I 'owe' Paypal £5,000, any advice?

[Deleted User]

Shembler wrote: »

Hi all. First time posting here.

I sold some bitcoin a few weeks ago and the guy I sold to paid via Paypal. £5,000 in total.
The trade went through and everything was great until a few weeks later when I was told by paypal that the payment was unauthorised and that they were refunding the buyer.
They also decided that this meant that I owe Paypal £5,000.

If the payment was fraudulent in the first place. If the account it came from was hacked, I'd have thought that was Paypal's issue to deal with. Passing on the debt to me seems like a stretch.
The money is currently sitting in my bank account, and my Paypal account is sitting at -£5,000

I've been getting frequent calls and threats that they'll sell off the debt to a collection agency.

I saw some situations similar to this by searching around, and the consensus seemed to be that you can fairly safely ignore all this. Is this still the case? any advice on how to deal with this?
I'm not exactly in my comfort zone in dealing with this.

Thanks for any advice!

I've been getting frequent calls and threats that they'll sell off the debt to a collection agency.

That's not a threat, it's a statement of intent. They're not going to just write that off.

I'm not exactly in my comfort zone in dealing with this.

The horse has already bolted but with hindsight you shouldn't have got involved with Bitcoin in the first place then.


Edit: You need to pay the £5,000 back to Paypal, it's not yours to keep.

Jumblebumble

kazwookie wrote: »

£5K by paypal, it has scam written all over it.

For untraceable bitcoins
What could possibly go wrong?

soolin

Mr_Singleton wrote: »

Was the hacked account holder negligent? Would be a nice little scam if account holder had a 'mate'. Seems odd that you can spend £5k just like that..... then again PayPal no doubt covers itself within the T&C's

Obviously no one here is suggesting OP is a scammer, but this does raise an interesting point.

I frequent a lot of strange forums and groups and sometimes accidentally stumble across some that make me want to give up my entire ebay business and only ever deal in face to face cash in a bank in future!

This sort of scam is often suggested as a quick way to raise a bit of dodgy money, in the past, before it got removed, we've even had 'hypothetical' questions raised on here about whether a seller could get away with pretending to sell something to a mate who then does a fraudulent charge back and then both disappear.

The biggest flaw in this as a scam is that the recipient account needs to be verified otherwise funds would be held- giving the hacked owner time to stop the transaction. If the recipient account is genuine and verified then paypal know their address, bank details etc and whilst they can't just help themselves from the bank (assuming the DD is cancelled) they can use debt collectors to harass as far as they can legally- and in the past paypal have been fined for using Debt collectors whose means were not always entirely legal/

Blackbeard_of_Perranporth

Shembler wrote: »

Hi all. First time posting here.

I sold some bitcoin a few weeks ago and the guy I sold to paid via Paypal. £5,000 in total.
The trade went through and everything was great until a few weeks later when I was told by paypal that the payment was unauthorised and that they were refunding the buyer.
They also decided that this meant that I owe Paypal £5,000.

If the payment was fraudulent in the first place. If the account it came from was hacked, I'd have thought that was Paypal's issue to deal with. Passing on the debt to me seems like a stretch.
The money is currently sitting in my bank account, and my Paypal account is sitting at -£5,000

I've been getting frequent calls and threats that they'll sell off the debt to a collection agency.

I saw some situations similar to this by searching around, and the consensus seemed to be that you can fairly safely ignore all this. Is this still the case? any advice on how to deal with this?
I'm not exactly in my comfort zone in dealing with this.

Thanks for any advice!

That get rich scam did not come off then!

steampowered

To advise we would need a lot more details as to exactly what happened and exactly what Paypal said in their communications.

The details are very important in a situation like this. Your Op is a bit too vague for people to provide meaningful advice.

soolin

steampowered wrote: »

To advise we would need a lot more details as to exactly what happened and exactly what Paypal said in their communications.

The details are very important in a situation like this. Your Op is a bit too vague for people to provide meaningful advice.

What other info is needed?

An unauthorised payment /fraudulent payment requires proof of posting to the PayPal address that PayPal say is 'OK to send to'. If OP has proof of tangible goods posted in line with the seller protection policy he can defend the claim easily, if this was for digital goods then OP has no seller protection.

Paul_DNAP

Shembler wrote: »

I 'owe' Paypal £5,000, any advice?UOTE]


Yep - call the police, someone has stolen all your bitcoin using the classic getting you to use paypal and then reversing the transaction after delivery scam.

Shembler

Cheers for all the advice guys. It's not exactly looking great from my end.

I guess the frustration comes from the fact that I'm paying to cover PayPal's inept security. As someone said above, it would be incredibly convenient if someone were to just cycle PayPal chargebacks like this and let PayPal foot the bill, so I can see why PP have the policy that they do.

I've got proof of the transaction, and I've put in a complaint with the FOS, but looking into it, seems I was way outside of PayPals terms of service anyway.

Based on all that I figure I've been completely strung up, not much hope. I don't much fancy my chances in court and I've still got the money.

I'll just chalk it up as a very expensive lesson against selling via PayPal.

Hermione_Granger

Shembler wrote: »

I guess the frustration comes from the fact that I'm paying to cover PayPal's inept security.

No you are not.
You are paying because you did not read or did not follow Paypal's terms and conditions regarding their seller protection policy.
If you had, you would have know that intangible items and currency conversions are not covered by this protection.

It's not exactly hidden in their T&C's so why not take a bit of personal responsibility and stop trying to blame Paypal for doing exactly what they stated that they would do.

shaun_from_Africa

I just can't understand why someone would sell what is a very high value, untraceable and high risk item such as Bitcoin to an unknown person and accept payment in such a way as to offer them zero protection should it turn out to be a scam.

It only takes a seconds to look at Paypal's protection policies to discover what is and isn't covered.

I've never heard of Paypal actually taking someone to court to recover money but IMO, it's only a matter of time before they do and for £5000, this could be that time.