back to article PayPal says sorry to Cryptome

PayPal's chief of legal affairs has apologised to Cryptome after the eBay-owned payment service confiscated its funds without explanation. John Muller, ultimately responsible for setting PayPal's guidelines, says the payment company made a mistake. He adds that he was a fan and former donor to Cryptome. Operator John Young …


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  1. Neil Greatorex

    Paypal is not a bank

    and, as such, is not regulated as a bank. The sooner people realise this and stop treating it as a bank the better.

    If they were a bank, Mr. Young's request for them to "provide an amelioration commensurate with their gravity" would probably be successful. As they aren't, they will only "provide an amelioration commensurate with their gravity" if they think it will get them good press. Unfortunately the horse has bolted.

    PS Andrew, my man, you are getting a little flighty lately, another story with comments enabled!

    Pint, because that's exactly what I'm quaffing right at this moment :-)

    1. Eddie Edwards

      Here's an interesting fact

      From the Financial Ombudsman's website (

      "Businesses are not required by law to join our voluntary jurisdiction. But in doing so, they formally agree to deal with complaints – and comply with our decisions – in the same way as under our compulsory jurisdiction.

      "Businesses that have signed up to join our voluntary jurisdiction by contractual agreement include:

      "PayPal (from 2 July 2007)"

      So in the UK you can go to the financial ombudsman if you have a complaint, and although PayPal need not be bound by their decisions, they have made the voluntary decision to be so.

      This puts things in a slightly different light, at least as far as PayPal UK is concerned.

      I'm not sure how interested they are in people whining because they didn't get enough of an apology, though ...

      1. Anonymous Coward
        Anonymous Coward

        Forget about the useless Ombudsman

        A little warning here. The Financial Ombudsman is paid by the banks, and from personal experience I can assure you that they will follow the following process. The description is based on you filing a full complaint, accompanied by facts to the point of making it blindingly obvious to ever the most adroit Sun reader that something fishy is going on.

        1 - acknowledge receipt of your complaint

        2 - sit on it for x months (2 months appears a minimum)

        3 - contact you telling you they are very busy

        4 - sit on it for another few months

        5 - reject your complaint and tell you that PayPal/bank was fully correct in doing whatever they did. I must admit I'm not entirely sure they do more than just scan the complaint for bits to copy and paste in their reply.

        Note: banks can stall your complaint for as long as you have not followed the Ombudsman process, so if it's your money that is locked out, you have just wasted on average 6 months with a process that has no benefit whatsoever to you, only for the banks as it has allowed them to stave off the regulation they seriously need for years. The only good news is that afterwards you can finally ignore the Ombudsman scam and take the sods to court. Where possible, ensure you call the bank employee involved as witness - this is something banks absolutely hate due to the way they work. If you are in your right, expect a doorknob settlement - no offer whatsoever to settle until you are literally have the doorknob to the court in your hands.

        Your problem here is that PayPal is not a bank, and thus hard to get your hands on. All that Ombudsman waffle is IMHO thus make believe - the idea is to waste so much of your time that you give up. Oh, BTW, if the organisation/bank in question has collaborated in a crime you have another problem, UK police is generally rather reticent in taking on any cases that represent doing any real work, even if you have all the evidence with it. Not sure why, I presume this is the "curse of today's targets" striking (if your crime isn't a target you have much less of a chance getting anyone to pay attention).

        So, now you know what is waiting for you if you have been referred to the Ombudsman. Where possible, never get into issues with a bank over more than £15k - that way you can skip the whole game and go straight into small claims.

        This is obviously no legal advice, IANAL, it wasn't me (etc etc ad infinitum) - you have been warned. Ombudsman process as observed in real life, assumptions of their internal activity are mine but given the result it's hard to come to any other conclusions.

        BTW, I have heard a few people observe that replacing PayPal itself ought to be easy - all you need to do is offer exact the same facility, but offer the customer service and properly defined processes that PayPal cannot be bothered to provide. It would be an interesting experiment.

  2. Stef 4


    "He adds that he was a fan and former donor to Cryptome."

    Wow, he went with that old chestnut?

    "I'm not homophobic, I have loads of gay friends. In fact I will only be friends with gay people." etc...

    I for one welcome our whistle blowing PayPal overlords who accidental restrict access to their favourites sites.

  3. Anonymous Coward

    What about everyone else

    What about other businesses that can have their account frozen without explanation?

    Not good enough. This means that Paypal are unreliable, unpredictable and untrustworthy. Not good for a company handling your money.

  4. Rogerborg

    Why is he using PayPal anyway?

    Back in the Day, Cryptome only accepted donations in the form of gold, gunpowder, salted fish, or tin foil (loose, or pre-made into hats). How the mighty have fallen.

  5. Anonymous Coward


    "Paypa is not a bank"

    Err maybe not in the US but in Europe, yes it is....

    1. Guus Leeuw

      @AC Title...

      Well no, not even in Europe... Paypal is a bank in Luxemburg, which is widely different than it being a bank in Europe. There is, in fact, only one bank in Europe: The European Central Bank (as far as I know).

      If paypal had balls, they would register as a bank in every country they operate, much like any other bank.

      Mine's the one with the phat wallet inside...

  6. Neil Greatorex

    @AC @ 16:25

    What a load of old bollocks:

    Is PayPal becoming a bank?

    PayPal was granted a bank license with the Luxembourg bank authority. We believe the bank status will allow PayPal to more effectively expand its marketing to online merchants. Ultimately, this will give users more places to use PayPal across the web.

    I'd quite like a license with the Luxembourg bank authorities.


    1. Destroy All Monsters Silver badge

      "I'd quite like a license with the Luxembourg bank authorities"

      Shouldn't be much of a problem, I would say you just gotta bring some dough to a "notaire" to get those signatures and you are on a roll.

      Problem, officer? Maybe the CSSF could help:

  7. Neil Greatorex

    Completely off topic

    I'm sat in front of a Dell laptop running windows 7, trying desperately to get it running anywhere near the speed it should be. Anyone else had the opportunity?

    What a pile of absolute shite, I'm already 4 hours in and I haven't got all the crap off it yet. :-( It took almost a sodding hour to remove the "Microsoft Office Suite Activation Assistant", I'm looking at the huge list of shite in the add/remove fanny & I'm ready to cut my own bleeding throat.


    Need more beer.

  8. Neil Greatorex

    Lost the will to live


  9. davenewman

    Name the PR

    Who was this PR person who lied to you?

    How about putting together a league table of the most frequent liars in the PR business?

  10. Philip Cohen

    PayPal is a Bank?

    “PayPal was granted a bank license with the Luxembourg bank authority.”

    This is all nonsense and it is for PayPal’s benefit, not for the benefit of PayPal’s customers. The statements contained on this web page are typical of those made by eBay and usually mean the exact opposite of what the words say. Luxembourg is one of those tax haven countries that will deal with anyone as long as there is a dollar in it for them; this licence has no effect anywhere else and PayPal is otherwise not a “bank” anywhere else; indeed PayPal does all its actual banking through another gouging organization, Citibank. Notice how all the snakes seem to gather together.

    PayPal is an unregulated, unprincipled, systemically dysfunctional, amateur organization (just like its ugly mother, eBay).

    PayPal and Bill Me Later are not a bank, are not regulated as banks are and yet offer banking-type services, services that would be more appropriately and more competently carried out under the auspices of the banking community (via their credit card company partners).

    The simple fact is that without the bankers’ knowledge of the entities involved in the transactions, PayPal, or any other non-bank provider, will always be handicapped. Non-bank providers will never guarantee anything for the buyer or seller because they simply don’t have the bankers’ knowledge of the entities involved.

    The head turkey at eBay, ‘Noise’ Donahoe, has talked of the possibility of offloading PayPal because he is just barely smart enough to know that when the major credit card companies do get off their butts and introduce a like card/terminal-less payments system to complement their credit card system, they will do it properly, and the dysfunctional PayPal will then sink like a stone—other than, possibly, on what is by then left of the Donahoe-shrinking eBay marketplace. Possibly, the banks may let PayPal keep those ‘no hoper’ customers that the banks, who will always better ‘know’ the entities involved, might not likely allow a merchant-type facility.

    If Donahoe has any brain at all he will be actively trying to sell PayPal to the banks to complement their credit card system; but I doubt the banks would want to lower their image any further by associating themselves with the likes of PayPal; not even for a peppercorn consideration would the banks touch such an incompetent amateur operation as PayPal, I suspect.

    Does anyone then think that ‘all the banks’ are not watching this market segment with interest, and is it possible that PayPal could be having some negative effect on their credit card business? Why then would ‘the banks’ not be considering a like system to complement their existing card systems? The simple fact is that anything that PayPal can do ‘the banks’ can do so much better and, after all, every internet banking user is already set up to receive such a service directly, efficiently and securely, from their bank.

    Do we then need to offer the banks and the major credit card companies another such monopoly-type situation? Ideally not. But, having said that, within the credit card system the individual banks do compete with each other on terms, interest rates, etc.

    Regardless, it would be nice to have a card/terminal-less system that worked efficiently and effectively—as does the banks’ credit card system. Regrettably (or thankfully, some say), PayPal does not have such a partnership with ‘all the banks’ and so PayPal can never offer that same effectiveness.

    My only surprise is that ‘all the banks’, via their credit card partners, have not yet offered their own system. When they do, I suspect that it will be bye, bye, PayPal—you most ugly of daughters. And, more importantly, we will then have a system that works effectively, just like our credit cards do!

    In support of the above comment I offer an introduction to the full sad/ugly story of eBay/PayPal at


    eBay/PayPal: Dead Men Walking

  11. Peter Hood
    Thumb Down


    Irrespective of whether pay pal is a bank or not - it is a financial institution of one sort or another, since it holds funds for clients, and pays them to people specified by its clients - I will never use them, not simply because of this specimen of their behaviour, but because of their behaviour over the years.

    Though the net is less of a community than it was pre web it still works as a very effective weapon against those who squirt merde at its denizens.

    Remember this pay pal. You will find that it will come to haunt you over the years.

  12. Simon B

    Sue paypal for slander

    Sue paypal for slander in referednce to saying he was involved in an illegal activity

  13. Peter Hood
    Thumb Down

    Sorry is not enough

    The sooner people realise this and stop treating it as a bank the better.

    Neil Greatorex Tuesday 16th March 2010 15:39 GMT

    That is one of the reasons why I've never used them. I've also resisted the temptation to use them because of the consistent trickle of troubling reports about their behaviour. It would seem, IMNSVHO, that these people are unreliable, capricious and put a brick wall in between their clients and their clients' money without due explanation, on an unpredictable basis. Cryptome have a far more valued presence online than paypal, and I can say this because I have, under another name, a connection with one of their stories. They are valued. Their honest presence online is worth more than all of the money held back by paypal, and that'll be quite a bit.

    Their ruse to join the UK banking ombudsman system is, well, a ruse. Never use them. Ever.

    As to the Cryptome situtation; paypal need to put a full apology on their web site, explaining how and why things came to this, and detailing how they propose to effect organisational change to prevent this sort of arbitrary decision from occurring again.

    As a guess; following principles in organisational psychology, if you encounter a problem with an organisation, trace that individual's presence in the organisation back to the original hiring team. You will probably find a spider's web of similarly bad decisions/bad practise. Reversing the barrel of the gun and looking down the chain, someone in paypal is evidently free to make bad decisions, and the only way it will stop is by people like us beating the drum loudly.

    Bang, bang, bang, bang.

    Got that paypal? I will never use you, and I will always point people to my growing store of URLs about you. That includes stuff from if material is removed from the web.

    In byte space no one can hear you scream, right?

  14. Anonymous Coward

    Haaaaa Haaaaaaaa Ebay and PAY-PAL Ohhhh ho ho ho

    Ebay and Paypal - in the simple principle - are FINE - in the actual transaction process.

    If only the process was confined to that... Add in millions of examples just like Cryptome had done to them, add in the sleazy corporate scam fest of "The Ebay ""community"" and then being treated like pawns on a spread sheet - and their penchant for trashing peoples lives and business's with their nazi bullshit and their "the GM pollen has blown into our crops" ethics...

    Ebay and Paypal have an absolutely astronomically bad history of consumer abuse.

    Here is an interesting article on the now former Ebay and thus Paypal CEO - who is running for governor of California and the endorsements she is getting and "the types of people" she is getting them from.....

    Paypal say they are sorry? I am only sorry to hear that no one has as yet burned it to the ground... that and Ebay's "global tax dodging" Swiss bank accounts...

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