After my post about being screwed with small print, one person posted a comment on my Slashdot journal post about it that I should file a dispute with PayPal. Ahhh, if only it was that easy.
Prior to joining Boxed Art, I found a site selling a package of web templates and clipart for $49.95. They also promised full resale rights. Though I wasn't interested in reselling it, that gave me broad usage rights, so I bought it.
Upon downloading and inspecting it, I found it was full of copyrighted materials they'd taken off other sites that had very strict usage rules and copyright notices. I contacted one site and they said they hadn't granted resale rights to anyone. So I filed a dispute with PayPal, stating that the goods were not as advertised, contained multiple copyright violations, and even offered to send PayPal proof of this.
Did PayPal care that the seller was using PayPal to accept funds for the sale of stolen intellectual property? Did they care that the product was falesly advertised? Did they ask to see the proof I offered? No, no, and no again. Their only concern, since this was a "virtual good" was "was it delivered". When the vendor showed that they'd provided me access to a download area where I could retrieve the "virtual goods", that was enough for PayPal. They ruled in the vendor's favor.
I appealed, once again offering to provide proof and making very clear that the vendor was selling stolen intellectual property. I stated that PayPal could be subject to vicarious liability for the copyright violations if they did not refund my payment and cancel the vendor's account. My appeal was denied.
While I do use PayPal, I now try to be VERY careful in what I buy via their service, both in terms of the types of goods and the vendors I buy them from. So, while I might use it to pay for domain registrations and extensions at GoDaddy, I wouldn't use them to buy anything from a vendor I didn't trust, because if the vendor turned out to be a thief, PayPal seems that they're more interested in being a "Pal" to con artists and thieves rather than consumers.
So, since the folks at Boxed Art can say "it was in the terms and conditions that we cannot refund renewals" (even though the word "cannot" is a lie), giving them a legal right to keep the money. And while they don't have a moral or ethical right to the money, I'm not going to go to the trouble of filing a PayPal dispute. I mean, come on. If PayPal wouldn't even refund the money for a product that was falsely advertized and sold illegally, why would I expect them to even bat an eye over this?
UPDATE
A PayPal-like payment transfer company, EGold got nailed by the Department of Justice on April 27th, getting hit with a 4-count indictment that included money laundering. Quoting from the article: "The defendants conducted funds transfers on behalf of their customers knowing that the funds involved were the proceeds of illegal activity, the DOJ said."
Now, if PayPal was told that the funds they transferred were the proceeds of illegal activity (i.e. piracy), but willfully turned a blind eye to such accusations and any evidence being offered, I'd say that constitutes something illegal. I'll have to drop a note to the DOJ and see if they might want to extend their investigation to PayPal and nail them for money laundering and facilitating the interstate sale of stolen goods.
Ahhhh, a boy can dream.
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PayPal has been a thorn in my side for years. I accept PayPal because my clients expect it, but I don't have to like it.
Just a few of the run-ins I've had with them:
-I bought some sticky labels from a seller on eBay. He did not ship the labels, did not respond to emails or phone calls. After about 3 weeks I filed a PayPal dispute. Within 24 hours he shipped the labels and supplied the tracking number to PayPal. PayPal closed the dispute, because the package had been shipped. When I received the package, he had shipped me less than half the number of labels I paid for and they all said "Property of UPS - for shipping UPS packages only." Since I wasn't planning to ship with UPS these were worthless to me - and on top of that it was very obvious he had taken the free labels from UPS and resold them. I tried to dispute the payment again on the basis of 'product not as described' and PayPal said "we've already closed a dispute on this transaction, you can't dispute it again."
-Several times I've worked on websites for clients who want to accept PayPal, and the PayPal interface does not behave the way it is described in the documentation. For several months there was no way to override the sales tax calculations that PayPal made, despite some notes in the docs on how to do that.
-Another eBay seller did not ship his product. I attempted to dispute with PayPal, they wouldn't listen. Called my credit card company and disputed with them, PayPal sent me a nasty letter telling me I should dispute with them first.
On the other hand, I've had a few clients try to dispute their PayPal payments to me for services rendered. Even though I was clearly in the right and had the documentation to back it up (signed contracts, emails agreeing that the project was complete) it was nice that I didn't have to worry about proving my case, I only had to say it was a virtual product and PayPal closed the dispute.
You can find lots more at http://www.paypalsucks.com - some of those people are whiners, but many have legitimate beefs.