I never liked PayPal. The idea of an unregulated corporation having access to all my personal, financial information made me nervous. But when a number of publishers and retailers give you no choice about getting paid except via PayPal, you sign up.
Whenever I had an alternative, I used it. I opened a bank account where I can deposit cheques in pounds sterling and I have an account that allows me to accept checks made out to my pen name.
I first learned trouble was brewing for erotica authors and publishers back in August when Essemoh Teepee reported to the Erotica Authors Association (EAA) list that: “The Religious Right owners of the PayPal service have just decided that I am a pornographer and the spawn of Hell. They have shut down my business account so I cannot sell my stories or audios using their service from my website.” In a followup email, he added: “it appears they have what they call a ‘Protector of the Brand’, somewhat like the Mediaeval ‘Defender of the Faith’ perhaps? If they take a look at what you do and they don’t like it, they freeze your account and all your money for 180 days before kicking you out. There is no appeal once they have put you to the sword.”
Other authors immediately reported they had suffered similar experiences. I noticed that most of the authors who had had their PayPal accounts shut down always seemed to have had large sums of money in their accounts when this happened, money which PayPal confiscated. One author I met at the EAA conference in Las Vegas later tweeted that everything he had was in his PayPal account when it was shut down and he didn’t even have money to pay his rent.
Of course, authors expressed outrage that PayPal could do this and urged those who had their money stolen to file lawsuits. But, when I researched the PayPal Terms of Service (which you must agree to before you sign up) I found:
“You may not use the PayPal service for activities that … relate to transactions involving … certain sexually oriented materials or services …”
AND, in a completely separate document:
“If PayPal, in its sole discretion, believes that you may have engaged in any Restricted Activities … We may close, suspend, or limit your access to your Account or the PayPal Services (such as limiting … your ability to send money, make withdrawals …”
“If you violate the PayPal Acceptable Use Policy, then in addition to the above actions you will be liable to PayPal for the amount of PayPal’s damages caused by your violation of the Acceptable Use Policy. You acknowledge and agree that $2,500.00 USD per violation of the Acceptable Use Policy is presently a reasonable minimum estimate of PayPal’s actual damages … PayPal may deduct such damages directly from any existing Balance in the offending Account, or any other Account you control.”
I’m not a lawyer, but if you put those paragraphs (from different documents and different sections of documents) together it’s obvious that PayPal has given itself the ability to legally steal confiscate people’s money for arbitrary reasons. They’ve also made it extremely unlikely that anyone would discover that they could do so until it was too late. After all, how many people thoroughly read the very long, often difficult to comprehend TOS, EULA, privacy policies, etc. that they accept with a click of their mouse every time they sign up for a new website?
Personally, I took what precautions I could (and I warned anyone who would listen). I made a point of immediately transferring any funds I received into my bank account rather than leave them there for possible future purposes and again I went out of my way to avoid using PayPal. Sometimes, as with Smashwords, that meant waiting until my royalties built up to a certain point. (Of course, that option is only available to U.S. authors/publishers with U.S. addresses and tax ID numbers. And, currently, unless you’ve published 100 books, Smashwords is the only option for getting your books listed for sale on Ebook Eros.)
When all this first came to my attention, I was considering setting up a shopping cart for my website since I’m now self publishing much of my work. I asked my submissive and webmaster, Patrick, to research alternatives to PayPal. He learned that every other merchant services option either had similar Terms of Service regarding the sale of “adult” material or they charged ridiculous amounts of money for the privilege of using their service to collect funds. I gave up on that idea and continued to sell books and short stories via various retailers, giving up 30 percent or more of what readers paid.
I didn’t really notice what happened with Bookstrand. I was incredibly busy at that time. I didn’t have books for sale there, and I didn’t even realize they had provided an opportunity for indie authors to sell their work.
But, on Feb. 20, I received an e-mail, sent to all publishers, from the Chief Operations Officer of All Romance. The e-mail purported to be about AR’s decision to separate Erotica from Erotic Romance. Now, I back that decision. I think it’s important to label our work so readers don’t accidentally purchase material they find offensive.
As much as I believe I should have the right to write and sell anything that anyone else will buy, I also strongly respect the right of any reader to draw a line that they don’t wish to cross in their reading experience. What I will not accept is any person moving that line for anyone else. No one should be permitted to force someone to read what they find offensive, but they shouldn’t be able to prevent anyone else from reading that same material just because they don’t like it.
The AR e-mail also stated: “Please review section 7 of the publisher contract” with a warning that: “If the amended terms are ones you can’t abide by … [we] will accept your notice of termination. …We request that you take immediate initiative to remove any titles that may be in breach.”
After reading section 7, I wrote an e-mail asking:
“I have a question about the amended terms. They state ‘Erotic Works which contain … scenes of non-consensual bondage or non-consensual sado-masochistic practices’ are ‘restricted.’
“My question is does this include questionable consent or consensual non-consent?
“I also would like to know why are you working to eliminate thought-provoking fiction which is not illegal?”
The response I got did not mention PayPal and instead discussed the vision for AR versus the type of stories independent authors and publishers were selling on their site.
However, I was told that I must “inactivate” both Broken and Shattered because they contain “questionable consent.” (I wrote about this in detail as part of Eden Connor’s excellent series by banned authors.)
Four days after the initial e-mail from AR, I received the now infamous letter from Mark Coker of Smashwords.
Ironically, when the first discussion about PayPal erupted on the EAA list last summer, one contributor noted that he had brought his concerns about PayPal to Coker’s attention and was assured: “They’re committed to protecting the rights of erotic authors (within legal bounds of course) and they use PayPal and haven’t had any trouble.”
After receiving the February Smashwords letter, I spent several hours changing keyword tags for my stories, which will reduce my sales since the people looking for transgessive stories won’t be able to find them. I also removed some promotional material that hadn’t been accepted for the premium catalog rather than provide an excuse to boot me and my stories.
Mark Coker put the blame for PayPal’s decisions on the credit card companies. He based that on
e-mail from PayPal stating: “Our banking partners and credit card associations have taken a very
strict stance on this subject matter.” However, an author reported to the EAA list that reliable sources inside Visa and MasterCard denied any culpability.
In a response to what it dismissed as “chatter,” PayPal’s director of communications posted a statement full of misrepresentations, allusions, and lies. In it, he made no mention of credit cards or financial partners. (Alessia Brio does an excellent job of ripping PayPal’s ludicrous
statement to shreds.)
Because of the uproar, I suspect many didn’t have time to read the “Amendment to the PayPal User Agreement” effective April 01, 2012 which account holders were notified about during this time.
“You authorize PayPal, directly or through third parties, to make any inquiries we consider necessary to validate your identity. This may include asking you for further information, requiring you to provide your date of birth, a taxpayer identification number and other information that will allow us to reasonably identify you, requiring you to take steps to confirm ownership of your email address or financial instruments, ordering a credit report, or verifying your Information against third party databases or through other sources. We may also ask to see your driver’s license or other identifying documents at any time. If you use certain PayPal Services federal law requires that PayPal verify some of your Information. PayPal reserves the right to close, suspend, or limit access to your Account and/or the PayPal Services in the event we are unable to obtain or verify this Information.” (Emphasis mine.)
PayPal also amended their “privacy” policies (but you would have to read the entire policy to see what’s changed). Orwell was wrong. The government isn’t Big Brother, the corporations are.
When I started publicly ranting about PayPal’s latest bullying, I was chastised on Twitter by a friend, Mick Luvbight, for coming ” late to
the party.” He reminded me that “PayPal has been denying its service to us pornographers for 10 years.”
Countless authors have lost hundreds of dollars in sales because of an arbitrary decision by a corporate bully. At least one publisher reportedly will close its doors at the end of the month. (Although there’s no mention of this on its website, at least two of its authors have blogged about its demise.)
Numerous authors have blogged about the outrageous bullying and the impact it will have on reader choice. Many of us have joined Banned Writers, a coalition of writers, readers, publishers, and editors fighting against economic censorship of erotic fiction started by Remittance Girl.
In addition to hosting a compelling series of interviews with and essays by banned authors on her blog, Eden Connor has also put out a call for transgressive erotica. The Erotic Tales of Transgression will collect, in defiance of corporate morality police, stories that examine the gritty truth of human sexuality.
Significantly, the rest of the Internet didn’t dismiss this issue as a problem only for “smut” writers. Although they condescendingly deny that they would ever write or read this type of fiction, many recognize the slippery slope. The issue has been covered in the mainstream press and by tech bloggers. Forbes wrote “Credit Card Companies Should Process Payments Not Censor Content.”
However, I don’t believe petitions will do the job. Although we’ve all been ranting about censorship, in reality PayPal is not preventing books from being written. If what PayPal is doing is illegal, it would come under restraint of trade. (And, given our current government interest in allowing corporations unfettered permission to abuse consumers, I’m not expecting to see any action taken.)
Instead, I urge anyone concerned about this corporate bullying to close their PayPal and eBay accounts. (I’ve closed all seven of mine and stated why in the comments.) Let merchants who only accept PayPal know why you will no longer shop with them. Money talks.
And, apparently PayPal listened. On March 12, in an update on Smashwords, Mark Coker stated: “I met with PayPal this afternoon at their office in San Jose. They will soon announce revised content policies that I expect will please the Smashwords community. Effective immediately, we are returning our Terms of Service to back to its pre-February 24 state.”
On March 13, to great cheering across the Interwebs, PayPal announced a clarification of “exactly how we are going to implement the policy,” stating ”First and foremost, we are going to focus this policy only on e-books that contain potentially illegal images, not e-books that are limited to just text.”
When was the last time you read an erotica e-book that contained images other than the cover and the author’s photo?
Excuse me if I don’t celebrate. PayPal is backpedalling because it got caught trying to prevent the sale of legal fiction. Many authors have lost days protesting this, days they could have spent writing fiction. My e-books are no longer visible on All Romance ebooks unless you log in. I learned Monday that another publisher has stopped selling independent e-books, allegedly because of a logistics issue, but I have to wonder.
Just as this incident didn’t begin in February, it won’t end in March unless we’re vigilant about protecting our rights to buy and sell what we choose to read and write. What we need more than anything else right now is an alternative to PayPal.
ABOUT I.G. FREDERICK: I.G. Frederick has traded words for cash more years than she cares to admit and has specialized in erotic fiction and poetry since 2001. She has sold numerous short stories and poems to various electronic, audio, and print anthologies. Her novels have received high praise from readers, critics, and other authors.
You can read reviews of her work and find links to purchase her novels, poetry books, and individual short stories on her website. You can also find her at Smashwords, Twitter, Google, Live journal, and Facebook.
In addition, I.G. Frederick is an accomplished book designer and together with the awesome artist Nyla Alisia and her submissive Patrick (web designer extraordinaire) provides services to indie authors and small presses as part of Pussy Cat Press. Pussy Cat Press services include elegant cover design for print and electronic books (check out the fabulous new covers for Broken, Shattered, and Dommemoir), print and electronic book formatting/design, and web development and design.