Paypal scams?

ZAP

Someone offered me a very good deal with something I have been after and I am going to pay by Paypal. However, I am a little worried about getting scammed. If when I make the payment, the money is taken from the card, and something does happen to go wrong, then the CC company will surely refund the money, right?

Shiggaddi

Would this be in ebay perhaps?

If it's in ebay, then the paypal will record the reference to ebay in the transaction details.

If it's outside ebay, and a private transaction, get the person who you are paying to send an invoice, with a description of what you're paying, and details on postage etc. Don't just send an e-mail payment through paypal to the other person.

I recently got scammed on ebay, by someone who got promoted to a power seller, and got 100% feedback in about 150 buyers over 6 months.

Then suddenly he listed alot of 1 day, and 3 day multiple auctions items which I estimate about £10,000.

Then we all paid by paypal, and he did a runner with the money!!!!

I contacted my credit card company, Morgan Stanley, and reported this fraud. Morgan Stanley contact paypal, who can either reject, or defend the claim, but only with the help of the paypal member. If the member doesn't answer the claim, then paypal don't defend the claim, and stump up the money to Morgan Stanley, irrespective of whether it's recovered from the guy who has run off with all the money.

empfun

Hi Zap, there is no guarantee that your payment will be refunded though I had an experience a couple of months ago on eBay and the payment was made with Paypal and the goods weren't received. The power seller had out of the blue accumulated a string of negative feedback for non-contact and non-delivery. I was refunded by Paypal their maximum compensation but there was still over £200 which had not been recovered. With good advice from fellow MSEs I contacted my card company and with very slight deliberation was able to recoup the remainder.

With any transaction make sure that it's a legit one should you want any chance of a claim being granted should things go wrong. If you have doubts then it's probably best to avoid it.

user1234_2

ZAP wrote:

Someone offered me a very good deal with something I have been after and I am going to pay by Paypal. However, I am a little worried about getting scammed. If when I make the payment, the money is taken from the card, and something does happen to go wrong, then the CC company will surely refund the money, right?

Wrong. The CC is not legally obliged to refund the money because you are paying Paypal to supply you with an e-money service (you are not paying Paypal for the item you are buying). If things go wrong then you will have to reclaim your money from Paypal or your CC may offer a goodwill refund.

By chance there is an article on this in today's Sunday Times:

http://business.timesonline.co.uk/article/0,,8214-1806736,00.html

Shiggaddi

Yes, paypal and ebay offer some sort of protection, and state that you are protected, but when they offer "protection" it means they will only refund some of your money, if they can recover it from the other side.

Therefore it's no surprize that whenever I win anything on ebay, and pay with paypal, I have to go through so much settings to pay by credit card, instead of the default direct debit, and when I choose credit card, paypal say "Are you sure you want to pay by credit card, paying by bank account means you pay instantly just like cash"

It also means that should the seller do a runner, I have to go through paypal to recover the money minus their fee, but paying by credit card means that I can recover the money, and paypal stump up the whole lot in the event of fraud. It also means that I earn my 1% cashback, and don't have to pay until next month.

So, the only people that benefit from paying through the bank account, are paypal, as it also means they pay less in fees as well, even though they pass these on to the seller at the same rate, whether paid by credit card, or direct debit!!

Shiggaddi

My previous post was made before I had read the post by user1234.

A very interesting read, and bad news for ebayers. However, the paypal transaction usually includes what you've bought from ebay.

On my credit card statement, it lists my transaction as "paypal USERNAME" Therefore my claim is not against Paypal as a company, but the individual trader which is called "Paypal USERNAME"

Since the transaction is listed against a registered person or business who has been authorised to accept credit card payments where does one stand?

ZAP

Now i'm getting a little bit confused here!

Unfortunately (really?) I am not buying from eBay and am getting directly off a person.

It's good to see Empfun got his problems sorted out and what about you Shiggaddi? Did you end up getting it all back?

Has anyone else had any particular experience at getting scammed through Paypal? Would really appreciate the input!

frugglewump

The problem with relying on Paypal buyer protection is how long it takes to get sorted out. From my own experience:

Item arrives - it was an imported NTSC PS2 game & not possible to use on my system.
Complain to seller that auction said PAL format UK version
5 days later complain again
7 days from auction pass on complaint to paypal
You state your side, the seller has the option to reply within 10 days- but you don't get to see his reply
Paypal think about it for 15 days

The problem is that paypal can only refund what is in the paypal balance or connected bank account and as you can see the seller has plenty of time to remove all money and cut the account access. This is precisely what happened to me.

This was a legitimate eBay sale - I wouldn't use paypal outide ebay as I don't trust them to give a toss.

ZAP

Frugglewump, you didn't take it up with the CC company did you?

frugglewump

ZAP wrote:

Frugglewump, you didn't take it up with the CC company did you?

My payment to the seller all came from my Paypal balance so i couldn't take it up with anyone else.

When i was first starting out on eBay I read the usenet uk-based group (until 2004 when i got very bored with it) and people on there who funded their paypal payments through a credit card would get their full amounts back from the CC company about 75% of the time. The difficulties were usually in persuading the CC company that the transaction was their responsibility not paypal

Shiggaddi

I only contacted Morgan Stanley about it this week. I even told them, that it was an item from ebay, and I had made the transaction, and the seller had absconded, therefore my transaction was frauduelent. The item is showing against my online statement as "transaction disputed" so they have put the wheels in motion and have probably been in touch with paypal already to issue a chargeback.

I don't know how concerned paypal will be about it all. Under standard protection, they can issue a full refund, if the seller is a genuine trader, who has an unsatisfied customer, and funds are recovered from the seller. If funds are not recovered, then they ebay buyer protection kicks in, which isn't much really. I think it's up to £120 minus a £15 admin fee. Quite cheeky really, since this power seller that I had trouble with has made profits for ebay and paypal with all profits from ebay listings, and paypal fees from what were obviously satisfied customers.

I don't know how paypal respond to the credit card companies. Do they try and fob them off with "we can't recover the funds and we're not paying" or do paypal stump up the money anyway, especially if the seller doesn't put up a defence. It certainly explains why paypal prefer direct debit funding, instead of credit card funding.

How do paypal persue the matter further. Surely the funds have gone to a bank account, which would obviously be on paypal file. Surely it's a matter to get police intervention, for the bank to discolse who the account belongs to. Surely with modern technology, it might involve a little bit of work, if people can be bothered, but it's not impossible to trace where the money has gone, even if using a false name on paypal. Also being verified like I am with paypal, means that paypal would have their landline phone number on record, which again can be passed to the police, and which BT/NTL/Telewest would have a duty to discolse the bill payer if the police wanted to know.

If paypal can't be bothered to take any further action, except say "Let's just pay the credit card company, and offer our customers standard protection" then this will spiral out of control, and make ebay/paypal easy pickings for fraudsters. I think paypal should involve the police, and take legal action, including filing a bankruptcy petition, or a CCJ against the fraudster.

Such actions might be time consuming for paypal, but if they are seen to be cracking down on fraud, then it might deter some people such as the person who ripped me off, from trying it on in the first place!! Maybe some stronger warnings on their home page, and articles of previous convictions to state that they do not tolerate fraud would help!!