PayPal USA Policy Changes Announced 4/30: Intangible Items Covered Starting 7/1

[DomainBop]

PayPal (USA) announced some changes to its buyer protection policy on April 30th.  The policy changes will be effective beginning July 1st.

Many changes announced but the change that will hit many VPS board users is that buyer protection will now be extended to intangible items like digital goods and services (and buyers can file a complaint for "not as described" when a service isn't as described in the advertisement: i.e. down for days at a time, advertised 24/7 service is really during recess and lunch hour only, etc)

from PayPal's 4/30 announcement:

 "if you pay for a service or digital product using PayPal and it is significantly different from how it was described, or you pay for one of these items and it is not delivered, PayPal will ensure that the money is credited back to your account."

from PayPal's policy changes:

Section 13.3
We are increasing the scope of PayPal Purchase Protection to now include coverage for intangible items.

Full text of the changes to PayPal's US agreements: https://www.paypal.com/us/webapps/mpp/ua/upcoming-policies-full

(and for anyone who missed them last month , the changes to the UK agreement which will also cover intangible items and services starting July 1st:  https://www.paypal.com/uk/webapps/mpp/ua/upcoming-policies-full )

As a footnote: there are a few low end providers I've named in the past whose business plan revolved around gaming the intangible items clause to rip off customers...that business plan ends July 1st...hope Kohl's is hiring.

 

[Nett]

Sounds good

 

[Francisco]

Yeah that's going to cause issues at a big handful of providers.

Francisco

 

[drmike]

Bahaha!

All I can say is: ABOUT DAMN TIME.

Thanks PayPal, I am happy to see a bunch of sketch hosts now go under.

 

[Shoaib_A]

I have always been of the opinion that buyers should be protected against intangible items. 

Merits:

1. Customers will be able to try out providers without the risk of losing their money

2. Providers will try improve quality rather than making fake promises

3. There have been a few providers offering unrealistic prices only to scam customers on account of "intangible goods" excuse. I think now we will see a gradual shift towards realistic pricing with less scammers around.

Demerits:

1. Disputes might increase as there are so many things which can be manipulated to claim that the product was not as described.

2. Provider might lose money even when the product was as described  because the customer had malicious intent to use the service & then try to get the money back.

3. PayPal employees' lack of knowledge about how things work in hosting industry will result in more providers being unhappy with paypal after the protection for intangible goods is implemented.

 

[MannDude]

Good!

Will be happy to see some of the crummier providers get dinged with this. Offer what you advertise, or else!

 

[Enterprisevpssolutions]

Good news for clients and companies that wanted the protection.

 

[Francisco]

Good news for clients and companies that wanted the protection.

Kinda. There'll likely be a spike of chargebacks from customers that get TOS'd and such so you end up getting screwed on not only the cleanup charges your datacenter might stick you with, you'll also get smacked with the chargeback fee as well.

It's a hard one. It'll force many of the "chargebacks put (gas in my Corvette|weed in my pipe)" hosts to actively try to provide what they promise, but it also gives a leg up to unreasonable customers that not even a saint could please.

I think it's going to put a serious nail in the summer hosts, especially considering it's going in place at the start of July. All the scammy minecraft hosts are going to think twice before trying to pull the 46 days trick, etc.

Francisco

 

[rds100]

. All the scammy minecraft hosts are going to think twice before trying to pull the 46 days trick, etc.


Francisco

Isn't it 180 days now?

 

[Francisco]

Isn't it 180 days now?

Even worse for them if true.

Francisco

 

[Vertical]

The only problem I see with this is that there are so many clients that will go from host to host abusing this to gain free services just like so many buyers on ebay. All they need do is wait until the time for disputes is almost up and then file a dispute over uptime or something that is easy for them to dispute and hard for paypal to validate and of course paypal will side with the buyer as they usually do. With that said, clients like that are better "in the wind" so to speak, but alot of good providers will get burned along with the shady guys that deserve it anyway. 

 

[GIANT_CRAB]

>advertised 24/7 service is really during recess and lunch hour only

ROFLMAO

Also, this is kind of a big move. Hope Paypal staffs get trained well not only in hosting industry related but also other kind of services eg - social escort, delivery services, gardening services, etc.

 

[MattKC]

Nice, a certain "winning" individual is angry today. He lives on denying refunds saying paypal won't cover intangible items. Several shell and lowend companies are going to be hurting with this change.


Good.

 

[Nick_A]

I'm skeptical as to how PayPal will arbitrate "not as described" for virtual server hosting.

 

[qps]

This sounds like it could be a big hassle for providers.  If a customer signs up for service and has buyers remorse, they can now dispute it and potentially get their money back even if there are no grounds for a refund.

For instance, I've had a customer who signed up and said that because they couldn't get 100MB/s (yes, 100 megabytes per second or 800 Megabits per second) from their server to their 100 Mbps (that's 100 megabits) home network they wanted a refund.  Obviously, not technically possible, but PayPal could lack understanding of the difference and give them a refund anyway.

 

[devonblzx]

I think people are missing the big point here about buyer protection from PayPal.  PayPal customer service agents probably won't know enough about VPS hosting to know what a customer is talking about or if what they describe is truly not fitting of the service so this is going to lead to legitimate providers losing or customers being misinterpreted when it comes to a requiring technical dialogue. 

 

[William]

Nothing really new for EU PayPal - I charged back multiple VPS for not being as advertised with my old Austrian paypal, usually they give in after a few complaints.

 

[PureVoltage]

As Nick said I'm also skeptical of how they will do this, however I spoke with PayPal months ago before this whole thing was announced and their reason for switching their disputes to 180 days is to try and prevent charge backs.

Before that when PayPal only supported their older amount and customers would ask what else they could do they had to tell them they could only take it up with their bank which now they can avoid doing so it should help a lot of the legit hosts.

Hopefully they can just figure out a way to kill off the kiddy hosts.

We will see soon how this all works out, I wish at times there was more protection us hosts could have, we've seen many sign up for game servers for months then charge back their months of service used, even with proof showing them playing on it, support tickets etc, not all credit card companies accept it.

However at the same time there are so many stupid hosts out there screwing people over it sucks when they get away with it.

 

[DomainBop]

This sounds like it could be a big hassle for providers.  If a customer signs up for service and has buyers remorse, they can now dispute it and potentially get their money back even if there are no grounds for a refund.

If there are no legitimate grounds for a refund (i.e. service not delivered, or item "significantly not as described") and the provider's TOS details their (no)refund policy, then my guess is PayPal will side with the merchant on a "non delivery" complaint as long as the merchant can prove the VPS was delivered to the buyer (which shouldn't be hard to do).

The key word for the not as described policy, is "significantly": for examples of "significantly" see 123systems, BlueVM and all the buyer complaints of VPS's being down for weeks and support being nonexistent, or see probably the biggest scam in the past year: Uniwebhosting and their $19 monthly payable annually only  E3 dedicated server ponzi scheme (which as predicted did implode since Uniweb was paying Hetzner $55 monthly for those servers).  If a buyer files a bogus claim based on your example of a technically impossible benchmark result, I think providers will be able to explain (show some screenshots of why it is impossible) and win the dispute.

My big question is: now that services like hotel rooms are covered by PayPal buyer protection, can I file a not as described complaint for my entire hotel bill if the room service food sucks or the drink I ordered from room service is 70% ice?

 

[qps]

If a buyer files a bogus claim based on your example of a technically impossible benchmark result, I think providers will be able to explain (show some screenshots of why it is impossible) and win the dispute.

I question whether PayPal's customer service is sophisticated enough to make sense of situations like that, but I guess we'll see soon enough.