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You are completely right. The problem is certainly not "fraud monitoring", and it's not a problem specific to Paypal either.

The problem is in the attitude. Being French, I'm well-trained in dealing with soulless bureaucracies; but with the French administration (or probably any public administration in most countries) there is always a way to escalate the issue; and if you were right, you very usually win.

But these companies are judge, jury, police and executioner. This can't go on forever.

For that kind of problem the solution seems to be forcing a fast arbitrage system.

I totally agree - there is a total lack of responsiveness to any communication or contact by all of these internet giants once their "systems" determine that you are guilty. It is a one-way, dead-end street. Surely, all of them must realize that no matter how sophisticated their pattern matching algorithms and fraud detection mechanisms, they can be prone to error. This may be by design though - these companies have no problem with systems with a high false-positive/Type I error rate (convicting innocent people), as long as they can decrease their False-negative/Type II error rates (letting guilty people go free). This is of course the exact opposite of how the rest of our legal and court systems are designed - and therefore the frustration and dissonance.

Many times, when dealing with fraud, the damage done by a false negative completely outweighs the damage done by a false positive. This is almost always the case for the company, in some cases it's also true for other users involved. Thus, companies are frequently OK with having a high false positive rate in order to get the false negative rate to be close to zero.

The company obviously realizes it has a large number of false positives, and it's probably decided that it's worth it.

There's nothing wrong with deliberately having a high false positive rate. Airport security does that too. The problem is if you treat everyone who gets flagged up as irredeemably guilty even though you know you have a self-positive rate.

This would be akin to having airport security send anyone who sets off the metal scanner to a maximum security prison without right of appeal.

Very true, they definitely should dig a bit into their margins to provide a method of appealing the decision - I think it would actually help them quite a lot on the PR front, so it might be good even from a bottom line perspective.

> This would be akin to having airport security send anyone who sets off the metal scanner to a maximum security prison without right of appeal.

Not so loud, TSA will hear you.

I too have had issues with Paypal, albeit it was just an account used for eBay purchases. Someone sent me some money, that person was somehow related to some fraudulent transaction so my account got blocked. They then wanted lots of ID and proof of my purchases for my sales... well I had only sold one old mobile phone on ebay... they repeatedly asked for this until someone with 2 brain cells had the bright idea to look up my sales history, and then they blocked my account anyway!

I try not to buy of ebay or use paypal now (it wasn't difficult to open a another account - different card/address), I would rather pay a little more and buy off Amazon who in my experience have the best customer service I have ever experienced.

"It's a totalitarian hit-them-with-a-hammer approach that truly needs to end."

In my mind, this behaviour can be explained as the one of a monopoly. PayPal is probably a great service in the vast majority of cases, but the behave unacceptably in a number of exceptions. And it would not even be very hard to solve, because it seems to be mostly about process, transparency and communication.

This is quite similar to the treatment you get from many government services, which happen to be organized monopolistically as well.

Once there is a true choice for these basic services like text ads, auctions and online payment, this would likely end quite quickly.

There is probably something in the structure of these businesses that makes them come pretty close to natural monopolies. Maybe internet users should actively start to pick always the second biggest provider for everything in this space. But I would not be able to tell you a name for payment service and auctions site that was to fit that description.

I wonder if US Congressional action would solve this? There are other options in the USA instead of PayPal, but outside the USA PayPal is sometimes the only option (if it's available at all, I wonder what Africans will tell you about PayPal). So in the USA, there is starting to be a force to make online payments better. But not outside USA. So if the USA brings in some law, will PayPal, the Luxembrugish bank, have to abide by it? Probably not.

But then, how do we fix this?

I totally agree.

I can also see why you're being downvoted here.

And that's why things are not changing.

Well, the voting system in HN is friggin broken. It's too easy for fan-boys to push you down and out of a conversation. I've experienced this many times. It's sad only because these are generally good discussions. However, if you don't tow the "company line", if you will, you'll get punished with down-votes. All this promotes is a uniform culture of fan boys or, what is worst, an audience that does not participate due to the futility of it all.

Down-vote away.

It'd be easy to implement a set of rules that could make it fair. For example, limit the rate of change on any given post so that it can't be attacked by a barrage of down votes by fan boys. This would open up a post to a wider non-ideological audience and allow it to float or sink on its merits rather than whether or not the author pandered to the fan-boy culture's point of view on all fronts.

Further to that, nobody should be allowed to down-vote silently. That's chicken-shit. If you down-vote you need to state why you are doing so and subject your view to the same peer review, if you will.

Another interesting idea is that down-voting costs you a significant amount of karma points. And, if you go below a certain number you are ejected from HN. Now people are likely to think twice before down-voting on ideological basis because they'll stand to loose something.

All said, HN is still tolerable but it really is frustrating to be down-voted when purely on ideological basis rather than on based on the merit, accuracy or veracity of a post.

Anyhow, the PayPal, Google, eBay, etc. problem is not likely to be solved by yelling and screaming on blogs and HN. I firmly believe that massive legal action, and, more than likely, in the US, Congressional action, is the only light at the end of the tunnel. They are too big and just can't be hurt or bothered with any other approach.

Be careful what you wish for. Congressional action forcing PayPal, Google, et. al to provide better customer service sounds great for consumers, but unless the legislation is very narrowly focused, it will just end up being another piece of regulation that protects incumbents and punishes newcomers (e.g. by imposing an untenable customer support burden on bootstrapping companies).

PayPal is the incumbent.

Exactly my point. If we use the government to protect ourselves from PayPal, we have to be careful not to kill WePay, Stripe, Dwolla, Gumroad, etc. in the process.

Not to mention that by the time it gets through the lobbying gauntlet, the legislation is more likely to protect Paypal than to harm it.

True, people downvote if they don't agree. without even giving a reason. While downvoting should be for eliminating spam and comments that don't add to discussion.

What it boils down to is the scale that these organizations operate and the limited investment in customer service means that CS operations can't spend the time to understand problems. They build a decision tree that doesn't capture the subtleties of the real world and then implement it in a draconian way giving no autonomy to the people implementing the decisions. This is how a Strad copy violin can be seen as a fake when copying Strads has been a common and accepted practice for centuries.

I always said that the service of all online companies is great until something goes wrong. How they handle mistakes and problems is the real test.

It's insane though, I just went through an issue approving my adsense account that took over a month. No replies, info, nothing. This is the life blood of the companies and they have so much money you think they would get on top of it better.