I really like this from PayPal. They have nipped the issue in the bud. They are making a donation to boot.

It seems to me that both Regretsy and PayPal are at fault. Regretsy for using a button with implications they didn't realise. Paypal for not making these issues clear and what looks like some shocking customer support. I hope PayPal look into the customer support issue but that aside the issue is resolved. PayPal have publically admitted fault and are taking steps to correct it. Good on them.

PayPal gets a lot of bad press. I do feel though if you look at the quantity of transactions they deal with and the amount of rules and regulations they have to work with they are doing an alright job. The could improve in areas but lets face it.. what big company couldn't.