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Resident cites Muslim bias via PayPal

PayPal

Mohamad Ali of Arlington, a technology executive and former CEO of two Boston-based companies, expressed this viewpoint first published May 21 by BostonGlobe.com under the headline “Targeting Muslims while they bank.” It is republished with the author's permission.

 About a year ago, I bought event tickets online through PayPal. They cost $200, and I used my credit card to buy them. Shortly afterward, I received an email from PayPal that said it needed additional personal information to complete the payment. I assumed my credit card was processed on the PayPal network. I called PayPal and was told that there was a security flag.

A what? I am an American citizen, have been chief executive of two American companies, and have an impeccable credit record. I wondered what the problem could possibly be. But PayPal would not provide me with any additional details without further personal information. The $200 charge was on my credit card, but my ticket purchase hadn’t been completed; PayPal wouldn’t send the payment to the vendor because of the security flag.

Help canceling transaction

I asked the customer service agent to refund my purchase to my credit card. They said they couldn’t without further personal information. Magically, after I emailed a board member I know at PayPal, the transaction was quickly processed.

Although my ticket purchase eventually went through, I was shaken by the experience — and suspicious of what triggered it. Who else was this happening to? At a Muslim gathering in a Boston suburb, I asked a few friends if they’d had similar problems with PayPal. Three out of 10 said yes. At a Chicago meeting with Muslim corporate executives, several others said they’d had this issue.

I started digging. I sent emails to PayPal requesting clarification about my case and those of my friends and acquaintances. I received no meaningful response. I read a study that found “one quarter of Muslims face challenges while banking,” twice the rate of the general US public.

I asked a former chair of Swift, the global financial messaging system that connects banks, about this discrimination, and he said he wasn’t surprised. Of course he wasn’t — he’s Muslim.

Class-action suit settled

This “security” issue preoccupied me for months. Then, about two months ago, I received notice that a class-action lawsuit had been settled. As part of the class, I could get $47. Lucky me! Turns out a non-Muslim of Mexican heritage in California had a similar security flag while trying to get a mortgage. According to the lawsuit, the mortgage company, Pulte Mortgage LLC, had bought data from a company, CoreLogic Credco LLC, that indicated a partial match of the plaintiff’s name to a name on the Office of Foreign Assets Control list.

The OFAC list is maintained by the US Department of Treasury. The settlement notice explains that it is the US government’s list of “people, groups, and companies that US businesses are not allowed to do business with, such as terrorists and narcotics traffickers.”

The plaintiff noted that a quick review of his full name, date of birth, and address would have shown he was not a match. The notice was in English, Spanish, and Arabic. Had PayPal bought and used the same list or a similar list?

A 'partial match'

I wrote to PayPal again. In a pleasant surprise, it came clean. Their response stated: “Your accounts, and those of some of the other individuals you identified, were limited for a brief period in time in 2023 because your name and their names were a partial match to a name on the OFAC sanctions list.” 

It’s unclear what a “partial match” is, but in the CoreLogic Credco LLC case, the match was for only parts of the plaintiff’s full name, not at all a match for his date of birth or address. Given that both Mohamad and Ali are extremely common names among Muslims, there is a good chance of a partial match with someone on the list.

I’m grateful for PayPal’s honesty. But what other companies are selling lists like this to financial institutions? And what other companies are buying these lists? Airlines? Banks? State agencies? Does anyone vet them? Are there a disproportionate number of Muslims, or others with Arabic names, on these lists? Does this help explain the “banking while Muslim” statistic that Muslims are twice as likely as the general public to experience challenges while banking?

Common experiences

Even if some are unperturbed by it, I believe most Americans are aware of ongoing and rising anti-Muslim hate and violence. Overt discrimination, mundane inconveniences, and occasionally terrifying fear for one’s safety are common experiences for Muslims, or people perceived as Muslim, in America.

But beneath these outward manifestations of bias is a hidden and unpredictable layer of discrimination embedded in our computer systems, algorithms, and data. Muslims frequently feel the effects but it is only rarely that this systematized discrimination is acknowledged. It’s time to bring this hidden layer into the open, make it part of our public conversation, and build a fairer system for us all. 

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This viewpoint was republished Tuesday, May 21, 2024.

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