Attached Link: http://www.paypalwarning.com/Default.htm

Your Paypal account can be frozen at any time, without advance notice leaving you without your money for weeks (if not forever), and there isn't much you can do about it. Paypal is currently being investigated by regulatory authorities in three states!

Links:

PayPal Warning
Things You Should See
PayPal Wall of Shame

Perhaps most of you won't care, but if any of you decide to try and sell your products and/or artwork from your website using PayPal, this will be especially interesting to you.

This recently happened to me with PayPal when I tried to sell some of my artwork from my website. PayPal froze my account - not allowing me to withdraw funds from my account, to accept or receive payments, to close my account, to remove my bank account and credit card information, etc. - because they said that my site is "offensive" and violates their "Acceptable Use - Mature Audience Policy" with regard to "Adult Material". The only "Adult Material" on my site are a couple of artistic renders of nudes.

On the other hand, Renderosity and similar sites which, mind you, sell fetish props/clothing, bondage props/clothing, as well as similar items and has a crapload of nudity, sexually stimulating images and the like in the gallery - curiously seem to slip by their "Adult Material" policy. When I wrote to PayPal to ask what exactly was so offensive about my site and asked why other sites are allowed to sell things much more "sexually oriented" than anything on my site, all I got was a canned response and a comment that there are no appeals, my account was "closed". (Please note here that "closed" means I cannot access my money or make any transactions except to add money to my account. They still retain all of my financial information such as bank account and credit card account numbers.) They even had the gall write me recently to tell me that my credit card on file with them is about to expire and wanted me to update it!

Excerpts From PayPal's "Mature Audiences Policy" (emphasis added):

Important Note Regarding PayPal's Mature Audiences Policy:

You may not use PayPal to send or receive payments for any "adult" or "sexually oriented" materials or services.

How does PayPal define "adult" or "sexually oriented" material?
"Adult" or "sexually-oriented" material includes, but is not limited to: - Any visual representation of human genitals presented in such a manner as to suggest sexual activity

• Any visual representation of any form of sexual intercourse involving humans
• Any materials which require that individuals be eighteen (18) or older (depending on the jurisdiction) to view or purchase those materials
• Any non-textual materials clearly designed to sexually arouse the viewer/reader
• Any items which, because of their nature or because of the item description, appear to be designed for use in sexual/adult activity
• Any items which depict human sexual characteristics in a degrading fashion
• **
  **
• Any item that portrays frontal nudity will normally be treated as "adult" material

What is not considered "adult" or "sexually oriented" material?
Material that is not considered "adult" or "sexually oriented" includes but is not limited to: - That which is a small and insignificant part of a catalog, book, periodical, or other work which is not, as a whole, primarily devoted to sexual matters

• Pieces of artwork that may be considered fine art-such as certain paintings, carvings, figurines and other similar materials. Examples include, but are not limited to, Michelangelo's David, certain (but not all) vintage pinup art, a renaissance-style painting of a nude female, or nude cherubs in the form of human infants (in the style of Raphael)

Can material containing nudity ever be sold using PayPal?
Yes. As long as the material containing nudity is not considered "adult" (as defined above) and fits into one of the categories below, you may use PayPal to sell the material outside of eBay, and you may sell or advertise such material on your website listed in PayPal Shops. You will not be allowed to use PayPal to sell these items through eBay's Mature Audience Category. -

• Collectible RisquPostcards
  PayPal permits the sale of postcards that contain some nudity but are not "adult" or "sexually oriented" (as defined above). While persons portrayed in postcards may be topless, scantily clothed, or in mildly suggestive poses, any postcards sold using PayPal should not depict male or female genitalia (frontal nudity below the waist) or strong sexual content. Because this category is for collectibles, these postcards should be at least 10 years old, and the description of the item should include the approximate year of publication.
• Collectible Pin Up Art
  PayPal permits the sale of pinups that contain some nudity but are not "adult" or "sexually oriented" (as defined above). While persons portrayed in pinups may be topless, scantily clothed or in mildly suggestive poses, the pin ups in this category should not depict male or female genitalia (frontal nudity below the waist) or strong sexual content. Because this category is for collectibles, these items should be at least 10 years old, and the description of the item should include the approximate year of publication.
• Pre-1940 RisquPhotographs
  PayPal permits the sale of photographic images that contain some nudity but are not "adult" or "sexually oriented" as defined above. While persons portrayed in these photographs may be topless, scantily clothed or in mildly suggestive poses, the pin ups in this category should not depict male or female genitalia (frontal nudity below the waist) or strong sexual content. In addition, these items should be published prior to 1940, and the description of the item should include the approximate year of publication.
• Items not falling under this category and which are therefore not permitted include items which are intended for use in a sexual setting (such as "bondage" and "fetish" items), items which display sexual activity or portray human genitalia in a "life-like" or realistic fashion, and vibrators intended for use in sexual activity (as opposed to ordinary massagers).

(Entire document can be found at this link - http://www.paypal.com/cgi-bin/webscr?cmd=p/gen/ua/use/index_frame-outside&ed=mature)

Hmmm, we use paypal and have never had any problems, going on 6 years now. Sharen

....but thank you for the information, I never knew about this before, I will check it out. Sharen

Sharen: Do you have anything on your site which could be considered "adult" in nature?

PayPal is handy, but if you use it, be careful not to keep any money in the account for long. As the warning says, they can freeze it for any reason. A friend of mine has had her account frozen for weeks now. The reason? She sold a ceramic angel on eBay last summer. Over six months later, her customer complained that it arrived broken. Said customer claims she didn't bother to open the package for six months. My friend thought that was unreasonable. But PayPal has frozen her account, and all funds in it.

I wouldn't think so, but that is what is concerning, when others assume that something is "adult" in nature may not be my interpertation of "adult". We are also adding a gallery in the next few weeks for our customers and I would not want to be restricted if Slight Nudity (my interpertation) will be a problem. Sharen

Fortunatley we are not connected to Ebay, which I think they have several different rules together. But I agree, never leave to much in there for to long a time. Sharen

I've never thought either paypal or ebay were good ideas, and from other groups I know that both have been hacked frequently. The only way I would even consider using paypal is setting up an account, only for that purpose. I only have one charge card, but have set it up with the bank that I am notified as soon as any charges come in. Works well, and no complaints. Needless to say, if I were to set up an account for paypal, the amount in it would be enought to cover any purchase, and the service charge, but not a penny more. I have to grin though, my alter ego keeps getting the scam notice from the phoney paypal that wants me to send in another card number. They may cancel my (non-existant) account, we'll talk about it later. Much later.

I wrote to PayPal to ask for clarification on their TOS, but I never got a reply. I know that Exotica's account was frozen because her digital art site was said to be "too explicit" (or whatever; they claimed it was TOS violating). I also wonder how R'osity gets away with using PayPal. A fair percentage of stuff in the store would violate PayPal's TOS, I suspect. Probably if you make them enough money, they leave your account alone... shrug bonni

LOL! Yeah, I don't think they get hacked so much as "phished." There was an article on MSNBC.com awhile back, where an interviewed hacker claimed he had his pick of 400 or more eBay accounts at any given time. He just sent out spam, telling people to reply with their usernames and passwords or their accounts would be cancelled. Only one out of a hundred actually did it, but if you send out enough spam...

But how does a TOS violation give them the right to effectively steal your money?

I have had my PayPal account for 3 years. All of a sudden it is in violation of their TOS?? Is there anything on my site that is anywhere near as explicit as some of the stuff you see right here in the Marketplace?

They claim they are "holding" the money but based on what I read they can effectively "hold" it forever and there is not a thing you can do about it.

This isn't about people hacking into your PayPal account and/or receiving phoney emails from people pretending to be PayPal. This is about discrimination and PayPal by all intents and purposes, taking your money. There is no phone number on the site to call anyone. I get the same canned response if I email them. This is BS!

Exotica.. check out this site as well http://www.paypalsucks.com/ also : http://www.aboutpaypal.org/ also check out the class action lawsuit article.. http://news.com.com/2100-1017-842240.html (not sure if this will help you or not though)

Attached Link: http://www.paypalsucks.com/forums/showthread.php?fid=6&tid=1529&old_block=0

The ONLY thing I use PayPal for is to buy from PhilC, since it's the only option, and because Phil can be trusted. I DO NOT trust PayPal, however, because of numerous stories like Exotica's. Posette, your question is a good one. It seems to me that refusing to return account funds is theft, pure and simple. I have a friend who was making a lot of money from his "Goth Erotica" site, until PayPal suddenly pulled the plug on the payment system about a year ago, when they implemented their new puritanical policy. This basically ruined the site for my friend, who had to shell out to a lot of customers who had subscribed. It might have been different if they'd had that policy from the beginning, but they didn't, they moved the goal posts mid-game. I'm aware that the majority of PayPal experiences for customer and merchant alike are trouble-free, but again, based on the experiences of others, I really don't trust them. Exotica, I'm so sorry this has happened and I hope they will pay you what they owe you.

Thanks. I'll check these out.

Mac, that message is chilling. But it makes sense. PayPal must be losing their shirts on chargebacks, now that they allow them, and since they aren't going bankrupt, they're making the money back somehow.

Well, actually, the joke is on them. I didn't have any funds in my account when they "closed" it. If I did, you could bet on it that I'd sue them for all they have! What upsets me about this whole thing - for starters is: 1. I was discriminated against, plain and simple - why? I don't know. It's obvious to anyone reading this that PayPal DOES allow sites with "adult" content to sell using their system. I've been discriminated against in the past and that is one of my biggest pet peeves. 2. I never sold a thing after listing my Poser Exotica website on my PayPal account. (See my email in post #12 toward the bottom.) I had only just put up the PayPal buttons to sell a plant prop set and a pose set. After removing the PayPal buttons from my site they still would not allow my PayPal account to remain "open." In the past I have used PayPal primarily to make purchases at some sites that did not accept credit cards. A nyway, if they wanted to completely "close" my account, why did they (and still do) refuse to remove my bank account and financial information? They have no right to retain this information if I request it to be removed. I do not like the fact that they have access to my accounts and can seemingly take what they please. 3. They have no right to hold anyone's money hostage. That is effectively what they are doing. I don't know of any legal grounds for this.

According to that link Mac posted, they know darn well they don't have a right to keep anyone's money. They're counting on the fact that it costs more to sue than it you'll ever get back. They figure you'll give up, and they'll get to keep your money. :-P

Just canceled my account with them, not going to support them in any way. Marque

Just closed my account as well, Marque.

Exotica, my intention by mentioning scams and fraud that happen outside of paypal was not to divert, just to reinforce that the existance of paypal and it's almost universal acceptance makes it easier for scammers. After following some of the links, it now seems to me that the biggest scammer is probably paypal itself. As far as I am aware, confiscation of funds is a priviledge that is vested only in the courts, and paypal certainly isn't a court of law. I do know the consumer protection laws can vary from state to state, but paypal must comply with not only the laws of the state they are in, but with the laws of states they do business in. By their not allowing an appeal, they violate the rights granted in our Constitution. One other hint, their having your credit card number does them no good if you cancel that one and apply for another. I've done that with others that kept trying to bill me for things not ordered. It's effective.

Well, I've just spent the last 1 1/2 hours reading posts complaining about PayPal andd I have to say I'm totally shocked. I wanted more information because I had been considering using PayPal for my own broker payments through DAZ. Well, Not any more. No sirree! Even if you discount some of the posts as being obvious fakes from people with a grudge or just too much time on their hands, it still leaves a HUGE amount of complaints. And it's pretty easy to spot the genuine posts. Then, if you add the various threads from lawyers, the class actions suits and the Federal and State investigations, it's pretty clear that something stinks at PayPal. Exotica, If you read carefully, you'll find that PayPal won't remove your bank account and financial information. That's one of the major problems. Once they have that info, it will stay with them. (From the PayPalSucks FAQ Page) 'We also recommend that you remove any checking and credit card accounts before you close your account, if you can. The problem is, Paypal keeps that information forever. But removing it shows your intent, and if the account gets hacked, it's less likely that the hacker will be able to access your accounts' Judging by what I read, the only way to be completely safe is to close ALL those bank accounts for good and open new ones. Otherwise you run the risk of PayPal (or some corrupt PP employee) eventually making withdrawals from your account whether you like it or not. Sad.... Really sad. mac

it is stupid.. then why could i use paypal in the checkout if i order, lets say for example, some of the bondage harness for maya/anime doll ? (there are 4 of them, 3 from one merchant, and another from a different merchant) i checked and the paypal option was here if i did a false checkout with these items in my shopping cart... if naked women clothed with small bunch of tight leather strings is not sexually oriented, then my fluffy toy bear is adultoriented maybe ? :) i guess rosity have some agreement to bypass paypal TOS. Maybe TOS of paypal only applies to poor individuals, not firms...

millman: No problem. I just wanted to make sure people didn't miss the message - PAYPAL ARE THIEVES! They have 3 accounts on file for me - a checking account (which I closed), another checking account (which has at the most $5 in it and we never use it, just haven't gotten around to closing it, but we should) and the credit card that they just asked me to update - closed that account as well. Just because I closed my accounts, I don't feel any LESS vunerable. Obviously, from what I've seen at the sites linked to above, they can get away with alot and not be held accountable. It's also kind of curious that at the same time this was happening, someone had fradulently charged about $600. on my debit card (also available at the time to PayPal). Luckily the merchant made note that I live in NY and the shipping address was Florida. He called me to verify the purchase and of course I told him I did NOT make nor authorize the purchase.

actually most likely any poser store will be hit sooner or later. Others online shops have been

I've been a Paypal user for quite some time (years) and never had a problem with them. But reading this prompted me to do some surfing. There seem to be quite a few sites and forums dedicated to warning people about Paypal transactions that have gone bad, including Ebay's own forum (who own Paypal).
This has prompted me to head out tomorrow and start a new account for checking/savings and leave the existing account for Paypal-only transactions. At least if a customer makes a fraudulent transaction, a chargeback or claims non-receipt of goods it won't affect my personal financial situation.
Thanks for the warnings, and exotica - love your site and your art. Keep up the great work. =)

Ben: Thanks for the compliments. :)

Just curious, does anyone know which subset of laws that paypal would be required to operate under?

So, how does someone get their account UNfrozen? Do you have to actually sue them, or what? bonni

That article about the lawsuit is almost 2 years old, I wonder what the outcome was. So if not PP, then what merchants do you guys recommend or have experience with?

Attached Link: http://paypalsucks.com/

This site also offers some alternatives to PP for people who do business online and want to be able to accept credit cards.

These news are alarming. PayPal seemed to be a fine option to easily transfer money from e.g. Renderosity without paying a lot of bank fees for the money transaction. Especially to Europe this can be quite expensive. Recently PayPal stated that they will open a separate company for the European Community by end of January in Great Britain. They say this will help to better serve the customers and solve problems locally. This certainly involves lawsuits. Wonder which way they will go. At least I will remove my credit card information. Thanks for the information.

PayPal's phone number can be found on their web site. Go to About Us/Contact Us/Customer Support Enquiries/Help by Phone/Service center. I'd post the link but I think it includes my account details. So log in to your account and follow those links. Anyway the number is:-

888 221 1161

It is possible to get your account reactivated but only after a day spent on the phone and complying with their wishes. For me little additions were required on the page http://www.philc.net/utility1.htm A more tangible outcome is that I have opened a merchant account and will very shortly be able to accept credit cards on my site directly.

Cheers for the heads up, I have a PayPal account and have onl really used it to keep my LiveJournal subscription going, also being UK based I've been watching with interest the changes being made. One thing I'm just off to do is remove any and all credit card/debit card details for the time being. This is to say the least a little disconcerting.

Attached Link: lawsuit update

I have had no problems with PayPal. It has been fast, neat, efficient, and provided receipts. It throws Money Market dividends into the account. Since I no longer have credit cards, it is the only way that I can make online purchases. I suspect that the name "exotica" was also a deciding factor... especially if the other one IS a porn site. Carolly, keeping her account

Phil, did they make you put "fig leaves" over the mesh "naughy bits"? Were those the changes they demanded?

yes

ROFL! I can't believe it. And they let you get away with a naked UV map? Well, Exotica, I guess you know what you have to do. (Hey, this could be a hot new product for the MP. "PayPal-Friendly" conforming fig leaves. ;-)

I can't believe that "vintage pinups" are okay but naked polygons are a problem.... Well, I guess I won't be putting my slightly-more-adult-oriented web design templates online any time soon, or I'll be switching to Kagi for the online transactions directly through the website... I mean, a nipple might show or something. I still need to use PayPal for some things, unfortunately. I'm glad this thread has come up, though. It made me go back and look at that Kagi account (which I haven't done in ages). ;) It's also clarified my question (which PayPal never answered). I can't possibly afford to spend a day on the phone with them. Phone calls from Australia to California are pretty damned pricey. bonni

ROFL. Thanks Phil but I'd rather not waste anymore of my time. I'm not about to give them another red cent. I could care less about the NAME of my website. I pointed out the distinction, that it was NOT the same site nor a porn site and that it didn't even have "real" people on it but rather 3D models. They can take their fig leaves and put them where the sun doesn't shine. If anyone wants to continue doing business with them, that's up to them, however, one is entitled to know the facts and about how some people are treated. Oh, and as far as a merchant account, it was. It was a merchant account from an old website I had, which, mind you, also had naked Vicki in a temple with a sword.

Oh, and let me just add...their phone number is next to impossible to locate and why should I have to waste my time and money calling when this could simply be handled by email, by someone with half a brain in their head. Shove it PayPal!

Their response... "We're working diligently, blah, blah, blah...

Hypocrites.

I don't understand the sudden prudery. The net being what it is, porn must have been a sizable portion of their business. Not to mention other sites that occasionally feature nudity. I remember reading last year that the famous "JenniCam" site was shutting down, because of PayPal's new TOS. They must have made a lot of money off of her. Seems like they are opening the door for other pay systems that won't be so anal.

PhilC, you are the only reason that I have a paypal account, and now that you will be accepting credit cards, it will be no longer!!!!

well, its VISA that's behind the whole Paypal problems with adult sites, believe it or not. VISA has been on a rampage about adult sites for a while. Rather than lose their VISA processing abilities, Paypal decided to crack down on adult sites. No American third party billing system can accept VISA for adult site payment. (and its starting to creep over to Europe as well) VISA wants you to pay for your own merchant account, which is hard to get and pricey to boot. It has everything to do with money and nothing to do with prudery, at least in Paypal's case.

Interesting. Just Visa, and not Mastercard? And Visa will allow sites to open merchant accounts and sell adult stuff that way? So, theoretically, Rosity would be in violation if it sold me an anatomically correct genital prop via PayPal, but not if I charged it to my Visa card directly?

Attached Link: http://www.forbes.com/2003/05/01/cz_sl_0501porn.html