PayPal Cuts Off VPN Service Canadians Use to Watch Netflix

Sorry, eh?

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Feb 5 2016, 6:40pm

Image: Flickr/Esther Vargas

For Canadians, American Netflix is a promised land of content that we can only dream about watching, thanks to the company's patchwork of licensing agreements. But that hasn't stopped legions of people from hopping over Netflix's geofence using services that route their connection through a foreign server.

As of today, hosers that use PayPal will have one less method of accessing Netflix's trove of foreign content, however.

Canadian company UnoTelly, which provides VPN and Smart DNS services and markets itself as a way for users to circumvent geoblocks like the kind Netflix uses to cordon off American content, announced in a blog post on Thursday that PayPal will no longer accept payments from the company. Customers will instead have to use credit card payments, or, failing that, presumably stop using the service altogether.

According to an email allegedly sent from PayPal to UnoTelly and reported by TorrentFreak, PayPal saw UnoTelly's services as a violation of its Terms of Service because VPNs may be used to violate copyright.

It's true that all VPN services could theoretically be used in ways that violate PayPal's Terms of Service. It's important to note, however, that they are also invaluable for people seeking some degree of anonymity online or a way to access the wider internet in censorious countries like China.

PayPal has a history of being unfriendly towards VPNs

A PayPal press rep said the issue in question is always "up in the air," however the company did not respond to my request to comment further. Motherboard also reached out to several popular VPN services to see if they have received similar letters from PayPal. Two services, TorGuard and NordVPN, confirmed that they have not received any emails or letters from PayPal. "We have not received any such letter," a spokesperson for the TorGuard VPN service wrote me in an email. "There's no word that anyone else is affected other than UnoTelly I believe."

PayPal has a history of being unfriendly towards VPNs. In 2011, an administrator on PayPal's user forums responded to a customer inquiry about the company's stance, writing: "If PayPal detects that someone may be accessing an account via a proxy, we may very well block access. Why? Because it doesn't look like you accessing the account, so we have to assume the worst."

The news of PayPal cutting off a VPN service also comes amidst a crackdown on Netflix's own part on the use of proxy servers to access foreign content. In January, Netflix announced that "In coming weeks, those using proxies and unblockers will only be able to access the service in the country where they currently are." However, the company was not clear on how, exactly, it planned on doing that.

It's unclear if other VPN services have also been cut off by PayPal, but thankfully many VPN services have free tiers (although some of these may be sketchy), and you can still use a credit card in most cases.

For those unlucky few using UnoTelly and for whatever reason are screwed by PayPal turning off the tap, enjoy watching The X Files for the 18th time.

UPDATE: A PayPal representative responded to Motherboard's request for comment. This is PayPal's comment in full:

"As a global payments company, we have to comply with laws set by governments and regulatory agencies. PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights. This policy extends to services that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners. In line with this policy, PayPal has recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws. We apologize for any disappointment this may cause our users."