Kokua Line

By June Watanabe

Sunday, November 18, 2001

Service can freeze funds
to ensure online security

Question: I buy and sell items on eBay and belong to an online payment system called Paypal. I pay them, and I can get payment through them. However, all of a sudden, they put a restriction on my account, taking the money coming in but not allowing me to withdraw funds. They said they wanted the following information before they would unfreeze it: a copy of my Hawaii driver's license; a copy of my credit card statement; a copy of my bank statement; a utility bill; where I travel and what I buy and sell on eBay. They never said they needed this kind of information when I signed up. Before I release all this information I just want to know if this is a legitimate request. Why do they need all this highly personal information?

Answer: "We don't normally ask people for this level of information. It's rare," Vincent Sollito, vice president of Paypal, Inc., said in a telephone interview from company headquarters in Palo Alto, Calif. (Paypal is the middle man in the online transfer of money between individuals and/or businesses.)

Sollito said such information is requested when the company suspects there may be fraud involved in an account.

That could mean the account's owner "may have done something that ran afoul of our internal rules or, perhaps, they were the unwitting victim of a fraudulent scam attempt where somebody sent them a bunch of fraudulent payments."

In such cases, Paypal "reserves the right, for the protection of both you and the rest of the community, to, on occasion, require additional verification before allowing you to withdraw funds," he said.

(We received your update that the restriction on your account was lifted soon after we told you to contact Sollito.)

Sollito explained that fraud, typically involving identity theft or seller fraud, is probably the biggest "burden" to e-commerce.

With identity theft, someone will use another person's name, address and credit card number to buy goods online. When the actual owner of the credit card gets the bill, however, and says he didn't buy any of the merchandise, then "the person who shipped the goods is out the money and the goods," Sollito explained.

"If you're a small business selling online, you can lose 2 or 3 percent of your sales every year purely to fraud due to stolen credit cards," he said.

In a system like Paypal, which allows people to send money back and forth to each other through a "middle man," scammers sometimes try to open accounts, sending money charged to stolen credit cards, then withdrawing it, he said.

With seller fraud, someone will offer something for sale, say Sony PlayStation 2s for $200 each. People e-mail the purported seller $200, "he withdraws $20,000 from his account and disappears," Sollito said.

Asked what reassurance he could give that your personal information is secure, he answered: "We're a big, reputable company. Our 11 million users do about 200,000 specific payment transactions every day and they move about $13 million a day.

"We basically handle people's money for them and we protect their online financial privacy. Many people like the Paypal service because it allows them to avoid giving their credit card number or bank account information all over the Web. All they do is give it to us. Then they can use Paypal all over the Web."

The bottom line, Sollito said, is that fraud occurs on the Internet, and one way Paypal tries to prevent fraud is by verifying people's identities. "Sometimes to do that and make e-commerce a little safer, we have to ask for a little bit more information than people might be used to giving out."

We checked with the Better Business Bureau of Hawaii to see if it had any information on Paypal and were referred to a report by the Better Business Bureau of Santa Clara County, Calif.

According to that bureau's files: "Paypal has a satisfactory record with the Better Business Bureau. Although an unsatisfactory record was previously reported due to a pattern of complaints, Paypal has taken action as prescribed by the Better Business Bureau to correct the underlying cause of those complaints. As a result, there has been a substantial reduction in a number of complaints received by the Bureau and the pattern has been eliminated. Paypal addresses all complaints brought to its attention by the Bureau and continues to work with the Bureau in evaluating complaints and increasing customer satisfaction."

However, in doing a Web search we found a far more critical evaluation of Paypal and its complaints record, saying that the BBB simply requires a company to respond to a complaint.

You can check it out at

Q: I've been noticing yellow droppings on my car. I assumed it was just from birds. But my friend said it was bee excrement and to use warm water to wash it off. Do you have any information?

A: "Bees have to rid themselves of wastes like every other animal," so it very well could be bee droppings that you see, said state Department of Agriculture entomologist Tom Culliney. That could especially be true if you park your car near a colony or along a flight path of bees.

As for getting rid of the droppings, just wash off it off as you would anything else on your car, Culliney said.

Got a question or complaint?
Call 529-4773, fax 529-4750, or write to Kokua Line,
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. As many as possible will be answered.
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