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PayPal to Fine Gambling, Porn Sites

CowboyNeal posted more than 10 years ago

The Almighty Buck 279

scubacuda writes "Yahoo! reports that PayPal is taking an aggressive stance against gambling, adult, and non-prescription drug sites: anyone caught using PayPal for these purposes will be charged $500. Eric Jackson, a former PayPal executive and author of the new book 'The PayPal Wars,' calls the new policy 'draconian' and says it is likely a two-fold strategy to discourage certain behavior while heading off regulators."

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9/11, Patriot Day? Idiot Day more like! (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#10221159)

jesus (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#10221160)

what a bunch of loons, theyve got me money bag.

How productive. (5, Insightful)

rincebrain (776480) | more than 10 years ago | (#10221162)

Now, instead of only worrying that we'll get crappy porn, we have to worry about having our money stolen, and NOT getting crappy porn!

fark (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#10221164)


How? (5, Interesting)

Nos. (179609) | more than 10 years ago | (#10221165)

What right does paypal have to fine people. If its against the terms of service they could shut down the offending account, but fine them?

Re:How? (4, Interesting)

rice_web (604109) | more than 10 years ago | (#10221184)

The money is technically in PayPal's name, so I assume that they are free to do with it what they please, as defined in the contracts that you "sign" by clicking the submit button.

PayPal holds the money in a Trust (4, Interesting)

Anonymous Coward | more than 10 years ago | (#10221251)

Actually, even if they have legal title, you still have equitable title.
So, PayPal holds your money in a Trust.
So, normal Trust Law rules apply.

With the caviet that you told them what they could do with your money when you signed the "Terms of Service" contract.

Re:PayPal holds the money in a Trust (0)

Anonymous Coward | more than 10 years ago | (#10221266)

I should have added...
normal Trust Laws == fiduciary duty, etc.

What money? (3, Insightful)

ebyrob (165903) | more than 10 years ago | (#10221501)

Paypal doesn't have any of my money in their accounts, it's all in my bank and credit card accounts until I actually order something...

Re:How? (4, Insightful)

Lehk228 (705449) | more than 10 years ago | (#10221200)

Since when has paypal cared about whether their actions are legal or not?

Re:How? (4, Interesting)

hattig (47930) | more than 10 years ago | (#10221213)

I agree, it seems totally illegal to me.

I think that they shouldn't be the ones to judge what is right and wrong morally. If it was illegal activity then locking the account might seem a reasonable measure once notified by someone with authority (as a normal bank would lock an account if a judge ordered it, etc). But otherwise they should not be doing this.

It's simply retarded. It looks like theft. Since when do companies have the right to fine their customers? They aren't a court of law.

And why a lot of people will never consider using Paypal at all. What next?

Re:How? (1)

proj_2501 (78149) | more than 10 years ago | (#10221315)

have you ever had a credit card? if you go over your credit limit or miss a payment, you effectively get fined (and worse!)

Re:How? (5, Insightful)

hattig (47930) | more than 10 years ago | (#10221346)

Not to the tune of $500 though.

Remember credit cards are YOU borrowing money from someone else.

Paypal is YOUR money.

Most bank charges and fees (they are not called fines) occur when YOU start eating into THEIR money, by being overdrawn, etc. You don't get fined because some of your money in your account came from you doing something illegal or immoral (according to the bank).

Contract Law gives them the right (0)

Anonymous Coward | more than 10 years ago | (#10221226)

Welcome to Contract Law.

If you agreed to their terms of service, you (I assume) agreed to let them fine you.

What right do they have? The rights you gave them when you agreed to their contract.

Re:How? (1)

Dr. Bent (533421) | more than 10 years ago | (#10221260)

What right does paypal have to fine people.

Companies fine people all the time. If you pay your credit card bill late, they fine you. If you fail to return a movie on time, they fine you. If you cancel a mobile phone contract early, they fine you.

When you agree to the terms of service for paypal, it's like any other're legally bound to hold up your end of the deal or they can sue you. If the contract says you will be fined for doing XYZ and you do it, you have to pay the penalty. If you don't like it, don't use paypal.

Re:How? (3, Informative)

Detritus (11846) | more than 10 years ago | (#10221324)

IANAL but a company isn't free to put anything that it wants in a contract and have it enforced by the courts. A judge can invalidate all or parts of a contract that are illegal, unconscionable or against public policy.

Re:How? (3, Insightful)

hattig (47930) | more than 10 years ago | (#10221380)

The common theme with all those fines though, is that it is you misusing their money/investment.

You get fined for taking out more money from the CC company than it wants you to.

You get fined for keeping hold of a store's property longer than they allowed you to.

You get fined for breaking a contract which most likely included a $200+ mobile phone for free as part of it.

Terms of Service aren't legally binding if they are unfair, immoral, etc. You can't have Terms of Service saying "If you are black, you will be charged 20% more". Unless you are the insurance industry that is :rolleyes:

Paypal hold YOUR money in trust (as someone else pointed out). It is not up to them to judge the right and wrongs of how that money is made, that is up to THE LAW.

Re:How? (3, Insightful)

Florian Weimer (88405) | more than 10 years ago | (#10221276)

What right does paypal have to fine people. If its against the terms of service they could shut down the offending account, but fine them?

It's called "regulatory pressure".

The US is currently trying very hard to push online gambling off the Internet (with a few exceptions for US sites with licenses, I assume). It tries to do this by targeting any US company that indirectly benefits from gambling sites: banner ad buyers, ISPs, and now PayPal.

PayPal's situation is complicated because they operate in a field that is strictly regulated (banking) and haven't got banking licenses in all US states. PayPal basically has no choice to comply with law enforcement suggestions at this point if they want to continue business.

Re:How? (1)

LostCluster (625375) | more than 10 years ago | (#10221533)

If you don't think PayPal has the authority to fine misbehaving users, maybe you should think of it as an "annoyance fee".

So long as the schedule of penalties are agreed to as part of the Terms of Service, the misbehaving user has already agreed that their activity would generate a fee that they'd be responsible for paying...

It's also the way most private universities generate the ability to fine people who break parking rules. "Unauthorized users of this space agree to pay $n" on a sign posted next to the space is good enough to generate a fee...

Join the HOMO today!! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#10221169)

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First, you have to obtain a copy of some PORNO [] . You can also apparently obtain some porno using BitTorrent.

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I think you mispelt GNAA (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#10221196)

Isn't the GNAA just a bunch of bored pimply heterosexual white boys?

Re:Join the HOMO today!! (0)

Anonymous Coward | more than 10 years ago | (#10221258)

Geeze, lighten up, mods. This was pretty funny - I especially like the links. Take a pill.

Re:Join the HOMO today!! (0)

Anonymous Coward | more than 10 years ago | (#10221424)

You win for best TROLL today

Re:Join the HOMO today!! (0)

Anonymous Coward | more than 10 years ago | (#10221455)

At least this is better than that damn dog killing troll.

But.. (2, Funny)

Anonymous Coward | more than 10 years ago | (#10221171)

how am I supposed to catch the monkey and win hentai dvd's made out of pressed viagra now, without resorting to credit cards?

Ebay does have Adult items (5, Insightful)

lecithin (745575) | more than 10 years ago | (#10221179)

What is the difference? They(ebay) list adult items, why could you not pay for them via Pay Pal?

Re:Ebay does have Adult items (3, Insightful)

Lisandro (799651) | more than 10 years ago | (#10221239)

My guess it's they want to deattach themselves from those "markets" and keep a reputation as a serious buisness. Otherwise i don't know; like you said, it's not very different from buying adult items from eBay. And it's not like gambling and prescription drugs don't leave them any money.

Re:Ebay does have Adult items (4, Informative)

tukkayoot (528280) | more than 10 years ago | (#10221444)

Are Mastercard, Visa or American Express taken any less seriously because they can facciliate the purchase pornography? How about First Union bank?

I don't think so.

No, like the article/summary says, I think this has something to do with regulatory pressure. I really don't understand all the fuss, but I think it has something to do with the fact that PayPal isn't a bank, and thus has a different set of regulations/laws it has to abide by.

Offhand I don't see why PayPal should be restricted in this manner, and why they should feel compelled to levy these fines, but IANAL or anything.

Re:Ebay does have Adult items (0)

Anonymous Coward | more than 10 years ago | (#10221534)

My guess it's they want to deattach themselves from those "markets" and keep a reputation as a serious buisness.

Porn is a serious business. While it's sleazy, by and large, it's a business. They make a lot of money, and pay a lot of taxes.

The porn industry is bigger than Hollywood. So is the video game industry. And yet, the porn & video game industry have almost no clout.

Now that Jack Valenti has left the MPAA, I think the porn industry should hire him as a lobbyist.

Re:Ebay does have Adult items (1)

spectral (158121) | more than 10 years ago | (#10221510)

Especially since they're the same damned company. If you buy something from eBay, but then aren't able to pay for it using an eBay owned payment/banking service, that seems kind of strange.

Re:Ebay does have Adult items (5, Informative)

mcknation (217793) | more than 10 years ago | (#10221519)

Well I did some *research* on this topic just now. ;)

Ebay hides all adult items in a catagory called "Mature Audiences". There is all kinds of stuff in this catagory. Sex toys. Elargement pills all kinds of stuff.

However not ONE single auction in this catagory allows paypal as a method of payment. My guess is that the forbid it entirely...even on ebay


Bwahahaha! (-1, Troll)

Anonymous Coward | more than 10 years ago | (#10221182)

Let me get this straight: PayPal is going after porn and gambling? That's ironic because Ebay and PayPal thrive on fraud.

Finally! (3, Funny)

maeka (518272) | more than 10 years ago | (#10221183)

Heaven forbid a private company make money from something sinful like gambling or porn.

Now if we could just get our government out of the gambling business...

Re:Finally! (0)

Anonymous Coward | more than 10 years ago | (#10221190)

I know people that used to buy marijuana using PayPal. Charging drugs to your CC... truly the way of the future.

PATRIOT act.. (1, Insightful)

k98sven (324383) | more than 10 years ago | (#10221216)

Thank the PATRIOT [] act.

This is another victory in the 'war on terror', obviously.

Re:Finally! (3, Interesting)

rice_web (604109) | more than 10 years ago | (#10221250)

Private companies are subject to the consumer. If consumers turn away from PayPal because they see it as a "sinful" company, then PayPal will have to make changes. Perhaps PayPal has received a fair number of suggestions and/or seen a drop in sales recently that have been attributed to their adult-industry clients, and as a result they have decided to drop-kick those companies from the PayPal database.

AAGGLL Re:Finally! (0)

Anonymous Coward | more than 10 years ago | (#10221270)

PayPal has most likely put this change into effect because of threatened government regulation.

Re:Finally! (1)

hernyo (770695) | more than 10 years ago | (#10221295)

Why is gambling sinful? Every dumb should have the right to risk his money. Every dumb can see that, in average, those machines will NOT pay more than people put in ("97% slot machines"). Every mature man is supposed to be able to think a little bit and realize that - something like - 97% of the gamblers LOSES and only 3% WINS. Anybody should be free to take this risk.

In China, there are DAILY 154.000 new companies registered and DAILY 150.000 bankrupt. But people still take the risk to start a company and risk everything they have.

You're right, gambling can not be compared with business.

-- yeah, i know, my english sucks

Re:Finally! (1)

dindi (78034) | more than 10 years ago | (#10221355)

yes, I agre, on the other half only part of "gambling" is really gambling :

putting $200 on a horse race IS GAMBLING ..

playing Poker with $0.50 with a few friends online IS GAMBLING ... but it is 2 different worlds ...

betting $0.50 at a decent Poker company (where they take 3% of the rake) opposed to throwin $200 at video blackjack... (a typical example of human stupidity, since everyone knows how to calculate a number that is smaller then the dealer's or bigger than 21 )

on the other hand Poker is not gambling (but it is just my opinion *and many others'*)

Re:Finally! (2, Insightful)

tabdelgawad (590061) | more than 10 years ago | (#10221433)

"Now if we could just get our government out of the gambling business..."

Modded funny, but the fact is the US government (at least state governments) have a *monopoly* on gambling. They share it with Native Americans as a form of compensation (Indian casinos), but note that no private entity is allowed to run a lottery, for example. State lotteries are a significant source of income (aka voluntaru taxes) for state governments.

Re:Finally! (2, Insightful)

gcaseye6677 (694805) | more than 10 years ago | (#10221490)

It seems like under the current laws, the mob [] is most likely to benefit from gambling being illegal. Especially if they have cooperation from corrupt individuals in government. Laws against gambling are no different than 1920s prohibition of alcohol. People will do it anyway, it's just a matter of who gets the profits.

How is this going to work for ebay? (5, Insightful)

sgant (178166) | more than 10 years ago | (#10221191)

Paypal is owned by ebay right now...but how is this going to work if you buy your adult stuff ON ebay?

Ebay does have a whole adult section where you can buy movies, toys etc will this effect it?

Fined by the same company that your buying adult things from.

Sounds too me like a double standard in the works. I don't think Paypal is trying to discourage this behavior that it finds objectionable...because if it did, then ebay would remove the entire adult section from it's site also.

Just and observation

Re:How is this going to work for ebay? (2, Interesting)

ari_j (90255) | more than 10 years ago | (#10221246)

So here's what you do...find all the adult items on eBay that only take Paypal, win all of 'em, and refuse to pay.

Re:How is this going to work for ebay? (0)

Anonymous Coward | more than 10 years ago | (#10221329)

I was just browsing the 'adult' section. I did not find a listing that you could use paypal. There may be some, but I didn't find it.

Re:How is this going to work for ebay? (4, Insightful)

rekoil (168689) | more than 10 years ago | (#10221344)

Actually, eBay items are the sole exception to Paypal's adult items policy. The policy was primarily aimed at porn sites who took subscription payments via paypal, rather than physical items such as adult movies, toys, etc.

This is due to the extremely high dispute rate for these types of payments, most often due to husbands claiming the charge is fraudulent when the wife discovers it. As you might expect, Paypal does not want to be in the middle of these disputes, and banning said usage is, in their opinion, the best way to avoid being put in that position

I'm curious if anyone's tried to sell memberships to a porn site on eBay, however...that could be an end run around the policy if eBay permits it.

Re:How is this going to work for ebay? (0)

Anonymous Coward | more than 10 years ago | (#10221382)

You mean you buy secondhand sex toys on ebay?

Re:How is this going to work for ebay? (0)

Anonymous Coward | more than 10 years ago | (#10221395)

When you buy stuff on eBay you arent buying it *from* ebay - ebay is just an auction house. Individual eBay members sell things on eBay, and other eBay members buy them (or not)

Have you ever actually used eBay? Somehow I tend to doubt it.

Re:How is this going to work for ebay? (1)

sgant (178166) | more than 10 years ago | (#10221489)

When you buy stuff on eBay you arent buying it *from* ebay - ebay is just an auction house. Individual eBay members sell things on eBay, and other eBay members buy them (or not)

Have you ever actually used eBay? Somehow I tend to doubt it.

Well no DUH! Yes I've used ebay quite a bit. I know how they work.

So to take what you say further...when you use Paypal to pay for something, you're only buying things through them as well. A go between from consumer and seller. Paypal isn't buying or selling anything themselves either.

Have you actually used Paypal? Somehow I tend to doubt it.

Re:How is this going to work for ebay? (1)

no-body (127863) | more than 10 years ago | (#10221498)

> Paypal is owned by ebay right now...but how is this going to work if you buy your adult stuff ON ebay?

It appears that the particular sites (or categories) in Ebay are blocked from accepting PayPal

Another thing - I looked a little bit into the PayPal issues, if something goes wrong with a purchase, let's say defective (DOA) item sent and there is a problem, one may consider the following condition for invoking PayPal's "Buyer Complaint Process requirements":

You must not have received the item that you purchased.

Well... you've reveived it, it's dead and PayPal's "Buyer Complaint Process" cannot be used!

Since I found this out, I don't use PayPal for any purchases since paying direct with a credit card gives you more right in a dispute.

As for PayPal's puritanism - that's right down the current US ruling parties road. Know a good country to move to on this planet?

Re:How is this going to work for ebay? (1)

sgant (178166) | more than 10 years ago | (#10221523)

I didn't know I've never bought anything from eBay's adult section, and as I remember I haven't even gone there because to get access you have to sign away your soul and jump through flaming hoops just to SEE what they have. It wasn't worth the hassle, and I wasn't buying anything on there anyway.

At least as far as anyone here knows...

I don't get it... (1)

NoMercy (105420) | more than 10 years ago | (#10221194)

There's a lot of money to be made in gambling and porn, so why not allow those customers, or complete the needed regulatory thingimagigs to allow them to act as a payment system for those industries.

I bet a lot more people would be willing to pay via paypal for pon than handing over there credit card details.

Re:I don't get it... (2, Interesting) (664381) | more than 10 years ago | (#10221215)

The biggest reason: FRAUD
Internet fraud rates are high, paypal factors that in to there fees charged ,but internet porn charge back rates are even higher.
Charge backs cost paypal money and PayPal has abviously done some calculations and determined it is more profitable for them to focus on the areas with lower charge back rates.
Do you understand now?

Re:I don't get it... (1)

FunkSoulBrother (140893) | more than 10 years ago | (#10221243)

As I mentioned in a previous post, I wouldn't necessarily say that the incidence of fraud is higher, just the incidence of stupid people with buyers remorse who think they can lay their porn/gambling addiction back on the Financial provider with false claims of fraud.

Re:I don't get it... (1) (664381) | more than 10 years ago | (#10221530)

FRAUD is FRAUD whether because of the buyer or the merchant.

Re:I don't get it...but someone else will (1)

DrWho520 (655973) | more than 10 years ago | (#10221326)

Sounds like a void in the market waiting to be filled to me. Some enterprising fellow could become the Larry Flynt of online monetary transfer.

Re:I don't get it... (4, Insightful)

RealProgrammer (723725) | more than 10 years ago | (#10221411)

My guess is there are three factors:
  1. Paypal sees that porn, gambling, and viagra sales generate a lot of customer complaints. People tend to claim they didn't want the item, it wasn't them, somebody stole their identity, etc. Like any business, they're trying to limit their losses.

  2. Those transactions are all very spammy. Add hot stock tips and Nigerian crown princes and you've pretty summarized my 'caughtspam' folder.

  3. Paypal doesn't want to be in the liability loop for kiddie porn, illegal gambling, and illegal drug sales.

  4. Paypal wants to keep a clean image, and genuinely don't want those transactions. I kind of doubt this was a factor, but there's always hope.

Crrrrrrrntz (1)

Doomrat (615771) | more than 10 years ago | (#10221195)

In the past I've paid for drugs* that are legal in my country (magic mushrooms namely) and illegal in others. Would they really dare try to fine me for that?

It was bad enough that I couldn't play poker online using my Paypal account to pay foreign sites.

Porn? Is this somehow entirely demonic now? Do the Paypal executives have bad thoughts about their own mothers and using the general public as an outlet for this?

Paypal are clearly incapable of enforcing what their accounts are used for of their own accord. This is clearly just a poor solution to pass the responsibility on to their users.

*A past chapter in my life.

sickening (1)

jmweirick (807315) | more than 10 years ago | (#10221206)

That's just wrong. Trying to tell people what they can and can't spend their money on.

I'm sure they are just being practical. (5, Interesting)

FunkSoulBrother (140893) | more than 10 years ago | (#10221219)

Being someone who does online sports betting, PayPal cut us out a little over 2 years ago.

But it was a practical, not moral cut in my opinion.

The fact of the matter is that in the gambling, adult and I suppose the drug business, you get way too many people who purchase the "product" and then get buyers remorse, and raise all kinds of hell at the card provider, saying it was never them but nefarious internet hooligans who gambled with their Paypal account, or bought that porn subscription to

It became so bad at least in the gambling world that Paypal said the hell with it, and left. Now we have similar providers, but more personal responsibility, too. I actually like it that way.

This is terrible news! (4, Funny)

The I Shing (700142) | more than 10 years ago | (#10221221)

Uh-oh, I'd better take those PayPal logos off of my website,

Re:This is terrible news! (0)

Anonymous Coward | more than 10 years ago | (#10221284) was already taken eh?

Conspiracy (0)

Anonymous Coward | more than 10 years ago | (#10221291)

And now the authorities have taken down your website. I bet this is a conspiracy against you!

Cost of doing business? (1)

deadmongrel (621467) | more than 10 years ago | (#10221222)

I did read the article and couldn't see aanywhere whether they would cancel the account if they were used for Gambling/Porn/High-Profit transaction. I am pretty sure the gambling/porn/illlegit-drug stores make probably 100 times that amount. $500 would probably be the "cost of doing business". the policy is just to please the regulators i guess.

E-Gold (4, Interesting)

carcass (115042) | more than 10 years ago | (#10221227)

PayPal's outdated. They're on a social engineering crusade.

Use e-gold [] instead.

Feed your local e-diots. (4, Insightful)

Anonymous Coward | more than 10 years ago | (#10221300)

Any site that has advertising popups on the main page, has no titles on pages, and panders to people who will believe anything anyone says, as long as it's backed in allegedly real gold... well... (Hey, nobody ever said /. only had intelligent people.)

Re:E-Gold -- screw that (5, Interesting)

hlygrail (700685) | more than 10 years ago | (#10221361)

Anything that resizes my browser window automatically gets a /dev/IGNORE entry from me.

Man I hate that... not to mention the ads and pop-ups.

What's Next? (5, Insightful)

BalorTFL (766196) | more than 10 years ago | (#10221228)

I really hope that this isn't the beginning of a new trend. How long until VISA won't let you buy beer or cigarettes and MasterCard charges a 50% tax on Penthouse? When payment methods start enforcing their own moralities on their costumers, something is seriously wrong.

Re:What's Next? (1)

FunkSoulBrother (140893) | more than 10 years ago | (#10221263)

Visa already won't let you do internet gambling transactions. But admittedly this is semi-legal in the USA, so they have some legal backing to make that decision.

Financial (2, Interesting)

Have Blue (616) | more than 10 years ago | (#10221232)

This might have an interesting effect on PayPal's financial classification (I recall arguments back when it became popular over whether or not it counted as a bank, mostly in terms of what regulations it had to obey). Are there any laws regarding this sort of discriminatory service fees by banks? Would doing this disqualify PayPal from any commercial status it was hoping to attain or maintain?

Fines for legal businesses? (3, Insightful)

nurb432 (527695) | more than 10 years ago | (#10221234)

Correct me if I'm wrong, but aren't adult sites legal, in this country at least?

And last I heard, on-line drugs are legal in general, if there is a real doctor on staff..

Sooo. how can pay-pal *fine* these people? Its not their job to play moral police...

Sure they can just refuse to do business with them, if they don't agree with the morality of the business, that is their right.. but FINES???

No I didn't RTFA, it wouldn't load..

Re:Fines for legal businesses? (0)

Anonymous Coward | more than 10 years ago | (#10221381)

Correct me if I'm wrong, but aren't adult sites legal, in this country at least?

No, not in this country. In that country perhaps, but not this one.

If the TOS allows it... (2, Insightful)

AtOMiCNebula (660055) | more than 10 years ago | (#10221387)

PayPal is a private business. You agree to give them the right to fine you for those actions when you sign up with them. If you don't like the fines, get a MasterCard or something.

But on the other hand, I doubt PayPal is going to catch many people. As long as you don't include "Here's my $500 bet for the game tonight. Gambling Rocks!" I doubt they're going to check every transaction. As long as you aren't dumb about it, I don't really know what they're going to do. I'm not saying keep doing what you're doing, just be careful about it. Don't send money to '', or use comments that show it.

But really, if you don't like it, don't do business with PayPal. As long as they get you to agree to it when you sign up, it's fine for them to do it, it's up to read the fine print if you're going to be doing risky stuff like that. And there's a clause in there (like in everything) that says they reserve the right to update the TOS/AUP whenever they want, and that you automaticially agree to it.

Re:Fines for legal businesses? (1)

rekoil (168689) | more than 10 years ago | (#10221404)

Criminal law =! contract law. Paypal is making these changes to their master user agreement, which means you contractually agree to pay said fines if you use the service in the ways that Paypal prohibits, whether or not those uses are legal.

This is no different from an ISP's acceptable use policy, which prohibits uses that are legal as well, such as sending CAN-SPAM-compliant commercial email.

Class action (1)

Lord_Dweomer (648696) | more than 10 years ago | (#10221235)

There will be a class action lawsuit against this so quickly PayPal won't know what hit them.

I don't know how many people would come forward to complain about porn, but gambling will have them up in pitchforks. And of course only the lawyers win.

But seriously, how dare PayPal decide what I do with my money. I hope they lose a lot of business for this, as I'm sure a large portion of their business comes from these very things.

ebay is starting to show it's true face (3, Insightful)

Pivot (4465) | more than 10 years ago | (#10221238)

You cannot get someone's paypal payment unless you sign up for a paypal merchant account.

It's no longer allowed to add a surcharge to ebay auctions to cover paypals 3% fee when you have a merchant account. Thus, you not only have to pay for listing your actions on ebay, you also have to pay to get your money.

I wish ebay had a little competition.

Re:ebay is starting to show it's true face (2, Insightful)

mrgreen4242 (759594) | more than 10 years ago | (#10221512)

Someone will fill that gap, inevitabley. Someone with enough capital and the knowhow of the online financial transaction business will start up a service that caters SPECIFICALLY to the porn/gampling/drug crowd. Of course, they will take other business, but they will advertise those three in particular.

If they do it fast, they can cash in on some free press as PayPal bans the activities.

The fact that the porn and gambling are probably some of the biggest money makers online, they could concievably overtake PayPal in terms of $ transferred in a relatively short time. The sheer bulk of what they are doing, plus the fact that the are the 'new kids on the block' (on an aside, why did that band have to ruin that saying?) will likely let them start a price war against PayPal.

This just might be good for the consumer in the long wrong. Paypal is making an opening into an otherwise global monopoly. Perhaps the new competing sites will even start up some sort eBay like related service if they do well enough.


misleading title (3, Interesting)

jdkane (588293) | more than 10 years ago | (#10221240)

Title says: PayPal to Fine Gambling, Porn Sites

However PayPal is actually fining the PayPal user, not the sites.

Should read: PayPal to Fine Users for Gambling, Porn Sites

Re:misleading title (0)

Anonymous Coward | more than 10 years ago | (#10221292)

Yeah, PayPal will learn the term "chargeback" pretty darn fast.

fine with me (1)

another misanthrope (688068) | more than 10 years ago | (#10221242)

It'll just open up a whole market for a(nother) payment vendor solution - I know there are already other online payment merchants out there but if they become the defacto standard for porn (there's a little bit on the internet these days I hear) then paypal might just be making a BIG ($$) mistake.

fine with me... I don't care for them anyway.

Online Poker will suffer (2, Interesting)

currivan (654314) | more than 10 years ago | (#10221254)

It's getting increasingly difficult to fund online poker accounts, which are enormously popular in light of the World Poker Tour and other televised events.

It looks like were seeing a new era of regulation through threat of regulation. The offshore drug sites are providing a valuable service too: AIDS activists lobbied to be allowed to import personal-use supplies of experimental drugs not yet approved domestically. They're also the main source of nootropics like Piracetam and Hydergine.

Re:Online Poker will suffer (1)

FunkSoulBrother (140893) | more than 10 years ago | (#10221277)

I don't know of anyone who has used Paypal for online poker in the last 2 years. Its been out for a while now.

Most people use Neteller and it suits them fine. Keeps people from gambling on credit, too.

Now if Neteller was shut down, then the poker world be in for some trouble.

It's a restriction of freedom. (2, Informative)

bs_02_06_02 (670476) | more than 10 years ago | (#10221273)

How would you feel if your bank said, "Write a check at the porn store, and we're charging you $500!"

It's a violation of our freedom. I've never, ever liked Paypal for their ability to screw the consumer without answering to anyone for any reason. There's a lot of discontent out there... just search for Paypal sucks sites... there are a lot of them. Thank god I don't have an account.

Spong3 (-1, Troll)

Anonymous Coward | more than 10 years ago | (#10221287)

down with paypal (3, Insightful)

Doc Ruby (173196) | more than 10 years ago | (#10221293)

PayPal is an unregulated global banking monopoly. The porn and gambling industries are some of the most intense hothouses of commercial Internet development. Darwinian pressure is creating an opportunity for a PayPal competitor which will give consumers an alternative. The world is in a sorry state when porn and gambling are our best hope for freedom, but it does sound familiar.

Re:down with paypal (0)

Anonymous Coward | more than 10 years ago | (#10221399)

The world is in a sorry state when porn and gambling are our best hope for freedom, but it does sound familiar.

It has ever been thus [] .

A real change in PayPal policy (0)

Anonymous Coward | more than 10 years ago | (#10221299)

I thought their only set in stone policy was charge outlandish fees for in essence doing no work whatsoever. Combining with eBay, they make a large percentage of the cost of an item for doing practically no work.

It's nice to see they changed their policy from "charging you so much for so little" to "charging you so much for anything that isn't A SIN YOU HEATHENS YOU SHALL BURN IN THE ETERNAL PIT".

People who legislate morality like eBay aren't that much off from the Nazi policy of book burning literature that conflicts with the ideals of the state.

Gambling and Paypal (1)

dindi (78034) | more than 10 years ago | (#10221302)

Paypal is not usable for casinos for a looong time.

Living in Costa Rica cannot even open a paypal account (well I can open, but my cards are just rejected) since so many US gaming companies companies hired locals to use personal accounts to do payouts and take payments ....

it also makes me wonder what is adult and what not : if I order a vibrator for my wife with my paypal from a "toy store" am I in violation ?

I feel paypal is putting so many regulations on the accounts it is already impossible to use for lots of people (eg. me)

just my thought ...I would use paypal, but I cannot, actually I mad at them and it got to the point where I say I hate paypal

what exactly does "the dept." handle? (0, Offtopic)

millia (35740) | more than 10 years ago | (#10221331)

i mean, off topic, sure, but what exactly does the department department handle? i know what all the others do.

Don't Hate Paypal (5, Insightful)

Anonymous Coward | more than 10 years ago | (#10221342)

Almost every single reply so more is complaining that its none of Paypal's business to enforce their morals on the user. Anyone who has said something like that is a mindless slashdot troll who doesn't know anything about 3rd party processing or merchant accounts. Most merchant account providers have banned adult sites and gambling for years because they are High Risk Industries. Its not just adult and gambling, many processors also ban game servers, IRC-related sites, MLM schemes, make $3000-working-from-home-sites, etc. These types of websites are highly likely to attract stolen credit cards, credit card fraud, and chargebacks. It costs the merchant provider money every time a chargeback is done, and it takes both time and money to fight a chargeback. So please do a little research into the world of credit card processing before you go on a rant about PaPal's religious crusade. They are simply trying to decrease fraudulent transactions. If you don't agree with their policies or the $500 fine, you can opt to use a different company which does allow adult and gambling merchants, but beware you will probably have higher transaction fees, more thorough background checks, and possibly a several day ACH hold on any funds you receive.

Paypal shutsdown romance novels and gay literature (3, Informative)

tehanu (682528) | more than 10 years ago | (#10221348)

Here is the google cache of the All About Romance newsletter (it seems to have disappeared from the site) which is a newsletter about romance novels and give a good idea about how specifically people are being affected: ww

Some interesting quotes:

"PayPal can be used to buy and sell pre-1980s issues of Playboy, Playgirl, and Penthouse. On eBay, these can be categorized as "Collectibles" rather than as "Mature Audiences.""

"Books classified as "romantica" - ie. books about people falling in love and making love are not allowed - but who is to say what is romantica and what is just hot romance? Print romances seem to get a pass. Readers can go onto eBay and find print erotic romances such as those published by Kensington's Brava line. They can also find books far more explicit than erotic romance novels for sale, and their PayPal payments will be accepted. The Claiming of Sleeping Beauty, one of Anne Rice's BDSM novels, is one obvious example of this."

"According to Brenna Lyons, when the new policy went into effect, many people noticed that the adult content guidelines were vague. For that reason, many publishers of sensual and erotic books asked PayPal to check out their sites. PayPals adult content guidelines are open to interpretation and so changes can be made. PayPal did, in fact, assure the publishers that their sites were acceptable.

Early in 2004, almost a year after the announcement of the new policy, PayPal began freezing the accounts of publishers, writers, and even readers of erotic romance. Brenna herself knows of four publishers, five self-published authors, and two review sites that had their accounts frozen by PayPal.

What happened to warrant such drastic action? PayPal was investigating them for violations of their Terms of Service (TOS). When an account is under investigation it can be frozen for up to 180 days.

Though those under investigation often disagree, Amanda Pires says that the investigation is "not an invasive process." PayPal doesn't contact the vendor until they've decided it's violating the Acceptable Use policy. They will, however, investigate sites on the basis of a single complaint. According to Amanda, this is because PayPal "encourages people to let them know because the Internet is so large." She adds, though, that while a single complaint is enough to start an investigation, that single complaint isn't enough to get PayPal to take action against a vendor. As part of this investigative process, PayPal staff review both the sites and the content. In the case of an electronic publisher, they might ask for downloads of the books. In a case like that, the process could take longer because they have to evaluate books rather than just evaluating a web site.

The evaluation process involves trying to determine "whether or not the sexual content is a small or insignificant part of the book." Ms. Pires adds, "We allow PayPal to be used to sell a book, not based on length or number of loves scenes, but on the topic or intent of the book. If the sexual scenes or content is part of the story line but not the primary purpose of the book, then PayPal can be used to sell the book." Staff members performing this evaluation must decide whether the books adhere to the Acceptable Use policy. When performing these evaluations, the staff members "try to be as fair as possible."

Many authors and publishers of erotic romances who have been investigated disagree that PayPal treated people in their industry fairly. According to Brenna Lyons, no warning was given to small publishers and self-published authors that they were about to be investigate. Their PayPal accounts were suddenly frozen. "Just wake up one morning and have your account frozen. If you happened to have most of your working capital in there, you were screwed. Pardon the frank language. Here's the cute part. When they started going after the big boys, they gave them a few weeks to change providers for sensual and erotic book sales." A publisher didn't have to use PayPal as a payment option to be affected. For example, eXtasy Books, which sells sensual and erotic romances such as The Truth About Vampires and Slave Heart, did not use their PayPal account to accept payments for their books. It was used for third-party payments, such as paying authors. And it is still frozen. And, Tina, a spokesperson for the publisher, argues that only smaller publishers seemed to be targeted by PayPal, and even then, only certain publishers."

Paypal is also shutting down publishers of gay literature ("None are pornographic, but some are somewhat erotic. Some of our authors are noted academicians, lawyers, psychologists, etc")

"GLB Publishers sells print books and e-books by and for gays, lesbians, and bisexuals. While publisher W. L. (Bill) Warner did not face the fund-freezing process, PayPal did suddenly refuse to handle payments to their site - despite the fact that the site sells few erotic titles. Warner sees what happened as antagonistic to publishing in general. Their books are gay, lesbian, bisexual, or transgender, but "there is 'romance' there just the same.""

They note that Paypal may be starting to hurt financially from this:

"It's not just the authors and publishers who have taken up arms against PayPal. Brenna Lyons notes that many readers have also joined them, closing down their PayPal accounts in protest and sending letters to PayPal explaining why they were shutting down the accounts. "The funny thing is that, while PayPal originally stated that they believed this wouldn't lose them much business from this policy, when the mass exodus started, they made a desperate attempt to get the account holders back." For example, many authors received offers inviting them to reopen their closed accounts. Brenna wonders "if they are losing more business than they counted on over this.""

If you want, you can sue them for this. (2, Interesting)

Anonymous Coward | more than 10 years ago | (#10221349)

Step 1: Buy an eBay share (Unless you have some already). They own PayPal.

Step 2: Sue the company for abusing minority shareholder rights. I mean, in what way is it in the shareholder's interest for the company to pursue some kind of wonky moral agenda?

(They do have this concept for publically traded companines in the 'States right?)

Discourage certain behavior? (1, Flamebait)

DroopyStonx (683090) | more than 10 years ago | (#10221354)

Who the fuck do they think they are, the Morality Squad?

Their job is to handle currency transfers, that's all, not to monitor what THEY think is right/wrong.

I hate when these companies get cocky and think they're doing the world a favor when in actuality they're just making themselves look bad.

Re:Discourage certain behavior? (0)

Anonymous Coward | more than 10 years ago | (#10221376)

who said they are monitoring what they think is right or wrong? adult purchases are very high risk transactions. banning them reduces fraud.

Re:Discourage certain behavior? (0)

Anonymous Coward | more than 10 years ago | (#10221392)

Doing the world a favor? No, only themselves. They're not doing this for any moral reason, they just don't want any legislation trouble.

Re:Discourage certain behavior? (1)

choas (102419) | more than 10 years ago | (#10221414)

+5 insightful if I ever saw one.

Actually, since the editor didn't take the time to fill out the dept. I would like to suggest:

from the who-the-fuck-do-they-think-they-are,-the-morality- squad? dept

Profit! (2, Funny)

headqtrs (467875) | more than 10 years ago | (#10221409)

1. Start PayPal 2 that allows all of this
2. ???
3. Profit!

Re:Profit! (1)

eBayDoug (764290) | more than 10 years ago | (#10221469)

Must be up to paypal 6 by now. Many have come and gone, others are still trying to be the paypal.

Who cares? There are other services out there. (5, Informative)

ellisDtrails (583304) | more than 10 years ago | (#10221418)

Use FIREPAY or NETTELLER (google them for info). They are RELIABLE and they aren't interested in being Big Brother or monitoring your online habits.

F Pay Pal.

Closed (2, Informative)

LordK2002 (672528) | more than 10 years ago | (#10221426)

Paypal account closed as of today.

They can have whatever policy they want, but they are not going to impose fines on me for breaking it.

Incidentally, the "Mature Audiences" category includes "items that you have to be 18 or over to purchase", which would seem to include any 18-rated film whether pornographic or not.


OK (0)

Greyfox (87712) | more than 10 years ago | (#10221428)

Seems like that lets the people who use Paypal to fund murder for hire and funding illegal wars in South America off the hook. I guess Paypal likes the people who are using their service for murder for hire and funding illegal wars in South America...
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