Privacy organization calls on PayPal to 'do better' after man's account closed

The privacy-oriented Electronic Frontier Foundation is calling on PayPal, the online payment processing organization, to “do better by its customers,” after the company shut down one customer’s account – without explanation.

The EFF said PayPal specifically should be publishing transparency reports, revealing how it determines punishments, then provide “meaningful notice” to users who may, or may not, have strayed outside guidelines, and have a reasonable appeal process.

“If a user’s PayPal account is shut down, they should have an opportunity to appeal to a person that was not involved in the initial decision to shut down the account,” the organization said in its new report.

The organization said the issue arose because of the cancellation of the account of Larry Brandt, a “long-time supporter of internet freedom.”

He has used PayPal for years to support Tor servers, which are set up to provide anonymity for web users. The technology allows people to anonymously send and receive traffic, and the EFF said its analysis confirms those operations are legal under U.S. law.

EFF said Brandt found his account closed when he tried to make a payment for a hosting company in Finland, and searching his PayPal page discovered a permanent ban.

He was unable to get help from PayPal, so reached out to EFF, the organization reported.

It reviewed his activity and “found no evidence of wrongdoing that would warrant shutting down his account,” but PayPal still was unresponsive to the requests for help.

“Given that the overwhelming majority of transactions on Brandt’s account were payments for servers running Tor nodes, EFF is deeply concerned that Brandt’s account was targeted for shut down specifically as a result of his activities supporting Tor,” the group said.

It only got a response that the account closure was unrelated to Tor, and a confirmation that no appeal was possible.

The Tor Project also said, “This is the first time we have heard about financial persecution for defending internet freedom in the Tor community. We’re very concerned about PayPal’s lack of transparency, and we urge them to reinstate this user’s account. Running relays for the Tor network is a daily activity for thousands of volunteers and relay associations around the world. Without them, there is no Tor – and without Tor, millions of users would not have access to the uncensored internet.”

EFF said its work on transparency issues already has “pressured companies like Facebook, Twitter, and YouTube to endorse the Santa Clara principles – but so far, PayPal has not.”

“When a handful of online payment services can dictate who has access to financial services, they can also determine which people and which services get to exist in our increasingly digital world. While tech giants like Google and Facebook have come under fire for their content moderation practices and wrongfully banning accounts, financial services haven’t gotten the same level of scrutiny,” EFF warned.

The organization reported, “For now, Brandt is not backing down. While he can’t use PayPal anymore, he’s still committed to supporting the Tor network by continuing to pay for servers around the world using alternative means, and he urges other people to think about what they can do to help support Tor in the future.”

The service is critical to people in China, Iran, Syria, Belarus and more who want to communicate outside their country but are prohibited from that activity.

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