[s-cars] Fw: Paypal
brett at cloud9.net
Thu May 2 17:40:06 EDT 2002
At 7:10 AM -0400 5/2/02, QSHIPQ at aol.com wrote:
>of the paypal debit card (US only) just adds icing to the cake, in under 1
>hour, anyone can have US dollars in hand from a UK/EC paypal payee.
Yes, but there's this minor little problem. Paypal isn't a
bank...which means they're not under a single item of federal bank
regulations, and further, your deposits are NOT FDIC INSURED FOR
-YOU-. If the bank where Paypal stores your money goes under,
great...Paypal is covered. If Paypal itself goes under or is cooking
the books(or has an accounting failure/problem), FDIC insurance won't
do you a damn bit of good, because it's a pooled account, and the
FDIC insures it for Paypal, not you. Paypal states this, along with
the fact that they "believe" your money is safe from creditors. Any
time you see fuzzy language in a legal document or PR statement,
warning bells should be going off left and right.
IF(and I repeat, IF) Paypal went belly-up tomorrow, you'd be in a
very uncomfortable position.
Pretty unlikely(I really doubt paypal is going anywhere any time
soon, they seem to be doing quite well), but nothing's for sure in
this world. The CFO where I used to work came from being CFO at a
company that tried to do the same thing as Paypal but
failed...probably because they didn't have a prayer with PayPal so
well established in the market.
I don't recall the company name off the top of my head, but
basically, a whole bunch of people lost everything in their accounts
because the company suddenly stopped accepting transactions and
stopped answering the phones/email; people simply couldn't get to
their money. Some got their money back(I think people who noticed
things going sour and called right away did, and then they completely
stopped answering the phones, gee, I wonder why)...but a number of
people didn't, and the whole thing was very slimy.
At least when a bank shuts down, your deposits are insured AND it's
YOUR account, not a pooled account that belongs to someone else(who
no longer exists or is being pursued by creditors, etc)...with a
private company, all bets are off; sure, they might break laws and
get caught, but you'd never see your money again.
"They that give up essential liberty to obtain temporary
safety deserve neither liberty nor safety." - Ben Franklin
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