Dear Sir/Madam.

 	I wish to bring to your attention the actions of 'Paypal', a popular Internet based 'Payment Processor'. Paypal has been the target of a number of complaints over the years relating to poor customer service, the unauthorised removal of funds in accounts and many other unseemly business practises.

 	In the United States Paypal has lobbied heavily in order that they not be regarded as a bank, and as such do not have to comply with the appropriate consumer protection schemes. This has resulted in their ability to suspend and confiscate money from accounts with little to no repercussion.

	In the United Kingdom, Paypal is registered as an occupant of Luxembourg and they believe themselves to be registered under 'Article 2 of the Law of 5th April 1993'. However, their informational page claims that they are only an E-Money processor and therefore not subject to requirements over deposit or investment protection.

	This seems contrary to law and certainly contrary to acceptable practises. In reality Paypal does not deal purely with 'electronic money' but acts as a middleman in physical transactions. In fact the auction site eBay has a complete monopoly on the market and both owns and enforces Paypal as the only allowed payment processor.

	The use of Paypal as a middleman in clearly physical montary transactions such as the payment for a physical item shows that their claimed category of 'electronic money processor' is inaccurate. Paypal includes such functionality as direct deposit and withdrawl from bank accounts, and specific integration with eBay to describe and agree on physical items for sale.
	Paypal in fact does not include any provisions for non-currency transfers. They function as a currency exchange where all permitted currencies are physical.

	I am no legal expert, and obviously eBay and Paypal will have employed hundreds of professionals in order to categorise them as favourably as possible. I simple write this letter to bring their dubious classification and their use of it to abuse consumers to your attention. I believe that the present UK Government should undertake to restrict the behaviour of such services, ensuring they undertake the same protection mechanisms as any UK deposit service are required to.

Regards,
XXX