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Comment by ckastner | Hacker News Reader

> Lena Evans, one of the plaintiffs who'd been a PayPal user for 22 years, said the website seized $26,984 from her account six months after it got frozen without ever telling her why.

Wait, what? They're actually taking the money? I thought the article was just being careless with the terms "frozen" and "seized".

On what power are they doing so? It's understandable when the relevant authorities (be it a tax authority, or a financial supervisory authority, or a court, or whatever) seize money, but they are not an authority.

Furthermore, if the money in question actually were illicit, then by what fantasy argument would they be allowed to keep it themselves rather than having to hand it over to the goverment? The entire point is that the money is dirty and nobody may keep it.

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See my comment below: they just seized (not frozen, seized) 50k EU from us in a targetted attack against our company and shareholders because we took legal counsel when they froze the accounts.

Good. I love when companies are so big they do as they please and retaliate when brought to task.

Hopefully it's one more nail in their coffin.

All the best, hope this is the beginning of their end.

the only way this stuff will change is if the fines are SUBSTANTIAL

It's theft in great amounts of money. Fines are necessary but not sufficient. There should be prison time.

Agreed, that's the only thing that will stop this garbage.

Between companies and banks doing this, our own government allowing civil forfeiture, and the penalties- of there even are any, are a monetary slap on the wrist, what recourse do we have?

We can't even change the laws because money lobbies and always wins.

I really hope this is the tide changing.

This applies to a great deal of white-collar crime. As long as there aren't serious PERSONAL consequences for wrongdoing, just a fine that the company coffers will pay as the cost of doing business, nothing will change. We need to start to put CEOs in actual prison and to forfeit their fortune.

PayPals parent company, Ebay, is not exactly innocent either.

> Federal prosecutors have said the harassment included anonymous deliveries of items like live insects, a funeral wreath, and a bloody pig face Halloween mask to the couple's home. The employees also sent pornographic magazines with the husband’s name on it to their neighbor’s house and planned to break into the couple’s garage to install a GPS device on their car.

https://abcnews.go.com/Business/wireStory/couple-ebay-harass...

FYI Ebay no longer owns Paypal, and hasn't for several years. Per https://en.wikipedia.org/wiki/Timeline_of_PayPal

> September 2014 onward: It is announced that PayPal will be split off eBay. The split will be completed by the second quarter of 2015.

EBay is actively de-integrating PayPal. E.g. sellers are being required to provide their banking info to eBay for eBay to deposit payments directly.

It was dumb to see eBay send two verification payments to “authorize” my bank account, of 1 cent and 3 cents, and after confirming, they let me know that they were going to take their 4 cents back.

ACH fees almost certainly mean it's not "worth" it to pull back the 4 cents.

But I can see people being frustrated by verification payments throwing their bookkeeping off, especially by a (literally) random amount.

I couldn’t tell if the numbers were just randomly low or decidedly low.

I’m used to the amounts being larger and thinking “hey, a free dollar almost”, but if they are random, 1 cent and 1 cent are entirely possible.

random under $1 in every bank I've had do this. It better be a good random algorithm, if it isn't you can defraud a lot of people fast. (I won't say how, but I think anyone here can guess quickly)

There's nothing dumb about it. This is common practice when linking accounts throughout the financial services industry. Like my stockbroker did it when I linked my bank checking account. By verifying the amounts on two small payments you give them reasonable assurance that you actually control the account. This protects against both fraud and accidental account number data entry errors.

It was the clawback of the hilariously low amount that I found dumb, not the verification technique.

In my experience, it’s 2x double digit amounts, not two single digit amounts. I guess if they’re clawing it back, maybe my low sums are out of randomness, or maybe they’ve really lowered the cap on the test deposits (less float/fraud loss but less security?).

I suspect it’s because they want to verify they can withdraw from the account, not just deposit. Maybe they have deposit-only account links but IIRC the default is two-way. That’s because, for example, you can subscribe to various services using PayPal (if you have no funds in your PP account they will withdraw it from your bank account).

This makes a lot of sense. Lots of advice in the early days of PayPal to have a separate account for them and keep nothing in it.

Capital one, when confirmed my credit union account by same method, didn't fetched the money back. Data point

2 Small payments can provide a larger range of random numbers for an account verification at lower cost to you.

Let's say you want a random number between 0 and 91, you can take up 9c times 2, for a maximum of 18c, giving a much lesser chance you can guess the number on the confirmation. Otherwise, for the same range you would take up to 91c out.

At the risk of arm-chairing this too much: did you contact the CSSF, who seems to be the supervisory authority responsible for AML enforcement in Luxembourg?

To highlight how insane this sounds: let's assume, for the sake of argument, that your 50K is suspected to be cocaine money. There exist exactly two outcomes: either you are exonerated and you get your money back, or you're eventually found guilty of something, and the government takes the money.

But Paypal? They have zero claim to the money, and they could be in hot water even for merely holding on to it.

But to seize it? There is just no way that any bank involved in AML enforcement can keep funds for themselves, and any supervisory authority who's handed evidence to such a practice would tear them apart.

They could plausibly return it to the people who paid it in, if their excuse is that it's believed to be fraudulent. Six months of float is enough to make a significant amount of money, too, especially if it's in an inflating currency (like the dollar over the last year).

Indeed, their behaviour should be criminal if it somehow already isn't.

I definitely appreciate the arm-chair assistance: I'm unfamiliar with the Luxembourg jurisdiction, so your pointers are great - we will discuss with our lawyers.

From what I understood, Luxembourg's consumer laws are more loosely defined than that of other EU jurisdictions - which makes the type of T&C that PP has established easier to maintain.

On what power? ”We are big and have money. You are small and have no money”.

This has been a reliable source of power for at least a century

Longer than that.

I meant on what official authority.

I understand what you meant to say, but realize that this is like some random bully stopping cars on the highway and issuing speeding tickets. Victims might play along for a while, but when actual law enforcement shows up, the bully is going to have a very bad time.

> this is like some random bully stopping cars on the highway and issuing speeding tickets

LOL, I've paid that exact "fine", the "bullies" were official, uniformed Mexican police. They were literally just flagging everyone on vacation at a specific resort, along the only road from that resort into town (with a big chain across the road to collect everyone) and taking $200 to be allowed to continue on. Nice work if you can get it I guess.

I've also paid bribes to bullies in Yugoslavia ("people with machine guns standing in the road") in order to pass by. I don't think they were official though.

Yes, rental cars stick out like a sore thumb so keep some cash on you. It is usually easy to negotiate them down by 50% though!

You can tell them, "dame la multa" (give me my fine) and most of the time they'll wave you on.

I don't know if this is still true, but years ago if you wanted to board your plane in La Paz, Bolivia everyone had to hand the police officer at the gate $20 USD cash (no substitutions) to board the plane. It didn't matter your nationality or where the plane was headed, just hand over $20 bucks or GTFO.

I had to pay an extra $90 when crossing the border into Zimbabwe. I was a little slow and asked all innocently why I had to pay more then the official entry tax when the guy in front of me paid the normal amount. The guy just shifted his AK-47 a bit and repeated the request. I figured it out at that point and forked it over.

Per the article, Paypal is seizing the money as damages:

> It also said that the money was taken from her account "for its liquidated damages arising from those AUP violations pursuant to the User Agreement.

Indeed, this is an important point that I missed. So if I get this right, this isn't about actually AML activity, but a civil claim under something like ToS.

So I looked up the AUP, and indeed: they claim $2,500(!) liquidated damages per violation of the AUP, which is on average a ridiculously high amount. Selling 10 individual bottles of wine without approval will incur $25,000 damages under this scheme.

Given these terms, you have to be absolutely nuts to sign any agreement with Paypal.

> if the money in question actually were illicit, then by what fantasy argument would they be allowed to keep it themselves rather than having to hand it over to the goverment? The entire point is that the money is dirty and nobody may keep it.

I don't know what fantasy they operate under, but back in the 2010s I observed Google doing this numerous times with "seized" click fraud revenue -- one of my sites was a victim of a click fraud attack as an attempt to get my AdSense account banned, and my friend's site at the time was advertising on my domain via AdWords and he didn't see any kind of refund despite the $800 that was taken from me (which was the entirety of my revenue for that month). Google just keeps funds they seize I'm pretty sure, or at least they did back then.

>They're actually taking the money? I thought the article was just being careless with the terms "frozen" and "seized".

but that's also the plaintiff's claim, so I wouldn't exactly call that reliable.

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