- you have no access to it. PayPal leaves out they will ask you for OTHER INFORMATION not included here such as business contacts, lists of inventory, lists of your suppliers, bank account statements, utility bills, mortgage agreements and leases!)


3.1 Sending Limits. We may, at our discretion, impose limits on the amount of money you can send through our Service. You can view your sending limit, if any, by logging into your Account and clicking on the “View Limits” link on the “Account Overview” page. If you have a Verified Account, we may increase the amount of, or remove, your sending limits. (PayPal advertises sending money with them is "easy" and hassle free. You can sign up for a PayPal account thinking you can send and receive what you want, however PayPal makes it clear they can, "at their discretion," impose limits on the amount of money you can send. The whole system is designed to get as much personal information about you as possible. When you "sending limit" has been reached, your account could be limited or frozen until you provide what PayPal wants you to provide. Again, they let you sign up for an account, but penalize you later for something they should require you to do BEFORE YOUR ACCOUNT IS OPENED).

3.2 Default Funding Sources. When you make a payment, PayPal will fund your transaction as follows:

Balance: If you have a Balance in your Account, PayPal will always use your Balance to fund your payment.

Funding Sources: If you do not have a Balance, or your Balance is not sufficient to fund your entire transaction, PayPal will fund your transaction, or the remainder of your transaction, in the following order: Balance (if any), Instant transfer from your bank account, PayPal Credit, Credit Card/Debit Card, eCheck. (This looks innocent enough; however, should you get into trouble with PayPal and PayPal tells you that you owe them money, this is the order in which they will try to take money from you. If your PayPal account goes into the negative, PayPal will try to take the money out of your bank account first, then will try your credit and debit cards!)

3.3 Preferred Funding Source. If you would like to select a Preferred Funding Source, you may do so each time you send a payment or establish a Recurring Payment. You may select a Preferred Funding Source by clicking the link on the payment confirmation page and selecting from your available Funding Sources. If you have a Balance in your Account, your Balance will be used instead of your Preferred Funding Source. The only exception is that you may select eCheck or Buyer Credit as your Preferred Funding Source instead of Balance. If you have a Balance and do not want to use it to fund your next payment, you must withdraw your Balance before initiating your next payment. (PayPal will always use money for your transactions if you have a balance with them. It doesn't matter if you want to fund your transaction with your preferred funding source. PayPal says you have to withdraw all of your money from your PayPal account in order for your "preferred funding source" to kick in. HOWEVER, withdrawing your money MAY CAUSE YOUR ACCOUNT TO BECOME LIMITED OR FROZEN. This is a trick PayPal uses to keep your money! There is no reason why you cannot fund a transaction ANY WAY YOU PLEASE, even while having a balance)

3.4 Funding Source Limitations. In order to manage risk, PayPal may limit the Funding Sources available for a transaction. If we limit the Funding Sources, we will alert you that there is a higher-than-normal level of risk associated with the payment. Such a notice does not mean that either party to the transaction is acting in a dishonest or fraudulent manner. It means there may be a higher-than-normal level of risk associated with the transaction. You may choose to continue with the transaction with the understanding that you may have fewer avenues available for dispute resolution should the transaction turn out to be unsatisfactory. (If you are able to use a funding source, that means you must withdraw all the money in your PayPal account -- risking account limitation! If you do not have money in your account, you must use a funding source to pay for your transaction anyway. PayPal is telling you that they will allow you to do that, however your purchase or sale WILL NOT BE PROTECTED or COVERED by PayPal's already limited buyer or seller protection policy).

3.5 Bank Transfers. When Instant Transfer or eCheck is used as your Funding Source, or when you initiate an Add Funds transaction, you are requesting an electronic transfer from your bank account. For these transactions, PayPal will make electronic transfers via ACH from your bank account in the amount you specify. You agree that such requests constitute your authorization to PayPal to make the transfers, and once you have provided your authorization for the transfer, you will not be able cancel the electronic transfer. You give PayPal the right to resubmit any ACH debit you authorized that is returned for insufficient or uncollected funds. (PayPal will try to take money out of your bank account AGAIN should it be returned for insufficient funds. You account will then be limited and your money will be frozen for 180 days)

3.6 Refused Transactions. When you send money, the recipient is not required to accept it. You agree that you will not hold PayPal liable for any damages resulting from a recipient's decision not to accept a payment made through the Service. We will return any unclaimed, refunded or denied payment to your Balance within 30 Days of the date you initiate payment. (PayPal will let your money float in space -- for them to use -- even if your payment is not accepted the day you send it. If you sent somebody a payment, and they chose not to accept it, you DO NOT GET YOUR MONEY BACK immediately. You give PayPal the right to return your money "within 30 days of the date you initiate payment.")

3.7 Merchant Processing Delay. When you send a payment to certain merchants, you are providing an Authorization to the merchant to process your payment and complete the transaction. The payment will be held as pending until the merchant processes your payment. Some merchants may delay processing your payment. In such an instance, your Authorization will remain valid for up to 30 Days. If your payment requires a currency conversion, the amount of the Exchange Rate & Fee (per section 8) will be determined at the time the merchant processes your payment and completes the transaction.

3.8 Recurring Payments. A Recurring Payment is a payment in which you provide an advance Authorization to a merchant to charge your PayPal Account directly on a one-time, regular, or sporadic basis. When you establish a Recurring Payment with a merchant, you are also entering into a Billing Agreement with PayPal. By entering into a Billing Agreement you are authorizing PayPal to allow the Merchant to charge your PayPal Account directly. When you establish a Recurring Payment, you will have the option of selecting a Preferred Funding Source. If you do not select a Preferred Funding Source then the Default Funding Sources will apply. Recurring Payments are sometimes called “subscriptions” or “pre approved payments”. (Should PayPal limit or freeze your funds, then you are in trouble. If you are using PayPal to pay bills automatically, the limitation of your account could cause you credit damage! If you are paying a bill using PayPal that needs to be paid on a certain date, and PayPal limits your account, you will have no access to your money in your account and PayPal will not pay your bill for you)

3.9 Waiver of Notice for Certain Recurring Payments. When a Recurring Payment is made by Instant Transfer or eCheck, you have the right to contact the merchant and insist on 10 Days' advance notice before the payment is made, if the amount of the payment may vary. This is designed to protect you from having insufficient funds in your bank account. By establishing a Recurring Payment, you are agreeing to receive this advance notice only when your total payments to a merchant exceed the limit established between you and the merchant.

3.10 Canceling Recurring Payments. You may cancel a Recurring Payment at any time up to 3 Business Days prior to the date the payment is scheduled to be made. To cancel a Recurring Payment, log in to your Account, access the “My Account” tab, then access the “Profile” tab, then access the “Financial Information” column and click on “Billing Agreements” and follow the instructions to cancel the payment. If your Recurring Payment is not in this column, then access the “History” tab instead of the “Profile” tab and access “Subscriptions” and follow the directions to cancel the payment. Please keep in mind that Recurring Payments are sometimes referred to as subscriptions or pre approved payments. In addition, if you cancel a Recurring Payment you may still be liable to the merchant for the payment and be required to pay the merchant through alternative means. (This feature will be useless should your account become limited or frozen!)

3.11 Sending Money in Multiple Currencies. You may send money in U.S. Dollars, Canadian Dollars, Euros, Pounds Sterling, Yen, Australian Dollars, Czech Koruna, Danish Krone, Hong Kong Dollar, Hungarian Forint, New Zealand Dollar, Norwegian Krone, Polish Zloty, Singapore Dollar, Swedish Krona and Swiss Franc. When you are sending money to a merchant who has requested a currency that is different than your primary currency, you will need to specify whether you want to pay the merchant in the merchant’s requested currency, or in your primary currency (in some cases, the merchant may not give you a choice). If you send money in a currency that is not your primary currency, we follow these practices:

  1. If you have a Balance in the requested currency, we will fund your transaction from your Balance.
  2. If you have a Balance in a different currency, we will perform a currency conversion and use it to fund your transaction.
  3. If you do not have a Balance, we will fund your transaction through your Default Funding Sources.
  4. If you are using your PayPal ATM/Debit Card or PayPal Virtual Debit Card your transaction will be funded with your U.S. dollar Balance, even if you have a Balance in another currency. Any required currency conversion will be performed by Visa, Master Card, or a similar third party and may be subject to a fee by that third party.

The Exchange Rate & Fee in section 8 of this Agreement will apply whenever PayPal performs a currency conversion. (While it costs nothing for PayPal to use different currencies, PayPal charges very high currency conversion rates!)

3.12 PayPal Mobile. PayPal Mobile is a Service that allows you to send and receive payments through your mobile phone. PayPal Mobile is not available in all countries. If you use PayPal Mobile you are responsible for any fees that your phone service provider charges for SMS, data services, etc.

3.13 Debit Card Processing. PayPal will process your debit card funded transactions through either the ATM debit network or the Visa/Master Card network. If you would like to have your transaction processed through the Visa/Master Card network, you may do so each time you make a payment by clicking the "Funding Sources" link on the payment confirmation page.


4.1 Personal Account Receiving Limit. If you have a Personal Account, you may not receive more than $500.00 USD per month in funds when the sender selects as the "category of purchase": (a) eBay item, (b) auction goods, or (c) goods-other. Once you have received $500.00 USD in a month, we will place subsequent payments in pending status, and you will be required to upgrade to a Premier or Business Account to accept the pending payments. (How is sending or receiving money through PayPal easy? This policy forces users to upgrade to an account they may not want. PayPal offers the "option" of picking which account you want, but then later forces your hand into picking what they want you to pick. This leads people into opening both a person and business/premier account. When you experience problems with your account later, PayPal has TWO accounts to limit -- AND MORE OF YOUR MONEY HELD HOSTAGE. Upgrading to a business/premier account may trigger a credit check -- this credit check many then be used as a reason to limit your account)

4.2 Receiving Different Types of Payments. If you have a Personal Account you may receive Balance/Bank Funded Payments for free, and up to 5 Card Funded Payments per 12 month period for a Fee, except that you may not receive Card Funded Payments into a Personal Account for an eBay transaction. If you have a Premier or Business Account, you may receive an unlimited number of Card Funded Payments. Please note that all payments received by a Premier or Business Account will be subject to a Fee in accordance with section 8 of this Agreement. (There you have it: "All payments received by a Premier or Business Account will be subject to a FEE." PayPal puts on these limits and restrictions on a Personal Account because they want you to upgrade you account so they can MAKE MORE MONEY OFF OF YOU)

4.3 Use of PayPal on eBay. Sellers who offer PayPal as a payment method in their eBay listings (either via logos or through text in the item description) must accept Card Funded Payments. Sellers must have a Premier or Business PayPal Account, or be willing to upgrade from a Personal PayPal Account to a Premier or Business Account upon receipt of a Card Funded Payment. Sellers may not communicate to buyers that they only accept Balance/Bank Funded Payments, or will not accept Card Funded Payments. eCheck is the only Funding Source that eBay Sellers are allowed to block. (Sellers who accept PayPal should have the right to accepted whatever source funding they want. By forcing sellers to accept credit card purchases, PayPal leaves sellers open to massive fraud. PayPal will never loose money because it will charge the seller's account for any charge backs)

4.4 Risk of Reversals, Charge backs and Claims. When you receive a payment, you are liable to PayPal for the full amount of the payment plus any Fees if the payment is later invalidated for any reason. This means that you will be responsible for the amount of the payment, plus the applicable Fees listed in section 8 of this Agreement if you lose a Claim or a Charge back, or if there is a Reversal of the payment. You agree to allow PayPal to recover any amounts due to PayPal by debiting your Balance. If there are insufficient funds in your Balance to cover your liability, you agree to reimburse PayPal through other means. If the transaction is eligible under the Seller Protection Policy in section 11, PayPal will cover the amount of the Reversal or Charge back and waive the Charge back Fee, if applicable. (If you are the victim of fraud, you, as the seller pays! If you receive a payment, and something goes wrong with that payment through no fault of your own, PayPal will hold you responsible! PayPal admits here -- indirectly -- that they are NOT just a transferor of money, they are an interested party)

4.5 Charge backs Process. In the event of a Charge back, we will determine whether we should dispute the Charge back with the credit card company. If we dispute the Charge back, we will place a temporary hold on the disputed funds in your Balance until the credit card company makes a decision. The credit card company, not paypal, will determine who wins the Charge back. (PayPal will LIMIT YOUR ENTIRE ACCOUNT, not just the "disputed funds." PayPal will freeze your account and give you no access to any of your money. Should you loose the charge back, PayPal will take the amount of your account. PayPal will NOT ALLOW YOU TO TAKE MONEY OUT OF YOUR ACCOUNT before the charge back is decided)

4.6 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions. (PayPal does not want you to charge buyers extra money to try and offset the fees PayPal charges. PayPal allows you to charge a handling fee in connection with the sale of goods or services, but can use this as a reason to limit or freeze your account if somebody claims you are charging a fee to accept PayPal)

4.7 No Splitting Payments. You may not split payments between a Personal Account and a Premier or Business Account by directing buyers paying with a credit card to send payments to your Premier or Business Account, and buyers paying with their Balance or bank account to send payments to your Personal Account. If you do so, we will charge you the Fees that would have applied to a Business or Premier Account.

4.8 Receiving Money in Multiple Currencies. You do not need to maintain a Balance in a particular currency to accept payments sent in that currency. If you already maintain a Balance in the currency in which you receive a payment, we will credit all payments received in that currency to your Balance. If you receive a payment in a currency for which you do not have a Balance, the payment will remain pending and we will ask you to manually accept or deny the payment unless you have a Premier or Business Account and have already established a preference in your Profile to automatically accept payments in that currency.

4.9 Taxes. It is your responsibility to determine what, if any, taxes apply to the payments you make or receive, and it is your responsibility to collect, report and remit the correct tax to the appropriate tax authority. PayPal is not responsible for determining whether taxes apply to your transaction, or for collecting, reporting or remitting any taxes arising from any transaction.


5.1 Balances. You do not need to maintain a Balance in your Account in order to make payments. If you do hold a Balance, PayPal will hold your funds separate from its corporate funds, will not use your funds for its operating expenses or any other corporate purposes and will not voluntarily make your funds available to its creditors in the event of bankruptcy. While your funds are in our custody, unless you enroll in the Money Market Fund sweep, PayPal may combine your funds with the funds of other Users and place those Pooled Accounts in one or more bank accounts in PayPal's name. Balances in U.S. Dollars that are held in Pooled Accounts may be eligible for FDIC pass-through insurance. (By law, PayPal must NOT mingle your funds with their corporate funds. PayPal includes this here as if it is doing you and I a favor. It is not doing us a favor because it is law. This is the section where PayPal tells you where your money is held. First, PayPal admits your MONEY IS AT RISK AND IS NOT INSURED. First, PayPal says it will not "voluntarily" make your funds available to its creditors in the event of bankruptcy. The key here is "voluntarily." PayPal's creditors -- as well as any court -- could compel PayPal to use YOUR MONEY to pay its debts. PayPal knows this. Second, PayPal keeps all of your money -- and that of other users -- in bank accounts under PayPal's name. PayPal claims -- correctly -- that this money is eligible for FDIC pass-through insurance. However, in the even of bankruptcy, your money held in these accounts ARE NOT NOT INSURED. Third, if you enroll in the PayPal Money Market, your funds ARE NOT INSURED OR PROTECTED AT ALL. If your account gets limited or frozen, and something happens to PayPal, YOU LOOSE YOUR MONEY. Fourth, all user balances are held in bank accounts controlled by PayPal and PayPal receives interest on that money. The more money PayPal can keep by freezing and limited accounts, the more money in interest they will make)

5.2 Assignment of Interest to PayPal. You agree that you will not receive interest or other earnings on the funds that PayPal handles as your agent and places in Pooled Accounts. In consideration for your use of the Service, you irrevocably transfer and assign to PayPal any ownership right that you may have in any interest that may accrue on funds held in Pooled Accounts. This assignment applies only to interest earned on your funds, and nothing in this Agreement grants PayPal any ownership right to the principal of the funds you maintain with PayPal. In addition to or instead of earning interest on Pooled Accounts, PayPal may receive a reduction in fees or expenses charged for banking services by the banks that hold your funds. (You give permission to PayPal to keep any interest it earns on your money! While PayPal claims you still own the principal of any funds in the pooled account under your name, PAYPAL STILL DENIES YOU ACCESS TO YOUR MONEY when your account is limited or frozen! No matter how PayPal spins it, PayPal is making money off your money!)

5.3 Money Market Fund. You will not receive any earnings on the funds that PayPal handles for you unless you enroll in the Money Market Fund. If you enroll in the Money Market Fund, PayPal's subsidiary, PayPal Asset Management Inc., will act as your agent to use any U.S. Dollar Balance in your Account on a daily basis to purchase shares in the Money Market Fund. In addition, all Balance funded payments that you make will be funded by redeeming your shares in the Money Market Fund. For more information on the Money Market Fund, please review the prospectus. (This money is NOT FDIC insured and you could, in fact, loose money investing in this money market)

5.4 Negative Balances and Multiple Currencies. If one of the currency Balances in your Account is negative for any reason, PayPal may offset the negative Balance by using funds you maintain in a different currency Balance, or by deducting amounts you owe PayPal from money you receive into your Account, or money you attempt to withdraw or send from your Account. If you have a negative balance for a period of 21 Days or longer, PayPal will convert your negative Balance to U.S. dollars.

5.5 Risks of Maintaining Balances in Multiple Currencies. You are responsible for all risks associated with maintaining Balances in multiple currencies. You agree that you will not attempt to use multiple currencies for speculative trading. (Sounds innocent enough. However, if you leave a certain currency balance in your account -- say Euros -- then decide to convert to U.S. Dollars and you make a profit, PayPal can limit your account claiming you agreed to not use your account for "speculative trading.")

5.6 Setoff of Balances. If you control more than one Account, then PayPal may debit one of your Accounts to setoff a negative Balance in another Account, or to pay eBay any amounts that are past due for a period of 180 Days. (Here you give PayPal permission to pay your eBay fees without explicit authorization. If you run into problems with PayPal and eBay, and your account gets limited, PayPal will take money out of your account to pay eBay whatever it says you owe).

5.7 Security Interest. To secure your performance of this Agreement, you grant to PayPal a lien on and security interest in your Account. (This small sentence has BIG consequences. You give PayPal permission to use YOUR MONEY as security to ensure you follow the terms of this agreement. If PayPal claims you have violated any part of this user agreement, PayPal can keep your money!)


6.1 How to Withdraw Money. You may withdraw funds by electronically transferring them to your bank account, requesting a physical check through the mail (U.S. Users only), or using your PayPal ATM/Debit Card (eligible Users only). Generally, we will send checks only to Confirmed Addresses, unless you have a Verified Account. We will not send checks to P.O. Boxes. If you would like us to send a check to an address that does not meet these criteria, you must contact Customer Service and provide the documentation that we request to verify your association with the address. If you fail to cash a check within 180 Days of the date of issuance, we will return the funds to your Balance (minus a Fee). (You can withdraw money from your account directly to your bank account, requesting a physical check or using your PayPal ATM/Debit card)

6.2 Withdrawal Limits. Depending on the degree to which you have Verified your Account, we may limit you to withdrawing no more than $500.00 USD per month. You can view your withdrawal limit, if any, by logging into your Account and clicking on the "View Limits" link on the "Account Overview." In addition, we may delay withdrawals of large sums of money while we screen for risk. (You give PayPal permission to tell you how much of your money you can withdraw. You give PayPal permission to "delay" large withdrawals of your money so they can screen it for "risk." They fail to define what "large sums" of money are, this leaves you at extreme risk of getting your account limited or frozen)

6.3 Withdrawing Money in Multiple Currencies. If you have multiple currencies in your Balance, you will be able to choose from those when you withdraw funds, but the withdrawal will take place in your home currency. The Exchange Rate & Fees stated in section 8 of this Agreement will apply if you withdraw your Balance in a currency other than your primary currency.


7.1 How to Close Your Account. You may close your Account at any time by logging in to your Account, clicking on the “Profile” tab, clicking on the “Close Account” link, and then following the instructions. Upon Account closure, we will cancel any pending transactions and you will forfeit any Balances associated with Redemption Codes. You must withdraw your Balance prior to closing your Account. (You already agreed PayPal can limit your account if you attempt to withdraw to large sums of money. In order to close your account, PayPal says you must withdraw all of the money in your account before you can close it. HOWEVER, by doing so, you may trigger PayPal to limit or freeze your account!)

7.2 Limitations on Closing Your Account. You may not close your Account to evade an investigation. If you attempt to close your Account while we are conducting an investigation, we may hold your funds for up to 180 Days to protect PayPal or a third party against the risk of Reversals, Charge backs, Claims, fees, fines, penalties and other liability. You will remain liable for all obligations related to your Account even after the Account is closed. (In section 7.1, PayPal claims you "can close your Account at any time...". However, in the next section, PayPal imposes limitations on your closing YOUR account. You are not able to close your account if your account is on limited status. For many people, getting their account unlimited is an impossible task. Even if their funds become available to them after 180 days, THE ACCOUNT WILL NOT BE ABLE TO BE CLOSED)

7.3 Escheatment of Dormant Accounts. If you do not log in to your Account for two or more years, PayPal may close your Account and send the Balance to your primary address. If PayPal does not close your Account and the Account remains dormant, or if PayPal does close your Account but your primary address is incorrect, PayPal may be required to escheat your Balance to your state of residency. PayPal will determine your residency based on the state listed in your primary address. If your address is unknown or registered as a foreign country, your funds will be escheated to the state of Delaware. Where applicable, PayPal will send you a notice prior to escheating or closing your Account. If you fail to respond to this notice, your Balance will be escheated to the state. If you would like to claim your funds from the state, please contact your state’s Unclaimed Property Administrator. (PayPal includes this section because it is required by law. However, PayPal does not mention if this includes accounts that are limited and not logged into for two or more years. If this does apply to limited accounts, it might be your ONLY way to get your money back and your account closed. If your money is stuck with PayPal for some reason, and you cannot close your account, you will have to wait two or more years until your account is listed as "abandoned." Meanwhile, PayPal gets to make money off of your money!)


(PayPal has a right to make a profit for the service that it offers. If you would like a detailed listing of PayPal's current fees, please view the user agreement for June 2007. You can find a copy of this agreement at the top of this page)


9.1 Restricted Activities. In connection with your use of our website, your Account, or the Services, or in the course of your interactions with PayPal, a User or a third party, you will not:

  • Breach this Agreement, the Card Processing Agreement, the Acceptable Use Policy or any other agreement that you have entered into with PayPal (including a Policy);
  • Violate any law, statute, ordinance, or regulation (for example, those governing financial services, consumer protections, unfair competition, anti-discrimination or false advertising);
  • Infringe PayPal's or any third party's copyright, patent, trademark, trade secret or other intellectual property rights, or rights of publicity or privacy;
  • Act in a manner that is defamatory, trade libelous, unlawfully threatening or unlawfully harassing;
  • Provide false, inaccurate or misleading Information;
  • Send or receive what we reasonably believe to be potentially fraudulent funds;
  • Refuse to cooperate in an investigation or provide confirmation of your identity or any Information you provide to us;
  • Attempt to "double dip" during the course of a dispute by receiving or attempting to receive funds from both PayPal and the seller, bank, or credit card company for the same transaction;
  • Use an anonymizing proxy;
  • Control an Account that is linked to another Account that has engaged in any of these Restricted Activities.
  • Conduct your business or use the Services in a manner that results in or may result in complaints, Disputes, Claims, Reversals, Charge backs, fees, fines, penalties and other liability to PayPal, a User, a third party or you;
  • Have a credit score from a credit reporting agency that indicates a high level of risk associated with your use of the Services;
  • Use your Account or the Services in a manner that PayPal, Visa, Master Card, American Express or Discover reasonably believe to be an abuse of the credit card system or a violation of credit card association rules;
  • Allow your Account to have a negative Balance;
  • Provide yourself a cash advance from your credit card (or help others to do so);
  • Access the Services from a country that is not included on PayPal's permitted countries list.
  • Disclose or distribute another User's Information to a third party, or use the Information for marketing purposes unless you receive the User's express consent to do so;
  • Send unsolicited email to a User or use the Services to collect payments for sending, or assisting in sending, unsolicited email to third parties;
  • Take any action that imposes an unreasonable or disproportionately large load on our infrastructure;
  • Facilitate any viruses, Trojan horses, worms or other computer programming routines that may damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or Information;
  • Use any robot, spider, other automatic device, or manual process to monitor or copy our website without our prior written permission;
  • Use any device, software or routine to bypass our robot exclusion headers, or interfere or attempt to interfere, with our website or the Services;
  • Take any action that may cause us to lose any of the services from our internet service providers, payment processors, or other suppliers;
  • Use the Service to test credit card behaviors. (PayPal does not need to provide you with any evidence that you violated any of these terms! PayPal can accuse you and then limit or freeze your account. You are totally powerless if PayPal levies an accusation against you. By agreeing to this portion of the user agreement, you are giving PayPal more reasons to limit or freeze your account. PayPal will find any reason, no matter how dumb, to keep your money)


10.1 Your Liability. You are responsible for all Reversals, Charge backs, Claims, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by or arising out of your breach of this Agreement, and/or your use of the Services. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (You are giving PayPal permission to YOU RESPOSIBLE FOR THEIR MISTAKES AND DEBTS! You sign away your consumer protection rights here. For example, if you are the victim of fraud, and a buyer initiates a charge back against you, and you loose, then you loose the item you sent that persons plus the amount of money the buyer paid. PayPal will come after you for all the charges! Read section 10.1 carefully!)

10.2 Actions by PayPal. If you engage in any Restricted Activities, we may take various actions to protect PayPal, eBay, a User, a third party, or you from Reversals, Charge backs, Claims, fees, fines, penalties and any other liability. The actions we may take include but are not limited to the following:

  • We may close, suspend, or limit your access to your Account or the Services (such as limiting access to any of your Funding Sources, and your ability to send money, make withdrawals, or remove financial Information);
  • We may contact buyers who have purchased goods or services from you, contact your bank or credit card issuer, and warn other Users, law enforcement, or impacted third parties of your actions;
  • We may update inaccurate Information you provided us;
  • We may refuse to provide our Services to you in the future;
  • We may hold your funds for up to 180 Days if reasonably needed to protect against the risk of liability; and
  • We may take legal action against you.

PayPal, in its sole discretion, reserves the right to terminate this Agreement, access to its website, or access to the Service for any reason and at any time upon notice to you and payment to you of any unrestricted funds held in custody for you. (This is where you allow PayPal to close, suspend, or limit your PayPal account for any reason that they want. PayPal DOES NOT HAVE TO GIVE YOU YOUR MONEY BACK SHOULD THEY CHOOSE. Read the last sentence carefully: "...and payment to you of any unrestricted funds held in custody for you." PayPal defines what funds are restricted -- if PayPal defines any or all of your funds "restricted," they do not have to give you your money back...EVEN IF THEY CLOSE YOUR ACCOUNT!

10.3 Account Closure, Termination of Service, or Limited Account Access. If we close your Account or terminate your use of our Services for any reason, we will provide you with notice of our actions. If we limit access to your Account, we will provide you with notice of our actions and the opportunity to request restoration of access if appropriate. (PayPal will give YOU NOTICE of account limitation and the opportunity to restore access to your money, BUT PAYPAL DOES NOT GUARANTEE IT WILL EVEN IF YOU FULFILL ALL OF PAYPAL'S REQUIREMENTS FOR DOING SO!)

10.4 Reserves for Premier and Business Accounts. When managing risk for Premier and Business Accounts, we may take various steps, such as establishing a Reserve, changing the speed or method of payment for withdrawals, and/or requiring you to deposit funds with us as security for your obligations to us or third parties. The following types of events may cause us to establish a Reserve:

You cease a substantial portion of or your business or adversely alter your business/operations;

  1. There is a material adverse change in your business;
  2. Your business becomes insolvent;
  3. We receive a disproportionate number of customer complaints, Reversals, Charge backs, Claims, fees, fines, penalties or other liability related to your Account; or
  4. We reasonably believe that you will not be able to perform your obligations under this Agreement, the Card Processing Agreement, or any other agreement you have entered into with PayPal.

We may immediately establish a Reserve if we reasonably believe that it is warranted under this section. If we establish a Reserve, we will provide you with notice specifying the terms of the Reserve. You may close your Account if you object to the Reserve. We may increase or decrease the amount of the Reserve, provided that in our reasonable judgment the amount of the Reserve is related to the risk for which it was created. If your Premier or Business Account is closed for any reason, we have the right to hold the Reserve for up to 180 Days. The Reserve will not be enrolled in the Money Market Fund even if the remainder of your Balance is enrolled in the Money Marked Fund, so you will not receive dividends or other earnings on Reserve funds.

PayPal Documentation. You must comply with the implementation and use requirements contained in all PayPal documentation accompanying the Services.. If you do not comply with PayPal’s implementation and use requirements you will be liable for all resulting damages suffered by you, PayPal and third parties. (PayPal in no way defines how they come to the conclusion that this portion of the agreement must come into force. Normally, it is PayPal's actions that cause this in the first place. Usually when PayPal suddenly limits or freezes an account, this causes a chain reaction of buyer and seller complaints that dooms your account)

10.5 Acceptable Use Policy Violation - User Fines. If you violate the Acceptable Use Policy as set forth below in clauses (a), (b), or (c) below, then we may fine you $500.00 USD for each such violation and may take legal action against you to recover additional losses we incur. You acknowledge and agree that $500.00 USD is presently a reasonable minimum estimate of PayPal’s damages, considering all currently existing circumstances, including the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated and the anticipation that proof of actual damages may be impractical or extremely difficult. PayPal may deduct such fines directly from any existing Balance in the offending Account, or any other PayPal Account you control. The specific activities that may subject you to fines by PayPal are:

  1. Using the Service to receive payments for any sexually oriented or obscene materials or services in violation of the Mature Audiences section of the Acceptable Use Policy;
  2. Using the Service to receive payments for any narcotics, other controlled substances, steroids or prescription drugs in violation of the Prescription Drugs and Devices of the Illegal Drugs and Drug Paraphernalia section of the Acceptable Use Policy; or
  3. Using the Service to receive payments for wagers, gambling debts or gambling winnings, regardless of the location or type of gambling activity. (PayPal defines what is acceptable and what is not...even if what you are selling, buying or linking to from your website is legal. If PayPal accuses you of anything, they can take $500 out of your account or bank account or credit card. Even if you are innocent, PayPal will require you sign an online affidavit admitting your guilt before they will review your limited account status!)

10.6 Attorneys' Fees for Acceptable Use Policy Litigation/Arbitration. If either you or PayPal commence litigation or arbitration in connection with a fine or other action taken related to our Acceptable Use Policy, the prevailing party will be entitled to recover reasonable attorneys’ fees and costs in addition to any other relief to which it may be entitled. (If you challenge PayPal and loose, you will have to pay all of their fees associated with any actions that you bring. I am sure PayPal's lawyers are NOT CHEAP!)

Seller Protection Policy: (This is the SAME seller protection policy PayPal publicly admitted it had "limited ability" to comply with)

11.2 Coverage. The Seller Protection Policy is limited to the following payout amounts per year for combined eligible Charge backs and Reversals:

  • $5,000.00 USD
  • $6,500.00 CAD
  • €4,000.00 EUR
  • £3,250.00 GBP
  • ¥550,000 JPY
  • $7,000.00 AUD
  • 6,500.00 CHF
  • 3,300.00 NOK
  • 40,000.00 SEK
  • 31,000.00 DKK
  • 16,000.00 PLN
  • 1,080,000 HUF
  • 120,000.00 CZK
  • $8,100.00 SGD
  • $38,000.00 HKD
  • $7,700.00 NZD

(There it is right there: Not only has PayPal admitted it has limited ability to comply with its own seller protection policy, you give PayPal permission to limit how much coverage you have per year! If you are a business, or a high volume seller, one potentially large charge back could leave you without seller protection for the rest of the year! Plus, the amounts PayPal gives here is good IF YOU QUALIFY for the seller protection policy!)

Please note that the combined annual total may not exceed the limit for any one currency.

A Charge back is covered if it was due to non-receipt of merchandise, or an unauthorized payment. A Reversal is covered if it was due to an unauthorized payment. The Seller Protection Policy does not cover Claims for Significantly Not as Described or for non-receipt of merchandise, or sales of intangible goods, services, or licenses for digital content. (You are not covered if you sent an item to a scammer, and he or she claims the item is not as described and initiates a chargeback! This is one of the biggest scams that PayPal helps perpetuate. Either way, in most cases, as PayPal already wrote in the user agreement, YOU ARE RESPONSIBLE for any fees and chargebacks. PayPal will not take the loss. You will!)

11.3 Qualification Requirements. In order to qualify for coverage under the Seller Protection Policy, you must meet the following requirements: (PayPal makes it very difficult in the first place to even qualify for seller protection! Even if you manage to qualify for protection on one item, it does not mean you will qualify for it with the next transaction!)

  1. You must have a Verified Business or Verified Premier Account at the time of the transaction,
  2. The transaction must be between a US, UK or Canadian buyer and a US, UK or Canadian seller, (You automatically have NO SELLER PROTECTION if you complete a transaction with somebody from France, Germany, Italy or another country that is NOT the U.S., U.K., or Canada! PayPal claims their service is a "business solution," but limits your protection options to only three countries, while PayPal leads the average user to believe that protection applies to any country PayPal has on its "approved list" of where you can send and receive money)
  3. The payment must be listed as "Seller Protection Policy Eligible" on the “Transaction Details” page, (It is virtually impossible to know if it is "eligible." There are NO eligibility requirements listed on the site. If you are a high volume seller, you must check this page each and every time. PayPal makes this difficult so that YOU WILL NOT CHECK and hence not be covered!)
  4. You must accept a single payment from one PayPal Account for the purchase,
  5. You must not charge a surcharge for accepting PayPal, (PayPal can deny your claim for seller protection right here by claiming your "handling" fees were to high and that constitutes a "surcharge" for accepting PayPal)
  6. You must ship the purchased item to the address listed on the “Transaction Details” page, and that address must be identified as a Confirmed Address, (YOU have no idea what the confirmed address of a buyer is. Plus even if you manage to ship it to the "confirmed address," a scammer can forward the package to another address! When you provide PayPal with a tracking number, the tracking number will show your package was delivered to a non-confirmed address. That means you loose. Lastly, the confirmed address must also be the same address used for the buyer's credit card! A buyer can still have a "confirmed address," but that confirmed address could be different from the address that the buyer has his or her credit card statements sent to)
  7. You must ship the item to the buyer within 7 Days of receiving payment, (Ship it on the 8th day, and you will loose. If the 7th day happens to be a Sunday when you cannot ship, you still loose!)
  8. You must have trackable online proof of delivery from an approved shipper to the address on the “Transaction Details” page. For transactions involving $250.00 USD or more, you must provide a proof of receipt that was signed or otherwise acknowledged by the buyer and can be viewed online, (If you paid in a currency other than US dollars, the following amounts apply for this section: $325.00 CAD, €200.00 EUR, £150.00 GBP, ¥28000.00 JPY, $350.00 AUD, 330.00 CHF, 1,600.00 NOK, 2,000.00 SEK, 1,500.00 DKK, 800.00 PLN, 55000.00 HUF, 6,000.00 CZK, $400.00 SGD, $2,000.00 HKD, $380.00 NZD), and (If you do everything right up to this point, BUT you use a shipper not approved by PayPal, you loose. Second, for any items shipped valued at $250 or more, you must provide proof to PayPal that the buyer signed for the item personally! Not only is this service an extra cost that most sellers don't even know about, the package must be send "restricted" delivery. If your buyer is not home and it takes a few days extra for the shipper to get the signature, you LOOSE. Why? You failed to deliver the item within 7 days of receiving payment! Scammers know this. A UPS or FEDEX driver release saying the package was delivered to the right address will not suffice. There are many ways in this portion of the protection policy where you could go wrong and end up not covered by the policy! Finally, the tracking verification number must be viewable online.)
  9. You must respond to PayPal’s requests for information within the time period PayPal specifies. (PayPal might tell you that you reply to requests for information within 7 days or within two days. If you fail to reply within that time frame, you automatically loose your appeal or application for coverage under the seller protection policy!)

(All of these requirements MUST BE MET on each and every transaction a seller makes in order to be qualified for the seller protection policy. PayPal makes it intentionally difficult to meet these requirements. Additionally, even if you manage to "qualify" for the seller protection, it is NO GUARANTEE YOU WILL RECEIVE ANY MONEY SHOULD YOU BE SCAMMED or otherwise separated from both your item and your money!)

Please note that in order to qualify for our Seller Protection Policy you must ship the item as required in this section. If you hand deliver an item, or provide delivery in any manner other than required in this section, your transaction will not qualify for the Seller Protection Policy. (Yet another requirement to fulfil in order to qualify. Forget about saving some money and helping out customers that might live in your city!)

11.4 Process. If there is a Chargeback or Reversal, and the seller’s account is a Verified Business or Premier Account, we will place a temporary hold on the transaction amount, and evaluate the transaction to determine whether it is eligible for our Seller Protection Policy. If the seller’s Account is not Verified, or is a Personal Account, then the amount of the payment will be automatically debited by PayPal, and PayPal will transfer the funds back to the buyer’s Account, as appropriate. If we determine that the transaction qualifies for Seller Protection, we will lift the temporary hold and restore your access to the funds. Please note that eligibility under the Seller Protection Policy is not a requirement to win a Claim filed by a buyer under section 13. (You are giving PayPal permission to limit or freeze your account. That is what happens often. It is rare when PayPal will actually freeze DISPUTED FUNDS, they often freeze ALL of the funds in your account in order to protect PayPal from any losses...not you! If you are the victim of a chargeback, and are NOT verified or you are not a business or premier account, PayPal automatically gives the buyer his or her money back! And that is BEFORE the buyer sends you your item back. You have to hope that the buyer is honest and will send you your item back AFTER the buyer gets his or her money back too! A great environment for scammers to prosper in!)


12.1 Identifying Errors and/or Unauthorized Transactions. You can inspect your transaction history at any time by logging in to your Account on the PayPal website and clicking the "History" tab. It is very important that you immediately notify PayPal if you have reason to believe any of the following activities have occurred: (i) there has been an unauthorized transaction from your Account; (ii) there has been an unauthorized access to your Account; (iii) your password or PayPal Mobile PIN has been compromised; (iv) your PayPal ATM/Debit Card or PayPal Mobile-activated phone has been lost, stolen, or deactivated, or (v) someone has transferred or may transfer money using your Account without your permission (collectively called “Improper Account Access”). (Enforcing your rights under this section practically guarantees PayPal will freeze your account. You will be treated like the criminal with PayPal scrambling to limit their losses while showing little concern for you)

12.2 Notifying PayPal of Errors and/or Unauthorized Transactions. To notify us if you believe there has been or will be an error or unauthorized transaction on your Account, telephone PayPal Customer Service at (402) 935-7733, contact us using this report form, or write to PayPal, Attn: Error Resolution Department, P.O. Box 45950, Omaha, NE 68145-0950. If you initially provide information to us via the telephone, we may require that you send your complaint or question in writing within 10 Business Days after the phone contact. Please complete the affidavit form and submit it online or mail it to PayPal, Attn: Error Resolution Department, P.O. Box 45950, Omaha, NE 68145-0950. (If you think your account might have been hacked into, or somebody stole your information, PayPal "may require" you mail your complaint to them within 10 business days. Meanwhile, your money is gone and PayPal is playing games)

12.3 Review of Reports of Errors and/or Unauthorized Transactions. We will advise you of the results of our investigation within 10 Business Days after we receive your notice (or 20 Business Days for transactions done at a point of sale terminal or outside the United States). If we have made an error, we will correct it promptly. If we need more time, however, we may take up to 45 Days to investigate your complaint or question (and 90 Days for transactions made at a point of sale terminal or outside the United States). If we decide that we need more time, we will provisionally re-credit your Account for the amount you think is in error within 10 Business Days after we receive your notice; so that you will have use of the money during the time it takes us to complete our investigation. If you initially provided information to us via the telephone and we do not receive your complaint or question in writing within 10 Business Days after your oral notice, we are not required to provisionally re-credit your Account. (PayPal make take up to 45 days to investigate your complaint! PayPal claims they will re credit your account for the disputed amount, but if you loose, PayPal takes the money back. At this point, your account could very well be limited or frozen. So any actions that PayPal takes could come too little too late.)

At the end of our investigation, we will advise you of the results within 3 Business Days. If we determine that there was no error, we will send you a written explanation and we may debit any provisional credit that we previously credited to you in relation to the alleged error. You may ask for copies of the documents that we used in our investigation. (After the 45 days PayPal could need to investigate, PayPal has another three days after that to let you know what is happening. 48 days! PayPal claims they will provide you with the documents that they used for their investigation, but you already agreed that PayPal can charge you $10 per page!)

12.4 Liability for Unauthorized Transactions. If you report and we verify that there has been an Improper Account Access related to your Account, we will reimburse you in full for all unauthorized transactions sent from your Account that occur within 60 Days of the time that you knew or should have known about the Improper Account Access. If you do not report the Improper Account Access to PayPal within 60 Days of the time that you knew or should have known about it, we will still reimburse you in full for all unauthorized transactions that took place within or before that 60-Day period, but you may be liable for all unauthorized transactions resulting from the Improper Account Access that occur on Day 61 and beyond (if we can demonstrate that we could have avoided any losses if you had notified us in a timely manner). (If you have been victimized, and PayPal finds in your favor, after 48 days, PayPal will then take up to 60 days to reimburse your account! That is 108 days for PayPal to reimburse you for a mistake that they made or for an unauthorized transaction made on your account)

12.5 Errors. If we discover a processing error, we will rectify the error. If the error resulted in your receiving less money than you were entitled to, PayPal will credit your Account for the difference. If the error results in you receiving more money than you were entitled to, PayPal may debit the extra funds from your PayPal Account. If the error resulted in our not completing a transaction on time or in the correct amount, we will be liable for your losses or damages directly and proximately caused by this failure, unless: (Here it comes...)

  1. through no fault of ours, you did not have enough available funds to complete the transaction, (If that was the case, why would PayPal's system even attempt to let you complete such a transaction?)
  2. our system was not working properly and you knew about the breakdown when you started the transaction, (Again, why would PayPal let you conduct a transaction when PayPal knows their "system is not working properly?" or
  3. circumstances beyond our control (such as fire or flood or loss of Internet connection) prevented the transaction, despite our reasonable precautions. (While "acts of God" is a defense, PayPal must make minimal protections against such incidents such as fires and floods!)


13.1 Buyer Protection Programs. If you buy an item using PayPal and either do not receive the item or receive an item that you believe is Significantly Not as Described by the seller, we encourage you to open a Dispute with the seller in our Resolution Center. By doing so, you will initiate our Online Dispute Resolution Process—a step-by-step system designed to facilitate communication between you and the seller in order to get resolution of the issue. If your dialogue with the seller fails to produce a satisfactory result, you can then escalate the Dispute into a Claim that we will evaluate for reimbursement under one of the following programs: (When a buyer -- or a scammer -- utilizes these options, it will eventually lead to the limitation or freezing of somebody's account)

  • PayPal Buyer Complaint Policy - Our best efforts program to reimburse Users for losses only to the extent we are able to recover the funds from sellers.(There it is. PayPal will not cover buyer losses if they are unable to get the money back from the seller. If a buyer has been scammed by a seller that PayPal itself has verified, PayPal will not cover your losses)
  • PayPal Buyer Protection Policy - Our program to reimburse Users for losses for up to (i) $2,000.00 USD (Top Tier Coverage Amount) for eligible items purchased on eBay and (ii) up to $200.00 USD (Basic Tier Coverage Amount) for all other eligible items purchased on eBay and for eligible items purchased outside of eBay that PayPal processed through the ATM debit network. Please see section 13.9 to determine whether Top Tier Coverage Amount or Basic Tier Coverage Amount applies to your eBay purchase. (Again, this is meaningless. PayPal has already said that whatever protection you do have is only based on PayPal's ability to get the money back from the seller!)
  • Buyer Protection for eBay Express - Our program to reimburse Users for the full amount of losses for items purchased on eBay Express.
  • Extended Buyer Protection with PayPal Credit - Our program to reimburse Users for the full amount of losses for items purchased using the PayPal Credit Card or PayPal Buyer Credit. (Federal consumer laws come into play here. PayPal must cover all losses in THIS CASE because a credit card was being used -- in this case a credit card issued by PayPal)

These programs only cover payments for tangible, physical goods. All other payments, such as payments for intangibles, services, airline flight tickets, or licenses and other access to digital content are not covered by any Buyer Protection Program that we offer (but may be covered by Chargeback rights). (PayPal limits protection to "physical goods." If you bought a website domain name, web design work, an ebook, etc. you are not covered. HOWEVER, if paid using a credit card, then you are covered with your credit card. However, as you will see later, if you use your legal consumer rights and do a chargeback, you risk your account getting limited, frozen or suspended!)

13.3 Filing Deadlines. We will not grant any Claim unless you first initiate a Dispute in our Resolution Center within 45 Days of the date of the relevant payment and then escalate the Dispute into a Claim within 20 Days of the date you file your Dispute. It is your responsibility to keep track of the deadlines under this section. (PayPal is going to make this a long, difficult process. You have to go through the entire dispute process. This could be difficult and drawn out if you are dealing with a scam seller. After that point, you must escalate to a claim. If you fail to meet the deadlines that PayPal imposes, you loose automatically)

13.4 Online Dispute Process. Once you file a Dispute as a buyer, PayPal will notify the seller of the Dispute, and while the Dispute is open, you and the seller are able to access the details of the Dispute via the Resolution Center and post messages to each other in connection with the Dispute. Any message you post is viewable by PayPal and the other party to the Dispute. If the Dispute is escalated to a Claim, PayPal may review and use the content of all posted messages during evaluation of the Claim. If you subsequently file a Chargeback, PayPal may use the content of any messages to dispute the Chargeback. You may not post any message that is offensive, discourteous, false, misleading, profane, abusive, threatening or otherwise inappropriate. (You give PayPal permission to use your own words against you if you decide to file a chargeback that PayPal says it will dispute! A buyer claims he or she has been wronged. Buyer the files a chargeback and PayPal says it will dispute that chargeback! Where is the buyer protection that PayPal is talking about?)

13.5 Closing Online Disputes. You or we will close all Disputes in one of the following ways:

  1. Closing the Dispute as "resolved." The buyer can close the Dispute as "resolved" from the time it is filed until 20 Days after it is filed. Once a buyer closes a Dispute as "resolved," we will not allow it to be reopened or escalated to a Claim.
  2. Escalating the Dispute into a Claim. Either party may close the Dispute by escalating the Dispute into a Claim within 20 Days of the date the Dispute is filed.
  3. Issuing a full refund. The seller may choose to close the Dispute by issuing a full refund to the buyer. If we process a full refund in this way, we will close the Dispute and not allow escalation to a Claim. If the seller does not have a sufficient Balance to close the Dispute but tries to close the Dispute by issuing a full refund, we will automatically escalate the Dispute into a Claim.
  4. Reaching other settlement. If the seller and buyer agree to a settlement other than a full refund, both parties agree to reflect the agreed settlement in the messages posted in the Resolution Center (so that we avoid resolving the Claim in a contrary manner).
  5. Dispute auto-closure after 20 Days. We will automatically close Disputes 20 Days after initiation if the buyer has not escalated it to a Claim within that time period. Once we close a Dispute in this way, we will not allow the buyer to re-open the Dispute or file a Claim relating to the transaction. In certain circumstances, we may escalate a Dispute into a Claim (for example, where a number of other buyers have opened Disputes against a seller who has failed to respond to the notices of Dispute).

(PayPal likes and includes all of these options because non of them involves PayPal taking any financial losses. The worst case scenario for PayPal is that they must reverse any transaction fees they have made from the initial transaction)

13.6 Escalating Disputes into Claims. If you are unable to reach a resolution with the seller within 20 Days of filing the Dispute or if you have reached a resolution with the seller but it has not been fully executed (for example: you have not received the refund or you have not received an exchange item that the seller agreed to send you), you should escalate the Dispute into a Claim in order to maintain your rights under the Buyer Protection Programs. You cannot file a Claim for reimbursement without first filing a Dispute in the Resolution Center. (Again, PayPal cannot offer any buyer protection other than what they say is their ability to get the funds back from the seller. By this time, the seller could have drained his or her PayPal account)

13.7 Claims Procedures. If you escalate a Dispute into a Claim, we will gather information from you and the seller and determine eligibility for reimbursement under the Buyer Protection Programs. Here are some important things to remember about the Claim process: (Translation: PayPal is going to find a way to see HOW YOU ARE NOT qualified for any protection)

  1. If a buyer files a Claim asserting receipt of a Significantly Not as Described item, we will generally require the buyer to return the item to the seller at the buyer's expense and to provide proof of return delivery. If the item is over $250.00 USD or equivalent, online signature confirmation must also accompany the proof of delivery. In some circumstances, we may require the buyer to send the item to us or to a third party specified by us, to obtain documentation from a qualified third party substantiating the Claim, or to provide evidence that the item has been destroyed. In some instances, we may ask a buyer to support a Claim by filing and supplying a copy of a police report.
  2. If a buyer initiates a Dispute/Claim and the amount in Dispute is greater than $100, PayPal will place the disputed amount (to the extent it remains in the seller's Account) on hold until the Dispute/Claim is resolved, and the seller will not be able to withdraw this amount while the Dispute/ Claim remains unresolved.
  3. You may only file one Dispute/Claim per payment. You are not permitted to file a Dispute/Claim based on an "item not received" and then convert the same Dispute/Claim so that it is based on a Significantly Not as Described claim (or vice versa) if circumstances change following the filing of your initial Dispute/Claim.
  4. Other than adding information you may not edit or change a Claim after filing it.
  5. We may ask a buyer to identify the minimum refund that would be acceptable to settle the Claim. If you specify a refund amount that is less than the amount of the original transaction, and the seller agrees to refund the amount you specified, PayPal will consider the Claim to be successfully resolved.
  6. After we close a Claim in favor of a buyer, a seller may appeal our decision on the Claim; however, PayPal generally will only grant the appeal if the seller is able to prove that the buyer sent the item back to the seller in a condition significantly different than when the Claim was filed (other than normal wear from shipping). PayPal does not guarantee recovery of money from a buyer for a seller if a seller wins an appeal.

(If you read each one of these requirements, you will see all the hoops PayPal makes its customers go through just to try and get some protection. For example in item 1, there is NO WAY to verify what was received, A dishonest buyer could send anything and claim anything. The honest seller in this case looses his or her item plus the cost of the item. There are so many impossible mandates to comply with, an honest buyer or seller would be the looser of the process every time. A dishonest buyer or seller could manipulate this process very easily. Again, no matter the outcome, PayPal is only concerned with one priority: that PayPal does not incur any losses!)

13.8 Claims Eligibility. In addition to the other limitations called out within this Agreement, the following limitations apply to Claims: (If you manage, up to this point, to qualify for any kind of buyer protection, PayPal puts up further obstacles that you must meet to get coverage. Many of these are subject to PayPal's interpretations and yours! For example, you purchase a piece of art work. A painting that contains nudes. While it is classified as art, and is legal in every civilized nation in the world, PayPal may classify it as "adult" content and you are not covered by buyer protection! Ditto for seller protection!)

  1. The PayPal Buyer Complaint Policy only applies to items purchased outside of eBay or eBay Express, the PayPal Buyer Protection Policy only applies to items purchased on eBay or processed through the ATM debit network and Buyer Protection for eBay Express only applies to items purchased on eBay Express. The Extended Buyer Protection with PayPal Credit applies to items purchased using PayPal Buyer Credit or PayPal Credit Card through PayPal. Extended Buyer Protection with PayPal Credit does not apply to items purchased with PayPal Credit Card not through PayPal. For example: Extended Buyer Protection with PayPal Credit does not apply when you use your PayPal Credit Card to make a purchase offline. The PayPal Buyer Protection Policy and the Extended Buyer Protection with PayPal Credit do not apply to payments made through PayPal Mobile.
  2. Only registered PayPal members in good standing are eligible for reimbursement. If you purchase an item on eBay Express and you are not a registered PayPal User, you will have to sign up for a PayPal Account in order to seek reimbursement via the process outlined here.
  3. Claims must be for payments for tangible, physical goods that can be shipped, and not all other payments, such as payments for intangibles, for services or for licenses and other access to digital content. For purposes of eBay items, motor vehicles and Live Auctions are not covered.
  4. Items prohibited in the PayPal Acceptable Use Policy are ineligible for coverage.
  5. For purposes of eBay items, the buyer must have sent a single PayPal payment for the full price of the item to the PayPal Account specified by the seller in the listing, and must have either used the "Pay Now" button or associated the payment with the eBay listing by entering the item number into the PayPal payment instructions. If the buyer sent payment to a different PayPal Account or by a different method, even at the seller's request, the transaction will not be covered.
  6. For purposes of eBay Express items, the buyer must have completed the transaction by paying on the eBay Express website using either a PayPal Account or a credit card.
  7. Buyers may only receive one reimbursement per eBay or eBay Express listing.
  8. For multiple-items paid with a single PayPal payment, each qualified item is eligible for up to the maximum payout in coverage, but buyers may file only one Claim per PayPal payment. If you purchased multiple qualified items with a single payment, you must identify all the items on which you are seeking reimbursement in a single Claim.
  9. Extended Buyer Protection with PayPal Credit applies to items purchased on eBay that are either not delivered or Significantly Not as Described and to items purchased outside of eBay that are not delivered.

(A buyer and seller must make sure every single one of these requirements are met in order to qualify for protection. And not just once, but for EVERY TRANSACTION. PayPal knows this is impossible and will make you feel like you are at fault for not following their impossible demands)

13.9 eBay Items Eligible for PayPal Buyer Protection. Every item on eBay (except Live Auctions and vehicles) that meets the above requirements is eligible for PayPal Buyer Protection up to $200.00 USD (Basic Tier Coverage Amount), but items are only eligible for PayPal Buyer Protection up to $2,000.00 USD (Top Tier Coverage Amount) and should be identified as eligible items in the eBay listing if:

  1. seller's eBay feedback rating is at least 50;
  2. At least 98% of the seller's eBay feedback is positive;
  3. The seller has a Verified Premier or Verified Business Account in good standing;
  4. The listing was on an eligible eBay site ( and certain other eBay sites self identified as such)
  5. PayPal is listed as an acceptable payment method; and
  6. The seller is a PayPal User from one of the following countries:
- Argentina - Italy
- Austria - Jamaica
- Australia - Japan
- Belgium - Korea
- Brazil - Mexico
- Canada - Netherlands
- Chile - New Zealand
- China - Norway
- Czech Republic - Poland
- Denmark - Portugal
- Ecuador - Singapore
- Finland - Sweden
- France - Spain
- Germany - Switzerland
- Greece - Taiwan
- Hong Kong - Thailand
- Hungary - United Kingdom
- India - United States
- Ireland - Uruguay

(However, the seller protection policy only covers transactions between the United States, Canada and the United Kingdom! PayPal adds yet more hurdles between you and your coverage. The bottom line is, it is not as simple as you've been scammed and you want justice. Even if you are clearly correct and are entitled to your money back, PayPal WILL FIND A WAY TO DENY YOU)

13.10 Protection for Purchases on non-U.S. eBay websites.

Sections 13.10.a and 13.10.b herein are effective for purchases made on or after June 6, 2007. For purchases made prior to June 6, 2007, section 13.10.c. herein shall apply. (PayPal depends on the fact that most of their users will not come to close to even understanding what any of this means. That means PayPal has the power. They can interpret any of this stuff in their favor and not in yours)

This chart shows the maximum amount of protection that you will receive based on the website from which you made your purchase. We will reimburse you in the currency of the original PayPal payment, up to the maximum payout listed in the table below: (Now it gets more complicated. Depending on which website you made your purchase from, you are entitled to differing claim amounts!)

Country Eligible eBay Website Basic Tier Top Tier
The United States $200 USD $2000 USD
Australia $400 AUD $3000 AUD
Austria 500 EUR Not applicable
Belgium or 200 EUR 1000 EUR
Canada or 315 CAD 2000 CAD
France 200 EUR 1000 EUR
Germany 500 EUR Not applicable
Ireland 200 EUR 1000 EUR
Italy 200 EUR 1000 EUR
Netherlands 200 EUR 1000 EUR
Spain 200 EUR 1000 EUR
Switzerland 500 EUR Not applicable
The United Kingdom 150 GPB 500 GPB


(Basic Tier Coverage and Top Tier Coverage all have their own special requirements that must be met before you can be considered qualified for any type of buyer protection. PayPal is purposely making this process complicated and arcane to make sure AS FEW PEOPLE qualify as possible)

eBay Standard Purchase Protection Program (This is a "bare bones" protection policy for certain purchases made from these websites)

If you make a purchase from one of the eBay websites listed below, you may be eligible for the eBay Standard Purchase Protection Program (“eBay SPPP”) instead of the PayPal Buyer Protection Policy. The eligibility requirements for eBay SPPP are the same eligibility requirements for PayPal Buyer Complaint Policy as listed above. eBay Standard Purchase Protection Program is our program to reimburse buyers for losses up to the applicable coverage amount minus the processing cost for purchases made on the eBay SPPP websites.

The final price of the item purchased must be over the applicable processing cost. Multiple listings cannot be combined into one Claim to become eligible, even if purchased from the same seller. Except that items purchased through multiple item auction are eligible, provided the combined value of all items purchased through a single listing is over the applicable processing cost. Buyers may submit up to three eBay Standard Purchase Protection Program claims per six-month period.

Country eBay SPPP Website Coverage Amount Processing Cost
Hong Kong 1500 HKD 200 HKD
New Zealand 300 NZD 40 NZD
Poland 650 PLN 80 PLN
Singapore 320 SGD 40 SGD
Sweden 1600 SEK 200 SEK

(In other words, these people are really screwed)

  • Buyer Protection Policy Benefits -- This Section 13.10.c is effective for purchases made prior to June 6, 2007 . For purchases made on or after June 3, 2007 sections 13.10.a and 13.10.b shall apply. (This is being phased out. Only purchases made BEFORE June 6, 2007 apply. After that, there are no real "Buyer Protection Benefits.")

    If we grant a Claim under the PayPal Buyer Protection Policy, we will reimburse you in the currency of the original PayPal payment, up to the maximum payout listed in the table below:

    Currency of original payment:

    • $2,000.00 USD
    • $2,000.00 CAD
    • €500.00 EUR
    • £500.00 GBP
    • ¥112,000 JPY
    • $1,500.00 AUD
    • ¥2,000.00 CNY
    • $1,500.00 NZD
    • $1,500.00 SGD
    • $8,000.00 HKD
    • 1,500.00 CHF
    • 6,750.00 NOK
    • 8,000.00 SEK
    • 6,250.00 DKK
    • 3,250.00 PLN
    • 215,000 HUF
    • 25,000.00 CZK

13.11 Significantly Not As Described. To the extent that we provide reimbursement for losses for items that are Significantly Not as Described when received by the buyer (which we may do under all programs except the Buyer Complaint Policy), an item is Significantly Not as Described if the seller clearly misrepresented the details of the item in a way that affects its value or usability. This does not include cases where the buyer is merely disappointed with the item or where the item did not meet the buyer’s expectations. Here are some of the reasons that an item may be considered Significantly Not as Described: (For dishonest buyers and sellers, this is a paradise. PayPal hands it to them on a silver platter)

  • The item is a completely different item than that represented by the seller in the listing, e.g. an audio book instead of a printed book, a desktop computer instead of a laptop, a picture of an item instead of the actual item; or an empty box.
  • The condition of the item is significantly different. For example, if the item has clearly been used multiple times rather than ”almost new” or ”still in box” or is obviously repackaged rather than ”mint.”
  • The item is unusable and was not disclosed as such. For example, if there are missing major parts or components, will not function or turn on or is spoiled or past a relevant date. This applies to the item in its received state, no matter what the condition when it was shipped.
  • The item was advertised as authentic but is not authentic. For example, a fake or knock-off item that was advertised as authentic or a completely different or inferior brand of a similar product.
  • The item is missing a major portion or quantity. For example, if the buyer ordered four dozen golf balls but only received one dozen or four golf balls, or the item is missing a primary component, like a blender missing a top or a coffee maker missing the bottom plate.

(PayPal has no way of determining if any of these requirements have been met. PayPal claims that in some cases, it will require the buyer to send the item to a third party for evaluation. Who pays for this? The buyer has 100% control over what he or she sends or does not send for evaluation. A dishonest party wins every time under this policy. However, PayPal often does not even require the item be sent to a third party for evaluation)

An item is not Significantly Not as Described if:

  1. The defect in the item was correctly described by the seller. For example, if the item description states one of the following: "Item may not work properly," "Item is missing some parts," or "See picture for scratches or damages."
  2. The item was properly described but you didn’t want it after you saw it in person.
  3. The description could have been reasonably misinterpreted. For example, if the item is a slightly different color than advertised (e.g. the item is aquamarine but was advertised as teal).
  4. The item was properly described but did not meet your expectations.
  5. The item has minor scratches and was listed as “used condition.”

(Again, PayPal has no way of determining if the item has been misrepresented or not! This is included here as "fluff." It means nothing and it cannot be checked by PayPal so that PayPal can make a well informed, correct decision on the claim)

Please note that these are representative examples. There may be other circumstances where the characteristics of the item or the situation are not exactly covered in the item description but do not render the item Significantly Not as Described. PayPal encourages all buyers and sellers to communicate with each other before and after the transaction to prevent these issues from occurring. We may make a decision as to whether an item is Significantly Not as Described if the buyer and seller cannot agree. For items that we believe do not qualify as Significantly Not as Described, we still encourage the buyer and seller to find an equitable solution. (Despite the fact that PayPal cannot make a decision because they have never seen the item or know nothing about the actual dispute, PayPal will make the final decision as to whether or not the item is "significantly not as described." How do you think that decision is made? In whatever way limits or eliminates any losses that PayPal might incur. The customer -- you -- is not considered. PayPal makes a decision and then lets you complain about it)

13.12 Buyer Complaint Policy Benefits. If we grant a Claim under our Buyer Complaint Policy, PayPal will seek to collect from the seller by debiting the seller's PayPal Account up to the amount of your loss, and you will receive a recovery to the extent that the seller has funds available in the Account at the time we debit the seller's Account. If there is more than one Claim against the same Account, we will process the Claims in the order they are filed, and will pay out on each granted Claim up to the amount of funds in the seller’s Account at the time the Claim is awarded, but not more than the amount of the Claim. (If you even make it this far, again, PayPal only guarantees protection BASED ON WHAT IT CAN COLLECT FROM THE SELLER. If you win a claim and are entitled money back, PayPal will not give you the money you are entitled to if it is not able to get the money back from the seller)

13.13 Buyer Protection for eBay Express Benefits. If we grant a Claim under Buyer Protection for eBay Express, we will reimburse you for losses up to the full amount of your eBay Express purchase. Your reimbursement will be paid in the currency of the original PayPal payment up to the full purchase amount. (If you somehow meet all the requirements)

13.14 Extended Buyer Protection with PayPal Credit Benefits. If we grant a Claim on a purchase you made with PayPal Buyer Credit or with the PayPal Credit Card through PayPal, we will reimburse you in the currency of the payment for losses up to the full amount of your purchase.

13.15 Relationship between PayPal Protection Programs and Chargeback Rights. The following information relates to reimbursement for losses from purchases where you used a credit card to fund a PayPal purchase:

  1. Credit card chargeback rights, if they apply, are broader than PayPal Buyer Protection: among other things chargeback rights are not limited to $2,000.00 USD per transaction, can be filed more than 45 days after the transaction, and may cover unsatisfactory items even if they are not Significantly Not as Described.” (PayPal tells you right here that your legal rights as a credit card holder provides more benefits than what PayPal is willing to provide. In short, don't bother with their protection policy, if you made a purchase using a credit card, you are covered with your card issuer. Plus you do not have to jump through a thousand hoops to get what is yours!)
  2. You can choose to file a Dispute through our Online Dispute Resolution process and escalate the Dispute into a Claim or to exercise your Chargeback rights. However, you cannot pursue both at the same time or seek a double recovery. If you initiate a Dispute through the Online Dispute Resolution process and you then, while the Dispute or Claim is pending, file a Chargeback, PayPal will cancel your Dispute or Claim, and you will have to rely solely on your Chargeback rights.
  3. If you close your Dispute or it is otherwise closed, or if you cancel a Claim or it is denied or results in no refund, you may still be able to pursue Chargeback rights.
  4. If you timely file a Dispute and then escalate it to a Claim, and we do not complete processing of that Claim until after your credit card issuer's imposed deadline for filing a Chargeback or after your bank's deadline for filing an Electronic Fund Transfer Act dispute, and you recover less than the full amount you would have been entitled to recover from the credit card issuer or the bank, we will reimburse you for the remainder of your loss (minus any amount you have already recovered from the seller or any other Buyer Protection Program). PayPal reserves the right to contest Chargebacks, in accordance with the rules of the applicable card issuer or card association.

(PayPal is giving you permission to excercise your legal rights. You do not need PayPal's permission. It is your right to use your chargeback rights under your credit card issuer policy. PayPal has included this because it was sanctioned by several states for DENYING CREDIT CARD HOLDERS their FEDERAL RIGHTS UNDER CONSUMER PROTECTION LAWS)

13.16 Seller and Buyer Cooperation. If you or another User you have sent money to or received money from initiates a Dispute, Claim or Chargeback, you agree to provide to any requesting party on a timely basis any documentation necessary to resolve the Dispute, Claim or Chargeback. You also agree to fully cooperate with PayPal in all aspects of our Dispute and Claim processes, and to reimburse your Account to the extent it goes negative because we decide to grant a Claim submitted by another User. We will cancel Claims of buyers who do not respond to inquiries regarding the Claim within the time specified. Sellers who fail to respond in a timely manner to our inquiries regarding a Claim forfeit any right to appeal, and we will reimburse the buyer from the seller's PayPal Account. (PayPal making sure they will not have to cover any losses themselves. The buyer or the seller is going to pay)

13.17 Release of PayPal. If you have a dispute with one or more Users, you release PayPal (and our officers, directors, agents, joint ventures and employees) from any and all Claims, demands and damages (actual and consequential) of every kind and nature arising out of or in any way connected with such disputes. In addition, you waive California Civil Code §1542, which says: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if not known by him must have materially affected his settlement with the debtor." (Even though PayPal facilitated the transaction, you waive your rights to hold PayPal responsible)


14.1 Contact PayPal First. If a dispute arises between you and PayPal, our goal is to learn about and address your concerns and, if we are unable to do so to your satisfaction, to provide you with a neutral and cost effective means of resolving the dispute quickly. Disputes between you and PayPal regarding our Services may be reported to Customer Service online through the PayPal Help Center at any time, or by calling (402) 935-2050 from 6 AM to midnight Central Time. (It has already been established that PayPal's customer service is useless. Yet they want to use it as a first means. If that fails, which is almost always does, PayPal will provide a neutral and "cost effective" means of resolving the dispute quickly. But cost effective for who? When your funds are frozen and your account is limited, every day is important to you. Thank you PayPal for burying your telephone number in the last section of your user agreement!)

14.2 Alternative Dispute Resolution. If you are unable to resolve your issue by working directly with us, PayPal will consider reasonable requests to resolve disputes through alternative dispute resolution procedures, such as mediation or binding arbitration as alternatives to litigation. Accordingly, you and PayPal agree to resolve any claim in accordance with this Agreement, or as otherwise agree to in writing. (PayPal is forcing you to consider options that ARE NOT IN YOUR BEST INTERESTS. You are agreeing to solve any dispute you have with PayPal IN ACCORDANCE WITH THIS AGREEMENT)

14.3 Arbitration. For any claim (excluding claims for injunctive or other equitable relief) where the total amount of the award sought is less than $10,000.00 USD, the party requesting relief may elect to resolve the dispute in a cost effective manner through binding non-appearance-based arbitration. If a party elects arbitration, that party will initiate such arbitration through an established alternative dispute resolution ("ADR") provider mutually agreed upon by the parties. The ADR provider and the parties must comply with the following rules: a) the arbitration shall be conducted by telephone, online and/or be solely based on written submissions, the specific manner shall be chosen by the party initiating the arbitration; b) the arbitration shall not involve any personal appearance by the parties or witnesses unless otherwise mutually agreed by the parties; and c) any judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction.(Earlier, PayPal forced you to come to California if you wanted arbitration. Since PayPal only offered arbitration as a solution -- you waived your rights to sue in court -- this option was not cost effective for PayPal users with legitimate complaints against PayPal. A California judge threw out the arbitration clause citing it was "unfair" and "unconsciousable" towards you, the PayPal customer. Yet, the arbitration clause is back, though modified. You now have the option to arbitrate over the telephone. YOU AGREE TO WHATEVER DECISION THE ARBITRATORS MAKE. AFter that, it is case closed. You do not know who these arbitrators are, you do not know if they are really neutral, and you do not know how much it costs. Is PayPal providing this service for free? This is how PayPal limits your options to dispute them. If they have frozen your account, with money in it, and they have denied you your money through normal claims, PayPal KNOWS few people will accept the "arbitration" option. This results in PayPal getting to keep millions of account holders funds in their possession)

14.4 Law and Forum for Disputes. Except as otherwise agreed by the parties or as described in section 14.3 above, you agree that any claim or dispute you may have against PayPal must be resolved by a court located in Santa Clara County, California. You agree to submit to the personal jurisdiction of the courts located within Santa Clara County, California for the purpose of litigating all such claims or disputes. This Agreement shall be governed in all respects by the laws of the State of California, without regard to conflict of law provisions. (Even though Federal law applies because you have done a transaction with them over state lines, and even though you may not reside in or near Santa Clara County, California, YOU WAIVE YOUR RIGHTS TO SUE PAYPAL in your local jurisdiction! If you file a lawsuit against PayPal, their first defense will be to dismiss your lawsuit based on your agreement to this user agreement. The average PayPal user cannot file a lawsuit in the jurisdiction that PayPal wants you to. PayPal knows this. This clause is designed to discourage you from fighting for your money! This clause allows PayPal to keep millions of user accounts frozen -- along with the funds in them -- for PayPal's use!)

14.5 Improperly Filed Litigation. All claims you bring against PayPal must be resolved in accordance with section 14 of this Agreement. All claims filed or brought contrary to section 14 shall be considered improperly filed a breach of this Agreement. Should you file a claim contrary to section 14, PayPal may recover attorneys' fees and costs (including in-house attorneys and paralegals) up to $1,000.00 USD, provided that PayPal has notified you in writing of the improperly filed claim, and you have failed to promptly withdraw the claim. (PayPal is trying to scare you here. They are saying that if you file a dispute with PayPal, it must be in accordance with this agreement. If you sue PayPal in your federal court jurisdiction or your local court jurisdiction, you will be responsible for all of PayPal's expenses! You are agreeing to this when you accept the user agreement)

14.6 No Waiver. Our failure to act with respect to a breach by you or others does not waive our right to act with respect to subsequent or similar breaches. (PayPal is saying just because they do not penalize you now for breech of this section, they reserve the right to screw you later should they choose to)

14.7 Limitations of Liability. IN NO EVENT SHALL WE, OUR PARENT, EMPLOYEES OR OUR SUPPLIERS BE LIABLE FOR LOST PROFITS OR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH OUR WEB SITE, OUR SERVICE, OR THIS AGREEMENT (HOWEVER ARISING, INCLUDING NEGLIGENCE). Some states do not allow the exclusion or limitation of incidental or consequential damages so the above limitation or exclusion may not apply to you. OUR LIABILITY, AND THE LIABILITY OF OUR PARENT, EMPLOYEES AND SUPPLIERS, TO YOU OR ANY THIRD PARTIES IN ANY CIRCUMSTANCE IS LIMITED TO THE ACTUAL AMOUNT OF DIRECT DAMAGES. (If, for example, your money is lost due to an inside PayPal employee theft or scam, you are only entitled to damages of what was actually taken. You are not entitled to punitive damages. If something PayPal does causes you to loose money, causes your business to be destroyed or otherwise harms you beyond what you actually lost in money, PayPal will not reimburse you for it. You are agreeing to this)

14.8 No Warranty. PAYPAL, OUR PARENT, EMPLOYEES AND OUR SUPPLIERS PROVIDE OUR SERVICES "AS IS" AND WITHOUT ANY WARRANTY OR CONDITION, EXPRESS, IMPLIED OR STATUTORY. PAYPAL, OUR PARENT, EMPLOYEES AND OUR SUPPLIERS SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. PayPal does not have any control over the products or services that are paid for with our Service and PayPal cannot ensure that a buyer or a seller you are dealing with will actually complete the transaction. PayPal does not guarantee continuous, uninterrupted or secure access to our Service, and operation of our site may be interfered with by numerous factors outside of our control. PayPal will make reasonable efforts to ensure that requests for electronic debits and credits involving bank accounts, credit cards, and check issuances are processed in a timely manner but PayPal makes no representations or warranties regarding the amount of time needed to complete processing because our Service is dependent upon many factors outside of our control, such as delays in the banking system or the U.S. or international mail service. Some states do not allow the disclaimer of implied warranties, so the foregoing disclaimers may not apply to you. This paragraph gives you specific legal rights and you may also have other legal rights that vary from state to state. (PayPal claims to have NO CONTROL over the products or services paid for using this service. This is a lie. Checkout their restricted items list just for starters. Paypal cannot guarantee uninterrupted access to their service! Of course not, how would they be able to freeze your account anytime they want? PayPal is claiming that they cannot guarantee "secure access" to their service!)

14.9 Indemnification. You agree to defend, indemnify and hold PayPal, its parent, officers, directors and employees harmless from any claim or demand (including attorneys' fees) made or incurred by any third party due to or arising out of your breach of this Agreement and/or your use of the Services. (You are agreeing to waive more of your rights away!)

14.10 State Agencies. In addition to reporting complaints against PayPal directly to PayPal as described in section 14 above, you may report complaints to the Complaint Assistance Unit of the Division of Consumer Services of the California Department of Consumer Affairs by contacting them in writing at 400 R Street, Sacramento, California 95814, or by telephone at (800) 952-5210. Florida residents may contact the Florida Department of Financial Services in writing at 200 East Gaines Street, Tallahassee, Florida, 32399, or by telephone at 1-800-342-2762. If you are a California resident, you have a right to receive the same information in section 1.7 by email. To make such a request, send a letter to PayPal at the address listed in section 1.6, include your email address, and request the information provided in section 1.7. (PayPal is saying you must report complaints to state agencies listed in this section. You have the right to complain about PayPal to whomever you want! However, here, you are agreeing that these are the agencies that you will complain to)

14.11 Complete Agreement. This Agreement sets forth the entire understanding between you and PayPal with respect to the Service. Sections 1, 7, 8, 10, 14 and 15, as well as any other terms which by their nature should survive, will survive the termination of this Agreement. If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall be enforced.

DEFINITIONS: (Nothing really important here. This section just defines words and terms used in the user agreement. If you are unsure of a term or word PayPal is using, you can find it here:)

  1. "ACH" means the Automated Clearing House network.
  2. "Account" or "PayPal Account" means a Personal, Business or Premier Account.
  3. "Add Funds" means your ability to add money into your Account.
  4. "Agreement" means this agreement including all subsequent amendments.
  5. "Authorize" or "Authorization" means you authorize a merchant to collect a payment from your Account.
  6. "Balance" means any money that you have in your PayPal Account. The terms "money" and "funds" are used interchangeably in this Agreement.
  7. "Balance/Bank Funded Payment" means a payment that is fully funded through Instant Transfer, eCheck and/or Balance.
  8. "Billing Agreement" means an agreement between you and PayPal whereby you authorize PayPal to set up a Recurring Payment with a merchant to allow the merchant to charge your PayPal Account directly in accordance with your agreement with the merchant. Billing Agreement is sometimes referred to as "Payment Agreement".
  9. "Business Account" and "Premier Account" means an Account used primarily for business purposes and not for personal, family, or household purposes.
  10. "Business Days" means Monday through Friday, excluding Holidays.
  11. "Buyer Protection Program" means the PayPal Buyer Complaint Policy, PayPal Buyer Protection Policy, Buyer Protection for eBay Express, Extended Buyer Protection with PayPal Credit and eBay Standard Purchase Protection Program all as further described in section 13 of this Agreement.
  12. "Card Funded Payment" means a payment that is fully or partially funded through a credit card, debit card or Buyer Credit.
  13. "Card Processing Agreement" means the agreement that commercial entities are required to enter into directly with PayPal's payment processor(s).
  14. "Chargeback" means a request made by a buyer directly to his or her credit card company to invalidate a payment.
  15. "Claim" means a request for reimbursement under a Buyer Protection Program.
  16. "Confirmed Address" means an address that has been reviewed by PayPal and found highly likely to be that of the User to which it is associated.
  17. "Customer Service" is PayPal's customer support which can be accessed online through the PayPal Help Center at any time, or by calling (402) 935-2050 from 6 AM to midnight Central Time.
  18. "Days" means calendar days.
  19. "Default Funding Sources" means the order in which PayPal uses your Funding Sources to fund a transaction if you do not select a Preferred Funding Source.
  20. "Dispute" means a dispute filed by a User (buyer) in the Online Resolution Center.
  21. "eBay" means eBay Inc.
  22. "eCheck" means a payment funded from a sender's bank account that is held pending and not received by the recipient until it clears. When you send money using eCheck it will usually be held pending for 3-4 Business Days. The amount of time that it is held pending will increase if the payment is sent from a bank account outside the United States.
  23. "Fees" means those amounts stated in section 8 of this Agreement.
  24. "Funding Source" means the payment method used to fund a transaction. The following payment methods may be used to fund a transaction: Balance, Instant Transfer, eCheck, Buyer Credit, credit card, debit card and Redemption Codes.
  25. "Holidays" means New Year's Day (January 1), Birthday of Martin Luther King, Jr. (the third Monday in January), Washington's Birthday (the third Monday in February), Memorial Day (the last Monday in May), Independence Day (July 4), Labor Day (the first Monday in September), Columbus Day (the second Monday in October), Veterans Day (November 11), Thanksgiving Day (the fourth Thursday in November) and Christmas Day (December 25).If a Holiday falls on a Saturday, PayPal shall observe the Holiday on the prior Friday. If the Holiday falls on a Sunday, PayPal shall observe the Holiday on the following Monday.
  26. "Information" means any confidential and/or personally identifiable information or other information related to an Account or User, including but not limited to the following: name, email address, billing/shipping address, phone number and financial information.
  27. "Instant Transfer" means a payment funded from the sender's bank account in which PayPal credits the recipient instantly.
  28. "Mass Payments" means the ability to send multiple payments at the same time.
  29. "Merchant Processing Delay" means a delay between the time you Authorize a payment and the merchant processes your payment.
  30. "Money Market Fund" means the PayPal Money Market Fund offered to U.S. Users as an option for investing Balances in their PayPal Account, as further described in the prospectus.
  31. "PayPal," "we," "us" or "our" means PayPal, Inc. and its subsidiaries and affiliates.
  32. "PayPal ATM/Debit Card" means a PayPal branded debit card that is accepted anywhere that accepts MasterCard.
  33. "PayPal Buyer Credit" a personal credit account exclusively for PayPal Users.
  34. "PayPal Credit" means PayPal Buyer Credit or PayPal Credit Card.
  35. "PayPal Mobile" means a Service that allows you to send and receive payments through your mobile phone.
  36. "PayPal Virtual Debit Card" means a PayPal service that provides you with a unique 16-digit number, an expiration date and a card security code that you can use to make a purchase from your Account on any website that accepts MasterCard.
  37. "Personal Account" means an Account used for non-business purposes and used primarily for personal, family, or household purposes.
  38. "Policy," or "Policies" means any Policy or other agreement between you and PayPal that you entered into on the PayPal website, or in connection with your use of the Services.
  39. "Pooled Accounts" means Accounts at one or more FDIC-insured banks in which PayPal will place User Balances that are not invested in the Money Market Fund.
  40. "Preferred Funding Source" means a Funding Source that you select to fund a payment instead of using the Default Funding Sources.
  41. "Recurring Payments" means a payment in which you provide an advance Authorization to a merchant to charge your PayPal Account directly on a one-time, regular, or sporadic basis in accordance with your agreement with the merchant. Recurring Payments are sometimes called “subscriptions” or “preapproved payments”.
  42. "Redemption Code" means the electronic code needed to obtain the benefit of gift certificates, eBay Anything Points, or other promotional coupons.
  43. "Reserve" means a percentage of the funds received into your Account that we hold in order to protect against the risk of Reversals, Chargebacks, Claims or any other liability related to your Account and/or use of the Services.
  44. "Restricted Activities" means those activities described in section 9 of this Agreement.
  45. "Reversal" means a payment that you received has been removed from your Balance for any reason other than a Chargeback or Claim pursuant to a Buyer Protection Program.
  46. "seller" and "merchant" are used interchangeably and mean a User who is selling goods and/or services and using the Services to receive payment.
  47. "Send Money" means your ability to send money though the Service.
  48. "Service" means all payment services and related products available through
  49. "Significantly Not as Described" means the definition provided in section 13.11 of this Agreement.
  50. "Substantial Change" means a change to the terms of this Agreement that reduces your rights or increases your responsibilities.
  51. "Verified" means that you have completed our verification process to establish your identity with PayPal. Verification does not constitute an endorsement of a User, or guarantee a User's business practices.
  52. "User," "you" or "your" means you and any other person or entity using the Service.









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