Bill's Story:

Dear Sir,

PayPal sent an email on 13 December 2007 informing me that they had processed a payment to Gala-Net, Inc for $50.00 US charged by debit card from my debit card. I e-mailed Gala-Net who informed me that they are a publisher of on-line games, in California - USA. I am a retired engineer living in the West Midlands - UK(!), I have never played a computer game in my life, I did not make this transaction, I did not authorise it, and nobody in my family possibly has access to my PayPal account. These last three statements are made without the slightest doubt. Full stop. [aka Period].

Gala-Net stated that if I did not make this payment (and I most definitely did not) then someone has gained access to my PayPal account. I am meticulous in my precautions to avoid identity theft, hence I believe that the breakdown in security must lie with PayPal. Due to this breach of security, I felt obliged to cancel my debit card, to place a stop on any pending transactions on that card, flag this erroneous transaction with my bank, and log a complaint with PayPal. This has been time consuming and inconvenient, especially the loss of use of my card just before Christmas. The security problem is internal to PayPal, and I feel most aggrieved at the inconvenience caused to me by their breach in security.

I appreciate that you will have to ‘take a view’ on the truthfulness of my statement that this transaction is fraudulent – it is – but I have taken the time to write because if I am correct about the poor security inside PayPal, then there will be many other similar complaints. The balance of probability will then be that the plaintiffs are truthful and the conclusion will be that PayPal is not fit-for-purpose and should be brought under the control of a suitable financial watchdog.

My intention was that once this fraudulent transaction had been rectified, and the monies properly returned to my account, I would close my PayPal account. However on the very same day that PayPal approved my "unauthorised activity claim" regarding the fraudulent transaction, and having refunded the monies, PayPal concocted "an issue regarding my account", and "for my protection", they "temporarily limited access" to my account'. This issue was allegedly that Napster UK Ltd had cancelled a Payment Agreement with me, an agreement that existed on a single occasion, over twelve months previously for the purchase of a single album, and which had been fully honoured by me. For PayPal, a happy coincidental (?) side effect was that the limited access to my account meant that I could not CLOSE it, thus increasing my exposure to further fraudulent use of my account due to their breach of security.

However on 27 December PayPal wrote to say that they had completed their review, and restored my account, somewhat surprisingly (?) with no further mention of their spurious allegation of my (alleged, but non-existent) dispute with Napster. I took this opportunity of closing the account, with a HUGE sigh of relief.

Although I have, of course, advised all my friends and family to avoid any dealings with PayPal, I would be pleased to receive any information as to how I might assist in a class action to reveal to the British public the true nature of this organisation which is, at the very best, merely unfit-for-purpose, but which I consider to be criminal. I have strong suspicions that their move from under the aegis of the UK's Financial Services Authority to PayPal (Europe) S.à r.l. & Cie, S.C.A. (aka PayPal Luxembourg) may assist them in their criminality.

I shall, of course, write to my MP.

Yours sincerely,

Bill Douglas

..NoPaypal says: Hi Bill, We're with you on your commects about Paypal. From what I'm led to believe, they have purposely NOT registered themselves as a bank so that they do not come under the scrutiny of the relative authorities and watchdogs for this financial sector. They argue that they don't hold or invest anyone's money but rather, just pass it from person to person. Contact Yanna (yanna@dsl.pipex.com) who'll help you with details of how to take legal action against Paypal...