I'm vacationing in Maui when I get a call on my cell phone from Rob Smith. He's an associate who's company, Trust Eli, is marketing my Security Awareness Courses and he's livid about an unholy rip-off PayPal just pulled on him.
He'd purchased tickets on eBay for the Pink Floyd concert at the LIVE 8 summit in London. Bowing to public pressure over people profiting from world hunger, eBay pulled the plug on all auctions of the wrist bands (including completed transactions) to the Hyde Park concert. (See here).
In reality, PayPal (which is part of eBay), IS profiting off eBay's actions. How? PayPal dinged Smith a $33 exchange rate fee for the cancellation that eBay initiated. And as Smith is telling me about it, my mind's making mathematical calculations about how many others were hit up for this exchange fee.
"You need to write a story about this," Smith told me after explaining the entire sordid story. "People need to know that eBay-slash-PayPal operates above the law."
I've written for years about how PayPal has been acting like a bank while flying beneath the radar of the SEC even though it handles peoples' money, credit, and deposits into and out of
their primary checking accounts. (See here and here.)
So even though I was in paradise, I was mad enough to attempt to get the story published. None of my traditional publishers were interested, so I went to the Associated Press and Reuters. No reply. So Smith went ahead and blogged the whole story himself at the Security Awareness Blog, which Smith and I are both affiliated with. To read his whole story, scroll down to the June 15th entry. Meanwhile, I'll leave you with Smith's most important lesson, which he wrote at the end of his blog:
"If you ever decide to buy anything from an International source and use PayPal, please make sure you check the exchange rate button which forces the credit card company to do the exchange and not PayPal," he wrote. "This will guarantee that you get a proper refund using the exact same method without commission. Don't let this scam happen to you."