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Sat Feb 28 2009 11:38:38

Does PayPal Really Ask for Bank Account Passwords?

By: Ina Steiner

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Some eBay sellers on a discussion board were questioning why PayPal was asking them to reveal passwords to their bank accounts. It certainly seemed like a valid concern, so I asked PayPal spokesperson Michael Oldenburg for more information.

Michael said PayPal does under some circumstances ask for that information if users want to instantly confirm their bank accounts. PayPal only asks that question - which is optional - when users are signed in to PayPal as a way to confirm a bank account instantly. Users may opt to use a different confirmation method that takes longer. Here's what he wrote in an email:

What the member referenced is our instant bank confirmation process. When members add a bank account to their PayPal accounts, we need to confirm that they are the owner of the account. There are two options to do this:

1) Random deposits - PayPal makes two small deposits to the member's bank account. The member then confirms the actual amount of these depots to let us know that they are the owner of the account. This process usually takes 2-3 days for the deposits to appear in the member's s bank account.

2) Instant bank confirmation - Using this option, members can confirm their account in minutes. It requires the member to type in his/her online banking username and password. PayPal then uses this data to validate ownership of the account. This instant process is relatively common today and is also used by many large financial institutions - such as Bank of America and eTrade - as a way of authenticating bank accounts.

It is important to know that during the instant process, PayPal does not save the member's online banking credentials. Also, instant bank confirmation is an optional process. Members can always elect to use the random deposit option if they prefer.

Given that PayPal, like other financial services, is a target of phishers, I'm not convinced it's a good idea to set a precedent for asking for someone's bank account password. Wouldn't it be better if the rule was, never give out your bank account password to anyone under any circumstances, no exceptions?

Michael explained that PayPal would never ask for such information in an email, nor would an agent ever ask for that. (So beware of phishing emails and phone calls.) He also pointed to a recent PayPal blog post that reminded users to update their Internet browsers to the latest version. PayPal has worked with Verisign's Extended Validation Certificate program so the latest browsers will glow green if you're really on the PayPal site, and will glow red if it believes you're on a spoof site.



This is feeling like cyber-security month, so remember - make sure you use up-to-date browsers and anti-virus software (preferably ones that keep themselves up-to-date automatically - check your settings), and be safe!


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Readers Comments

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by: Nancy

Tue Mar 3 10:15:23 2009

@Tim

DUHH, the only ones who are gonna PAY that extra interest to help out the IDIOTS who gave CC to people with no income and bad credit ratings ARE US, the doofuses who pay on time and then stupidly pay even MORE in taxes to the dingbats in the US gov't to bail OUT the idiots who gave loans to people with bad credit ratings......

Do you really think someone who just lost his job is gonna PAY OFF a credit card, an unscured debt? NO of course not, he will declare bankruptcy, and then they will have to find another way to get out of the stupid UNSECURED credit cards they gave to people who didn't deserve them, during the every-man-for-himself lets-give-anyone-who-can-fog-up-a-mirror credit spree of the last ten years!!

They WILL go out of business, and for TARP money to be used to stop that is throwing good money after bad.

If I do stupid things, my business goes under. As well it should. And these credit card companies have the BA**s to ask me for TAX money on top of raising my interest rate?  That TARP money is money they'll never be able to repay. I am looking at my crystal ball, here.

Gotta go write my congressman and senators now, a place that MIGHT actually do some good.

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by: booger

Tue Mar 3 14:35:21 2009

Sounds like Paypal is going to follow the example of credit card companies by adding their longer holding periods so they can make more money off of their customers. Pretty soon they'll be threatening our credit scores, as well, just like the CC companies, who lower your credit limits, which increases your % of used credit and lowers your available credit, which lowers your credit score, which makes other CC companies raise your rates and lower your credit limit and so on and so on....

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by: tarp this

Wed Jul 1 15:24:43 2009

My scumbag Credit card is trying to weasel out of the rewards that got me to use it in the first place. Scum.

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by: imelda

Wed Jul 1 19:07:38 2009

MY credit card comapny (S) AL raised my interest even though I've NEVER been late.

Oh, yes, I can "opt out" but have to pay it all off. Good thing those thieves are all paid already.

The ONLY solution?

Go to a new credit card, one that offers no interest for the first 9 months to a year, then another in 9 mos, then another.

I hope they ALL go out of business.

Especially Capital One.

By the way, in case y'all missed it, pay-pal isn't paying the cash back until month's END now. Another way to hold out money and earn interest off of it while we (surprise) wait yet again.

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by: ziggy

Wed Dec 9 14:19:22 2009

This shows you the arrogance of paypal. we thinking it was mandatory gave them our password and guess what? It does NOT instantly verify your account. we did it with 2 different accounts and it NEVER verified the account. its a scam. paypal is the absolute devil. they never answered emails when we asked them why they asked for our passwords but the account would not work. its a complete scam to get your info. paypal is going to get theirs. they will not be able to get away with what they are doing. they are riding the line of lawlessness because internet law has not caught up with them because they are not a bank. the lawsuits against paypal and ebay in future will be tremendous..but until then they will steal from us and get rich. Reason number 1 AMAZON.COM stock is so high becase we sell more on amazon and the money goes directly into our bank account. sell on amazon screw ebay/paypal they are crooks. go to paypal sucks website and read the horror stories.

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by: mr screwed

Mon Aug 9 09:52:46 2010

yes they do and even if you  only put in the bank info and backspace before you type the password they still get account num and routing number the futher mucker on the phone told me. they might as well be giving away thousand dollar bills if you cant get at it--it isnt there i didnt get what i bought on ebay why should it take a month a week another week and another three or four days for the money to get back where it came from? should it?

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by: Ina Collins

Tue Dec 14 22:12:38 2010

Hi.  I just wanted to thank you for this clear and concise information. I was just asked for my bank account and password and I froze in shock! Now, I understand that it is optional, so I will ''OPT'' not to give it and let them do the 2-3 day verification process.

I also see that you're an ''Ina'' too, so that's great to see!

Ina

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by: Carole

Wed May 4 09:35:46 2011

When PayPay asked me for this information, I immediately closed their website.  Personally I will never disclose this information.  If you ask me. there are other ways they can verify a person without asking for this information.  How do you know it's really Paypay????

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by: Angel

Tue Aug 30 03:41:55 2011

When I was asked the question by PayPal to give my password I felt like it was so unbelieveable. Not a good feeling to walk around all day not knowing if your money is still there. This is a terrible thing and I would rather wait and do what it is I need to do other than that. Maybe safe, but if you can't sleep because of it, it's not worth that feeling of being violated.

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by: DT

Wed Sep 21 10:44:36 2011

What bothers me is that I attempted to "instantly confirm" my bank accounts, PayPal went off for "1-3 minutes" then came back with a screen that still required me to verify the 2-3 day method.  No explanation, no way to try again, nothing.  I've no idea what just happened.

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