credit card unauthorised payment

Rhino666

Hi

I run a website that used paypal to take debit/credit card payments.

Three years ago I lost nearly £200 because of a chargeback for unauthorised payment through a credit card. Paypal took back the payment, their transaction fee and another £7 charge for unsuccessfully pursuing the matter through the credit card company. The paypal address (despatch address) was unconfirmed, as are at least half of the addresses connected to paypal transactions made through the website. Paypal's rules mean that they will not refund for an unauthorised payment where the address in unconfirmed. I always use a signed for courier, so the proof of postage was supplied. In this case the police were involved and it came to light that the card was stolen.

In the last two weeks there have been two further chargebacks against my paypal account for unauthorised transactions. I am worried that the outcome for these will be the same. My question is how can the credit card company wriggle out of paying out for these fraudulent transactions when the despatch address matches the address on paypal and presumably has to match the credit card billing address for the transaction to be initially validated by them ? Paypal will not divulge details of the credit card company so I was unable to pursue this matter through them.

Any help/advice on this issue much appreciated as the sums involved equate to about two weeks profits from the website :-(

iamana1ias

The paypal address does not have to match the credit card address. AFAIK you don't even enter the billing address on paypal.

soolin

I suspect the rules are different for merchant users, but as a single seller you are covered regardless of the address as long as the status in paypal is 'OK to send' and you use the address that paypal give you.

It might be worth trawling through all the small print to see whether the rules are different for those using paypal as a merchant service.

Rhino666

Hi

My account is a paypal business user account.

Here is the stated rule regarding unauthorised payment where the address is not confirmed.........
Protection for unauthorised payments

Because ********** address isn't confirmed, you won't be protected if this turns out to be an unauthorised payment.
Before posting, we recommend that you contact ******** to make sure this payment was authorised. Most of the time, posting to an unconfirmed address is fine. But we always encourage you to help protect yourself.
For more information, see our tips to sell securely

As you can see paypal wash their hands of this where the paypal address is not confirmed. I have been selling using paypal for about eight years now - there are at least as many unconfirmed paypal addresses as confirmed. The advice to contact the customer regarding the unconfirmed address is a waste of time as most fraudsters, including one of my current ones has enough front to confirm an address.

In the light that most of my transactions (car parts) are likely to have unconfirmed paypal addresses, it seems a totally irresponsible system that makes me responsible for unauthorised payments where there is no tie up with the card billing address and paypal address.

iamana1ias

Rhino666 wrote: »

In the light that most of my transactions (car parts) are likely to have unconfirmed paypal addresses, it seems a totally irresponsible system that makes me responsible for unauthorised payments where there is no tie up with the card billing address and paypal address.

You don't have to use Paypal.....................

adam.mt

I'd also call the blame with PayPal profiteering, rather than it being the credit card companies fault. Surely, if you're paying PayPal for the privilege of handling the payment then they should offer some sort of guarantee (and accept at the very least part responsibility). As it is, they seem to want the minimum responsibility and yet highest transaction fees that they can get away with (just like ebay, their parent company).

Although ebay have a near monopoly of the market, PayPal don't so I recommend evaluating their competitors.

soolin

Even a single seller would not be covered if paypal state up front that they don't offer seller protection on the particular sale. As most of my sales are on ebay I am stuck with paypal, although in fairness I have never had any issues at all with them, as a website owner maybe you might want to rethink your payment methods. The small business board might be able to help. However I suspect that other payment methods will be as unsafe and almost certainly much more expensive.

The other thought i had is if this is happening quite a bit with you are you being targetted at all, is there anything in your stock that makes you an easy target ?

Rhino666

Thanks for the replies

I don't believe I am being specifically targeted as there have been three chargebacks in eight years, although two have occured in the last two weeks so maybe I am ?

I sell cats, front pipes and lambda sensors for cars. The buyer needs to put full details on my website including a car registration for a comprehensive part -> vehicle check that allows me to guarantee the part is correct before sending out.

If paypal and the card companies have no rules on the addresses matching ie. card billing address and paypal address, it wouldn't take a particularly intelligent fraudster to be successful at the sellers expense.

When I tried to purchase a laptop some years ago and get it delivered to a friends address, the transaction failed because the despatch address and billing address did not match.

Paypals addresses may typically not be confirmed but there surely must be some sort of link between the paypal address and card billing address. My registration number check is a deterent to fraudsters. Most websites do not have these checks. If it is possible to steal card details. register a paypal account and order goods with no need for the despatch/paypal address to match the card billing address, the fraudsters would surely rule the world ?

Is there anyone around that can give us all some informed advice in this matter as it appears we are all potentially vulnerable. If my costly experience - first chargeback three years ago cost me nearly £200, as well as stress, involving useless police, numerous emails, etc, etc, can possibly close these stupid loopholes then I will be happy.

cally6008

soolin wrote: »

I suspect the rules are different for merchant users, but as a single seller you are covered regardless of the address as long as the status in paypal is 'OK to send' and you use the address that paypal give you.

It might be worth trawling through all the small print to see whether the rules are different for those using paypal as a merchant service.

Would the seller be better off selling through Ebay instead of using their website ? Would they get better protection ?

unholyangel

cally6008 wrote: »

Would the seller be better off selling through Ebay instead of using their website ? Would they get better protection ?

Ebay is linked with paypal. I believe you need to offer paypal as a payment option when using ebay (at least i'm trusting what another MSE user said when saying this). And in short, paypal and ebay tend to favour the buyer.

It wouldnt really change anything if the details are being used fraudulently and if the buyers are just at it, nor would it change anything there.

There was a post recently in MSE forums about a guy who managed to have his ebay account under a different name and say he was from Ireland when he wasnt. Such a shame that people feel the need to scam others.

soolin

cally6008 wrote: »

Would the seller be better off selling through Ebay instead of using their website ? Would they get better protection ?

Unfortunately not, the seller would still have no seller protection if paypal warned him the address was not OK to send to. At least with a standalone site he could then refuse the payment and ask buyer to re pay using a different method or to verify the account and confirm the anti fraud measures paypal require and then re pay. If he sold on ebay he obviously could still ask all that but would be likely to get a negative and that would hurt a business.

So basically what I am saying in a very round about way OP is that if you get any more payments that state you are not eligible for seller prtection, then refuse the payment . That would put you in the same position as you were when you tried to buy a lap top, if buyer couldn't set up his paypal account to satify their anti fraud requirements don't sell to them.