

PayPal shuts down Hackers For Charity - fossguy
http://www.hackersforcharity.org/259/paypal-shuts-us-down/

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HeyLaughingBoy
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!_

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jsteele
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.

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bcl
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.

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mahmud
They can pull it out without your conscent.

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weaksauce
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.

~~~
jrockway
Depends on the bank. Most banks would be happy to give them the money and
charge you the overdraft fee and interest. (But of course, you can just not
pay.)

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TrevorJ
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
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.

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

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

~~~
die_sekte
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
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.

~~~
cellis
Besides this incident, what other evidence do you present that Paypal is a
massive scam? I've used paypal for 5 years and never had a problem. I'm sure
things like this happen, but it has to be a negligible percentage of their
volume.

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adharmad
Not my own personal experiences.....but nevertheless:
<http://www.paypalsucks.com/>

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yan
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
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.

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

