by Mike Masnick

PayPal Helping The IRS Track Down Tax Cheats

from the so,-please-launder-elsewhere dept

A few years ago, in a widely publicized article, eBay's liaison to law enforcement proudly talked about how the company would hand over all sorts of info to law enforcement if asked (even without a subpoena). So, it shouldn't come as much of a surprise eBay-owned PayPal is helping the IRS track down tax cheats by handing over the identity of customers using PayPal from a variety of well known tax havens. Of course, anyone who thought it was a smart idea to launder money through PayPal probably shouldn't be all that surprised when federal investigators show up on their doorstep.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Nov 7th, 2005 @ 2:57am

    No Subject Given

    reply to this | link to this | view in thread ]

  2. identicon
    Mousky, Nov 7th, 2005 @ 8:02am

    Re: No Subject Given

    You have to love these "sucks.com" sites. They provide tons of information about the company that sucks, but next-to-nothing about themselves. Lots of references to "we", but who is "we"? There is someone called "the admin". Is that the "we" refered to in the privacy policy? You can contact them by email but not by alternative means. They are no different from the anonymous coward who posted the original comment.

    reply to this | link to this | view in thread ]

  3. identicon
    Greg, Nov 7th, 2005 @ 9:01am

    Re: No Subject Given

    not everyone loves giving up their identity when trying to even the playing field against a large, crooked corporate entity such as Paypal. The claims being made on paypalsucks.com are quite valid - right from Paypal's own terms of service. That info needs to be diseminated. I'd never heard of that site until this thread but I have avoided paypal for years because of the reasons listed on that site.
    As far as anonimity goes: could be that it's not so much that people want to hide their identity as maybe they don't have a blog they sink 4 hrs a day into that they feel compelled to keep linking to on other sites.

    reply to this | link to this | view in thread ]

  4. identicon
    admin, Nov 7th, 2005 @ 11:10am

    Re: No Subject Given

    This thread was sent to me so I thought I'd address some of the concerns raised here.

    1. re: PayPalSucks.com... "Next-to-nothing about themselves." I had a page detailing my origins with PayPal and eBay, but took it down for reasons you'll read below in just a moment. The origins of the site are well documented in press articles about the site. I was just a regular user of PayPal from it's earliest years (one of the first 10,000 to sign up). When I had a question about PayPal. I called and when the person could not answer the question, they hung up on me. At the time I made the first call, I was 100% Pro-PayPal. I was nice, cordial and pleasant on the phone. When the person I spoke with could not answer the question, I asked to speak to someone who could. I was disconnected. So I called back. I thought I was disconnected because they were transferring me to another person. I called back, got a different person, went through the same questions only to be told "that information is not disclosed." I was confused and asked again and this time I was told "Look, I've told you all that I'm going to tell you!" and then they hung up on me. Have you ever called a company and been hung up on? Ever been spoken to that way? Now I was a little pissed but more shocked. So I waited a day and called back and this time insisted on talking to a supervisor. After some time I talked to a person who would only identify themselves as "John" and after a few minutes with him, he hung up on me. 3 times in 2 days? That is outrageous. So I registered the domain PayPalSucks.com and put up a blank page. A month later I checked and found 90 people had typed in "paypalsucks.com" in their browser to get to my blank page. So I put up a guest book to see what/why they were coming there. W/in a week the guestbook had 100 posts from people complaining about PayPal. In addition we had at least one post from a PayPal employee (verified by IP) dropping so-not-so-flattering information about PayPal. That information is saved here: http://www.paypalsucks.com/PayPalWhistleBlower1.shtml

    Very quickly it became obvious the guestbook was not the best way to handle the complaints so the forum was put up. Again, within weeks we had hundreds of posts...

    The rest, as they say, is history.

    I used to have my phone number on the site and whois information. But the threatening and hate filled phone calls (including one death threat.) ended that. We also had very vile and hate filled posts from PayPal employees (verified by IP) and so that's when I decided it's better to keep my personal information personal (and at the time I still had my PayPal account and feared someone at PayPal might do some retribution.)

    2. You can contact me by mail (do a whois lookup) or email. I don't take phone calls because I work for a living and I have no desire to have my personal life disrupted by phone calls all during the night. (Which I did have when I had the phone numbers on the site.) I didn't see your home number in your post Mousky. No, I don't work for a competitor (in case you were wondering.) When I started the site there was no such thing as a competitor to PayPal.

    3. "We..." I almost always answer from the "We" perspective because I have always considered the site more than myself. I have always considered it a community of people trying to affect change.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Hero, Nov 7th, 2005 @ 11:11am

    Re: No Subject Given

    Hey Mouskey, is "Mouskey" really your full legal name? Hypocrite.

    reply to this | link to this | view in thread ]

  6. identicon
    admin, Nov 7th, 2005 @ 11:29am

    Re: No Subject Given

    Another one is the class action lawsuit site:


    Where PayPal agreed to not only release $5million it was holding of people's money, but pay another $9.25million in claims.

    About the $5million... that was money that paypal had frozen from it's customers account and had gone by the 180 day waiting period. PayPal had NOT sent the money to the account holders, despite it clearing all concerns, because, according to PayPal: they didn't ask for it back. Part of the class action lawsuit was that Paypal would voluntarily refund funds held for 180 days without the account holder having to put in a specific request for it.

    Holding people's money for 180 days is bad enough, but what do you call it when they do not release it after the 180 days? The courts call it conversion and it's a crime.

    reply to this | link to this | view in thread ]

  7. identicon
    Robert Miles, Nov 7th, 2005 @ 11:40am

    Re: No Subject Given

    When I used paypal for 2 years of ebay buying and selling via paypal without a single problem, I ran into a problem buyer. One who purchased a $450 guitar from me. I quickly shipped the item as soon as the auction had ended and the paypal payment was confirmed as received. The item was shipped as FedEx, complete with tracking number and signed delivery form (as I always ship my items as). Two weeks had gone buy and the sale was long since in the back of my mind, because as far as the confirmation on FedEx's website stated, Package had been signed for and delivered. Wouldn't you know it. It was bound to happen. The buyer did a charge-back, stating that the item had not been received. This was all within 20 days of the auction ending, and the guitar being shipped and signed for by the same name that was used during our email conversations back and forth.

    I called up paypal within a few minutes of me signing on and noticing that my account balance had been set at -$410. I provided the FedEx information that was requested by paypal to verify that the guitar was shipped. 9 days later, I get a notice from paypal stating that the case was now closed and that I was out of my $450 PLUS the guitar I had shipped and was proven to be received.

    I called back up to Paypal because there had got to have been some mistake as to why the case was closed, even though I provided all of the information requested and FedEx had shown the item being received and signed for by the same name on the "buyer" account. When i finally got on the phone with a real life person, I asked for help in resolving this. The paypal representative told me, "go to church". After a bit of silence from my part, I asked "excuse me?". The paypal rep had said once again, "my advice to you is, go to church". I ignored this second time in which she said this, and continued to seek out help in resolving this obviously flawed transaction of paypal's part. The representative continued to mention that becoming more religious would be a better solution to solve this $$$ error on behalf of paypal. As you can see, that phone call didn't get any further. I never received my money back. And after being a member for about 2 years without any errors, this incident of $450 and the inappropriate religious suggestions by paypal's representative, lost them another member. I now only check/money-orders to receive payments. and when buying, i look for items being sold by persons within 100 radius of where i live - so I can meet the seller, face-to-face.

    reply to this | link to this | view in thread ]

  8. identicon
    Dave, Oct 3rd, 2007 @ 7:12pm

    Paypal destroyed my business

    I have been a member of paypal for about 5 years. I've never had a problem with them, well until I started a ebay business.
    I found a good honest supplier, after about 20 sales Paypal restricted my account. After 2 days, about 15 calls and an unbelievable amount of faxes I have sent to paypal. They wanted my driver license, a utility bill, my suppliers name, phone number and website. Then they wanted tracking numbers on my last 4 sales which I was using a dropshipper and was not able to send the funds to my supplier to get tracking numbers. And finally I went on a website for the product I was selling to get a letter from them stating these items was not fake. I received this and faxed it to Paypal and my account was no longer restricted.
    Well guess what, 2 weeks later I got up and as always checked my email and found out that Paypal closed my account because my credit score was not high enough for them, and along with that they are keeping the $6,182.00 I had in my account for 180 days.
    This money was not mine, it was my customers which are waiting for their item they bought from me. There is no way I can send that money to my supplier out of my pocket.
    Within 24 hours I had my first complaint from a buyer. I know I will lose this money. Also I received some items I already sold. I have to pay over $300 out of my pocket for shipping because I cannot print shipping labels as I always done from paypal.
    What I want to know is why paypal is running credit checks on me and what my credit score has to do with anything?
    My advice is stay as far away from paypal as you can. I had a good business going and they shut it down with no warning and for no reason. Now my ebay account looks like I was a fraud!!! I use to have a 99.8% feedback, not anymore. THANK YOU PAYPAL

    reply to this | link to this | view in thread ]

  9. identicon
    Nodave, Feb 4th, 2009 @ 11:30am

    Drop shipping is a scam and you deserved what you got

    Did you have the product in hand? NO. So you shouldn't have been selling it, jerk. Glad you are gone from ebay.

    reply to this | link to this | view in thread ]

  10. identicon
    Menexis Offshore, Mar 30th, 2009 @ 11:31am

    knew all along

    I've always knew or suspected that paypal does this. If you carefully read their privacy policy and read between the lines, they do state that government officials have the right to request information from them, but this was mostly for fraud investigations and would also include others minor things like taxes as well

    reply to this | link to this | view in thread ]

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