After it surfaced from several ebay users on discussion board threads on ebay, Ina Steiner then broke the story on EcommerceBytes.com The title of the article by Steiner is Ebay Drags Heels In Fixing Automatic Five-Star DSRs. Seems that the automatic five-star DSR that a seller is SUPPOSED to get if they offer free shipping and upload tracking HASN'T ALWAYS BEEN WORKING. In fact many ebay sellers still got unfair and unwarranted low DSR stars from buyers, that the BUYERS WERE NOT SUPPOSED TO BE ABLE TO LEAVE! Since many of the 15,000 sellers who got kicked off ebay on August 6, 2013 were only out of compliance by 1 DSR star, one wonders how many were kicked off because of this glitch- this error- that ebay admits to being aware of for quite some time and not trying to fix.
Ebay forces ebay sellers to use PayPal to accept payments from buyers. Of course Ebay owns PayPal, and the seller pays fees at both ends (both at PayPal and Ebay). In the United States, PayPal is licensed as a money transmitter only on a state-by-state basis. Basically, it's a middleman with no access to funds in the real banks.
The biggest challenge for PayPal is an unsustainable business model. Initially, PayPal offered its service with lower cost, planning to earn interest on funds in users PayPal accounts (i.e., the float).
However, most recipients withdrew their funds immediately. Furthermore, a large majority of senders funded their payments using credit cards, which cost PayPal roughly 2% of payment value, rather than relying on much less with business accounts qualified for seller protection against losses due to chargebacks, provided that they complied with reimbursement policies.
In August 2002, Craig Comb and two others filed a class action against PayPal in, Craig Comb, et al. v. PayPal, Inc.. They sued, alleging illegal misappropriation of customer accounts and detailed ghastly customer service experiences. Allegations included freezing deposited funds for up to 180 days until disputes were resolved by PayPal
The court ruled against PayPal, stating that "the User Agreement and arbitration clause are substantively unconscionable under California law," noting their unjustifiable one-sidedness and explicit prohibition of class actions produces results that "shock the conscience" and indicate PayPal was "attempting to insulate itself contractually from any meaningful challenge to its alleged practices"
Just for fun? Grab a cup of coffee. Google PayPal lawsuits.
