Paypal

[ccohen5]

Quite correct and this is what the various AGs in some 20 US states are
complaining about.

Colin

----- Original Message -----
From: "Brett Dikeman" <brett at cloud9.net>
To: <QSHIPQ at aol.com>; <ccohen5 at compuserve.com>
Cc: <s-car-list at audifans.com>; <quattro at audifans.com>
Sent: Thursday, May 02, 2002 4:40 PM
Subject: Re: [s-cars] Fw: Paypal


|
| At 7:10 AM -0400 5/2/02, QSHIPQ at aol.com wrote:
|
|
|
| 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.
|
| Brett
| --
| ----
| "They that give up essential liberty to obtain temporary
| safety deserve neither liberty nor safety." - Ben Franklin
| http://www.users.cloud9.net/~brett/