If I book a place at a conference I don't understand why it's any of PayPal's problem if the organiser runs off with my money and the conference is cancelled? What's the legal backing there? Is this some quirk of US American law?
If I pay by credit card then I can recoup the money from them - but they're supposed to insure themselves to mitigate the effects of the risk going bad, again what's that to do with PayPal?
It sounds like PayPal are being screwed by credit card companies and not by event organisers.
You book a place at a conference using PayPal. PayPal transfers money to the organizer. The organizer withdraws it, buys a lot of beer, never organizes the conference.
You used your credit card to pay for the ticket, so you call your credit card company and request a chargeback. The credit card company takes the money back from Paypal IMMEDIATELY (this is standard in all merchant agreements), pending an investigation. Ultimately, PayPal gets left holding the bag.
Sure, credit card companies count on losses for fraud, but in most cases, they get their pound of flesh. In this case, it's PayPal's flesh.
If I pay by credit card then I can recoup the money from them - but they're supposed to insure themselves to mitigate the effects of the risk going bad, again what's that to do with PayPal?
It sounds like PayPal are being screwed by credit card companies and not by event organisers.