I've seen some interesting explanations about PayPal here - except for the only one that is needed.

There is but one explanation for PayPal and its behaviour : PayPal is not a bank. PayPal has not signed any bank charter anywhere, nor is it subject to any banking rules.

Thus, PayPal can "do what it wants", and that pretty much explains everything that has happened to unwary PayPal "customers".

Of course, PayPal does get it right sometimes - heck I'll even accept most of the time. Unfortunately, it's not when all is fine that you need help. And when you do need help, PayPal is most definitely no longer your "pal".

What continues to gall me about PayPal is the fact that this company that is not a bank continues to (mis)manage people's money without any government stepping in and checking what is going on.