PAYPAL warning

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Posted By: <b>Bobby Binder</b><p>Today PAYPAL reversed a charge on my account for almost $3000.00 on a transaction that happened on 12/5/06. I sold a card and was paid via PAYPAL and waited a week before shipping the item just to be safe. Well needless to say you would think that they would back their service but instead they debit my account today the $3000 and leave me no recourse to get the money or the item back from the original buyer. I thought using this service was a safe place to conduct business transactions. With this being the case then you are much better off only taking checks and cash because PAYPAL is not a safe bet.<br /><br />I have put in a complaint but don't know what else I can do to rectify the situation. I purposely keep a low balance just in case and don't know if I should pay them back or not. Should I close the accounts that are connected to that PAYPAL so they can not take the money with out my permission?<br /><br />TO ELABORATE:<br /><br />The seller did not complain PAYPAL determined over a month after the fact that it was a bad transaction. I have no idea if the seller used a stolen credit card or not. The complaint was not issued by the buyer and assuming through the PAYPAL fraud department.<br /><br />I updated to give more information..

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Posted By: <b>Anonymous</b><p>Can you give detail as to why the buyer wanted his $3,000 back? Thanks

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Posted By: <b>Judge Dred (Fred)</b><p>Did the buyer give any indication that they were going to return the item or were not satisfied with it?

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Posted By: <b>Tim Newcomb</b><p>Too many stories like this one: paypal seems to offer almost no protection for its sellers. They have a history of reversing charges for the flimsiest of reasons, and of refusing to reinstate them even when the seller has powerful evidence of delivery (like a USPS record of delivery confirmation). It SEEMS that all an unscrupulous buyer has to do is to claim he didn't receive the item. <br /><br />I hope I'm wrong about all this, and that Bobby will get his money back. But I think I'm accurately summarizing numerous experiences and complaints we've heard in the past. <br /><br />Regards,<br />Tim

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Posted By: <b>Bobby Binder</b><p>The seller did not complain PAYPAL determined over a month after the fact that it was a bad transaction. I have no idea if the seller used a stolen credit card or not. The complaint was not issued by the buyer and assuming through the PAYPAL fraud department.

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Posted By: <b>chris</b><p>Thanks for the extra info...it does sound like possible fraud and I'm not too sure what you can do.

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Posted By: <b>barrysloate</b><p>I would love to drop my paypal account, but I'm afraid it would negatively affect my ebay sales. Just too many problems- I've had funds tied up before, I got a bill last week from paypal for something I never bought (it was a scam) and their fees are too high. Bobby, I hope this works out but I think you will have some level of frustration ahead of you to deal with.

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Posted By: <b>leon</b><p>Bobby- Did they take the money from your paypal account or a bank account linked to it? I keep very little money in my paypal account for this very reason. But if they can go into a bank account tied to it then I will have to give thought if I really want to do paypal anymore...

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Posted By: <b>mark</b><p>If you don't have enough money in your account they will go to the reserve account which is a credit card or bank account. Paypal should be contacting you by phone if they had any kind of customer service. And of course we all get the fake Paypal emails, i just delete them and log on to my account thru the Paypal web site and see if there are any messages. Goodluck

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Posted By: <b>Tom Boblitt</b><p>I have my Paypal bank account linked to another account in my PNC....I feel like a mafia dude but if I have a bunch of money in paypal, I pull it to my Paypal account at the bank and then IMMEDIATELY move it to my normal checking account. They cannot hit that account through the other one.......just insurance for such riciculous b.s. from Paypal..........<br />

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Posted By: <b>Cobby33</b><p>Leon- I don't believe they have the authority to reach into your bank account/credit card (but reading all of the other posts, maybe they do???). Also, I NEVER leave a high balance in my Paypal account for that very reason. Frequent withdrawals are the way to go.

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Posted By: <b>DR</b><p>For this reason and several others, leaving funds in a Paypal account is risky. NEVER leave funds in a Paypal account (besides the fact the money market fund balance is uninsured)! I am curious if Paypal has the power to take funds from a linked bank account or credit card. Is this even legal or possible? <br /><br />My favorite payment method for large transactions is an e-check. For a $5 max fee, one can accept an unlimited amount. It is transfered directly from a checking account so a chargeback is not an option. Paypal could likely claim fraud on this type of transaction but credit card fraud is much more prevalent.<br /><br />Shipping with signature confirmation (online delivery confirmation including a signature) for transactions over $250 - $400 is VERY important. This would prevent most chargebacks. However, anything is possible with eBay. One day (hopefully soon), the DOJ or states AGs are going to have a field day w/ eBay.<br /><br /><a href="http://www.paypalsucks.com" target="_new" rel="nofollow">http://www.paypalsucks.com</a> (horror stories)

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Posted By: <b>Bobby Binder</b><p>Leon,<br /><br />Right now on PAYPAL it shows a negative balance with a link that says "Restore account Balance" they want me to go in and authorize the funds transfer. I just got an email from them in regards to my complaint and the usual 5 business days to review.<br /><br />I don't know if they will take the money out of my account with out my authorization. I hope not because they should be liable for the loss not me. At least that is my thinking for over a month they say it is a good transaction and now they say no. Does not seem right to me if it was a couple of dollars I would not care but for $3K is a different story.

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Posted By: <b>chris</b><p>Bobby,<br /><br />Out of curiosity, what kind of feedback did the "buyer" have?

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Posted By: <b>Bobby Binder</b><p>The buyer had 13 positive transactions all buys that where large amounts. With PAYPAL taking more then a month to act the buyer could of made a number of buys and gotten the positive feedbacks. But now the person is no longer on eBay.

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Posted By: <b>leon</b><p>Your email is bouncing...I think it's on my end (maybe)...can you give me a call please.... 972-774-7032 or send me your number to lluckey@moredirect.com<br /><br />thanks

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Posted By: <b>B.C.Daniels</b><p>post the item here!<br />and the buyer so we can keep an eye out?<br /><br />BcD <img src="/images/happy.gif" height=14 width=14><br /><br />also:<br /><br /><br /><a href="http://www.paypalsucks.com/" target="_new" rel="nofollow">http://www.paypalsucks.com/</a>

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Posted By: <b>warshawlaw</b><p>Sounds like there was a problem with the credit card. If so, Paypal will hammer you for it. One of the risks of accepting credit card payments from people is their ability to charge back. My understanding is that paypal will just hammer the seller for a chargeback from a CC issuer. I will NEVER take paypal as a seller.

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Posted By: <b>Dave</b><p>I didnt think paypal could remove any money without a dispute being opened on an item? And if it was because the buyer had a bad credit card or whatever, I still didnt think the seller would be out that money....hmm

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Posted By: <b>Denny Walsh</b><p>Great Topic! I am in the same position as Bobby, and have beem for some time now. 2 transactions from ebayers, whom I'm not sure I want to "let out of the bag", just yet. I am in the process for the long haul and Paypal & ebay make it very difficult, to say the least. <br /><br />Leon & All, <br /> Paypal cannot take any funds out of any account unless you give them permission. This is the law! What I mean is, they can take fees that you set up with them to withdraw from your bank or Credit Card Acc. only if you gave them permission to. They just can't take $$$.$$ out because your account with them is in the Negative. Even if they decided to do it because they don't card about the law, you can always go back thru that institution with they "Illegally withdrew the funds", & recoupe it that way. <br /> My account is presently -$140.00, because an ebayer decided to crack out an SGC40 card that I sold him, and then he said he didn't want the card. At the time I didn't know this though. After he bugged me a bit, I told him to send it back and I would refund his money. When I got the card back, He sent it back Uninsured, Knuklehead! He switched the card with the same card but it was a "1" at best, & then put it back in the holder. Wanting me to believe that it happened in the post.<br /> No Insurance, with a Delivery Confirmation #, Paypal refunded his money from my account balance. So, He got the good card and My $340.00! <br /> The other transaction is way to long to lay out, But I will be Closeing My Account with Paypal very soon!<br /> I needed to get this off my heart and into the 54 Family!<br /><br />"THANKS BOBBY, FUR DA THREAD" <br /><br />Denny Walsh

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Posted By: <b>Fred Y</b><p>AMAZING!!<br /><br />I have been Selling on EBay for almost 6 yrs w/out using PayPal & have done very well! The "horror stories" have kept me away from it.<br /><br />Just this week I was ready to cave in--cleared a 2nd cking acct to be ready to sign up --and now THIS!!<br /><br />I have just postponed my intended action!

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Posted By: <b>Jason Duncan</b><p>I had used paypal in years past with no problems. I do not accept it anymore. I dont want the risk. I take checks and MOs only I do not have problems. My auctions seems to do well regardless. <br /><br /><br />Jason<br /><br />

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Posted By: <b>Mark Burke</b><p>I only buy cards on ebay and I buy quite a large number. I like the convenience of Paypal but it does not stop me from sending sellers checks. It is slightly more of a hassle but definitely not a deal killer. I thought Paypal was a safer way to pay than checks. Anyway, sounds like it isn't. But, my point is the only real deal killer for me besides a rating below 99 is the dreaded MO only seller. Sounds like in your case the buyer had the funds tied to a fraudulent credit card and the credit card company got their money back from PayPal and you got left holding the bag.

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Posted By: <b>Bobby Binder</b><p>I have had stores where we take credit cards and when they give you the approval then the transaction is good. Anything after they take the hit since they verified the card as being good. Same should go for PAYPAL they processed the card not me and gave me the money from the deal and took their cut. They are the ones who told me that the money was now mine and it was a go to ship the product. I feel they are responsible for the money not me. The only way I can see a charge back is if the customer is not satisfied and wants to return the product but all else PAYPAL should be held accountable.

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Posted By: <b>Jason Duncan</b><p>I smell a lawsuit. Definitely do not pay back the account.<br /><br /><br /><br />

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Posted By: <b>Mark Burke</b><p>Receipt of Payments; Risk of Reversal of Transactions; Collection of Funds you owe PayPal. When you receive a payment through the Service, unless you follow the steps necessary to qualify for our Seller Protection Policy described in Part VII of this User Agreement, you are not protected against a subsequent reversal of the transaction. In the event that the sender's transaction is reversed for any reason and you do not qualify for the Seller Protection Policy for that transaction, you will owe PayPal for the amount of the reversed transaction plus any fees imposed on PayPal as a result of the reversal. Examples of such a reversal include, but are not limited to, a credit card reversal by the sender of the payment, and a reversal of the transaction because the sender of the payment was using a stolen credit card or unauthorized bank account. PayPal will seek to recover the funds from you by debiting your PayPal balance and, if there are not sufficient funds in your PayPal balance, PayPal reserves the right to collect your debt to PayPal by any other legal means. If you open a Premier or Business Account after October 11, 2001, you authorize PayPal to debit your bank account linked to that PayPal account for the amount that you owe PayPal on transactions which were not covered by the Seller Protection Policy and which were not recoverable from your PayPal balance.<br /><br />further down....<br /><br />General. PayPal agrees to indemnify sellers of physical goods from reversal liability resulting from a buyer's unauthorized use of a credit card and/or false claims of non-shipment of goods. This protection applies only to the sale of physical goods, and not to any non-tangible, non-physical goods or services pursuant to section 1 above. It applies to up to $5,000.00 USD per year of payments received by the seller through PayPal if the following conditions are met:<br /><br /><br />The seller has a U.S. Verified Business or a U.S. Verified Premier Account or a Canadian Verified Business or Canadian Verified Premier Account. Note: While non-U.S. sellers outside of Canada may have a status of Non-U.S. Verified, they do not qualify for and are not protected by the Seller Protection Policy and therefore may be responsible for any reversals made due to fraudulent funds <br />The seller ships to the buyer's Confirmed Address. <br />The seller can provide reasonable proof-of-shipment which can be tracked online. This documentation must show that you shipped to the Confirmed Address. (Most U.S. carrier companies offer this service, including the U.S. Postal Service.) For transactions $500.00 USD or more in value that are initiated between November 15, 2001 and April 19, 2002, and for transactions $250.00 USD or more in value that are initiated on or after April 19, 2002, the seller also needs to provide an online proof-of-receipt in the form of a signature from the recipient. Because comparable proof-of-shipment is not currently available for electronically-delivered items, we are currently unable to offer Seller Protection for digital goods and other electronically-delivered items. <br />The seller accepted a single payment from only one PayPal account for the purchase. (Multiple payments from different accounts for a single item are a fraud indicator. Sellers should not accept such payments.) <br />The seller ships to a domestic (U.S.) buyer at a U.S. address. <br />The seller cooperates in resolving disputes by responding in the following time periods: When a complaint occurs, the seller must provide complete information within 7 days of a request from PayPal. However, if PayPal is required by the credit card association to respond immediately to resolve a reversal, sellers must provide the information within 3 days. PayPal will indicate the response time required in the e-mail message sent to the seller. <br />The seller ships within 7 days of receiving payment. <br />If you do not qualify for the Seller Protection Policy. When you receive funds through PayPal, if the sender's transaction is reversed for any reason and you do not qualify for the Seller Protection Policy for that transaction, you will owe PayPal for the amount of the reversed transaction plus any fees imposed on PayPal as a result of the reversal. You agree to reimburse PayPal from either your PayPal account or by other means as described in Section IV.2 under "Receipt of Payments." <br />

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Posted By: <b>Frank Evanov</b><p>They cannot touch your bank account. Unfortunately, if anyone else pays you with Paypal, that money is taken from you.<br /><br />Paypal offers sellers very little protection. Chargebacks should be handled by the original CC company, not the seller.<br><br>Frank

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Posted By: <b>JK</b><p>This langauage taken from above would indicate that they can debit your bank account.<br /><br />"If you open a Premier or Business Account after October 11, 2001, you authorize PayPal to debit your bank account linked to that PayPal account for the amount that you owe PayPal on transactions which were not covered by the Seller Protection Policy and which were not recoverable from your PayPal balance."<br />

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Posted By: <b>Mark Burke</b><p>good, if not great reason NOT to accept Paypal unless you are covered by the seller protection policy.

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Posted By: <b>fkw</b><p>On eBay I only accept PayPal for small orders (usually under $100) unless I know the buyer. Another way is to only accept PayPal where the funds are from a PayPal balance or a checking account (no credit cards).<br /><br />I got nailed on a $1000 chargeback about 6-7 years ago by another company that was similar to PayPal (forgot the name, but I think eBay owned it at the time). Evere since then Ive been jumpy about taking credit card payments from winners I dont know, especially one with low feedback.<br /><br />When buying PayPal is all good, at least for me it is.

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Posted By: <b>Adam J. Baxter</b><p>Sorry to hear about your situation Bobby. <br /><br />I found myself in a similar fiasco a short while back over a book I sold on Ebay. The seller paid and I sent the book. After he received it we corresponded by email a few times about it (he had been looking for a copy for some time) and all seemed well. About six weeks later I get this message from Paypal saying that he had not received the merchandise and blah, blah, blah. I provided Paypal with scans of the postal receipt, E-mails, and an insurance receipt. As it turned out, I would have been better off flushing all of my evidence down the crapper. Paypal debited the monet from my checking account with little of no explanation as to their findings or the other guys claims. It wasn't alot of money ($30.00) as I recall, but their idea of an investigation is b.s.

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Posted By: <b>anthony</b><p>cobby and frank are correct unless the law has changed...this happened to me before as well, i removed all my dough and they put a freeze on my paypal account...so i closed it and opened up another a few months later under a new email, bank acct, and credit card...i hate them as well but use them on smaller transactions when i sell and all the time to buy....<br /><br />dont pay them $3000 or $3...they are wrong!

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Posted By: <b>T E</b><p>Sorry to hear about this horror, Bobby. You may have written details already above in this thread, haven't had enough sleep so maybe I missed it, but were you shipping to a confirmed address? Did you get Signature Confirmation? <br /><br />I use paypal, I'm a second level power seller, been doing this since early 01. I only accept payments from confirmed shipping addresses. 90% of my money comes through paypal. I was ripped off once, I did not have delivery confirmation on the order (I had insured it and stupidly thought that was enough), so paypal took buyer's side in claim.