Can you be defrauded by a buyer using Paypal?

[KLP 92]

Short answer is YES!!

I have stopped accepting paypal due to the recent increase in fraud.

I sold a TV 3 months ago, received payment and shipped the item to an unverified address. I received positive feedback from the buyer. 2 weeks ago i received an email stating that the credit card transaction was unauthorised by the owner and hence paypal have taken the funds from my account Basically as far as they are concerned thats the end of it! I have reported the matter to the police but its just a headache.

Second scenerio was i sold a set of wheels. I described them as being fully refurbed with a polished metal lip. 40 days after the sale the chap does a chargeback stating the wheels were misdescribed and the lips weren't lacquered! Paypal go ahead and issue the buyer a refund. I now have a used set of wheels returned to me.

I personally think Paypal are a fraud. In all my years of using them i have made 7 chargebacks due to non receipt. Out of these they did not on any occasion refund me anythig close to the actual amount. I spoke to one of the chaps i did the chargeback to, he claimed that paypal took the full sum of £320 out of his account, but i've only recieved £105! Something definately fishy going on.

And lastly they have the worst customer service known to mankind. Don't ever bother ringing them, its a waste of time.

 

[big x]

Short answer is YES!!

I have stopped accepting paypal due to the recent increase in fraud.

I sold a TV 3 months ago, received payment and shipped the item to an unverified address. I received positive feedback from the buyer. 2 weeks ago i received an email stating that the credit card transaction was unauthorised by the owner and hence paypal have taken the funds from my account Basically as far as they are concerned thats the end of it! I have reported the matter to the police but its just a headache.

Second scenerio was i sold a set of wheels. I described them as being fully refurbed with a polished metal lip. 40 days after the sale the chap does a chargeback stating the wheels were misdescribed and the lips weren't lacquered! Paypal go ahead and issue the buyer a refund. I now have a used set of wheels returned to me.

I personally think Paypal are a fraud. In all my years of using them i have made 7 chargebacks due to non receipt. Out of these they did not on any occasion refund me anythig close to the actual amount. I spoke to one of the chaps i did the chargeback to, he claimed that paypal took the full sum of £320 out of his account, but i've only recieved £105! Something definately fishy going on.

And lastly they have the worst customer service known to mankind. Don't ever bother ringing them, its a waste of time.

As I said always clear funds from your Paypal account ! With the TV you would not of lost out. Shipping to an unverfied address is nuts, you loose sellers protection rights.
You mention chargebacks... if this is applicable to credit cards it's something out of Paypals hands.I've done one chargeback via the card provider and received the whole sum.If the dispite is going through Paypal the wheel experience shows Paypal do provide buyer protection even if in this case the buyer was pushing his luck and telling porkies.

adam

 

[masqueraid]

Steve there's enough information in what you've posted to look at the account.

My gut feeling is you would be OK, you seem to have sold the 'phone to a student or newly qualified teacher. If you want to double check why not email your concern to the last person she bought something from (see feedback) they might help reassure you that they are a genuine customer.

The other issue is that you're being paid by e-cheque. This is a direct fund transfer from a bank current account. They take a while to clear & you shouldn't assume anything until Paypal notify you the money is in your account, but this kind of transaction is far less prone to the kind of fraud described above.

Hope this helps

 

[big x]

There is a way - you can just open a basic account with them.

If someone tries to pay with a credit card into a basic account Paypal will take their money and offer it to you if you upgrade your account (so they can add a handling fee) but you can simply refuse to do this and accept payments from a cash balance only. If you reject the payment Paypal refund the buyer's credit card account after a few days.

If you have a premium account credit card payments are automatically accepted into it.

Just make it clear that you don't accept Paypal payments made via a credit card in your auction details.

I've found selling prices are lower if you don't have the Paypal logo on display with the credit card names.Depends on volume I suppose but for me the additional revenue far outweighed card risk when I was selling watches internationally.

adam

 

[i_york]

Steve,

I've traded on eBay using PayPal both in the States and here in the UK for several years. I've been both a buyer and a seller (trading pro camera gear), so consider myself to be pretty experienced in the foibles of PayPal transactions. So, here's my 2 penneth worth...

1. PayPal, despite its shortcomings, offers a level of protection to both buyer and seller. It's also an instant, no hassle method of payment. For these reasons, I prefer PayPal over every other payment method and will only purchase items via PayPal for the chargeback rights I have by using a credit card to fund the purchase.

2. Despite what some sellers claim who don't take PayPal (which rings alarm bells with me as a prospective buyer anyway) and despite what has been mentioned in this thread, PayPal's charges are NOT high! They charge 3.4% + 20p per transaction. That's not a lot to pay for immediate payment and to be saved the hassle of going down to the bank, paying-in a cheque, waiting for it to clear, etc. In fact, PayPal's rates are comparable to those charged for traditional merchant accounts for businesses wanting to accept credit card payments.

2. NEVER ship to an unconfirmed address. If the buyer supplied an unconfirmed address, it means PayPal have not verified that the address provided is the billing address for the credit card being used by the buyer. It could be that the buyer simply hasn't completed the process to confirm his address, but it could also be that the credit card is stolen. If the card IS stolen, you can be certain that the person the credit card belongs to will issue a chargeback when they see something they didn't purchase on their statement. This will leave you out of pocket with no recourse. Because of this, PayPal does not offer Seller Protection if you ship to an unconfirmed address, so, even if you have proof of delivery, PayPal will not be interested in fighting your case.

In this case, because the buyer has provided an unconfirmed address, I would ask them to pay by another method (one which cannot be reversed). Ask them to pay by bank transfer, cheque or bank draft. All these methods take a bit longer for the money to clear, but once the money has cleared into your account, you're 100% safe. Whatever you do, ALWAYS use a delivery method that provides proof of delivery. Never send anything by regular letter post, as there's absolutely no way you can prove the buyer has received the item, or not.

Cheers,
Ian.

 

[i_york]

I personally think Paypal are a fraud. In all my years of using them i have made 7 chargebacks due to non receipt. Out of these they did not on any occasion refund me anythig close to the actual amount. I spoke to one of the chaps i did the chargeback to, he claimed that paypal took the full sum of £320 out of his account, but i've only recieved £105! Something definately fishy going on.

In these cases, you should either go directly to your card issuer and ask them to issue a chargeback to recover your money, or goto PayPal, get the £105 max limit, then goto your card issuer and get them to chargeback the remainder. Having said this, some card issuers (not all) aren't keen on issuing chargebacks to PayPal because PayPal are just a proxy in any transaction. At the end of the day, PayPal's responsiblity as a payment processor starts and ends with the transfer of money between the buyer and the seller. With this in mind, they're not to blame, per se, for what happens between the buyer and the seller regarding the actual goods. To be as safe as possible, confirm with your card issuer that they will chargeback the full value of transactions with PayPal in the event of non-delivery, etc before proceeding with a large transaction. Alternatively, only ever purchase goods up to the value of £105 using PayPal to ensure you're covered for the full purchase amount under the terms of the Buyer Protection Policy.

Cheers,
Ian.

 

[big x]

Steve,

I've traded on eBay using PayPal both in the States and here in the UK for several years. I've been both a buyer and a seller (trading pro camera gear), so consider myself to be pretty experienced in the foibles of PayPal transactions. So, here's my 2 penneth worth...

1. PayPal, despite its shortcomings, offers a level of protection to both buyer and seller. It's also an instant, no hassle method of payment. For these reasons, I prefer PayPal over every other payment method and will only purchase items via PayPal for the chargeback rights I have by using a credit card to fund the purchase.

2. Despite what some sellers claim who don't take PayPal (which rings alarm bells with me as a prospective buyer anyway) and despite what has been mentioned in this thread, PayPal's charges are NOT high! They charge 3.4% + 20p per transaction. That's not a lot to pay for immediate payment and to be saved the hassle of going down to the bank, paying-in a cheque, waiting for it to clear, etc. In fact, PayPal's rates are comparable to those charged for traditional merchant accounts for businesses wanting to accept credit card payments.

2. NEVER ship to an unconfirmed address. If the buyer supplied an unconfirmed address, it means PayPal have not verified that the address provided is the billing address for the credit card being used by the buyer. It could be that the buyer simply hasn't completed the process to confirm his address, but it could also be that the credit card is stolen. If the card IS stolen, you can be certain that the person the credit card belongs to will issue a chargeback when they see something they didn't purchase on their statement. This will leave you out of pocket with no recourse. Because of this, PayPal does not offer Seller Protection if you ship to an unconfirmed address, so, even if you have proof of delivery, PayPal will not be interested in fighting your case.

In this case, because the buyer has provided an unconfirmed address, I would ask them to pay by another method (one which cannot be reversed). Ask them to pay by bank transfer, cheque or bank draft. All these methods take a bit longer for the money to clear, but once the money has cleared into your account, you're 100% safe. Whatever you do, ALWAYS use a delivery method that provides proof of delivery. Never send anything by regular letter post, as there's absolutely no way you can prove the buyer has received the item, or not.

Cheers,
Ian.

Your right and the Paypal the Seller Protection Policy covers up to £3,250.00 GBP per year and buyers protection up to a £500 purchase.

One area they do sting though is the spread on the foreign exchange rate typically 2.5% higher than wholesale.Last year I sold a Linhof stateside for $3000 and I really should have insisted on a bank wire for a better exchange rate.

For small items (apart from perhaps phones) Paypal is great and less hassle than accepting cards direct.

adam

 

[clegsr]

I have sold lots of stuff on Ebay - usually without problems but the two mobiles I did sell gave me the most grief.

They seem to attract all the scammers in the world and your inbox becomes like a rogues gallery of email scams of the world.

The most obvious fraud using paypal is people using a stolen credit card, which will mean you get the funds via paypal but then when the card is reported stolen you will get the money taken out of your account.

I initially tried only sending the phones to people with a "verified" paypal address but the problem was that people don't know what that is, and it just causes confusion after the end of the auction.

I now ONLY sell mobiles without accepting paypal - i.e. cash/ British Bank cheque or Postal order.

This sorts the wheat from the chaff - and although you slightly restrict your customer base - you are a lot more secure. I also strongly recommend the earlier comments re sending via a trackable postal service - it usually only cost 39p more.

I suggest you cancel the auction - saying its not available -

You can do that here

cancel the individual bids and then re-list but removing the paypal option.

Also make sure you tick the "Buyers in countries to which I don't ship" boxes
which will also excludes the "far-east scam-u-like"

You can do that here

I hope that helps.

 

[i_york]

One area they do sting though is the spread on the foreign exchange rate typically 2.5% higher than wholesale.

Agreed... on a high value, international, transaction, the high spread + the usual eBay / PayPal fees really eats into margin!

Cheers,
Ian.