Euro banks block billions in rogue PayPal direct debits after fraud glitch

Shoppers and merchants in Germany found themselves dealing with billions of euros in frozen transactions this week, thanks to an apparent failure in PayPal's fraud-detection systems. According to the Association of German Banks, the problem hit on Monday when banks noticed a slew of recent unauthorized direct debits from PayPal. The body said the banks responded in various ways, which is one way of putting it – the Süddeutsche Zeitung reported that some stopped all PayPal transactions, with the total number of frozen payments likely to be around €10 billion. A spokesperson for the German Savings Banks Association (DSGV), which represents hundreds of regional banks across the country, confirmed the issue to The Register. The DSGV said PayPal had assured it the problem was resolved, adding that PayPal payments had been running smoothly since Tuesday morning and the US payments platform was informing affected customers "directly." The DSGV said the unauthorized payments had a "significant impact on transactions throughout Europe, particularly in Germany." However, there have been no confirmed reports of the incident being felt outside Germany. Austrian media reported that the banks there had seen no problems. PayPal is the most popular method of online payment in Germany, having been used for 28.5 percent of online purchases last year, according to research by the EHI Retail Institute. (The next most popular option is buying on account.) That's largely down to PayPal's payment p...