My first credit chargeback run-in with PayPal / eBay.

[thecomicsheet]

Just got the following e-mail from PayPal:

 

====================================================

Dear Darryl Buchanan,

 

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:

 

Buyer's Name: XXXXXXXXXXXX

Buyer's Email: XXXXXXXXXXXXXXX

Transaction Date: Sep. 30, 2003

Transaction Amount: -$185.05 USD

Case #: PP-026-255-957

 

PayPal indemnifies sellers from chargeback 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 $5,000.00 USD per year when the following conditions are met:

 

1. The seller has a U.S. Verified Business or U.S. Verified Premier Account, or a Canadian Verified Business or Canadian Verified Premier Account. Note: While non-U.S. sellers outside of Canada may be Verified, they do not qualify for and are not protected by the Seller Protection Policy and therefore may be responsible for any reversals made due to fraudulent funds.

 

2. The seller ships to the buyer's Confirmed Address.

 

3. The seller can provide reasonable proof-of-shipment which can be tracked online. This documentation must show that you shipped to the Confirmed Address. (Most U.S. carrier companies, including the U.S. Postal Service, offer this service.) For transactions $250.00 USD or more in value, the seller also needs to provide an online proof-of-receipt in the form of a signature from the recipient. Because comparable proof-of-shipment is not currently available for electronically-delivered items, we are currently unable to offer Seller Protection for digital goods and other electronically-delivered items.

 

4. The seller accepted a single payment from only one PayPal account for the purchase. (Multiple payments from different accounts for a single item are a fraud indicator. Sellers should not accept such payments.)

 

5. The seller ships to a domestic (U.S.) buyer at a U.S. address.

 

6. The seller cooperates in resolving disputes by responding in the following time periods: When a complaint occurs, the seller must provide complete information within 7 days of a request from PayPal. However, if PayPal is required by the credit card association to respond immediately to resolve a reversal, sellers must provide the information within 3 days. PayPal will indicate the response time required in the e-mail message sent to the seller.

 

7. The seller ships within 7 days of receiving payment.

 

Under the guidelines of our Seller Protection Policy, we reserve the right to place a hold on the transaction in question while we investigate this case. To resolve this case, please click on the link below and provide us with the requested information:

 

https://www.paypal.com/us/cgi-bin/webscr?cmd=_chargeback-view-details&cid=PP-026-255-957

 

All correspondence regarding this case must be received within 72 hours via the link provided above. If you fail to provide the requested information within that timeframe, your chargeback protection for this transaction will be forfeited.

 

We look forward to your reply.

 

Sincerely,

 

 

 

PayPal Chargeback Division

 

 

Please do not reply to this e-mail. Mail sent to this address will not be received and therefore, not answered. For assistance, log in to your PayPal account and click the "Help" link in the footer of any page. If your inquiry is regarding a claim, log in to your PayPal account and click the pink Service Center link.

====================================================

 

I do have delivery confirmation on the books, so I filled out the PayPal forms. I'll see if I get my money back.

I've been getting a little lax about sweeping my money out of my PayPal account and my checking account set up for PayPal. I'm going to be a lot more diligent in the future about this!!

 

Thing is, I don't understand from the e-mail what was supposed to have happened. Is the buyer claiming fraud / didn't get the merchandise?

Is the buyer claiming that they were the victim of an account number / eBay account / identity theft crime?

 

Has anyone else ever had a satisfactory conclusion to one of these situations?

 

 

 

 

[Adam-migration]

I really hate to be the bringer of bad news, but I think you may be in for an unpleasant surprise It has been my experience that Paypal does not offer the buyer or seller protection they claim, and they will always find a way not to re-imburse you.

 

Example: Last year I bought a $1500 high grade CGC book off eBay. The seller had low feedback, but I was new to eBay so not knowing any better I decided to take a chance because Paypal offered their buyer protection in the event something went wrong. So I paid $1580 off my discover card through Paypal and waited for my item to arrive. A few weeks later the item hadn't arrived. The seller couldn't be reached through phone or E-mail, except when he responded to me once saying something to the effect of "hahahaha I have your money and you'll never get what you bought from me". So I filed my claim with Paypal, and apparantly they sent the seller a note asking to prove he had shipped me my item. So he went down to the post office, picked up an express mail-box, shut it, and mailed it to me empty. Then he took the tracking # home and E-mailed it to Paypal. Well, luckily the seller was stupid enough to insure the item, so I had to pick it up at the post office. When I got there I could tell it was too light to be carrying a CGC book. (The package weight listed on the package was around 2 ozs) A CGC book alone (forget packing supplies) weighs approximately 16 ozs. So I opened the box at the post office in front of everyone working there that day, and they all saw it was empty. I got a few of them to write some things down for me, some postal workers gave me their names and phone #s, and asked me to have Paypal call them to verify what they saw. So I got home, and received another E_mail from the seller admitting that he had mailed me an empty box but that there was nothing I could do about it.. So I called up Paypal and tried to explain my situation, but they refused to provide me with a phone number or E-mail address where I could give my information to (I wanted to forward the seller's E-mails, give the names and phone #s of all the people who witnessed that the box I received was empty, and give them the express mailing receipt showing the weight of the package to be 2 ozs)

 

Well, the lady on the phone at Paypal said something like "So, you admit that you DID receive a package then?" and I explained "Yes, but the box was entirely empty, there was nothing inside.. I did not receive my item and I can prove it". The Lady over at Paypal gave me some garbage about how Paypal is not responsible for the quality of merchandise received, and that if I received an empty box that is considered merchandise.. and therefore this was a quality issue, not an issue of non-receipt of merchandise. She said there was nothing their buyer complaint department would be able to do for me. I must have called Paypal 50 times, and each time I would get someone different who would give me the same load of garbage and then hang up on me.

 

Unfortunately, it got even worse when I called Discover, and tried to dispute the charges with my credit card... Apparantly Discover has some sort of agreement with Paypal... (or at least they did last year.. I am not sure if that has changed after all the complaints they have received) Discover actually refused to issue any chargebacks against Paypal. (Discover will apparantly charge back any fraudulent charges made anywhere in the world, except something you buy from Paypal..) So if you try to pay for something with a Discover card, you are actually more protected if you just give your credit card number to a total stranger over the phone (because then you can dispute any illegal charges) than you are paying through Paypal's supposedly secure buyer protection program. (I believe this particular problem is only with Discover, and Visa/Mastercard will allow you to dispute Paypal charges)

 

 

I had another Paypal problem a few months ago. This time I was selling an item on eBay. (A mid to low grade Amazing Spider-man 3). The seller paid me through Paypal. Even though the seller didn't pay extra for insurance, I decided to insure the package for the full amount anyway when I mailed it out to him. I also decided to pay for Delivery confirmation, in case anything went wrong. So I came home with all my receipts in order, and the following week I received a notice from Paypal saying that I may have been paid with fraudulent funds, and I now had a negative account balance of several hundred dollars while they attempted to sort everything out. They gave me the form to fill out, and I sent it back to them within the hour. I had everything they were looking for including the tracking # that you get when you purchase insurance, and the delivery confirmation number. I was convinced that this time there was no way Paypal was going to be able to back out on their seller protection policy because I had followed everything they had wanted me to do down to the letter. Anyway, despite sending them the insurance # and the delivery confirmation number they wrote back to me saying I was not eligable to be re-imbursed under the seller protection policy. I wrote back to them really angrily asking why, since I had included the insurance # and delivery confirmation number. They wrote back to me saying that the only thing THEY consider to be acceptable proof of shipment is "Signature confirmation" through the USPS which is apparantly different than "Delivery confirmation". I never got my $$ back.

 

Anyway, these were just my own personal experiences so I certainly hope your situation ends up better than mine! (I'm sure there must be some people out there with good things to say about Paypal..!) But I personally don't find it too hard to understand why they are being investigated by the NYS Attorney General for Fraud charges, or why they are the target of multiple ongoing class-action lawsuits.. (or why they have received thousands of complaints with the Better Business Bureau)

 

Please keep us posted on how your situation works out. Maybe its not too late to send out the seller an empty box with signature confirmation on it.. you know.. just to protect yourself

 

Hopefully the item in question for you wasn't worth alot of $$, but if things do go badly and there's anything I can do to help please let me know!

 

Adam

[BachelorOfComix]

Sorry to hear about that Adam. Scammer d.ickheads like that will burn in Hell.

[Rickdogg]

Sorry to hear about your misfortune. The same thing happened to me a while back and I was able to recoup my money.

 

About a month ago I had to file a complaint with paypal from the buying end, since a seller decided not to respond to my numerous emails and phone calls. A few days after I filed my complaint, the seller responded and my account was credited since the seller admitted he didn't send me any merchandise.

 

Good Luck

[BronzeBruce13]

Hey Adam,

 

Sounds like you've been put through the ringer.

 

I use Visa and Discover Card throuh Paypal and after reading your post I called them. They confirmed that previously they did not provide for chargeback services against any 3rd party (payment services, etc.)... BUT on August 1st 2003 they changed their policies to allow for Chargebacks, even through Paypal. They suggested one should try to resolve with Paypal first, then come to them if nothing is accomplished. They would then treat the matter as if it was a direct complaint and if you have proper proof, there would be no problem.

 

Discover said there are no existing stipulations, limitations or restrictions any longer.

 

Maybe a few other Discover card owners could call and see if they get the exact same story?

 

 

 

[Elephant-migration]

I got ripped off for $220 on Ebay. The guy never sent the stuff, and to make it even worse his excuse was that he had been down at Ground Zero helping the Red Cross and handing out food to victims and thus had been very busy (this was right after September 11, 2001), insisting that I was an insensitive unpatriotic person since in the face of national tragedy I was hounding him about merchandise he'd not sent me.

 

Anyway, I complained to Paypal and filed a claim, and they confirmed that he was a scammer and had any number of complaints against him, but since he'd cleaned out his account they couldn't do anything about it. Ebay also claims to cover you but it's only up to $75, and you have to pay $25 to file a claim, or something like that, so basically I was only looking at recouping some $50, or a loss of $170.

 

My credit card company (Visa) called maybe two months after I'd filed a claim with them and they credited me, so it all turned out okay except for the headache and the irritation and the anger.

[xboxist]

Adam -

 

Wow, that's horrible. You opened up an empty box, with USPS WORKERS right in front of you, willing to testify that the box was indeed empty... and you're the one that loses out. That absolutely baffles me!! I mean, what can a guy do? That system is ridiculous. Paypal is completely encouraging protected fraud, and that's aggravating. Makes me consider avoiding the whole auction scene.

[drbanner]

3. The seller can provide reasonable proof-of-shipment which can be tracked online. This documentation must show that you shipped to the Confirmed Address. (Most U.S. carrier companies, including the U.S. Postal Service, offer this service.) For transactions $250.00 USD or more in value, the seller also needs to provide an online proof-of-receipt in the form of a signature from the recipient. Because comparable proof-of-shipment is not currently available for electronically-delivered items, we are currently unable to offer Seller Protection for digital goods and other electronically-delivered items.

 

Does anyone know for certain if USPS Delivery Confirmation satisfies this requirement (for items under $250), or is the Signature Confirmation required also (or, is SC only needed on items over $250)? Looks like Adam was told SC was needed, but now I wonder?

 

As there's no on-line tracking for insurance only, some other type of proof is obviously needed...but which one...which one??

 

Hey Darryl - any market index updates coming to your site!?!?

[dadaist]

Hey Darryl

 

I've been through this mess, and posted about it awhile back. I certainly hope your resolution to the matter fairs better than mine.

 

Reading your email, it looks like you have a better shot at eligibility under PayPal Payment Protection Plan than I did. Just make sure you do whatever they ask, and don't confuse complacency with protest. I had some pretty good advice offered when I posted my situation, but one thing I did learn with my own experience is that PayPal is extremely autocratic -- specifically in dealing with any type of dispute resolutions -- and does everything by the book. In cases such as yours (and mine), they don't care so much that a fraudster used a stolen credit card, or that their system had no way of catching it at the time the transaction occured. Don't expect to ever find this out -- nor expect PayPal to share any background info on the situation.

 

Their main concern is making sure they don't have to absorb the chargeback.

[Mephisto]

Adam I was wondering if you ever tried to get the Postal service involved when you were sent an empty box. Since he insured an empty box and you had postal employees see that an empty box was empty and insured, they may have been able to go after him for Postal Fraud.

[BronzeBruce13]

I was told by Paypal that they wanted a Tracking # (USPS Express) or Fed Ex/UPS. Sounded like they wanted a signature (USPS Sig.Confirmation/Return Receipt) or (standard sigs wFed/Ex/UPS) too on more expensive items. I don't think USPS insurance or DC or SC by itself is enough in most cases, although someone posted recently that Sig Confirmation was enough for his problem... play it safe on the expensive stuff.

[thecomicsheet]

Hey Darryl - any market index updates coming to your site!?!?

 

Hope to get an update uploaded tomorrow night. Trying to get my column put to bed tonight. My index updates have been a little erratic for a while. Busy at work, busy gathering data, busy working on the column, kids have been sick with the flu, wife's been sick (same old story - when momma ain't happy, there ain't NOBODY happy!) So now they've all had the flu, looks like its my turn. Haven't made it in for a flu shot. Got my fingers crossed it passes me by!

[thecomicsheet]

Sorry to hear about your misfortune. The same thing happened to me a while back and I was able to recoup my money.

 

About a month ago I had to file a complaint with paypal from the buying end, since a seller decided not to respond to my numerous emails and phone calls. A few days after I filed my complaint, the seller responded and my account was credited since the seller admitted he didn't send me any merchandise.

 

Good Luck

 

Sounds like you got lucky that the seller at least owned up to not shipping the books.

In my case I'm out the books (which were delivered) and now PayPal has grabbed the cash back.

The PayPal form asked me for proof of delivery. One of the choices on their menu was USPS delivery confirmation number (which I provided).

No resolution as of now. Still says pending.

 

PS: I have drained my PayPal account of any remaining balance and I have transferred all but a token amount out of the checking account attached to the PayPal account. Then I remembered I have $400 overdraft protection on my account. I wonder if they can ding me that way?

[BronzeBruce13]

They can, but you can probably instruct your bank to reverse it. My Bank said they would serve me and reverse it if I asked. I recommend you go have a talk with your bank rep. and see what they'll do. I also asked them to make note that I do not authorize any debits to my bank from Paypal whatsoever.

 

You should also get another account at the same bank Darryl, and transfer the money out of the Paypal connected acount to the new "non-connected" account as soon as it arrives.. so they have no access at all to your funds.

[thecomicsheet]

They can, but you can probably instruct your bank to reverse it. My Bank said they would serve me and reverse it if I asked. I recommend you go have a talk with your bank rep. and see what they'll do. I also asked them to make note that I do not authorize any debits to my bank from Paypal whatsoever.

 

You should also get another account at the same bank Darryl, and transfer the money out of the Paypal connected acount to the new "non-connected" account as soon as it arrives.. so they have no access at all to your funds.

 

I think I'll have a talk with my bank tomorrow about not letting PayPal get at that account. I do have a non-connected account at the bank by the way. I opened up another account a year ago just for linking to PayPal. It is at my same bank, and they let me do easy internet fund transfers between my accounts. (One of the few benefits of turning 50 by the way. They let me have free checking now, no minimum balances, free checks, multiple accounts, and I can write as many checks as I want. Plus they even pay me interest! A whole 0.10% - that's right, a whopping 1/10 of one percent - WOO HOO!)

[thanos_oftitan]

I really hate to be the bringer of bad news, but I think you may be in for an unpleasant surprise It has been my experience that Paypal does not offer the buyer or seller protection they claim, and they will always find a way not to re-imburse you.

 

Example: Last year I bought a $1500 high grade CGC book off eBay. The seller had low feedback, but I was new to eBay so not knowing any better I decided to take a chance because Paypal offered their buyer protection in the event something went wrong. So I paid $1580 off my discover card through Paypal and waited for my item to arrive. A few weeks later the item hadn't arrived. The seller couldn't be reached through phone or E-mail, except when he responded to me once saying something to the effect of "hahahaha I have your money and you'll never get what you bought from me". So I filed my claim with Paypal, and apparantly they sent the seller a note asking to prove he had shipped me my item. So he went down to the post office, picked up an express mail-box, shut it, and mailed it to me empty. Then he took the tracking # home and E-mailed it to Paypal. Well, luckily the seller was stupid enough to insure the item, so I had to pick it up at the post office. When I got there I could tell it was too light to be carrying a CGC book. (The package weight listed on the package was around 2 ozs) A CGC book alone (forget packing supplies) weighs approximately 16 ozs. So I opened the box at the post office in front of everyone working there that day, and they all saw it was empty. I got a few of them to write some things down for me, some postal workers gave me their names and phone #s, and asked me to have Paypal call them to verify what they saw. So I got home, and received another E_mail from the seller admitting that he had mailed me an empty box but that there was nothing I could do about it.. So I called up Paypal and tried to explain my situation, but they refused to provide me with a phone number or E-mail address where I could give my information to (I wanted to forward the seller's E-mails, give the names and phone #s of all the people who witnessed that the box I received was empty, and give them the express mailing receipt showing the weight of the package to be 2 ozs)

 

Well, the lady on the phone at Paypal said something like "So, you admit that you DID receive a package then?" and I explained "Yes, but the box was entirely empty, there was nothing inside.. I did not receive my item and I can prove it". The Lady over at Paypal gave me some garbage about how Paypal is not responsible for the quality of merchandise received, and that if I received an empty box that is considered merchandise.. and therefore this was a quality issue, not an issue of non-receipt of merchandise. She said there was nothing their buyer complaint department would be able to do for me. I must have called Paypal 50 times, and each time I would get someone different who would give me the same load of garbage and then hang up on me.

 

Your out $1500 and didn't buy a plane ticket, I'ld be paying someone a not so friendly visit.

 

 

[Mr. Zipper]

I'm a bit further along on a similar problem.

 

Back in May I sold a FF#1 on ebay and the winner paid me through Paypal. 2 months later, I got the same message about a possible chargeback. I submitted my info, and within hours Paypal's exhaustive investigation showed that I was on the hook for $1,100. Luckily, I always quickly get my money out of Paypal, so they didn't get my money, but left me with a negative $1,100 balance which they insisted that I pay up.

 

I sent the item via USPS Delivery Confirmation and fully insured. I had all the tracking info, but Paypal said that USPS Delivery confirmation is not sufficient proof of delivery to the confirmed address. (In their User Agreement, they state "reasonable proof of shipping that can be tracked online." So, according to Paypal, USPS Delivery Confirmation is not "reasonable proof."

 

So, I've written letters of complaint with all supporting documentation to the NYS Attorney General (that's where I live), and the California and Nebraska AGs (Paypal's offices)

 

California and Nebraska were of little help, NYS was great and sent a number of letters asking Paypal to re-evaluate my case. Paypal totally blew them off.

 

In my case, the buyer claimed identity theft and someone else used his accounts. He's full of [!@#%^&^] and is just using Paypal as a tool to scam people. This guy had a record of buying and selling comics on ebay... It's a bit too coincidental that the person who steals his identity also bought and sold comics (I wasn't the only one he ripped off). To add insult to injury, the buyer left positive feedback for me indicating he received the comic and it was packed well!

 

Paypal is aware that people use them to beat the system, but they really don't care. They just want the money from the party they can find.

 

Paypal sent me a bunch of threatening emails and I ignored them. IMO, THEY verified a bad transaction, NOT me. I followed THEIR instructions and shipped to THEIR confirmed address... I'm not taking the hit because they say my shipping proof isn't good enough. Bear in mind, Paypal isn't a bank or credit card company and is not subject to various rules and guidelines. They basically make up their own rules which in all cases favor their rights, not the users.

 

So, yesterday I got a letter from Paypal's collection agency. I'm going to drag this out as long as I can and just not pay.

 

I have a file folder 3 inches thick with all my correspondence, and hopefully they will write me off when they see they are not going to collect from me. I'm hoping it doesn't show up on my credit report.

 

Now I can no longer use Paypal and it's a pain when sellers only accept Paypal. That said, I see more and more Paypal sellers accepting bank payments only... so I believe word is getting out that Paypal is NOT safe for sellers. Their seller's protection is a joke and the only party it really protects is Paypal.

 

For more horror stories:

www.paypalsucks.com

[OldSchoolTerry]

These are some real horror stories here! Thanks to everyone for sharing them. I actually was about to just begin selling and or/buying on ebay, and this has been a real eye-opener.

[Amazing_Bag_man]

As eventually one day I will sell some of my comics on "Ebay" would a safer bet for payment through money order and to wait for it to clear be safer option or does it mean a new system of payment has to happen before everyone feel more secure to fork out the money?? ....

[Mr. Zipper]

As eventually one day I will sell some of my comics on "Ebay" would a safer bet for payment through money order and to wait for it to clear be safer option or does it mean a new system of payment has to happen before everyone

 

I have never had a problem with a personal check or a money order. I use BidPay which works fairly well, except it has a $700 limit and gets pricey at the higher dollar amounts.

 

Non-in-person credit card transactions will always be a risk, and by accepting credit cards one must accept the risks associated with chargebacks. The problem, in my view, is that Paypal does not properly inform users of the risks and misleads the user to think they are "protected" when the protection is minimal and one must jump through impossible hoops to qualify. All of this can happen months after the transaction.

 

How many people here keep tracking records and email correspondence months after the person left you positive feedback? According to Paypal, you better.

 

One advantage of no longer being on Paypal is that it has reduced the number of impulse buys I make... when you have to write out a check and mail it, you think twice before buying.