I was curious why my address (Swedish) was not confirmed by Paypal and filed a complaint to them. I got the following answer, I have changed my name and their support name for privacy
reasons,  the amounts and dates PayPal have erased for my and the sellers privacy:
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Dear yyyy,

Hello, my name is xxxx and I will be happy to assist you with your
question regarding the confirmation of your shipping address.

Mr. yyyy, we are sorry for the inconvenience caused, your PayPal member
status is verified, for our services it means that your are allowed an
unlimited sending and withdrawal limit, but the unconfirmed status that
your seller mention to you, is the shipping address. For the moment
we are able to confirm the UK, Canada, and USA shipping addresses, but

not for the other countries due to the regulations stated in the Law of
Right of Privacy of those countries, and  Sweden is one of them.

I advise you to contact your seller, and request from him, if you  can
send a copy of one of your utility bill, e.g. a copy of a phone bill,
electricity bill or gas bill, it can confirm your address.

PayPal uses an Automated Verification System to confirm credit card
billing addresses that are entered on the system. If a credit card
billing address passes the Automated Verification System check, the
address will be confirmed. Gift Addresses cannot be confirmed.

Addresses provided by UK and Canadian buyers may have a status of
Confirmed. Because not all credit card companies are currently able to
confirm addresses, only some UK and Canadian addresses can be confirmed
at this time. Sellers can use the presence of a Confirmed Address as an
additional risk management tool when considering transactions where the
Seller Protection Policy may be unavailable. All addresses for PayPal
members outside the US, UK and Canada will continue to show a status of
Unconfirmed.

These types of security measures are unfortunately necessary in an
online environment where it is difficult to check someone's identity. In
the physical world, sellers can check someone's credit card and driver's
licence. In the online world, where simple and effective identification
tools do not yet exist, we have to take different precautions. We
believe that these safety precautions are in the interest of all our
members.


Please let me know if you need further assistance.

Sincerely,
xxxx
PayPal, an eBay Company

Copyright (c) 1999-2006 PayPal. All rights reserved.  PayPal (Europe)
Ltd. is authorised and regulated by the Financial Services Authority in
the United Kingdom as an electronic money institution.  PayPal FSA
Register Number: 226056



Original Message Follows:
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Form Message
customer subject: Confirmation missing, reservation handled wrong
customer message: Describe the nature of your complaint: 'Dear Sirs,
I have three complaints/questions.

#) Why is my address "not confirmed"? I have three credit cards
and two bank accounts connected to my PayPal account and have
been a member since ####. This is very annoying as many
seller (eBay) only ship to confirmed addresses.
And it says (Credit card) on the addresses in my profile.

#) I had an issue with a seller the ##st. We had agree upon using
PayPal, but when he saw that my address was "not confirmed"
he rejected/refunded the payment. Apart from failure to buy
it also caused my money ($#### USD) to be locked (reserved)
on my bank account for a week, until ##th. This reservation
should have been released immediately.

#) During the reservation/release process of the #### USD I
lost ## USD in the transaction. This implies as I understand
that PayPal has treated the refunding wrong. The reservation
at the ##st should just be released when the seller rejected,
now it seems as PayPal has handled this in some other way,
causing a loss for me.

	Best regards
	yyyy

eBay claim that their business is international, it is not really. US/Canada (possibly UK) are priviliged. PayPal does not 'confirm' international addresses. Mine is 'verified', but some sellers do not satisfy with this. Why can't PayPal confirm int. addresses? Other companies I've been trading with (quite a few)  can do this address confirmation without problems for VISA and MasterCard, why not PayPal?

I recently had an issue with a seller about this. I was buying quite an expensive laptop (my favourite Toshiba M200) and the seller and I agreed upon using PayPal. I told him that my address is 'verified' but that I don't really know the difference between 'confirmed' and 'verified'. We exchanged a lot of references (I have a lot) and the seller after that agreed upon PayPal, despite this he finally refused my payment because it said 'unconfirmed address' on the receipt, and he then asked for Western Union, which I of course would not accept for someone I don't know. By refusing my payment after relisting the machine the seller lost 5$, but I didn't get the machine and my money were then locked in my bank account (reserved) for almost a week.

Apart from that I consider this seller behaved bad, this issue is a real problem in eBay international trading. We intend to solve this with Wish-IT (business we are working on), but the question is, what does PayPal do about this? I've been a member of eBay and PayPal since July 2001 and still they can't confirm my addresses, which I consider bad. They earn money but don't do much effort for their international customers.