PayPal Chargeback

Mtrott71565

Hi everyone. Apols in advance for a long post. Any help would be massively appreciated. 

So I’ve been trying to make a bit of money on the side selling goods on FB marketplace. 

A guy I spoke to last month bought a product for an agreed price and used PayPal as his method of payment. He transferred the money by pay pal, I sent him the goods and I used a website called parcel2go which very helpfully includes tracking information showing it has been delivered. I also paid the option to get a signature upon delivery but I have yet to see evidence of this. 

So about 20 days after he received the item, and after me having transferred the money from PayPal to my bank account, I get an email off PayPal saying he has disputed the transaction saying it wasn’t authorised. Note- in the emails they refer to him as ‘the buyer’, hence perhaps showing that they somehow knew or suspected this was a business transaction (this detail is quite important as you will soon see). The email says words to the effect of ‘send us the tracking information and any other proof.’ Not a problem I send screenshots of the conversation agreeing the sale and proof of postage. 

I then get an email saying that whilst they dispute the chargeback with his credit card company my account is now in debit (they’ve passed the charge on to me suggesting it appears he may have successfully got his money back from his financial institution.). Again I’m not too worried I’ve clearly got proof he agreed to buy it and I posted it to him.

I then ask a question on the community about what can I do to win the dispute (no other forms of contact available at the time) A responder who according to the forum is a super adviser responds by saying that in order for the transaction to meet seller protection, it needs To fulfill  PP’s seller protection agreement. One of which is that any transaction made under the ‘friends and family’ functionality is not eligible. 
PP’s interface is actually quite poor and it really wasn’t clear at the time if he made the payment using this functionality - I also cannot find out now if he did or not, it just simply doesn’t show what type of transaction it is- only he sent the money.  The reply to my community post also stated they I had to have sent it to his registered PayPal address to meet PP’s selling conditions, which isn’t shown on PayPal either. 

So I have responded to this dispute and await their reply but if the community response is anything to go by it doesn’t look good. My questions are: 

- Does anyone know if PayPal automatically takes money out of a linked bank account if you are in debit (this would be a disaster as the item was expensive and I don’t have the money to do this). If they do not, I will complain on the grounds I have legitimately sold something and I will do anything I can to avoid paying the money as I feel this situation is very unjust. 

- if it is me that ends up footing the bill for this, as far as I’m concerned, I have acted in good faith and may have been hoodwinked by quite a sophisticated scam and also by PayPals terms of service. But essentially a sale has been agreed and I have provided the goods. So, under consumer law is there some sort of ombudsman I can go to to try to somehow win this case or get the balance restored to 0?

- finally, will PayPal’s negative balance end up showing on my credit file? If not, my inclination is just to fight tooth and nail to dispute the case and ultimately if I lose I still feel strongly inclined not to pay them it I don’t have to. 

Apols for the long post. TIA to any responses. 

F1shyFingers

Mtrott71565 said:

- Does anyone know if PayPal automatically takes money out of a linked bank account if you are in debit (this would be a disaster as the item was expensive and I don’t have the money to do this). If they do not, I will complain on the grounds I have legitimately sold something and I will do anything I can to avoid paying the money as I feel this situation is very unjust. 

Yes, if the account goes negative they're going to take the money from any registered payment methods you have if you lose the claim.

- if it is me that ends up footing the bill for this, as far as I’m concerned, I have acted in good faith and may have been hoodwinked by quite a sophisticated scam and also by PayPals terms of service. But essentially a sale has been agreed and I have provided the goods. So, under consumer law is there some sort of ombudsman I can go to to try to somehow win this case or get the balance restored to 0?

If you've been hoodwinked then it is your problem and it's not a sophisticated scam.  It's a simple scam reliant on a very naive PayPal user.  The FOS will not rule in your favour here so in essence no, there is no-one you can go running to.  You can, however, sue the miscreant who scammed you, although I suspect they either don't exist for the account was hijacked.

- finally, will PayPal’s negative balance end up showing on my credit file? If not, my inclination is just to fight tooth and nail to dispute the case and ultimately if I lose I still feel strongly inclined not to pay them it I don’t have to. 

Apols for the long post. TIA to any responses. 

Only credit agreements show on your credit file so unless they take you to court and obtain a CCJ, and you fail to pay it within 30 days it will not appear on your credit file.  You will most likely get hounded by a DCA regarding the debt until the end of time, however.

I think you're putting the cart before the horse here.  Unless PayPal has told you they've made a decision, the negative balance is them putting a hold on the funds, nothing more.  If you have electronic proof of posting, a chargeback will fail.

Mtrott71565

I sincerely hope the chargeback fails. If he is trying to scam me how would a chargeback work? Is it possible you can buy products/transfer money and then simply claim it wasn’t you who authorised the transaction? I’m pretty amazed if that’s the case, or will he have to provide proof to his creditor that he did not authorise the transaction (don’t know how you would prove this) also, will PayPal communicate the proof I have sent them of the postage/sale to his creditor? 

born_again

The danger "The Buyer" faces here. Is when PayPal send the information back to the bank contesting the chargeback. Is that the bank could take a very dim view of the customer lying to them.
Ultimately they can & will close accounts. As it is breach of trust.

Sandtree

Welcome to the world of business!

If its a F&F payment you can generally tell because of the lack of fees, if a PP fee was taken then it certainly wasn't F&F. The fact PP is calling them a buyer suggests its not F&F but PP can be lax in their language 

Mtrott71565 said:

- if it is me that ends up footing the bill for this, as far as I’m concerned, I have acted in good faith and may have been hoodwinked by quite a sophisticated scam and also by PayPals terms of service. But essentially a sale has been agreed and I have provided the goods. So, under consumer law is there some sort of ombudsman I can go to to try to somehow win this case or get the balance restored to 0?

Ombudsman are there to protect consumers from big nasty businesses, not businesses from underhanded consumers. As soon as you decide to attempt to sell for profit you are a business and as such considered not to need the level of protection as Joe Public has. 

Like any business you've got to decide if you lose the PP case if its worth pursuing the buyer for the costs or write it off as a loss. Its always a roll of the dice if the person just genuinely didn't tie up what's showing on their bank statement with the purchase they made from you and so its a mistake or if its a basic con and the name/address etc are all fake in which case a court case will just be a waste of money. 

Mtrott71565

Thank you. My issue is that PayPal does not make it clear if the payment is F and F or not - even now it doesn’t say on the transaction details that he used F and F.  I did think it was strange that there was no fee. 

Sandtree

Mtrott71565 said:

Thank you. My issue is that PayPal does not make it clear if the payment is F and F or not - even now it doesn’t say on the transaction details that he used F and F.  I did think it was strange that there was no fee. 

Well normally you would send them a request for the payment via PP at which point they get no choice but to pay it as a normal payment. If you go into a payment (by clicking the name) however it does show its type:

Payment type: Friends and family
or
Payment type: Goods and Services

There are also no fees if they pay from funds already held in their account. 

bris

Botton line is Paypal will decide and there is nothing you can do about it other than hope it's in your favour.

If not then you will need to either pay it back to keep your account, or remove any funds from whereever they can take it back from.

This will close your account but they will never take you to court for it. You will get letters and threats but they eventually stop.

If it was F and F then there is no protection to rely on.

Mtrott71565

bris said:

Botton line is Paypal will decide and there is nothing you can do about it other than hope it's in your favour.

If not then you will need to either pay it back to keep your account, or remove any funds from whereever they can take it back from.

This will close your account but they will never take you to court for it. You will get letters and threats but they eventually stop.

If it was F and F then there is no protection to rely on.

Thanks, problem is I have multiple bank accounts registered with them. 

born_again

Mtrott71565 said:

Thank you. My issue is that PayPal does not make it clear if the payment is F and F or not - even now it doesn’t say on the transaction details that he used F and F.  I did think it was strange that there was no fee. 

Well you would know if it's F&F.

If you send the customer a invoice to pay, its not F&F.
If you ask them to send payment via F&F to your email address... Thus avoiding charges to you, it is.

As a seller it is your responsibility to send a invoice. Simply asking for payment to a email via F&F (you would have to ask for this method) is putting you in danger of having your account closed. Especially given what you had told PayPal as it is deliberate avoiding their charges.

As to a signature on delivery. No courier has taken these since Covid lockdown. Best you will get is a picture of parcel on doorstep.

Olinda99

when a payment is f&f, you receive the full amount - that is how you tell. For f&f,, the buyer has no paypal protection, but they can always of course go to the underlying card and attempt a chargeback. The charheback should fail - unless of course their paypal account had been hacked and it was indeed a fraudulent transaction. In this case, you would be a victim of crime and have to suffer the loss like any other victim of crime.