There are those who would argue that the 21st Century is the Golden Age of piracy, except that the piratical villain in their scenario is PayPal, a supergeek buccaneer that roams the lawless reaches of the Internet, scooping up $15 million per day in transactions involving individuals and small businesses.

As if it weren't sufficiently intimidating in its own right, PayPal is now part of the eBay armada, giving it ready access to untold millions of auctions involving such items as used sweaters, old CDs and spare auto parts.

The pirates of old were beyond the reach of the law and so, at least for now, is PayPal.

• Although it handles more money than many banks, the Federal Deposit Insurance Commission has declared it's not a bank.
  
• Although it is now insuring online purchases, no state has yet declared it an insurance company.
  
• Perhaps most infuriating to its victims, PayPal has placed itself outside the reach of the courts through its 25-page service agreement, which requires that all disputes be submitted to arbitration in San Jose, Calif., which just happens to be PayPal's hometown. Users give up their right to sue PayPal when they accept the service agreement.
  

A federal judge last year ruled that PayPal's arbitration clause did not comply with California law. The company has since updated the clause and is now systematically requiring its customers to accept its new service agreement, which contains a modified arbitration clause.

By so doing, PayPal is depriving its customers of the opportunity to participate in a class-action suit that alleges the company's dispute resolution procedures violate the Electronic Funds Transfer Act.

The issue that may finally bring PayPal into the sights of regulators is its so-called buyer protection plan. This leaky sieve of a guarantee was introduced in July 2002 as PayPal Financial Guarantee Insurance but she was soon rechristened the PayPal Money Back Guarantee Program, apparently after the in-house lawyers dropped their teeth upon hearing the word "insurance."

Insurance, after all, is something that is regulated by each of the 50 states. Lawmakers in those states are accustomed to being wined, dined and contributed to by the insurance companies seeking to feed upon their populace and they do not cotton to the notion of self-proclaimed geek-wad cyberinsurers cutting them out of the loot.

Several states are reportedly conducting inquiries into whether PayPal is illegally poaching on the states' turfs. Paul Kress of Wisconsin's insurance commission told a complaining constituent that his office was pursuing a response from PayPal on the citizen's complaint.

"A company can guarantee its own products or services but not the products or services of a third party," Kress was quoted as saying. Oklahoma, Florida and Nebraska are also said to be studying the situation.

There is also the matter of the debit cards PayPal advertises widely on its site and issues to many of its users. The cards are actually issued by Bank One but critics say that PayPal handles most of the dispute resolution functions and is not complying with provisions that banks must follow in electronic fund transfers.

Then there's PayPal's money market fund management, which is reportedly being investigated by the Securities and Exchange Commission (SEC). The SEC is looking into allegations that PayPal is charging more than 1.80% in expenses when its Money Market Fund Prospectus states that the rates are 0.10%.

It may well be that the various investigations produce little or no action. But some consumers have faith that the great merchant vessels whose territory PayPal has invaded will band together against the new cutthroat.

"The very least we might hope for is that the banking industry might move to banish PayPal�s debit card as it holds an unfair advantage in the market," said Mike Fleming, a Sacramento consumer locked in a duel over a $1,010 money-market fund transaction. Besides the many fiscal consequences he has suffered, Fleming says he has experienced discord in his familial life.