Don't go dropping all your cash into those crazy crowdfunding campaigns - it's not protected if the company goes belly up.
PayPal is pulling its purchase protection from all crowdfunding websites, which could mean sites like Indiegogo are about to see a lot fewer pledges.
Buy something online from a seller covered by purchase protection and your cash is safe if something "doesn't go as planned". Think that dodgy eBay seller that doesn't send you your auction winnings, or the Amazon marketplace store that sends a knockoff rather than the item shown in its pics.
Ditching purchase protection from crowdfunding now means that when the talking toaster project you've stumped up for turns out to be a dud, you're never seeing that money again.
PayPal is also excluding anything purchased from, or amounts paid to government agencies, as well as “gambling, gaming and/or any other activity with an entry fee and a prize.”
This isn't a massive surprise, as PayPal has refused to work with gambling or gaming sites in the past, only recently lifting its own ban. With purchase protection removed, PayPal won't have to deal with the risk those sites carry.
According to PayPal, the move is "consistent with the risks and uncertainties involved in contributing to crowdfunding campaigns, which do not guarantee a return for the investment made in these types of campaigns."
The changes go into effect after June 25 in Australia, Brazil, Canada, Japan, the US and other countries - but not the UK, as PayPal's PR pointed out to us earlier today.
Hopefully it'll encourage crowfunders to be a little more careful before openeing their wallets to fund drones that cut your hair or musical car windscreen wipers.
[Source: The Verge]