I found this in my mailbox yesterday afternoon.
Yes, it’s a real card. No, I didn’t ask for or sign up for it. I have seen ads for it on PayPal’s website, but did not want one, so I ignored it. Apparently they don’t take “no” for an answer, and decided that I needed one whether I wanted it or not.
This is truly evil, and here’s the main reason why.
That’s right – if you activate the card, you set yourself up for nearly $60 per year in charges and fees before you have even used the card… all for the privilege of being able to spend your own money. I have two bank debit cards, and neither one costs me a penny – if they did, I would drop ’em like a hot brick.
eBay is a de facto monopoly on the web, and PayPal is a de jure monopoly on eBay – they no longer allow other methods of payment. And their behavior stinks. For instance, as a seller, you are required to link your PayPal account to a real-world bank account. In the event of a dispute, PayPal can lock the linked bank account for up to six months without warning or explanation. they can also reverse transactions. This is the main reason that I stopped selling things on eBay and closed my eBay seller account.
PayPal is not a bank. And they like it that way. There are several reasons/excuse for this:
- PayPal does not “move money around”
- PayPal does not engage in fractional reserve banking.
- “PayPal doesn’t have a charter, thus it is not a bank”, say the FDIC
- “PayPal does not physically handle or hold funds placed into the PayPal service”. (er… neither do my accounts with ING direct or Perkstreet Financial – and they are both banks).
I don’t know whether or not PayPal is technically a bank. Maybe they are, maybe they are not. But there are few businesses in the world in more dire need of oversight and regulation than eBay/PayPal.
If you are as outraged about this as I am, feel free to leave a comment – and write to your Congressman.