It has been reported that online dispute resolution issues are affecting the electronic payment system known as PayPal.  The site performs like a "digital wallet," allowing consumers to build up balances and use them to pay bills online, including bills for merchandise ordered over the World Wide Web.  In addition, PayPal acts as a repository of your financial information such as credit card numbers so that consumers can charge items online without disclosing their private financial data to sites that may not be trustworthy.  In this respect, PayPal acts like a middleman, charging the credit card and forwarding funds to the merchants, all without disclosing the credit card number itself to the merchant site.

Online Dispute Resolution Creating Unhappy Customers

Not all of PayPal’s customers, however, are satisfied with the payment site's commercial mediation process.  One point of contention is the way in which the site handles dispute resolution.  Diana Jones provides a case in point.  She regularly shops online, and most of the time when she has a dispute with a merchant, PayPal has handled the issue promptly and appropriately.  Not so with her recent dispute with clothing-angel.com, according to Jones. 

In this case, Diana Jones claims the T-shirts she ordered were never delivered.  Instead, she received nothing but a reusable shopping bag.  "I thought PayPal would protect me, but PayPal doesn't protect you," she says of the experience.  "[But they tell] you to send the item back at your expense.  The word should get out about this site."