How do chargebacks work?

InsideInsurance

jimmyrambo wrote: »

But I dont get it? Im filing a chargeback against paypal who provide a service to transfer money from one person to another. They will be able to prove that. Why would they be responsible for whether I recieve the goods or not? There is no way I will receive anything, or anyway to prove I have, and on top of that, the scammer posted a fake tracking number!

You are forgetting the other key difference. S75 comes out of your banks pocket, initially at least. A chargeback comes out of the other sides' pocket and the banks are judge, jury and executioner on the matter.

S75 therefore gets hung up on the fact that PayPal have provided the service they said they would and so your bank is left carrying the can if they reimburse you.

Chargebacks dont because the bank gets their money so they are willing to do it. As the money thats claimed is actually PayPals money its then down to PayPal to decide who has to reimburse them, you or the end merchant. Their business process is to trigger their dispute resolution process and that team will determine who the wrongful party are and thus who should be made to pay.

Stageshoot

I had a situation where I bought a camera from a private seller via paypal for £3200,

It never arrived, I did a claim through paypal, paypal said the seller sent it recorded delivery!!!. (Recorded not Special. With no insurance) And provided a recorded delivery number and a copy of a signature that was not me or any of my family.

Paypal refused the claim saying the recorded delivery was enough proof.

I made a claim through myt credit card for non delivery. The Credit Card company accepted this and did a chargeback against paypal

Paypal still did not accept this and left my paypal account at -£3200, I have not been able to use paypal since. They left it in a loop saying account blocked until item returned to seller (How could I return item I did not have)

3 years later still like that and cannot use paypal.

Imagine you would end up in a similar situation.

jimmyrambo

I thought you couldnt do a chargeback if it was over £100?

All the Indian guy (from barclaycard) said on the phone was. "I see you haven't got your item, you arent going to recieve it, I will raise a chargeback under section 75 against paypal". So it can still be raised in these situations but it becomes ineffective if Paypal are the middle man?

And sorry to hear that Stageshoot, yes I am in a similar situation to you, although the scammer has done a runner. So Im not sure how they would prove I recieved the item...

Buzby

This is not new ground - what happens depends on your bank. If you seek a chargeback, then you go to PayPal under their disputes procedure. If they rule against you, that's an end to the matter.

If you then go to your bank to complain, they should (rightly) tell you they cannot intervene as the seller wasn't the person you paid - you went through an intermediary, so appeal through them.

However, some banks erroneously forget this and mistakenly process a reversal. If this happens, PayPal asks you to repay the amount taken and the debit balance shows on your account. You have 14 days approx to fund your account before it becomes limited.

If the payment is still not made, PayPal blocks access to your account, flags a default on your credit file and sends in the debt collectors, before finally selling of the debt to a third party collector.

eskbanker

jimmyrambo wrote: »

I thought you couldnt do a chargeback if it was over £100?

All the Indian guy (from barclaycard) said on the phone was. "I see you haven't got your item, you arent going to recieve it, I will raise a chargeback under section 75 against paypal". So it can still be raised in these situations but it becomes ineffective if Paypal are the middle man?

Probably worth reading up on the difference between the chargeback process (which isn't limited to £100 maximum) and the entirely different section 75 claim one (which has a £100 minimum), see the MSE articles at:
http://www.moneysavingexpert.com/shopping/visa-mastercard-chargeback
http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases

jimmyrambo

So they are jointly liable?

75. — (1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

I now see this on my CC statement:

7th Aug - Dispute Paypal - Imagination* - £500 CR
7th Aug - Dispute Paypal - Imagination* - £521 CR

Does this mean I've been temporarily reimbursed?

Im not spending a penny until I know this case has been resolved.

InsideInsurance

jimmyrambo wrote: »

So they are jointly liable?

75. — (1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

Yes, the credit provider and the company you pay.... as per the prior post the issue is that with an intermediary like PayPal and with travel agents etc you are not paying the seller of the goods/ hotel with the card but the middleman hence you cannot use S75 for the errors of the end party.

jimmyrambo

Its more clear now,

I can see this getting pretty nasty with Paypal. But at large, its looking like I will fail the S75 claim and have the huge sum of £1000 to pay back to my credit card + what ever sactions Paypal decide to use on my paypal account. Great :mad:

InsideInsurance

jimmyrambo wrote: »

Its more clear now,

I can see this getting pretty nasty with Paypal. But at large, its looking like I will fail the S75 claim and have the huge sum of £1000 to pay back to my credit card + what ever sactions Paypal decide to use on my paypal account. Great :mad:

If a chargeback happens then it basically becomes a PayPal dispute case. If the seller cannot prove that you got the goods then you will win the dispute and PayPal will recover the money from the seller.

Its just S75 thats blocked. Chargebacks are totally different.

glentoran99

jimmyrambo wrote: »

I want to know what happens when my credit card company raises a chargeback against paypal, after the seller has deleted their account? Let's say Mr Scammer has set up a fake paypal account, with fake bank details etc, does the chargeback then get filed against paypal themselves? Surely they are going to put up a fight if my credit card company wants money off Paypal and not the scammer!

Also, I was informed by my credit card company that they are raising the chargeback under section 75, which seems strange as Ive read everywhere that Paypal is not covered under this law?

If it's a fake bank account then they couldnt have got the money