Paypal Police

[transit]

Paypal
police</span>

by Ray Boyd /span><st1:date year="2005" day="28" month="9">28 Sept, 2005</span></st1:date>)</span>




The premier online money
manager is a big bad corporation with big bad law enforcement complex – and
they're going after marijuana, drug-related businesses, and you.</span>




There it is, on the
e-commerce websites of people selling bongs, cannabis seeds, weighing scales,
hydroponics equipment, and cannabis cultivation books. It's on the websites of
marijuana advocates, left-wing activist groups, environmental organizations,
gun dealers, and Bible wholesalers.



What is it? None other than the famous PayPal logo, usually accompanied
by a cheerful statement proclaiming PayPal is an easy, safe and effective
way to do business on the Internet.



Too bad PayPal isn't really a safe, effective way to engage in
e-commerce. In reality, PayPal is a corporate volunteer in the war on
drugs and free speech.



Not My Pal



The genesis for this article came when a marijuana entrepreneur called me to
complain about PayPal. The website for his company does a lot of
Internet business, retail and wholesale. None of his products are illegal; they
are sold in hundreds of retail outlets worldwide.



"They've got thousands of dollars of my money," he screamed into the
phone, panic-stricken. "I've been doing business through them for years.
Now they're holding months of payments made to us by customers using PayPal.



"They say they'll hold it for six months. We have bills to pay, we need
the money, but they've frozen the damn account. When I called them, they got
nasty. They said if I were smart I wouldn't raise any noise about this, because
they had a lot of information on my customers and me.



"They threatened to nark me out! They have a lot of personal information
that would be harmful if it was disclosed to law enforcement. I can't do
anything to get people's private information off my account. They've got it
locked down." My friend reported that he spent hundreds of dollars on long
distance phone calls and registered mail, trying to get his money and prevent
his customers' information from being provided to police agencies.



"The way they treat you is like shit," he said. "They
transferred me around, gave me false information, and held on to my money as
long as they could. They so much as said that they are an information-gathering
source for the police. That's the shit I want people to pay attention to the
most."



My friend's experience reveals that using PayPal means giving up
sensitive financial and personal information and the right to keep that
information private.



The PayPal user agreement makes clear you've signed your privacy away
when you become a PayPal user. You've also given PayPal the right
to determine which of your e-commerce transactions are acceptable or
unacceptable, as defined by PayPal. If you're a pothead or a pot
entrepreneur, using PayPal means you've given the company the right to
help get you busted.



PayPal also bans sales of "paraphernalia," and says, "</span><st1:City><st1lace>Sale</span></st1lace></st1:City> of [some other drugs] may be legal in certain
jurisdictions or circumstances, [but] due to safety concerns, PayPal
also prohibits the sale of GHB (gamma hydroxyl butyrate), Rohypnol, and
anabolic steroids."



PayPal's definition of paraphernalia is whatever PayPal says it
is. In cases where it's not absolutely clear whether a product is illegal or
affiliated with use of an illegal substance, PayPal actually examines
the product.



They look at its marketing, the company selling it, and its packaging to
determine if the product glorifies illegal drugs, or if the product is a drug
use accessory marketed to illegal drug users.



Usually, only law enforcement officers, Justice Department attorneys, and
prosecutors are allowed make such determinations; it appears that PayPal
sees itself as a quasi-law enforcement regulatory agency.



PayPal takes voluntary action against marijuana-related sites and
individuals who visit them. Such was the case with Planet Skunk, an
Irish cannabis-related site. In 2003, Planet Skunk's site administrator
received simultaneous account cancellation notices from PayPal and from
an Australian licensed version of PayPal called PayMate.



Planet Skunk stated on its website that PayPal closed the
company's account without notice and would not give them the money in their
account for 180 days. PayMate closed Planet Skunk's account
without notice and kept the company's PayMate registration fee.



Economic Warfare



Because PayPal and eBay are dominant, pervasive facilitators of
e-commerce, their attacks against the cannabis community can be seen as part of
the drug war's arsenal of economic weapons. These weapons used to only include
arrests, property thefts and asset forfeitures conducted by law enforcement
agencies and prosecutors.



But now, PayPal is practicing its own form of asset forfeiture by
temporarily holding money owed to people who've used PayPal to receive
payment. And because there are few other easy methods for e-commerce entrepreneurs
to receive payments from customers, being banned from PayPal is often a
deathblow to e-commerce merchants.



In March 2005, Dutch cannabis entrepreneur Nol Van Schaik received a sudden and
rude notice from PayPal.



"Dear Nol van Schaik," PayPal's email said. "The PayPal
User Agreement states that PayPal, at its sole discretion, reserves the
right to close an account for any violation of the User Agreement, including
the Acceptable Use Policy.



"Under the Acceptable Use Policy, PayPal may not be used to send or
receive payments for narcotics, steroids, controlled substances or drug
paraphernalia.



"We are hereby notifying you that, after a recent review of your account
activity, it has been determined that you are in violation of PayPal's
Acceptable Use Policy.



"Therefore, your account has been closed. You will need to remove all
references to PayPal from your website(s) and/or auction(s). This
includes not only removing PayPal as a payment option, but also the PayPal
logo and/or shopping cart. We thank you in advance for your cooperation."



Van Schaik complied with PayPal's corporate drug war policy, and was
forced to shut down his Internet web shop as a result.



Similar economic warfare has hit members of </span><st1:State><st1lace>British Columbia</span></st1lace></st1:State>'s cannabis activism family.



In December 2003, Cannabis Culture publisher and international cannabis
genetics purveyor Marc Emery was victimized when PayPal prevented him
from using PayPal to receive donations to his Pot-TV.net Internet media
network.



PayPal informed Emery of its suspension of his account
"privileges" without prior notice, claiming that Pot-TV.net was
"acquiring and promoting drug paraphernalia."



Bubbleman, whose bubblebag water extraction production method is used to source
medicinal glands from a variety of plants, says PayPal suspended his
account in 2004, and kept $10,000 of his money for 180 days, without paying him
a penny of interest.



Renee Boje, a Canada-based drug war refugee who retails legal medicinal herbs
through her innovative Urban Shaman Entheobotanicals store, was repeatedly
frustrated by PayPal's corporate reps when she tried to find out why PayPal
had canceled her account.



PayPal finally sent her a cryptic unsigned email, dated </span><st1:date year="2005" day="7" month="2">Feb. 7, 2005</span></st1:date>. The email said Boje's PayPal access was
being suspended "regarding the sale of salvia divinorum, herbal ecstasy
and other items.



The email explained, "Under the Acceptable Use Policy, PayPal may
not be used in the sale of any dietary supplements banned by the U.S. Food and
Drug Administration (FDA) or on the FDA's Alerts list."



At first glance, PayPal's email seemed to contain at least partial
support for its contention that Boje violated the corporation's draconian
Acceptable Use agreement, but closer examination showed the FDA had NOT stated
that specific products Boje was selling were illegal substances in the US or
Canada.



It is also of note that PayPal's email indicated that the company was
closely monitoring Boje's business transactions and the geographic location of
her customers.</span>






Not Just Pot</span>



PayPal doesn't just go after herbal products and pot people. It also
smashes progressive political activists and organizations.



In 2004, PayPal reportedly canceled an account maintained by the Leonard
Peltier Defense Committee. PayPal gave as reason for its cancellation
the fact that Peltier is a convicted felon. Of course Peltier's Defense
Committee knows he's a convicted felon: its members, along with thousands of
other people, consider Peltier to be an innocent Native American activist framed
during the 1973 </span><st1lace>Wounded Knee</span></st1lace> uprising for crimes he did not commit.



The Committee's work can hardly be considered illegal- it is an advocacy
organization seeking judicial review of Peltier's conviction. Yet, PayPal
allegedly closed the Committee's account.



In response, Michael Snedeker of the </span><st1lace><st1:PlaceName>National</span></st1:PlaceName> </span><st1lace>Center</span></st1lace></st1lace> for Reason and Justice sent a protest letter to PayPal, stating
that his organization was canceling its account with PayPal.



"The Peltier matter alerts us that PayPal, through its anonymous
informants, has assumed the role of admitting those it deems worthy of
democratic participation and rejecting those it deems unworthy," Snedeker
told PayPal.



"No doubt selecting your customers is your legal prerogative. It is also
our prerogative to stop giving you our money. If you wish to change your policy
and start doing business with anyone carrying on the crucial, legal act of
raising money for political causes - including the Peltier committee - we will
be happy to sign up again with PayPal.



"Until then, we will help publicize what we believe is your misguided,
dangerous misuse of corporate power."



Snedeker isn't the only person threatening to publicize PayPal's
"misguided, dangerous misuse of corporate power."



There are entire websites, among them www.PayPalsucks.com and www.PayPalwarning.com
that feature thousands of complaints, action alerts, and boycott strategies
designed to challenge PayPal and its parent company, eBay.



Don't pay this pal!



So I called PayPal and tried to get their reps to answer a series of
questions. I was transferred from phone to phone, and the answers people gave
were non-answers and refusals to comment substantively, all designed to put me
off.



I emailed PayPal. It took PayPal representatives a long time to
get back to me. Initially PayPal press spokesperson Sara Bettencourt
said she'd answer the questions, then she refused to answer them unless I told
her which magazine I was writing for.



When I finally did get her answers, they did little to clarify whether PayPal
is an active nark outfit that also steals money from users. Indeed, Bettencourt
referred back to the user agreement, which I had already thoroughly reviewed,
as a premise for most of her answers.



She did provide confirmation that PayPal is a nark corporation by
admitting that PayPal reports illegal internet activity to police
"in compliance with federal and state laws."



In regards to claims that PayPal is taking too long to give users their
money, she said, "PayPal will limit accounts if users are in
blatant violation of our acceptable use policy. If a user's account is limited,
PayPal will investigate the matter promptly.



"If the investigation is not in a user's favor, PayPal may continue
to limit the account access for up to 180 days as is necessary to protect
against the risk of chargebacks, or may close the account by giving the user
notice and mailing a check for any funds in the account."



According to Sara, despite claims to the contrary by Peltier's advocates and
many other political groups, "PayPal does not evaluate users'
political views when reviewing a site for violation of our acceptable use
policy."



On the other hand, she admits that "PayPal has a dedicated team
that is focused on reviewing sites for user policy compliance, and they will
determine after thorough investigation if an account is in violation of our
policies. We maintain a proactive compliance team whose sole purpose is to stop
illegal or unauthorized use of our service.



"PayPal also uses sophisticated analytical systems and third party
services to help detect and stop the use of our system or illegal activities.
We also work closely with our community of users to alert us to any illegal or
unauthorized use of the PayPal service."



I asked her if PayPal's acceptable use policies reflect the fact that
medical marijuana is currently legal in 11 states, and could be federally legal
if the Supreme Court backs state medpot laws in its ruling on the Ashcroft
versus Raich-Monson case.



She said, "We are not in the position to speculate on future federal or
state policy decisions. PayPal's acceptable use policy currently
prohibits our service to be used for the sale of marijuana, and we have not
announced any plans to change this policy."



Of course, this answer does not explain why PayPal closed Bubbleman's
account, given that he was not selling anything illegal at all!



Bettencourt refused to reveal how many users have had accounts suspended due to
violations of PayPal's drug-related acceptable use policies. She also
refused to discuss if her company has been sued by account holders seeking
compensation for PayPal's actions.



PayPal Alternatives?



Some pot entrepreneurs say there are PayPal clones that offer discreet,
truly safe payment options for herbalists and others who've run afoul of PayPal's
corporate conservatism.



The homepage of a website called www.aboutPayPal.org sounds like it provides an
alternative purchasing system; it also contains dozens of PayPal horror
stories that include people losing thousands of dollars when hackers broke into
PayPal accounts and created false transactions that left the customer,
not PayPal, on the hook for monies owed.



"PayPal Provides you with a PayPal account, not a real
merchant account," the site warns. "Your money is deposited into a PayPal
account, which PayPal controls, rather than your own bank account.



"If PayPal even wonders for a second about the validity of a
transaction, they can freeze your PayPal account immediately and suck
all your money out.



"They can even pull your money directly out of your personal bank account,
many times without even a phone call or e-mail.



"If you think PayPal treated you unfairly and want to dispute their
decision, you will be at their mercy, as PayPal plays the role of the
Investigator, Judge, Jury and Executioner in all issues regarding your account.
(You agreed to all of this, when you signed up.)



"Sound fair? We don't think so. Explaining your version of what happened,
in most cases seems to make no difference. They will refuse to provide you with
detailed information from their investigation and will not disclose documents
they relied upon to make their decisions."



As bad as PayPal is for counterculture people, the corporation
apparently isn't the only electronic payment service company that mistreats pot
people.



For example, after having his account terminated by PayPal, Bubbleman
signed on with www.beanstream.com, a </span><st1:State><st1lace>Victoria</span></st1lace></st1:State>, B.C.-based </span><st1:country-region><st1lace>Canada</span></st1lace></st1:country-region> electronic cash transaction service.



"They froze over $10,000 for 180 days, saying the bubblebags were related
to marijuana," Bubbleman says. So Bubbleman tried a </span><st1:City><st1lace>Montreal</span></st1lace></st1:City> company www.paysystems.com.



"They terminated our account in September 2004," he laments.
"Over 200 days later they still have $7000 </span><st1:country-region><st1lace>U.S.</span></st1lace></st1:country-region> of our money, and they have no intention of handing
it over. We did $600,000 worth of business through them up to that point; no
complaints, nothing at all illegal. In fact, they complimented us on having an
excellent record of customer satisfaction.



"PaySystems makes two to five percent on every transaction. They
made $12,000 to $30,000 handling our sales, and then they ditch us, freeze our
account, and won't hand over our money at all."



Bubbleman's internet payment system saga unhappily continued when he tried
using www.2checkout.com.



"We went with www.2checkout.com and yes, they cancelled our account and
have held $6000 </span><st1:country-region><st1lace>U.S.</span></st1lace></st1:country-region> They told us they aren't giving us the money, and 'good luck
trying,'" he reports.



Bubbleman's experience mirrors my friend's reality. PayPal froze my
friend's business PayPal account; apparently he never got all the money PayPal
owed him. He lost about $4,000, he says, and his business credit rating was
negatively affected.



He gave up trying to get fairness from PayPal when two of his customers
told him they got busted because of information PayPal provided to
police about their PayPal purchases of cannabis-related equipment from
him or from another merchant.



"These customers were pros and they didn't make any other security
mistakes," he said. "The only possible vector for them going down was
purchasing through PayPal. We're convinced PayPal is a
corporation that thinks it's a police force. Every time you do something
through PayPal, they are scrutinizing it, to see if you're violating
marijuana laws.



"I tell everybody: Make a political statement against corporate pigs –
don't use PayPal or eBay. Meet people in person. Barter. Send
money orders or wire money. Use </span><st1lace>Western Union</span></st1lace>. Send a
cheque. Send an ounce of gold.



"Just don't use PayPal. They're fucking narks!"

</span>


http://www.cannabisculture.com/articles/4410.html

[sg43]

Looks like SWIM will not be using paypal for research chemicals anymore...

[Alfa]

Various Dutch online head-, seed- & smart-shops have had the same experience with paypal. Paypal tends to wait for a time when the account is filled to the max and then confiscates the money. No matter if products and services are 100% legal in Holland. Paypal is a US company and follows US policy. The writer of the article above is mistaken about Western Union; Western Union works very close together with US authorities. In fact if a company gets in trouble with the US and has an Western Union account, the first thing that will most likely happen is a block by Western Union. Even before the company will here anything from US LE. That's how close they are.

[unico_walker]

SWIM was once an ebay merchant, nothing even drug related all mostly vintage video games.

Paypal allowed my account to reach several thousand and when I tried to withdraw they froze it and gave no reason.

After jumping through numerous hoops and even faxing my ID and bank
statement to them they unfroze the account several months later.

The only reason I ever got out of them was that someone I had dealt with on ebay was under investigation for something.



Its just a money making venture, freeze accounts at random and a
certain percentage of people won't bother with jumping through the
hoops, paypal is nothing but scum.