Terms of service does not shield companies from misleading practices. Paypal most definitely knows this as of late.
2.3 is also contradictory in and of itself.
yea, it is fucking bs. I hate paypal more than you, pal. what it is saying is, oh...if you are using the preapproved payment agreement, we will revert back to the order of funding source at stated in 2.2.
I used to have 1 paypal for making purchaes and receive money, now I have learned to separate them.
one time, I made a purchase for $1200 on a laptop on a CC via PP. I have received money greater than that before the transaction was completed and promptly move it to my checking account. It didn't matter, paypal saw funding in the account, they reversed the charge on my CC and tried to take money from there. There was no money because I withdrew it so they went to my checking account to take it.
of course, my checking account didn't see the cash until 3-4 days later, and my balance I had there was about $30 less than the purchase amount. my bank rejected PP and charged me $25 NSF. I was so pissed off. I quickly called a friend to deposit physical cash into my checking account at a branch so I'd enough money for PP to take.
PP would do this 3x before they go back to the backup funding source. It was just fucked up.