Seller Protection - non existent

Road_Hog · 10 August 2008 at 9:23AM

I sold an item at the beginning of June, confirmed address and sent by Recorded and is showing as tracked on the RM website.

Buyer does a reversal through their bank. Goes to dispute, I send off the tracking info, job done me thinks, cut & dry and I'm going to get my payment back.

Suprise, they find in favour of the buyer and return the funds. So I phone paypal up and say, you made a mistake, confirmed address, sent promptly and with tracked delivery, I'm covered under seller protection, give me my money.

No sir, you're not covered for chargebacks that are directly from the bank account, only if the payment was from a credit or debit account.

So if a customer pays you by "instant payment" from their bank, I argued that if they paid directly from the bank it would be an e-cheque, but apparently you can pay directly from your bank (not using your debit card) and it is classified as an "instant payment". If the buyer pays in this way, and the a chargeback is done, you are not covered by seller protection.

soolin · 10 August 2008 at 10:04AM

Ok this is where Martj J and i disagree, I say that claims of either fraudulent use or just a straight reversal are not covered regardless of tracking, but marty J has links to rules that state sellers are covered against this so maybe he is the one to help you here?

My normal response would be to contact the buyer and explain that they have receievd goods for which you have now not been paid and as you can prove they have received those goods you will of course be seeking legal redress. It may well be that they don't even realise what has happened, so a quick phone call may well just get a swift repayment to you. if they prevaricate or anything then explain that you will be starting an online money claim in a few weeks. However, if Marty J is correct then this might just be a paypal glitch, and there is one at the moment which means valid claims are being refused all over the place..so I am probably not the best person to give advice and I would certainly wait for someone else to come along on this thread. You might want to give paypal a call tomorrow as well though and point out that you believe you are fully covered and that you want them to reopen this and ensure that your funds are returned.

Road_Hog · 10 August 2008 at 11:05AM

soolin wrote: »

Ok this is where Martj J and i disagree, I say that claims of either fraudulent use or just a straight reversal are not covered regardless of tracking, but marty J has links to rules that state sellers are covered against this so maybe he is the one to help you here?

It may well be that they don't even realise what has happened, so a quick phone call may well just get a swift repayment to you. if they prevaricate or anything then explain that you will be starting an online money claim in a few weeks. However, if Marty J is correct then this might just be a paypal glitch, and there is one at the moment which means valid claims are being refused all over the place

First off, I have spoken to paypal and it is them that have told me that because it is an "instant payment" from a bank account it is not covered, had they paid by via debit card from their bank account I would have been covered. I'm struggling to understand what an "instant payment" is, because if it comes direct from your bank account, I always thought that that was a direct debit/e-cheque. But the paypal women was insistant that it was different to an e-cheque but wasn't a debit card payment.

To be honest, I can't understand how you can send money from your bank account (as in transfer not with debit card) and then claim it back.

I'm going to put a claim in, they're scammers, they tried to pretend they hadn't received the phone and the timing of the message was within hours of paypal asking for the tracking info.

soolin · 10 August 2008 at 11:09AM

My son recently had problems, he pays direct from his bank account so the payment shows as instant for the seller but takes a few days to go through his bank account.

The bank messed up another DD for him and then cancelled the rest of his payments going out on a certain day. That meant that although he actually had his goods, the seller had not been paid but as he had a card registered as well paypal used that card to make a second payment to the seller which the seller receievd a few days later.

frivolous_fay · 10 August 2008 at 11:19AM

I don't understand how an instant payment can't come via a debit card either. I've had a debit card payment fail before, after goods had arrived - fortunately for my seller I had backup funding.

soolin · 10 August 2008 at 12:55PM

I am another who does not understand paypal. Going back to my son he has one bank account and on paypal the default option is to pay via bank funding, the secondary back up payment method is the debit card associated with that same bank account?

So with the recent problem he had the bank stopped the payment going as a bank transfer as it happened on the same day he has problems with a bank mess up. However they allowed the debit card payment a couple of days later..same bank account same money

Also, before anyone reminds me that I always advocate credit card payments via paypal my excuse is that DS is not good with money and he has sensibly decided that he is not going to manage very well if he is given credit, so has always declined a card. I think he is very sensible in doing that even if it makes him vulnerable on paypal. However when he makes a large payment we just use my account and back it by a CC.

amcluesent · 10 August 2008 at 8:01PM

>they're scammers<

And no doubt the scammers ('fausands of 'em!) will all be clued up on Paypal not honouring seller protection if they use this type of payment.

Another reason to abandon Ebay! Which the 'suits' want us to do, of course.

Marty_J · 10 August 2008 at 11:53PM

I'm a bit confused as to what's going on here, so stick with me if I appear to be a bit slow.

If the buyer has paid by an "instant payment", then the payment was funded by a direct debit from their bank account. As far as I know, the only way this could be reversed is if the buyer calls their bank and asks for a refund of the money under the Direct Debit Guarantee.

As you've found out, there is no seller protection for transactions that were not funded by a credit card, so PayPal are now out of pocket and want to reclaim the money from you.

As you can show delivery to the buyer meaning you have proof they have effectively stolen money by deceit, PayPal should really be pursuing the buyer for fraud. But all they really care about is getting their money, and unfortunately it's easier just to take it from you.

If you're selling something, PayPal is probably the most unsafe way there is to get paid for it.

digerati · 11 August 2008 at 2:53AM

Road_Hog,

You need to understand that PayPal policy is to protect PayPal first, the buyer second and the seller last. In any case PayPal must never, ever be out of pocket. However PayPal are not a law unto themselves and there are many avenues open to you, to obtain a full refund plus expenses...

That being said, this case would seem to be either 1) a deliberate scammer pulling a fast one, or 2) an erroroneous bank transfer reversal. I'd contact the buyer and repeat what soolin advised: "...they have received goods for which you have now not been paid, and as you can prove they have received those goods, you will of course be seeking legal redress". Ask them to reply within say 72 hours.

If no timely reply - your next step is to visit your local Police station and make a formal complaint under Section 2 of the Fraud Act 2006, namely Fraud by false representation as your buyer obtained your goods without payment. Bring printouts of your emails between you and buyer, PayPal and eBay with full headers shown. The Police will contact your buyer and eBay/PayPal to start the ball rolling.

Road_Hog · 11 August 2008 at 9:21AM

To Marty J,

Yes you have understood it correctly.

Yes I understand that paypal only care about themselves, I still get suprised by the new accuses they trot out each time to get out of honouring seller protection. But I felt the need to warn others. How you tell whether you have been paid by an "instant payment" or other type so you are aware if you are covered or not is beyond me.

To digerati,

I have a very jaundiced view of the police and my past experience of any dealings with them is that you get a crime number and then end of story, so I probably won't waste half a day of my life going to a police station.

I'll go down the small claims route, my only concern is I can't remember if you do an online claim and it goes to arbitration (i.e. you end up in court) whether it goes to a court near me or them as they're in the IOM.

Marty_J · 11 August 2008 at 9:47AM

Road_Hog wrote: »

To Marty J,

Yes you have understood it correctly.

Yes I understand that paypal only care about themselves, I still get suprised by the new accuses they trot out each time to get out of honouring seller protection. But I felt the need to warn others. How you tell whether you have been paid by an "instant payment" or other type so you are aware if you are covered or not is beyond me.

To digerati,

I have a very jaundiced view of the police and my past experience of any dealings with them is that you get a crime number and then end of story, so I probably won't waste half a day of my life going to a police station.

I'll go down the small claims route, my only concern is I can't remember if you do an online claim and it goes to arbitration (i.e. you end up in court) whether it goes to a court near me or them as they're in the IOM.

I wish you the best of luck and hope you take it as far as you can go. Are you going after just the buyer, or PayPal too?

They would seem to be complicit in the whole thing; the buyer stole their money, so they stole yours.

Seller Protection - non existent

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