A new twist on paypal.......

Peaceman · March 31, 2004 8:49AM

Totally legit... went to paypal.com to verify....

"PayPal is committed to maintaining a safe environment for its community of
buyers and sellers. Our team employs the most advanced systems in the world
to protect the security of your account.
During a recent review of our system, we determined that you received funds
from an account with reports of fraudulent bank account use. In accordance
with PayPal's Seller Protection Policy, the following transaction involving
unauthorized funds has been reversed:

Transaction ID: (there was a # here)
Transaction Date: Mar. 23, 2004
Transaction Amount: $70.00 USD
Buyer's Email: (their email was here)
Buyer's Name: (His name was here)

The transaction was reversed because you were not covered by PayPal's
Seller Protection Policy. Please note that this withholding is in
accordance with our User Agreement, Section VII, Paragraph 3.

In the future, you can protect yourself against fraudulent buyers by
following the conditions of our Seller Protection Policy. For full
details, please visit our User Agreement at: http://www.paypal.com/UA

Sincerely,
The PayPal Team

ok..... let's review.......

1) Someone buys a coin from you for $ 70....
2) Paypal tells you that your tranaction is completed and the funds are in your account.
3) You ship the coin to Mr. XYZ.
4) You give the guy great feedback because he paid in less than a day.
5) Paypal contacts you 5 days after the transaction and gives you the email above. Sorry, you no longer have the $ 70 or the coin....

Lucky for me, the guy sent another payment the same day and it cleared with no problem.....

Did I scare anyone.......

greghansen · March 31, 2004 8:52AM

Yea, that's scary. It's one reason why I never let a large balance accumulate in my Paypal account.

Russ · March 31, 2004 8:54AM

As long as you ship only to a confirmed address and verified account and have proof of delivery, you would not be out the money.

Russ, NCNE

relayer · March 31, 2004 8:55AM

Hey somebody has to be out money when there is fraud.

You can be sure it won't be PayPal

BigAl · March 31, 2004 8:57AM

very scary, what if it was $700?

can paypal automatically draft funds from a linked bank account or from your 'backup' crdit card if your paypal account is zero?

Russ · March 31, 2004 8:58AM

<< can paypal automatically draft funds from a linked bank account or from your 'backup' crdit card if your paypal account is zero? >>

Yes. But, that is no different than any merchant account. On a chargeback, the processing service levies first and asks questions later.

Russ, NCNE

bearcave · March 31, 2004 8:59AM

Do you have a Premier or business account?

LouisCamp · March 31, 2004 9:00AM

Make sure if the item sells for over $200 you either send via registered mail or with delivery conformation. I thought insured mail was trackable, but the buttkakes at paypal cannot go online and view. I lost $500, filed a postal fraud claim, took the post office 6 months, and then I get a letter from the post office stating "moved, no forwarding address".

Got to love the good old "USA"

Lou

BigAl · March 31, 2004 9:07AM

I don't agree with the way paypal handles this, but it doesn't suprise me. I would think that the defrauded account holder would be responsible for the funds, not an innocent 3rd party. I bet the law would agree also...

Russ · March 31, 2004 9:12AM

<< I would think that the defrauded account holder would be responsible for the funds, not an innocent 3rd party. I bet the law would agree also... >>

You would lose that bet. PayPal operates no differently that any other merchant processing service. On transactions where the card is not physically swiped, the seller is the one on the hook in case of fraud. The only protection is to ship only to the billing address, (PayPal lingo - "confirmed"), of the cardholder and have proof of receipt.

Russ, NCNE

LALASD4 · March 31, 2004 9:17AM

I am still uncleared on how Paypal works. From the post above, it seens like Paypal protects the buyer but I was the buyer at one time and when I did not received the coin, Paypal only gave me back a fraction of what I paid and said it can not recover the rest of my funds and I paid with a mastercard and mastercard would not do anything either. I think only VISA will stand on your side.

Russ · March 31, 2004 9:20AM

<< From the post above, it seens like Paypal protects the buyer but I was the buyer at one time and when I did not received the coin, Paypal only gave me back a fraction of what I paid and said it can not recover the rest of my funds and I paid with a mastercard and mastercard would not do anything either. I think only VISA will stand on your side. >>

PayPal's standard buyer protection is up to $200. Anything above that wouldn't be covered. Mastercard will also stand up for you, but with both card types there are time restrictions that vary from bank to bank.

Russ, NCNE

BigAl · March 31, 2004 9:24AM

but if you ship to a confirmed address everything is peachy?

my comment was in reference to the original account holder (possibly a bank account), not paypal.
ie) roomate A uses roomate B's account info to consumate a transaction w/o B's permission (defradede account). Bank allows the transaction (either with or without notice of fraud) so innocent 3rd party (C) is now responsible?

ddink · March 31, 2004 9:27AM

Unfortunately these messages are a fact of life for me

Selling virtual items in EverQuest I've lost about $1000 to date dealing with fraudulent buyers. They receive the item then do a chargeback immediately. It's a very sad world we live in--just be glad that you deal in tangible, not virtual, items and have some recourse (that is, the seller protection policy).

<< can paypal automatically draft funds from a linked bank account or from your 'backup' crdit card if your paypal account is zero? >>

What many people do is go to their bank and, in writing, instruct the bank that under no circumstances is PayPal allowed to deduct funds from your bank account without your written consent. In many cases it's better to be safe than sorry.

Russ · March 31, 2004 9:29AM

<< but if you ship to a confirmed address everything is peachy? >>

And verified account, and have proof of delivery, yes. Under those circumstances the seller is protected under PayPal's TOS. The money would still be levied, though, until the proper proof was provided - the same as is done with internet credit card transactions.

<< Bank allows the transaction (either with or without notice of fraud) so innocent 3rd party (C) is now responsible? >>

If said party did not ship to the billing address, yes. That is simply the way it works with internet transactions.

Russ, NCNE

Russ · March 31, 2004 9:31AM

<< Selling virtual items in EverQuest I've lost about $1000 to date dealing with fraudulent buyers. They receive the item then do a chargeback immediately. >>

In your case, since you are not physically shipping an item, there's no way to protect yourself completely.

Russ, NCNE

ddink · March 31, 2004 9:33AM

<< And verified account, and have proof of delivery, yes. Under those circumstances the seller is protected under PayPal's TOS. The money would still be levied, though, until the proper proof was provided - the same as is done with internet credit card transactions. >>

Actually your PayPal account will show a negative balance while the transaction is "researched." If they decide against you, then they bill your bank account.

As long as you jump through all the appropriate hoops, PayPal is fine for sellers of tangible items. With virtual items, the common scam is to tell PayPal that your account info was stolen. Naturally, there are people whose account information has been "stolen" dozens of times, but PayPal never seems to catch on.

<< In your case, since you are not physically shipping an item, there's no way to protect yourself completely. >>

That's right. If you sell an EverQuest account, many people ship a piece of paper with the username and password, shipped FedEx overnight, so that they are covered. Many virtual merchants don't accept PayPal. There are some ways to lessen the chance of fraud that are really outside the perview of this thread, but basically you are absolutely right.

BigAl · March 31, 2004 9:40AM

good info gentlemen, thanks. I Suppose it's time for me to put a 10X loupe to the Paypal agreement...

LALASD4 · March 31, 2004 9:40AM

Mastercard will NOT standup for you, believe me, I have tried. And it is not a time limit problem, the max you can get back is $200.00 from Paypal and $150.00 from Ebay. If the seller's account has no money, you are out of luck.

Russ · March 31, 2004 9:44AM

<< Mastercard will NOT standup for you, believe me, I have tried. >>

You may have been past the time limit specified in the cardholder agreement. Besides, MasterCard is just the franchisor; it is the issuing institution from which your protection derives. If you were denied this protection, I'd suggest you switch banks.

Russ, NCNE

Peaceman · March 31, 2004 9:53AM

The buyer had 100+ transactions with paypal and had a verified address.... It's funny how paypal can "complete" this transaction with a "bad" account number or NSF.... what's up with that....

I'm REALLY looking to close out my account even without getting burned....

Russ · March 31, 2004 9:59AM

<< The buyer had 100+ transactions with paypal and had a verified address.... >>

Verified and confirmed are two different things. Verified has nothing to do with their address, it means only that they have a linked bank account that has been verified by a small deposit from PayPal. Confirmed address means that the billing address of the credit card matches the shipping address.

The buyer having a verified account is meaningless for seller protection if they don't have a confirmed address.

Russ, NCNE

A new twist on paypal.......

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