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Massive Paypal withdrawals stalled

Paypal Experiences Security Glitch Resulting in Banks Halting Billions in Direct Debits; Incident Reportedly Resolved by Company.

Massive PayPal withdrawals halted
Massive PayPal withdrawals halted

Massive Paypal withdrawals stalled

PayPal Security System Failure Affects Thousands of Transactions Across Europe

Last week, PayPal experienced a significant security system failure that allowed all direct debits to be submitted to banks without checking for fraud. This incident, which primarily affected merchants who received their money late through legitimate direct debits, also had a significant impact on payment traffic across Europe, particularly in Germany.

According to reports, banks halted direct debits in the billions due to the PayPal security system failure. The German Savings and Giro Association (DSGV) confirmed the incident and reported cases of unauthorized direct debits from PayPal to various credit institutions.

PayPal's European headquarters are in Luxembourg, making the company subject to Luxembourg authorities, not German banking supervision (Bafin). The activities of PayPal on the European market are supervised by the regulatory authorities in Luxembourg, specifically the Luxembourg financial regulator (CSSF - Commission de Surveillance du Secteur Financier).

The issue causing the PayPal service interruption has been identified and is being resolved. According to PayPal's statement, the problem has now been resolved, and transactions for a small number of accounts were delayed over the weekend.

In response to the incident, consumer advocates advised PayPal customers to check their PayPal accounts for unauthorized debits. The activities of criminals trying to trick banks and financial service providers like PayPal, using fake direct debits to steal money from victims' bank accounts, were not specified in the available information.

PayPal is the most significant online payment service on the German market, with a share of around 30% of online purchases. The company's temporary service interruption affected certain transactions of their banking partners and possibly their customers.

The supervisory authorities have been informed about the incidents at PayPal. No new information regarding the attempts by the authorities to address the issue or the main impact on merchants who received their money late through legitimate direct debits was provided in this paragraph.

As the situation develops, it is essential for PayPal customers to remain vigilant and check their accounts regularly for any unauthorized activity. PayPal has assured its customers that they will be compensated for any losses incurred due to the security system failure.

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