Paypal Update [Update III] by Sefeiren < Journal | Inkbunny, the Furry Art Community

So a lot of people have commented on the previous paypal journal, which is super cool that people are active and invested in the issue. I'm really appreciative of opinions on varying points, and that others are investigating further.

We've also investigated further, with otterface having contacted a manager at Paypal to ask some questions and get answers for the concerns relating to Paypal's Services, the ToS, and AUP. We've got some corrections to what we previously believed. He had to call several times to find someone that was even aware of some of the issues we were concerned about, let alone be able to correctly interpret the ToS and AUP. Most of the customer service representatives we talked to before being put in touch with a manager did not understand the wording and legalese in the ToS and AUP. So, for anyone contacting about this situation for themselves, we might advise you to try and work your way up the ladder for a better answer.

What information we got was over the phone, so of course everything here will be paraphrased. This is not a definitive list in regards to Paypal. If you have a concern you should, of course, contact them directly and not just take our word on the matter based off of what we were told.

1) The $2,500 US Fine for AUP Violations

Does it exist? Yes. Does it apply to all AUP Violations? No. Despite the ToS stating otherwise, the information we got from the Paypal representative was that this fine is in relation primarily to the OFAC Rule. So, basically, illegal gambling, money laundering etc. In regards to specifically "certain sexually oriented materials or services", what it mainly pertains to is human trafficking and prostitution.

2) What else falls under "certain sexually oriented materials or services"?

This is a grey area, according to the representative, however what might also fall under this category would be photographic pornography and certain types of drawn pornography as well as dating services.

Otterface specifically asked in regards to the furry fandom, at which point the manager had to talk to yet another higher-up to get clarification. What we were then told was that tentatively most drawn pornography that is not "extreme" would be okay to sell through Paypal. But because furries are anthropomorphic animals it can potentially fall under a grey area where they might consider the artwork to be bestiality. We were provided an e-mail address that is a direct line to the the department that makes the decision as to whether or not content is appropriate for sale through Paypal, and were told that you can contact them with the artwork you're looking to sell in question and they will come back to you with a decision. How this may apply to commissions that have not been drawn as of yet, I do not know. Most likely, if you're following the rules and you're being smart and discreet, you won't run in to any trouble. Our AUP violations weren't for commissions, but rather selling a digital portfolio.

The e-mail address provided was AUP@paypal.com

For general questions, service@paypal.com was also provided.

3) Sending payments for services as gifts

First and foremost, is receiving payment for a service as a gift against the AUP? Yes. Will it instigate an action of the $2,500 fine? No (according to the representative).

We asked what would happen if someone was doing this and were told that, if you're caught you will be asked to cease doing that. If you persist your account will be closed, and your funds held.

But what if a client sends the payment as a gift instead of a service? If this is the case, the representative advised that you immediately refund the gift and send an invoice to the client instead.

In the event that you do have your account closed for avoiding paying fees and then try and circumvent Paypal by creating another account, or any other way of circumventing their decision in relation to your previous account, then at that point you may be at risk of being subject to the $2,500 fine.

4) Making your customers pay the fee

We asked about this as well, and if you're doing this then you're straight up in the wrong. This is not allowed, period. You will most likely be looking at account closure and funds being held if you're caught. You may be warned to cut that shit out first though.

5) Disputes regarding digital goods and services

In the event of a paypal dispute over delivered digital goods or services, there is currently no way to prove those products have been delivered. The representative said that a digital goods protection policy is being put in to place, and that there should be more information about it after July 2nd.

6) Other ways to circumvent the system

One additional thing we'd noticed in the community or similar communities in the same vein as ours, was using something like a "token" or "key" to be purchased instead of the actual product. So, for example, 'buy this token, then exchange it for this adult art pack' or 'buy this token then receive a password to access the special adult artwork' etc etc. We wanted to know if this was considered circumventing Paypal's policies, and the answer we received was 'Yes, it was'. So if you're doing that, then you should be aware that you haven't found a loophole in the system, and you may be at risk of action should you be caught.

This is more-or-less the sum of the information received from the representative talked to. To those of you still worried about the $2,500 fine, it should be noted that it does actually exist in the current ToS (the one last updated on May 1, 2015), so if you're using Paypal now then you've already agreed to it and have most likely been using the account while under its effects. Most likely, though, it won't be something you'll ever have to worry about (unless you're a crime lord).

Hopefully this will help relieve some concerns in regards to those using Paypal.

Another informative journal by Spix can be found here, who also contacted a representative to get information: http://www.furaffinity.net/journal/6740803/

Now, the whole reason we mentioned previously not planning to use Paypal in the future isn't purely because of the wildfire and rumours going around about the fines, it was because we actually had actions taken against us. According to what the representative said, I would think that the products we got actioned for actually fall in line with everything she told us. So while I think that, overall, the information given here is good news for those that wish to continue to use Paypal, it still seems to be fairly unpredictable whether or not your adult content will abide by their rulings. At the very least, though, you won't be fined $2,500.

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Update II: A few other people have been reaching out to Paypal inquiring on concerns (which I think is awesome). Biscuits appears to have specifically inquired on the $2,500 fine. The information Biscuits received is in conflict with the information we received. Please check out his journal for more information on what he heard from his Paypal representative: https://www.furaffinity.net/journal/6740786/

It may be that.... everyone is getting a different answer depending on their representative, or perhaps that those lower on the customer service totem pole are using their best judgement to interpret the AUP as best as possible.

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Update III: Dahan pointed out a really good piece of information that Paypal has stated in writing in regards to the sale of sexually orientated material and what that means for digital sales of such content through their services. An excerpt from his link:

We don’t permit PayPal account holders to buy or sell:

    Sexually oriented digital goods or content delivered through a digital medium. Downloadable pictures or videos and website subscriptions are examples of digital goods.
    Sexually oriented goods or services that involve, or appear to involve, minors.
    Services whose purpose is to facilitate meetings for sexually oriented activities.

Now what's interesting to me is that they say "buy or sell", which implies to me that both parties could potentially be held accountable. That's purely my interpretation and speculation though.

I also wanted to reiterate a point that Iruka mentioned in regards to what's been said here, which is that even though various representative have stated that certain things only apply in certain ways (ie. the fine applies to primarily the OFAC Rule), the ToS and AUP you agree to still gives them the ability to apply it to more than that, and you should keep that in mind. What a representative says, and what you legally agree to can be two totally different things.

Viewed:	601 times
Added:	9 years, 3 months ago 17 May 2015 06:59 CEST

24 Comments on this Journal

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GronV3

9 years, 3 months ago

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No wonder a lot of people are dropping Paypal.
So much damn red tape that it is one big headache for everyone myself included. :|

Malachyte

9 years, 3 months ago

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This is incredibly informative! Thank you so much for taking the time to find out all this. I hadn't considered that it would be a better idea to contact a manager rather than a general representative, for one. You've clarified a lot of things I was about to set into asking about, so that certainly does save me the trouble in some areas, ha ha.

I feel that the rep that Biscuit contacted seems somewhat misinformed. I don't see how selling adult artwork, but only under the stipulation that it's physical media and considered "artistic" would hold any water with the higher ups. I wonder where they got that?

dahan

9 years, 3 months ago

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Edited 9 years, 3 months ago by Owner

@ Malachyte

"	Spix wrote:
	I feel that the rep that Biscuit contacted seems somewhat misinformed. I don't see how selling adult artwork, but only under the stipulation that it's physical media and considered "artistic" would hold any water with the higher ups. I wonder where they got that?

No, he knows what he's talking about. It's Paypal's policy right on their website.

Malachyte

9 years, 3 months ago

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@ dahan

I see! Thank you for the link to this. I'm surprised that neither of these reps that Biscuit nor I spoke to didn't direct us to it. This is indeed an incredibly weird rule to me, but I guess it's something to work with.

LeafyGreens

9 years, 3 months ago

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@ dahan

"	In deciding what sexually oriented goods and services to allow, we consider: -Potential medicinal or educational uses for the product.

Am I the only one who got a laugh out of that?

Krechevskoy

9 years, 3 months ago

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Thank you very much for taking the time to gather this information and share it with us!

dahan

9 years, 3 months ago

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"	What we were then told was that tentatively most drawn pornography that is not "extreme" would be okay to sell through Paypal.

Note that digitally-delivered pornography is never OK to sell through Paypal—the only sexually-oriented material that might be OK are physical goods. (And both parties have to be in the US). I.e., if you draw furry porn on paper and mail it to the commissioner, that's OK. You can even mail a CD or USB drive with a PNG/JPG/PSD/etc... to the commissioner. However, you can't email the PNG/JPG/PSD, or put it on Dropbox or some other website. See their page on What is PayPal’s policy on transactions that involve sexually oriented goods and services? for details.

Sefeiren

9 years, 3 months ago

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@ dahan

Thank you for linking this!

Roketsune

9 years, 3 months ago

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Edited 9 years, 3 months ago by Owner

I think PayPal's stance on all this is, "We probably won't do this to you except for extreme circumstances, but we might do it for ordinary violations, and fuck you if you don't like it in the event we do because it's in our ToS."

Rooth

9 years, 3 months ago

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Edited 9 years, 3 months ago by Owner

It is worth noting that the prohibition against charging the customer for the PayPal fees is mostly a USA thing, and may some day go away, if the 10 states now prohibiting it change their mind (it used to be a federal law, but that got repealed a few years back). Many other countries do not have this clause in their PayPal AUP. For instance, go to the Germany AUP, and you'll see they don't prohibit this. See for yourself: go here and you can select other countries that have English-version policies.

It's important to point out the different policies in the different countries because people may walk away from this very informative journal thinking that they can tell ANY artist "you're doing it wrong." A couple of years ago I learned the hard way, pissing off one German artist 'cause I thought the policy applied to everyone. That's why I wrote up an extensive journal about it in 2013 here: http://www.furaffinity.net/journal/5299119/

Rooth

9 years, 3 months ago

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Edited 9 years, 3 months ago by Owner

@ Rooth

Ok, weird thing - clicking that Germany link in Firefox takes me to the USA policy again. But the same link in Chrome takes me to the Germany policy. @_@
#4.6 should read:

"	4.6 Receiving Money in Multiple Currencies.

If it instead says "No surcharges", then that's the USA one.

Roketsune

9 years, 3 months ago

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@ Rooth

I'm far from a laissez-faire capitalist, but, this isn't a problem that needs to be regulated. People should be entitled to set their own prices and explain the components. Since when aren't businesses allowed to consider expenses when determining their prices? I really hope Europe doesn't have nearly the same level of asinine laws and regulation that we do. Of course, we also seem to UNDER regulate other things, so we just don't seem to get much right.

MackeyGraphics

9 years, 3 months ago

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This is great information, thanks a ton for doing the research and presenting it for the rest of us in this format as it makes it a heck of a lot easier to find and understand. And yeah, looks like I am probably going to have to find another service...which sucks, cause the moment they hold my money or try for a $2500 fine for anything, they are putting my family on the street without foods, so yeah, death offense there.

ffs

9 years, 3 months ago

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Okay, I need to ask for clarification because nobody ever is specific enough about it for me to understand, because I'm dumb I guess. Let's say that I charge $35 for a commission. I talk it over with my client beforehand, and say that I'd like to add $1.35 on top of that to cover the fee so I get $35 even, but still send an invoice so it's down as goods/services as opposed to family/friends. Like does that count as dodging the fee or..?

Roketsune

9 years, 3 months ago

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@ ffs

PayPal prohibits you from asking the client for the fee, or specifically listing the fee as a component of the commission pricing. However, they obviously cannot read your mind when you set a price without explanation. So, it's a Don't Ask, Don't Tell situation with them.

Why the fuck they do that, I don't know. It's not like people aren't at liberty to silently consider the PayPal fee when determining commission prices. People don't even object to them charging the fee, as a company has a right to turn a profit off of people using their services. It's this stupid fucking secrecy policy that angers people.

ffs

9 years, 3 months ago

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@ Roketsune

Thank you for clearing that up. That's kind of why I've been confused about it, because it's still technically having the seller cover the fee. I've always seen the fee as something similar to sales tax, because it's basically the same thing.

Roketsune

9 years, 3 months ago

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@ ffs

Artists have to decide how much they are worth or can get on their own, of course. However, nothing stops them from thinking, "Well, I think 30 for this is a fair price for my skill level, and I will set a price of 31 to cover the fees." and then doing precisely that. They just for some reason (I've heard it's due to some laws in America) prohibit people from actually admitting it.

And, yes, it IS a sales tax of sorts, only imposed by the company rather than a government.

Sawolf151

9 years, 3 months ago

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Bad Dragon is working a new site that will, in theory, let you pay fee for them and transactions of commissions will be administrated by this new staff of the site, the project sounded really interesting, some ideas still not that great but you should try to look for info about "Furry Network", that is the name of their site.

Zalrex

9 years, 3 months ago

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@ Sawolf151

"	Sawolf151 wrote:
	Bad Dragon is working a new site that will, in theory, let you pay fee for them and transactions of commissions will be administrated by this new staff of the site, the project sounded really interesting, some ideas still not that great but you should try to look for info about "Furry Network", that is the name of their site.

Do you have a link to the info for this? I'd like to look into it a bit more ^^

Sawolf151

9 years, 3 months ago

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@ Zalrex

Not sure when they will make that public, I was on BLFC this weekend and they had a panel for that, the site also looks really well done, so they will probably talk about it in the coming weeks.

Zalrex

9 years, 3 months ago

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@ Sawolf151

Cool. Thank you =3

picklejuice

9 years, 3 months ago

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So. What's everyone's favorite alternate to paypal? Anyone like Bitcoin?

Niji

9 years, 3 months ago

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Its pretty dang easy to just use regular credit cards now if you are making any kind of living off the sale of art or art related services like commissions 1.5-7.5% take the companies get usually. Fun ways to maybe subvert art to commssion something and recieve a normal non sexually oriented piece of art, and hen later you get a cool gift of sexually oriented art compeletly unrelated (no half assing though) via another way. Of course that opens one up to getting ripped off through paypal...but if you just use regular credit cards/credit or checks/money orders that problem is subverted anyway(anyone over 18 will have a debit card from their bank account they can use as such so only minors who arent allowed by law to possess/commission such things are ruled out anyway) amd you don't have much to worry about other than the conents of the art (if you are taxing an art hobby as a job or orherwise the majority of your income from the production of art) legality in the recievers country(and any rights you may have in your own to create such things).

BreakingCloud

9 years, 3 months ago

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So in other words, same as before, we're still fine to commission or be commissioned for adult art.

And same as before, we shouldn't make any note or hint what-so-ever to what exactly is being bought, i.e. placing a note on the payment, "Here's to the peepee in butt cum bucket you're drawing for me!"

Right?

The only difference for security is, artist's should start sending out invoices now.

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