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Whether or not your personal opinion is that Paypal is the most wonderful thing since sliced bread and you have been using them longer than they've actually been around :rolleyes: I think it's fair to say that people have been screwed over by Paypal, whether by Paypal's fault (closing a busy account because it looked suspicious) or through buyer fraud (claiming unshipped/not as specified).

I plan on getting a merchant service account for my business as soon as it becomes feasible, but I will still need Paypal, even if it's just to buy or sell used equipment on eBay. What kind of precautions have you taken or heard of to minimize damage if Paypal ever does freeze your funds, or, worse, yank them back out of your checking account.

I discussed this with the local bank manager this afternoon, and how to protect the account. She said that since you sign away all your rights when you sign up for Paypal, the bank has no ability or recourse to protect the account. If Paypal pulls more than is actually in the account, they will draft funds out of another account without warning. She agreed with me that I would be better off going to a bank which I have no financial services with and opening an account with a minimum balance, which would protect my personal savings and checking accounts if a worst case scenario occurred. Both the manager and teller commented on several things (like complete account freezes before mediation instead of claimed amount freezes) they'd seen Paypal do that would be a banking regulation violation if a "real bank" had done it.

I'm usually good at seeing a scam when it comes in (I've protected the company I worked for back when we were retail from IP relay and other more obscure scams) but since I've been resisting Paypal, any advice as to sneakier scams to watch out for would be appreciated.
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