Free Money from Paypal! Please help?

Martyn1981

Hello everyone, I'm after some help as I'm very concerned about my sister's finances. I've always found 'clever' ways to save a few quid here and there, but I don't believe the so called system my brother in law is using to fund a cashflow problem, I think he may be lying to my sister and getting in over his head. Here's the story;

Following a redundancy my sister and brother in law are low on cash, so as he is also a major trader on e-bay (might be irrelevant) he has been buying from himself on her credit card (£2,000 at a time) and then immediately drawing the cash from Paypal.

Firstly, he missed paying the bill on time so interest at 1.6% is being charged on the first installment and he's done 2 more since. Stupid I know but some people eh!

Secondly and here's the trick or lie, he claims that he receives (as retailer)every penny he pays (as customer) because he's an e-bay gold trader and therefore doesn't pay any fees to Paypal. Regardless of whether e-bay is involved (I think he's just transferring to himself) and as I can't see the receipts, I can't complete the circle / story, but I can't believe that neither the credit card company nor Paypal make any money on this. I'm sure he'd only receive 98 to 99% of the money, as one or both companies needs to earn money from this.

If I'm wrong, then let's all do it, max out as many credit cards as you can get, eg buy £50,000 of 'stuff' a month off ourselves, stick it in the bank and 5 weeks later clear all our credit cards and pocket the interest and repeat - too easy, too many other parties involved earning nothing, and the CC companies down £50k with nothing in it for them.

Sorry for the rant, but desperate for some Paypal / ebay experts and traders to let me know if my sister is being lied too, or if I should immediately open two Paypal accounts and get in on the act?

Very thankful for any advice.

Martyn.

Gorgeous_George

Oh dear.

Even if the credit cards companies and PayPal earn nothing (unlikely), there are listing fees, final value fees and INCOME TAX!

I would call the Police.

GG

Martyn1981

Morning Gorgeous, or is that Mr George to me.

Yeah I'd thought of the E-bay side (costs commission etc) and that's why I reckon he's just doing a Paypal transfer, nothing to do with E-bay, that's just a lie to muddy the water.

Also, and this is where a e-bay trader can help, as Paypal is a seperate organisation to e-bay, I don't see why being a major trader on e-bay would affect your Paypal commission. Obviously I'm aware that the more you move through Paypal each month the lower the commission rates are, I just don't believe that a 'super duper' e-bay trader gets it all for free.

Like them or hate, the credit card companies are perfectly entitled to earn a living off our transactions (I think they usually get between 0.75% and 1.75% commission on each purchase from the retailer), so what would be in it for them!

Martyn.

Paul_Herring

Martyn1981 wrote: »

so as he is also a major trader on e-bay (might be irrelevant) he has been buying from himself on her credit card (£2,000 at a time) and then immediately drawing the cash from Paypal.

Presumably he's using the withdrawn money to pay the card off.

Sounds suspiciously like cross-firing, which is illegal.

Martyn1981

Morning Paul, he's using the money to 'live on', because like most high earners, he and my sister are non-savers, so they financially crash between each job.

My sister has always out earned me by almost 2 to 1, as she and my brother in law are fantastic at all types of sales. But I've always said it's not what you earn, it's what you spend. They don't monitor or care about the price of anything (eg, leave the heating on, but open the windows when it's too hot).

He's convinced my sister and tried to convince me that if he remembers to pay the card off entirely each month (from where!!!!!!), then the money costs him nothing.

I'm sure that Paypal will be charging him (including the CC's commission) about 1.4% or more, possibly 3.4%. So he's lying, but their finances have always been a disaster, so nothing new there.

I'm not really that concerned at them borrowing on their credit cards. Whilst I think that's lazy and stupid, they are old and ugly enough to sort out their own problems, and at some point you have to walk away to save yourself from all the worry.

What I'm peeved about is the BS that he can effectively draw cash and try to convince me that it's free of charges.

If they let me loose at their bills I'd have them sorted in 6 months, but they know best.

Their gas bill £1,000
Their electricity bill £600

My combined energy bill £500

Their water bill £1,200 (I warned them not to buy a house already on a meter)

Mine - £215

It goes on and on. Got a big bill just earn more to pay it off, don't bother about sorting out the problem, just go on holiday and worry about it later.

Lost cause me thinks?

God I'm a moaning git this morning, sorry.

Martyn.

NickX

Martyn1981 wrote: »

Lost cause me thinks?

Well I think this sort of "non money saving expert" type behaviour is pretty typical these days.

I have many friends who earn much more than I do, but are always skint for exactly the reasons that you have identified.

I suspect that money-savvy users of this site really are a small proportion of the population.

Martyn1981

NickX

Time to hate me, but I must absolve myself of my passed sins, I worked for Lloyds Bank 88 to 91, culminating in the position of, wait for it, 'lending services officer' - low level loans and overdrafts.

I really enjoyed being a cashier or working the enquiries counter, but I couldn't stick the job after promotion to 'Debt Pimp'.

Most of the people in trouble were very high earners, they just kept spending more every week/month than they earned. Back then I was on about £600 pm and I had to listen to sob stories from people on £1,500 + (not bad even for today) who simply couldn't afford to live on that kind of money.

I don't think anything has changed. I was reading through some of the help requests on this forum over the weekend. It left me sad, angry and bemused.

I genuinely feel sorry for people with major debt problems, but when they say that their monthly income (net) is £2k, £3k or even more, and then go on to list about a dozen assorted loans, overdrafts, mortgages, hp, cc's, family/friends loans etc, I simply can't help but scream - stop spending. Save some money then get the telly, or double glazing, or car etc. You don't have a right to get everything now and then complain about the repayments.

I feel so passionately that schools need to teach 'proper' finance. Kids need to be prepared for loans, CC's, hp etc. I don't think the term minefield is overstating what they are walking into when they get their first job, or go to Uni.

Britain needs a major money / maths education overhaul - but we 'strange people who save first' are in a tiny minority shouting into the wind.

Second rant of the day overwith - actually I'm usually quite a funny guy - just got a bug up my !!!! today, sorry!

Pound-Of-Flesh

Hello Martyn,

I think you already know the answer to your own question.

Maybe, just maybe, you could make a very small profit as you described in your £50k example. Spend money on card (avoiding balance transfer fee); stick money in bank; 6 weeks later pay card off in full. But you don't earn enough interest to live on in 6 weeks do you??

The above only works IF you pay off the card - and you have stated that your relatives are NOT doing that. Which means they are living off the credit card, aren't they???

So the only - tiny - advantage in all this is that it might (maybe) be a bit cheaper than using the credit card in an ATM to withdraw cash.

What it boils down to is that they are using the card to fund their lifestyle - presumably at an APR of 20% or more. The very opposite of stoozing. All that clever-clever nonsense about PayPal is just a red herring. Your brother-in-law has obviously misled your sister. Maybe he believes it himself. But it is total bullsh*t.

My advice would be to explain it to your Sis if she will listen. But don't get sucked into their problems!

Good Luck!

methusala_2

another little tit bit, IF he is drawing DHSS payments, following his redundancy the DHSS will eventually find out about his E-bay earnings and WILL recover all payments made to him under threat of court action for fraud for undeclared earnings and THEY dont take into account the outgoings for stock just the incomings from Paypal, impossible to hide cos its listed on your bank statements.

Martyn1981

Thanks for all the replies.

'Pound of Flesh' - I don't actually believe there is any money to be made. It would work on a rinse and repeat process, but only if there were no transaction fees - which my B.I.L. claims.

Personally I believe he is not misleading himself, but simply lying. I'm 99.99% certain that the CC company or Paypal (on their behalf) will be charging a commission fee of 1.4 to 3.4% for the transaction, and that's before you even get to the interest if the bill isn't paid on time.

Oh, and yes I should walk away and try not to worry, but the set-up is a little more complex than I've explained so far and as a result is causing my father a huge amount of worry - and that's where I get dragged in, as he (at 70 years old) was and probably is one of the first ever MSE's, making and saving money left right and center all his life.

I copied him, my sister rebelled. Still 50% success isn't bad I suppose?