PayPal shuts down Hackers For Charity

http://www.hackersforcharity.org/259/paypal-shuts-us-down/

by fossguy • 17 years ago

51 22 17 years ago

bcl• 17 years ago

That's a pretty sad story. I thought everyone knew not to keep money in their PayPal account? As soon as I get a payment I transfer it out to my bank.

mahmud• 17 years ago

They can pull it out without your conscent.

gommm• 17 years ago

Really? I know that one of the next step they list that I should do with my account is give them some paper to allow them to take money out of my bank account but I've never done that (I don't trust them and it seems a tad too risky). So without that authorization, how can they pull out the money without my conscent? The only other possibility I can think of is by using my credit card information but then I should be able to contest it with visa?

weaksauce• 17 years ago

Get a bank account for just paypal transactions and then anytime there is sufficient money, whatever threshold makes you nervous if you lost it, in the account transfer it to a different account. If they try to pull from an account that has no money they will not get any money.

ajg1977• 17 years ago

Which is why, if you do any sizeable transactions with Paypal, you set up a separate checking/savings account and route your withdrawals through that.

With most US banks it's super-easy to have multiple subaccounts and transfer money between them via online banking.

Sure, they'll send nasty letters asking you to rectify the negative balance in your account, but if you are in the right it's a lot lot lot easier to work from this position than when they've taken or frozen your money.

TrevorJ• 17 years ago

It really seems as if PP has taken a turn for the worse lately. My only experience with them was a few years ago when I had a problem with someone accessing my account fraudulently. They where easy to get ahold of and proactive. A shame that doesn't seem to be the case any longer.

ajross• 17 years ago

Isn't this the flip side of the same proactivity? PayPal is paranoid that someone is going to try to regulate them as a bank. As a result, they'll shut down anything that doesn't look 100% legitimate.

I hate to be the devil's advocate here, because it looks like HFC was truly wronged. But still: an off-shore not-quite-yet-a-charity with no paper trail, no office, and no contact info beyond a web site is hardly a paragon of transparent legitimacy. Put "hacker" in the title and things get worse for the poor PayPal pencil pusher to figure out. I'm not surprised at all that someone got cold feet and pulled the plug. That doesn't mean PayPal is "right" to do this. But their motivations are pretty clear to me.

One lesson here is that organization is your friend. A few weeks spent filling out 501c3 forms and establishing banking records (maybe finding a pro bono accountant, too) would have obviously been a good idea in hindsight. Charging off to Africa shouting "Give me money!", not so much.

randallsquared• 17 years ago

No, it's been like this since near the beginning. Back when I was in the online gold sales industry (2000-2005), it was well understood that Paypal would put you out of business with their shady business practices. The gold industry has really small margins to begin with, so a single account freezing could (and often did) wipe out an exchanger.

theklub• 17 years ago

I think its time for a good alternative. I mean I know there are some out there but what else has market?

die_sekte• 17 years ago

The problem is that money transfer and storage tend to be rather heavy and complex things. And countries like to regulate banking.

But nevertheless, a online payment thingie that doesn't suck? Sign me up!

Elessar• 17 years ago

Paypal isn't even considered a bank in any of the countries it operates in (except Luxembourg, where they serve all of the EU). This means they're not subject to any of the regulations that are attempts to keep banks honest.

Keeping your money in PayPal is a massive risk. As a customer, you have no protection, no deposit insurance (covered by your Federal government in Canada and USA), and basically when things go wrong, you are stuck with sending emails and legal action.

What a massive scam. Spread the word: avoid PayPal.

yan• 17 years ago

For those who are unfamiliar with Johnny, check out recordings of his talks. "Low-tech hacking" (or similar title) was a beautiful talk, entertainingly delivered. He's working on different purposes now, but he contributed a lot to the security industry and an all-around great guy.

sp332• 17 years ago

It's "No-Tech Hacking" http://video.google.com/videoplay?docid=-2160824376898701015

He has a book out by the same title, all proceeds from the book go to the charity.

dmm• 17 years ago

Don't trust anybody with your money that you can't physically shake your fist at. It keeps them honest.

HeyLaughingBoy• 17 years ago

Going against the tide here...

Although this is about PayPal, any bank would probably respond the same way. Try depositing a check made out to your business into a personal account. Most banks will simply refuse to do so. You can go into the bank and show tons of documentation that you own the business AND if it's an emergency AND you get the bank manager involved they may bend the rules, but usually it simply won't happen. Trying to resolve that over the phone? Forget it.

What this guy is doing (HFC) is a great cause, but the entrepreneurs out there should read this as a cautionary tale. It's because of stuff like this that we need to get our business finances set up properly from the beginning. A few minutes spent filing paperwork a year ago would have prevented all his problems.

Banks (yeah, I know PP isn't a bank) don't screw around!

jsteele• 17 years ago

I have to agree. To me, it seems naive not to expect problems when mixing business and personal banking (corporate veil: pierced), not having the correct paperwork available, using not-on-file email addresses, etc.

If PayPal or a bank didn't insist on these strictures, imagine the outrage when someone's accounts are cleaned out by some fraudster with flimsy, half-good credentials.

Especially when traveling (especially to Africa!) you have to arrange things carefully in advance. Maybe someday things will be smoother, but it's still messy in 2009.

Hackers: Learn to hack your finances, too.

eli• 17 years ago

So if he's not a 501(c)3, how exactly was he going to account for all this money with the IRS?

PayPal shuts down Hackers For Charity

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