Problem with PayPal

[Ilyag]

About 3 and a half months ago, I sold an Online Game Auction over E-Bay to a certain person. Well, he paid me around $170.00 over PayPal for it, and I gave him the account info. About a week ago, I get an e-mail from Paypal:

Dear Ilya Galperin,

We have just been informed that you have received funds from
an account with reports of fraudulent credit card use.

Details of the transaction and this case are as follows:

Transaction Date: 08/04/2001
Transaction Amount: $170.00
Buyer's Name: Cencored
Buyer's E-mail: Cencored
Case #: 243253

PayPal indemnifies sellers of charge back liability resulting
from a buyer's fraudulent use of a stolen credit card and/or
false claims of non-shipment of goods for payments received
through PayPal of up to $5,000 per year when the following
conditions are met:

...
"
So to me it seemed like the buyer is trying to rip me off. So I immediatley fly off an E-Mail to PayPal telling them that I successfully transferred the goods and it has been over 3 months without any complaints. PayPal e-mails me back telling me that I must provide a tracking number for the item that I transferred over 3 months ago, and that had no tracking number (since it was a username and password to an account). Just recently, I find another e-mail in my Inbox. Paypal tells me that because I failed to provide them with a tracking number and am not verified, they are charging my account $180.00 because either
1. The Buyer Filed a Complaint
or
2. The Buyer used a fraudulent Credit Card

So I e-mail PayPal, demanding the buyer's Phone # and Address, since the buyer does not bother responding to my e-mails. I get an e-mail from PayPal this morning...

"Dear I. Galperin,

Buyer Email address: robluvsash@yahoo.com
Buyer Name: John Browne

The phone number will not be released.

The 30 day time frame you quoted in one of your other emails is for our
Buyer Protection claim process. This buyer went outside of PayPal and
filed a chargeback with their credit card company. Visa/Mastercard
regulations give card holders up to 120 days to file a dispute.

Sincerely,
Valerie
Chargeback Division
"

So now it seems that I owe $180.00 to PayPal because some jerk is trying to rip me off, and they will not give me any of his contact information other than his E-Mail Address, which he is not responding to.

What should I do?

 

[khtm]

send Paypaldamon a PM.

-khtm-

 

[Ns1]

if it's fraud you're pretty much SOL since paypal's seller protection doesn't apply to you since you didn't ship to a verified address (since shipping was not required)

 

[brnbngls]

If the buyer used a stolen credit card to pay, then it should be up to the issuing bank to clear up this matter. It's the same thing as when a stolen credit card gets used at a store.
I personally think this guy is trying to screw you and Paypal. My wife works chargebacks for Papa John's and she is always telling me about people who pay for pizza with a cc, sign the receipt when the pizza arrives and then disputes it. it usually ends up coming out of PJ's pocket. People are unscrupulous and deceptive. I say f this guy (or gal).

 

[Ilyag]

I'm really not planning on coughing up $180.00 that I don't have. I'm not planning on paying paypal any time soon, if any time at all. I'd really like to get this straightened out though.

 

[Damon]

Hi,

Accepting credit card payments does mean accepting liability for any chargebacks filed. We have limited protections from chargebacks through the Seller Protection Program (claims of non-delivery/fraudulent credit card usage,etc), but it doesn't apply if:

a) the user did not follow the SPP
b) the chargeback was for merchandise quality
c) if it was for an international transaction

Contact information on all customers (including you) is proprietary, which means it would not be released without legal documentation to request it. This is in place to protect the privacy of our users.

If you did not comply with the Seller Protection Program, you will be liable (per our terms of use) for the chargebacks.

 

[HyTekJosh]

PayPal Damon -
PayPal has some serious flaws, no seller is ever "truly" protected. All a buyer has to do is file a quality of goods complaint and there is nothing the seller can do, the money is taken right from them. Nice way to score some free stuff if you are the buyer!

 

[Mister T]

Hytekjosh,

my sentiments exactly

 

[clarkmo]

So let me see. The buyer is disputing the purchase. You can't see the reason for the dispute because he used his credit card thru Paypal and you don't know how Paypal handled the dispute. You can't rspond to the buyer's claims because a You don't know what they are, b You don't know who he is.
If he had purchased directly from you with his cc all of this info would be available to you but it's not because Paypal won't reveal it and you have to trust them to handle the dispute. They won't even give you the cause for the dispute? Get another service and don't use them again! And always get full info from everyone you do business with on the internet. This is the reason why! Live and learn.

 

[Ilyag]

Well, I've already decided never to use the PayPal service again, but now I also owe $180.00 which I do not have. PayPalDamon: If I do not pay the payment within a certain amount of time, do they close down my account?

 

[andrew123]

HyTekJosh is exactly right... I've heard of different stories of people who talked to their customers and sometimes the customer demands a refund months later, and said if you don't give it, i'm filing a merchendise quality dispute. So of course the seller denies the request since the auctions usually either say all sales are final or refunds only except for defective merchendise within 7 days of buying, etc. So the buyer files an unwarrented merchendise quality dispute. BOOM. The money comes out of the seller's account, never to be seen again. Even if the auction said in huge letters ALL SALES ARE FINAL. Even if there is evidence (e-mail messages) from the buyer saying he doesn't like the item anymore. It's tough luck for the seller, since he can't even respond. The buyer could decide he didn't really want to pay for an item he bought, all he has to do is file a merchant quality dispute. With a real merchant account, you can dispute chargebacks, and provide evidence that shows the buyer filed an unwarrented chargeback. With PayPal (I have called about this and they told me this), they will only let you keep your money if the buyer files a claim of non-delivery dispute or if it was fraudulent credit card usage. This is a giant loophole in PayPal's system. Until PayPal starts protecting sellers (or at least giving them a chance to respond to the dispute) from ALL chargebacks, I do not consider PayPal a safe service to use to sell items with.

 

[Damon]

Hi,

The change would actually need to happen with the credit card companies---they grant the rights to consumers for just about any reason. The credit card company has final say in chargeback issuance---we only process them.

They (chargebacks)are quite rare, but I understand the valid concern.

Please realize that the issue was caused by actions on the buyer's end. We also take actions against individuals that file excessive chargebacks.

Chargebacks are ALWAYS a risk when accepting credit card payments. You would find the same terms in every payment service, or even merchant account, that I am aware of. We are also, to the best of my knowledge, offering any kind of protection from chargebacks.

In addition, the user showed that they did not have tracking, which is needed to attempt to fight a chargeback. The Seller Protection Policy does not apply to digital goods (which it sounds like this is).

 

[Ilyag]

So I have no way of fighting back against this scam?
What happens if I DON'T pay PayPal the amount that they took from my account ($180.00), do they shut down my account?

 

[HyTekJosh]

Is your account linked to a bank account or credit card or both?

 

[andrew123]

If you registered your account before October 11, 2001, then they can not take money out of your bank account. However, they could charge a credit card you have on file for they amount they deemed owed to them. However, I don't know how Credit Card Companies would handle this if you disputed that charge, they would probably mark it as unauthorized or something and give you your money back (just like the other person did to you). I've also heard PayPal might report people who owe them money to a collections agency. Also, as soon as money is deposited into your PayPal account they will take it for themselves up to the amount they deemed owed to them. The only final way to get your money back (if they report you to collections) is with arbitration.

 

[Ilyag]

The account was registered long before October 31st and my credit card is NOT on there. So basically, they cannot do anything to me except close down my account?

 

[Damon]

Hi ilyag,


Recovery for the chargeback can occur in one of these ways:

a) charge the debit card/credit card on file
b) take it from the PayPal account balance
c) seek collection through other means, which may include a collection agency

Closing your account does not eliminate the liability for the chargeback.

 

[slag]

I dont think that paypal can legally pull money from a debit card (which is a direct feed into a bank account), without the person's authorization. I seem to recall reading that is a felony or something to that matter.

I'd just close up shop with paypal and look elsewhere and tell the person they are SOL. If you really want to, cancel your debit and credit cards on file and have them reissue new ones.

I mean, really.. do you think the person is going to legally persue that small amount of money, especially when you have records showing sales are final and everything.

 

[Ilyag]

Well, the guy isn't emailing me back and Paypal won't give me any contact of his other than his e-mail so he's not getting his money back.

 

[HyTekJosh]

If its a credit card, no problem! You call 'em up and tell them it was an unauthorized charge.

 

[gittyup]

Problem with PayPal

Solution: BidPay

 

[bigbootydaddy]

off topic, paypal is supposed to be down for a couple of hours later tonite.

i wish anandtech was cool enough to have the off topic smilie...but what do i expect.

booty