>Open question to HN: how could PayPal do a better job of handling the situation?
By simply being up front about their terms. If they don't care about events then they should set a policy not to support them, it's that simple. Don't lure people in and then make their lives a pain in the ass once you're holding their money. They know better than anyone how they can make events work, if at all.
I agree, PayPal is often over criticized considering the spectacular international fraud resolution and prevention work they do that goes, mostly, unthanked. True, we should remember the alternative is processing the payments ourselves, but if you are going to offer a product, offer a good one or not at all. Especially when so much money is at stake.
If what's described in the linked article is correct, they deserve the criticism. There's fraud prevention, and then there's organized harassment and extortion. The examples given are of the latter, and if it were me I'd just hire an attorney and file a lawsuit with enough zeroes in the damage claim to get wide press coverage and, thus, the attention of someone who's actually accountable.
As I mentioned, to criticize PayPal's inflexibility in situations like this as "harassment and extortion" is melodramatic and misunderstands both the work they really do, and the number of times you aren't saying this about the people on the other end of the transaction.
Step one of the process was repeated demands for verification, re-verification and re-re-verification, which in my book is harassment; there's a level of verification that's reasonable to protect against fraud, and there's a level of verification which adds nothing to the protection and serves only to frustrate.
Step two was "you don't want to play our game? Fine, we'll lock up your money". That's extortion, plain and simple. Given the reported background behind it, there is nothing reasonable about it. And no matter how much good work they may do in other cases, it provides no excuse for the conduct described in this case.
Or, more succinctly: there's a very good reason why Paypal has such an abysmal reputation, and it's not because they're portrayed unfairly in cases like this one.
>And no matter how much good work they may do in other cases, it provides no excuse for the conduct described in this case.
That's just not true. It completely disregards reality. In a fantasy world where life is totally fair you are correct. Back in the real world, failure rate is a VERY relevant stat, and is never expected to be 0. The system and processes in the company have been optimized to handle certain types of cases extremely well. They will fail on other cases (like this one).
My argument is that they should change their policy to simply not support the cases for which their system isn't perfected, but you are using a volvo and expecting a porsche. But just because this one case was a failure does not mean the system is failing in general. It's not, there is a reason PayPal is so successful.
By simply being up front about their terms. If they don't care about events then they should set a policy not to support them, it's that simple. Don't lure people in and then make their lives a pain in the ass once you're holding their money. They know better than anyone how they can make events work, if at all.
I agree, PayPal is often over criticized considering the spectacular international fraud resolution and prevention work they do that goes, mostly, unthanked. True, we should remember the alternative is processing the payments ourselves, but if you are going to offer a product, offer a good one or not at all. Especially when so much money is at stake.