PayPal Inc., the online payment processor owned by EBay Inc., agreed to work with Australia’s financial crimes regulator after the agency found it wasn’t compliant with reporting standards to prevent money laundering. 

The company will hire an independent party to help it meet the standards, the Australian Transaction Reports and Analysis Centre and PayPal said today in separate statements. 

PayPal has spent $13 million over the last two years to comply with Australia’s regulatory standards, the company said. Australia, the payment processor’s fifth-biggest market, made a similar assessment of Barclays Plc in July. PayPal, which accounts for about 31 percent of EBay’s revenue, said it didn’t know how much it would cost to meet the requirements. 

Under Australian law, banks are required to submit suspicious transactions to the country’s counter-terrorism financing agency, know as AUSTRAC. The lenders must also have processes in place to prevent money laundering. 

Merchants use PayPal for transactions on EBay.com and other retail Web sites. The company charges a fee for every payment processed by a merchant. It is also used by people to send money to each other. 

PayPal is available in 190 countries and supports payments in 24 currencies. EBay said the unit’s sales will double to $5 billion by 2011 and the payment processor will eventually become the San Jose, California-based company’s biggest business.

http://www.theaustralian.com.au/australian-it/paypal-agrees-to-tighten-security-against-money-launderers-and-criminals/story-e6frgakx-1225802525251

PayPal agrees to tighten security against money launderers and criminals

AUSTRALIA'S financial transactions regulator has given eBay subsidiary PayPal Australia until May next year to bulletproof its online payment service against money launderers and terrorism financiers.

PayPal accepted the deadline yesterday as part of enforceable undertakings ratified by the Australian Transactions Reports and Analysis Centre (AUSTRAC) in a bid to resolve a dispute with the regulator that has bubbled away for more than a year.

AUSTRAC chief John Schmidt said the centre had concerns over PayPal's "fine-grain" ability to adequately report anti-money laundering and terrorism financing risks on its service.

He said AUSTRAC had been in negotiations with PayPal for "a considerable period of time" and accepted yesterday the undertakings to make changes.

The undertaking contained a declaration that "AUSTRAC has expressed concerns that PayPal has contravened and continues to contravene the (Anti-Money Laundering Act and the Counter Terrorism Financing Act) and AML/CTF rules."

It also contained a declaration that PayPal lacked the ability to assess high-risk customers before providing them with service.

Mr Schmidt said the regulator was particularly concerned about the adequacy of PayPal's transaction monitoring and customer identification measures for accounts with balances less than $1000. The accounts, which make up the vast majority of PayPal's service, were the subject of a declaration that AUSTRAC issued against the company in October last year.

Under the terms of the declaration, PayPal was not required to conduct customer verifications for accounts that did not meet the $1000 threshold as long as it deemed that the risk the customer was facilitating money launderers or terrorists was low. AUSTRAC, however, had lingering concerns about the company's implementation of the declaration on accounts that did not meet the threshold.

"We need to be sure that an organisation that has got an (anti-money laundering regime) in place to identify suspicious transactions. And those transactions could be a dollar or a million dollars," Mr Schmidt said. "One of the factors that led us to go back and ask PayPal about their compliance regime were transactions arising in respect of that ($1000) threshold."

PayPal Australia managing director Frerk-Malte Feller said PayPal did not ordinarily seek to verify customer accounts until after account balances reached the threshold. AUSTRAC wants customer risks assessed before the verification limit is reached.

"That's what we've committing to AUSTRAC, to improve and that's what we will be implementing until next year," Mr Feller said.

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Dr. Jay went rather spastic about this very matter of Ebay / Paypal doing fuck all about everything - especially ID checks....

Thursday, December 4, 2008 - Dr Jay goes Mental....

PayPal has a policy of not commenting on individual cases.

PAYPAL HAS A POLICY OF NOT COMMENTING.

PERIOD.

EBay spokesperson Daniel Feiler repeated the company's stance that a 100-point identity check was useless to curb fraud.

A KNIFE AND FORK ARE USELESS TOO, IF YOU DON'T HAVE A STEAK ON YOUR PLATE, YOU DUMBFUCK.

"In this day and age, when people can create all sorts of identities, that's not going to help," Mr Feiler said on the program. "It's the activity that people do online that is the best indication."

REALLY? WHAT ABOUT THE FRAUDULENT ACTIVITIES EBAY COMMITS? IS THAT "THE BEST INDICATION" OF EBAY'S ATTEMPTS TO CURB FRAUD - BY MATCHING IT DOLLAR-FOR-DOLLAR?

HELLLLOOOOO?

Former Communications Law Centre director Elizabeth Beal said she didn't see any real motivation for eBay to stop fraud.

YOU DON'T NEED 20-20 VISION TO SEE THAT, FOR CHRIST'S SAKE.

"They still benefit from fraudulent sellers because they still collect the fees," Ms Beal told the 7.30 Report.

YOU DON'T NEED 20-20 VISION TO SEE THAT EITHER, FOR CHRIST'S SAKE.

Ahhh Dr. Jay - we love you.

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EBay spokesperson Daniel Feiler repeated the company's stance that a 100-point identity check was useless to curb fraud.

Now why would the people who manage Ebay be refusing to perform ID checks on sellers?

I mean Ebay and Paypal move 30% of all the worlds fakes and fraud.

There is a lot of profit to be had from this, tax evasion and organised crime; and funnily enough - in aiding, abetting and skimming profits from money laundering too - including failing to expose or report criminal activity on Ebay - with the cash being transferred around the place via Paypal - for a price.

Funny about the people who run Ebay (and Paypal) failing to do ID checks on the very people pulling all the very profitable and illegal scams - including money laundering.