But I really think that the banking regulator should take note of user stories such as the ones that are regularly all over HN and get to the bottom of it. After all PayPal, at least in Europe, is subject to the same regulation as other banks and payment processors. And if that's not the job of a banking regulator to take note when a financial institution has such shitty processes that consumers regularly suffer damages, then I don't know what is.

Also, maybe a private lawfirm should put together a class action or something on the basis of all those user stories. I realize that cases tend to be rather different to each other, but I'm finding it hard to believe that there aren't some things that happen so frequently and so systematically that it should be easy to take a stab at in court on behalf of a larger group of users who have suffered damages.

That reads like a "no" to me.

Also the fact that they reply to my initial question about the refund, with an absolutist "After investigating, YOU have logged in and YOU have initiated the refund", when I know I have done not such thing, immediately makes me think that I've been hacked or somehow have fallen a victim of fraud.

Further inquiries to clarify the issue, only leads me to get my account blocked/locked. I have no idea how this can be considered fraud protection from their side! And all this means that all in all I agree with you about the lack of competence of the fraud protection team...

I've done this a fair amount in the past: When I would do business with a vendor that I don't trust all that much with the way they do their billing, I would give them a credit card number for a prepaid credit card with tightly controlled balances, instead of giving them anything that's linked to my main bank account.

But it doesn't really help. When the untrustworthy party wants to deduct a payment from the mechanism you've given them and it can't, then they will instead just turn to bullying and threatening legal action, and you end up paying them whatever is in dispute because you won't want to risk them taking legal action.

Another consideration that enters into this is the dark and murky territory of consumer credit rating. If there's an account that's in your name, regardless of whether it's PayPal, a prepaid credit card, a bank account or whatever, and there's a charge that hits the account and there's no balance, then this is an event that they'll collect data about, and that may be disseminated in ways that you may not realize, and it may come back to bite you in the ass when you want to apply for a mortgage or something. So it's best not to go that route.

At the end of the day, the only thing you can do is to not do business with certain kinds of entities at all. And PayPal is definitely on my list of entities not to do business with.