People shouldn’t be deprived of their own money – Redlands Daily Facts

On October 3 at 1:22 a.m., PayPal posted a new “Acceptable Use Policy” on its website. In the first paragraph of the seven-page pdf document, it stated: “Violation of this Acceptable Use Policy constitutes a breach of PayPal’s Terms of Service and may subject you to damages, including liquidated damages from US$2,500.00 per violation, which may be charged directly to your PayPal account(s).

The policy stated that it was not “acceptable use” of the company’s services to engage in activities that, among other things, “promote misinformation.”

After the new policy was reported by the Daily Wire and other media, the company’s share price fell almost 6%. USA Today reported that internet searches for how to “remove PayPal” increased by 1,400%.

On Monday, the payment processor said it was simply an error.

“PayPal does not fine people for misinformation and this language was never intended to be inserted into our policy,” the spokesperson said. “We are sorry for the confusion this has caused.”

Another financial institution that is “sorry” is Scotiabank in Canada, which froze the bank accounts of truckers participating in the Freedom Convoy in February. In March, Scotiabank CEO Brian Porter sent a letter apologizing for the “frustration and inconvenience this may have caused” and thanking truckers for their “patience”.

Patience? Inconvenience? For participating in the truck convoy protest, 257 truckers had their own money made inaccessible. “We couldn’t buy medicine, we couldn’t buy food, we had no access to any financial means of transaction,” Freedom Convoy spokesman Benjamin Dichter told a TV reporter.

How long could you last if your bank did this to you all of a sudden?

Confidence in the banking system is absolutely essential for the proper functioning of the economy. This is why banks and other financial services companies should never freeze or confiscate their customers’ funds for something as subjective and vague as “misinformation”.

In 1929, at the start of the Great Depression, 650 banks failed. In the fall of 1930, there was a bank run in Nashville, which sparked a wave of bank runs in the southeastern United States.

During a bank run, depositors who have lost confidence all show up at once to withdraw their money, forcing the bank to liquidate loans and assets, often at a large loss that can push the bank into insolvency. This, of course, triggers more panic.

Other bank runs occurred in 1931, 1932, and early 1933. When Franklin Delano Roosevelt was sworn in as president in March 1933 (presidential inaugurations were held in March at the time), he declared a national “holiday”, shutting down everything. banks nationwide until federal inspections can prove they are solvent and trustworthy. “I can assure you, my friends, it’s safer to keep your money in a reopened bank than to keep it under the mattress,” FDR told Americans.

The Federal Deposit Insurance Corporation was formed that year, bringing the full trust and credit of the U.S. government into play to assure wary depositors that if they put money in a bank, they could always withdraw it.

Today, our money flows electronically from one new technology to another, paying for things with apps and taps and being paid with wire transfers from major banks and non-banks. It’s all fun and games until a government official declares a disputed or controversial statement on social media to be ‘domestic terrorism’, then financial institutions freeze ‘terrorists’ accounts presumed.

It’s one thing for a financial services company to prohibit users from engaging in fraud, crime, violence, or obscenity. It is another thing to prohibit “disinformation”. How is PayPal, or any financial services company, supposed to know the truth or falsity of what appears in a book or what is sewn on a hat? The answer is that they cannot. They can only know what someone else, probably in or related to government, has said is misinformation.

PayPal and Scotiabank, no doubt burned by customer anger, have backtracked and tried to restore trust in their services, but it’s not enough. It cannot be optional. Financial services firms must be prohibited from freezing or seizing their clients’ accounts over the content of their clients’ speech.

A modern bank run could not only cause millions of people to close their accounts and reclaim their funds at the same time, but also cause countless people to stop buying and selling online to avoid the risk of confiscation or of disturbance. If banks say they could freeze customer accounts to end “misinformation,” millions of Americans could also stop direct deposits, cut off their debit cards and use cash.

Panic occurs when the risk is unlimited. Financial services customers who have never had a problem complying with terms and conditions prohibiting fraudulent, criminal, violent, or obscene activity may wonder if the government or its agents would consider any of their remarks to be misinformation. , and how long they could survive if they were locked out of their accounts.

Not so long ago, businesses of all kinds had to work very hard to convince customers to trust e-commerce. Even today, companies are still urging the holdouts to go “paperless” and trust that their records and money will be available online as reliably as they would be in a wall safe.

If that trust is broken, the crash will be heard around the world.

Email [email protected] or follow her on Twitter @Susan_Shelley