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Comment by mikece | Hacker News Reader

Does it matter? PayPal and Stripe don't advertise that they will only do business with organizations with which they agree. To accept a business as a client for a mission critical service like payment processing and then summarily cancel or suspend service without notice should be able to be prosecuted the same as someone who vandalizes a physical storefront to the point they cannot open for business. This is non-trivial and PayPal and others are acting like rat bastards to accept a client, get them dependent, and then dump them without warning.

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> PayPal and Stripe don't advertise that they will only do business with organizations with which they agree.

https://stripe.com/legal/restricted-businesses

> Firearms, explosives and dangerous materials

> Guns, gunpowders, ammunitions, weapons, fireworks and other explosives. Peptides, research chemicals, and other toxic, flammable and radioactive materials

Why does the payment processor get to dictate whether I can run a defense ordnance company or run a scientific chemical supplies store?

Some of this stuff needs to be challenged in the court or regulated so that payment processor has no say whatsoever in whatever their belief system says about legitimacy of a business.

> Why does the fucking payment processor get to dictate whether I can run a defense ordnance company or run a scientific chemical supplies store?

Because they have the legal right to do so? They could ban companies run by redheads, if they like. As long as they're not discriminating based on very specific sets of criteria established by law, they get to choose who they do business with.

The government requiring private citizenry to associate with everyone who wishes to associate with them seems like a very dark path to go down.

While I agree with your point, I think banning redheads would violate Title II of the Civil Rights Act of 1964.

No; hair color is not what that legislation covers.

It is entirely legal in the United States to discriminate against redheads, or people whose names start with B, or Hacker News users, or people who enjoy skiing.

https://www.fwlaw.com/insights/is-hair-a-protected-class#:~:....

If you read that closely, it doesn't apply in the slightest to the example.

I do believe that there could be an argument that discrimination on hair color could fall under national origin or color:

Under 29 CFR § 1606.1, national origin is defined as but not limited to: An individual's, or his or her ancestor's, place of origin; or because an individual has the physical, cultural or linguistic characteristics of a national origin group.

With the current court, almost certainly not; they're not inclined to expand the definition of "disparate impact" like that.

If a future Court ever decides hair color denotes national origin, fall back to a different example of your choosing; people with tattoos, Mac users, viola players.

Hair color is something you're born with and is a genetic mutation based off lineage and other factors. I don't think they directly corelate and it wouldn't necessarily even make it to the Supreme Court. Most businesses aren't going to appeal to say that they can discriminate based on hair color nor willingly admit to doing so, nor would they ever likely make the argument that they did it and that it is okay.

The law doesn’t say “things you are born with”, though. That’s a common theme with the specific categories it does name, but only those specific categories are protected.

It isn't specifically limited to those specific narrow words by the most limited means you're thinking. I'm sure they could make that argument, but only a fool would risk a discrimination lawsuit based on hair color. Even if that is the specific reason a person would have to be either a fool or want to try to challenge the law, and there is no guarantee after losing that the Supreme Court would even take the case. I don't think the Supreme Court would even want to touch such a case nor that it would be ruled on in the manner you're thinking.

You could discriminate against people with dyed hair colors, but I find it hard to believe that any court would say that a person's natural hair is not a physical characteristic of a national origin group.

They are common carriers. The elephant in the room is the Visa/Mastercard duopoly.

As a red head, this made me chuckle. Thank you.

Why do you believe that private companies shouldn't have freedom of association? Or put differently, why should the government be able to force Stripe to do business with people who Stripe thinks would not be good for their business?

In a world of free association Stripe would probably be more willing to do business with "high risk" companies because they could charge them substantially higher fees. The government directly and indirectly tries to discourage business with these kinds of companies which is why companies like porn websites, fireworks wholesalers and check cashers have a hard time getting bank accounts these days.

Sorry, who do you believe is preventing Stripe from charging higher fees to riskier accounts? Please be specific.

Also, what's your evidence that some payment processors don't handle porn because of government pressure, rather than just natural market forces? I had a friend who did tech for a porn company, and from what he says, even a well-run porn company has much higher rates of chargebacks (e.g., next-day regrets and "no honey I don't know what that charge is") and fraud (stolen cards, fraudulent affiliate program participants).

You mean the belief system of wanting to not get sued by someone who get's hurt or killed?

I was considering starting a weapons ordnance company, getting federal ATF license and bid on a contract to USG and NATO forces. I guess Stripe billing isn't going to be our choice of service. Stripe has really good invoice/PO processing APIs.

On the off chance there are more regulatory requirements to accept this sort of business and they don't want to build out the support necessary to do so? Maybe there's different risk profiles that they're not willing to accept

Stripe has an internal list of "instant ban, no questions allowed" activities/triggers.

Think about how they can accept 100+ currencies without a relationship with some dodgy central banks in developing countries.

There are absolutely items on that list for political reasons.

It does matter if it actually violates the TOS, or could be vaguely interpreted to do so I guess?

And how many times does a company claim you have violated TOS and then refuse to tell you how you violated the TOS? To act in this manner nullifies the TOS in my opinion.

It definitely sucks for the merchant companies ending up on the pointy end of the TOS. But you also need to consider the payment company side of things. They face a relentless tide of fraud and shady merchants. If they are too transparent about exactly how they detect a problem, that makes it much easier for the criminals, scam artists, and dodgy merchants to get around TOS enforcement.

The real culprits here are the people trying to violate the TOS, plus everybody's desire for cheap services and easy onboarding. The historical alternative was very expensive setup (e.g., spend a few years building a relationship with your local bank branch manager and establishing a financial track record). Making it easy to get started means that most problems will show up down the road, and the lower merchant costs means less money to pay for smart people to carefully untangle the truly dodgy from accounts that just look that way.

> If they are too transparent about exactly how they detect a problem, that makes it much easier for the criminals, scam artists, and dodgy merchants to get around TOS enforcement.

I get that, but I don't see how actually telling people what term of service was violated gives too much leverage to the bad guys.

Neither do I, but I wouldn't expect to see it without really understanding the bad actors and what they're up to. So this could be their best effort. Or it could be that they're just going with a blanket "say nothing" policy because it's too hard to create a more nuanced policy that the CSRs can apply consistently. Or it could just be laziness and a lack of customer focus. It's impossible to say from the outside.

Never. In 20+ years of using Internet I have never been banned unduly from any service.

I have seen way to many stories about people claiming to have been banned for no reasons from services (online video games are a popular one) before it is revealed the ban was 100% legitimate, to take any new story like this at face value.

I was banned by PayPal once because I didn't sign up with an SSN or EIN and proceeded to make enough to trigger a review because they couldn't file a proper 1099-K on me. This was an oversight on my part and I offered to correct the situation by submitting any documentation they needed -- photo ID, SSN, prior year tax returns to PROVE that I was paying tax on the revenue coming from PayPal, the new LLC and EIN I had for that company's activity. They refused to update my account, told me to start over with a new account, and then similarly ban-hammered me again (probably because I started an account after getting banned even though it's what they told me to do!).

I made a mistake out of inexperience, was refused the chance to correct that mistake, and all of my PayPal accounts -- including my PERSONAL account that I had had for years -- were banned because they were started by a person (me) who had an account frozen or banned. Is that a legitimate enough story?

No, not legitimate at all.

PayPal had banned me because I was under 18 when I opened my account, they then allowed me to open a new one (right after this one got suspended) and it has been working fine without any issue since then (10 years+).

Stop doing shady stuff.

> Stop doing shady stuff.

If PayPal requires an SSN or EIN, why do they even allow you to create an account without one?

Because it doesn't require one. You can see the holes in OP's story. First he starts saying that he can give them an ID or his SSN and then all of a sudden it becomes a company account?

The guy can't keep his story straight for 3 lines on HackerNews, he is obviously doing stuff that he shouldn't and using his PayPal in a sketchy manner.

But at least you knew why you got banned!

Only the first time. They never told me why my other accounts -- which were following all of the rules -- were frozen.

guilt by association

Somewhere between occasionally and almost always, depending on the reason.

In most cases, you will not be given details if fraud is suspected. The reason being that companies don't want to tell fraudsters how they got caught.

Whether or not the TOS can be said to be legally nullified (not being a lawyer, I have no idea) canceling or suspending someone's account without telling them some kind of reason they can do something about is absolutely unethical.

It is also very common.

It is very common because it is not benefial for the company to clarify reasons. It includes many risks.

They can be proved to be incorrect, for exmpale if they refer into their own ToS, which is public information and binding. And then some legal expert says that this is not how it goes and it ends up into court, because customer sees risks being lower.

If they made a mistake or there was a software failure, it is bad PR.

If they ban someone for some specific reason but not someone else, there will be drama.

It is very beneficial to just say nothing.

Maybe there is a market for insurance to initiate a "Wrongful ToS Ban Lawsuit." I take no right/wrong position on the below gentleman but note that he did bring a lawsuit against Twitter for being banned and his account reinstatement coincides with a settlement of the suit. Right now the payment facilitators only have loss of an account in terms of incentive to reduce false positives in detecting fraud.

One year ago this month, Twitter permanently suspended a 340,000-follower account for “repeated violations of our COVID-19 misinformation rules.” The owner of that account, the former New York Times reporter and vaccine skeptic Alex Berenson, responded with a lawsuit demanding reinstatement. . . .

. . . Earlier this summer, Twitter put Berenson’s account back online, noting that “the parties have come to a mutually acceptable resolution.” Berenson wasted little time in calling out mainstream media for failing to cover the “pathbreaking settlement” that led to his return. . . .

https://www.theatlantic.com/technology/archive/2022/08/alex-...

They did say they had been running the business for several years and have prior discussions with Stripe about TOS on file.

Ok but is that a green flag or a yellow flag?

How many companies using Stripe have had multiple conversations about the TOS? I would guess it’s a minority. Not a topic anyone is usually excited to talk about.

The TOS can be updated/changed/clarified over time and they could end up falling outside of what they cover as a result. It's not great and sucks as a customer but it can happen.

NO, it does not in this case

They can determine up front if it violates the TOS

They can notify the customer of the SPECIFIC violation IN DETAIL, and what can be done to cure it, and provide time to do so.

They can deny access to the transaction instead of nuking the entire business for some algorithmic flag.

The Stripes and PayPals of the world do NONE of this. Instead, they act like they accept almost all businesses, get them dependent on that piece of infrastructure, then willfully trash the business on a whim.

The type of business matters if we're trying to guess whether they violated the TOS or not.

I completely agree with you that how these companies handle these issues is completely wrong, if not fraudulent.

I agree that in general, it matters.

However, by a long series of deliberate actions, Stripe has made it irrelevant to the fact that they are now deliberately, unilaterally, and with zero notice whatsoever shutting down that biz' critical infrastructure.

They could have, and should have as a part of KYC compliance, already figured out what type of business it is. If they failed at that, then fine, give them 60 days notice to find other infrastructure. Stripe is taking its OWN FAILURE to properly vet their customers according to their own standards and dumping the consequences onto the ex-customers. Sorry, but unless we're talking actual provable international criminal/autocratic money-laundering, that's just wrong.

The part where they said everything was fine and then re-locked so much a week later is completely unacceptable even if the business does violate the TOS.

> PayPal and Stripe don't advertise that they will only do business with organizations with which they agree.

Huh? Of course they do. Just one example:

https://www.paypal.com/us/smarthelp/article/what-is-paypal%E...

https://www.paypal.com/us/legalhub/acceptableuse-full

always read the fine print

Is it all companies that can no longer decide who they do business with in accordance with the terms of the contracts in place?

>Does it matter?

That is indeed the question. There is no way of knowing if the nature of the business is a factor unless you know that nature of the business.

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