posted on October 6, 2000 04:42:20 AM
According to a thread over on OTWA in the PP forum, that can be dangerous business. PP apparently removed $1000 from a user's account without any authorization. In fact, the user learned about it at the grocery store, when her debit card was declined. Note, this was not an X.com account, this was an account through Key Bank.
There's more to the story of course, Romanians, FBI, all kinds of stuff...
But the bottom line is, PayPal took money out of the user's account.
The user appears to have no knowledge of wrongdoing and has not been notified of any wrongdoing, although it is suspected that they are a victim of a scam.
PayPal removed their transaction history from the site.
PayPal froze $3000 in the account and then took another $1000 out of their personal bank account.
PayPal TOS:
quote:
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X.com will never make electronic transfers from your bank account without your explicit permission. Furthermore, X.com provides you unlimited protection against unauthorized withdrawals from your bank account.
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Of course, they are calling it a reversal of deposit. But if all of your PayPal money is received as a deposit, then it can also all be reversed. Is this the same as a withdrawal?
If you fall victim to fraud, you may find the funds 'reversed' from your account rather than withdrawn. Something to keep in mind if you choose to use them, and also in deciding what account is used for incoming PP deposits and is used for 'verification'.
In any event, it's clear that mistakes were made by the user, but the user does legitimately appear to be a victim just as much as anyone else in the matter. And interestingly, the Romanian involved is still in regular contact with the user, acting confused about the accusations, etc. While a great deal of fraud is perpetrated from that part of the world, it's not a guarantee that all Romaians are crooked! I used to buy from one on ebaY who had great product and feedback!
All in all, PP's handling of this bears perusal by anyone who chooses to use their services.
posted on October 6, 2000 05:04:35 AM
I'm not familiar with thread on the other site, but I would like to point out what I think may be part of the problem.
If the credit card is stolen and the seller ships to an address that is not the billing address of the credit-card, the seller will probably be charged back for the amount of the sale.
What I'm noticing is an alarming trend of sellers shipping outside the USA when payment is made by PayPal. PayPal does not currently accept users who are not USA residents. Yet, sellers are shipping outside USA?
This is what the User's Agreement states:
"3.Seller Protection Guarantee. Beginning August 23, 2000, X.com agrees to indemnify sellers for charge back liability resulting from buyer's fraudulent use of a stolen credit card and/or false claims of non-shipment of goods for purchases made through the Service for up to $5,000 per year when the following conditions are met:
a) The seller is Verified;
b) The seller can provide reasonable proof-of-delivery which can be tracked online. (Most U.S. carrier companies offer this service, including the U.S. Postal Service.);
c) The seller accepted 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.);
d) The seller does not ship internationally (when X.com releases international payments (coming soon), this rule will be replaced with a list of approved countries)."
What I think is important to notice is (d) above. The seller must not ship internationally.
I suggest that anyone who uses PayPal ought to read very carefully the User's Agreement and understand better how to protect themselves from credit-card fraud or the use of a stolen credit card for payment.
I also suggest that everyone who uses PayPal or a service similar to PayPal be very careful to only ship to the address of the credit-card billing address, which is the address sent in the e-mail from the service, that confirms that the payment has been sent to the seller.
posted on October 6, 2000 05:08:52 AM
I would love to link it, but I don't think I can provide a link to another message board without violating the CG thingies.
The person has been invited here to share, if she decides to do so.
posted on October 6, 2000 05:10:16 AM
I guess you didn't get the point dude. Paypal has withdrawn money from the user's bank account while they kept on saying over and over again they'd never do this.
<br>
That's the point here. You may want to re-read the original post.
posted on October 6, 2000 05:11:46 AM
The fact that the seller may have been in error in shipping to a different address isn't the issue here. It is certainly a valid issue concerning the protection offered to verified PayPal sellers, but the issue isn't really relevant to this thread.
The issue at hand is PayPal taking money out of a user's bank account FOR ANY REASON without the user's EXPLICIT PERMISSION. We don't know all of the facts yet, but if PayPal did in fact "reverse" the money back out of the bank account, that is withdrawing funds from the account without the user's explicit permission. Plain and simple.
PayPal's TOU and PayPalDamon have said repeatedly that PayPal will NEVER do that. It will be interesting to see how this one unfolds.
posted on October 6, 2000 05:24:12 AM
Toyranch -
THE BANK ACCOUNT WAS NOT TOUCHED! TRead the entire thread before you start doing a Chicken Little impersonation. To quote the affected person, from the thread you referred to:
"They reversed the withdrawals before the money was transferred to my bank account. My PayPal account was showing these withdrawals as pending and my account balance was debited the amount of the withdrawals. Now after they froze the account, the withdrawals are shown as reversed and my PayPal account has been credited back. The money never reached my bank account.
While it is still an unpleasant thing to do, it's not quite hwhat you implied it was.
posted on October 6, 2000 05:33:54 AM
The point I am making:
If the user does not abide by the Terms of Use, and a stolen credit card was used, PayPal may not feel it has to honor that part of its agreement or that part of its agreement does not apply, and/or it is "charging-back" the uncollected payment from the user's bank account.
In other words, a charge-back on a payment made with a stolen credit card may be quite different than a withdrawal that requires your permission from your bank account.
I do want to make a disclaimer here: I do not know that PayPal did withdraw any money from that user's account. That's hearsay and at this point only one side of the story.
I'm simply trying to figure it all out too, and I would like to know the truth about this issue, so that's why I joined-in on the discussion.
posted on October 6, 2000 05:37:39 AM"They reversed the withdrawals before the money was transferred to my bank account. My PayPal account was showing these withdrawals as pending and my account balance was debited the amount of the withdrawals. Now after they froze the account, the withdrawals are shown as reversed and my PayPal account has been credited back. The money never reached my bank account.
This is the way it is supposed to work. Evidently PayPal DID NOT touch the bank account. It would be interesting to see what would have happened had the bank deposits been completed before the reversal.
No, maybe YOU need to read better before invoking Chicken Little...
quote:
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This gets worse by the minute. I went to the grocery store today and my debit card was declined. I knew something was wrong because the last time I looked I have over $1000 in my account. You guessed it! There is an x.com reversal of nearly $1000 right out of my checking account. I may as well cut my wrist and give them all my blood.
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quote:
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They reversed a deposit which was made into my Key Bank checking account on Sep. 5. I called the bank and was told I had to call PayPal to find out why they did this.
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And a few quotes from Damon, reiterating the ISSUE here...
The simple fact that I have stated that PayPal will not access your bank account unless you have initiated a transaction should quell those fears. The ONLY time that PayPal will access your bank account is when you explicitly tell us to, such as adding funds from your bank account to your PayPal account or withdrawing funds to your bank account from your PayPal account, an item that the end user has to tell us to do.
I can only reiterate that PayPal would not initiate a withdrawal from your bank account and that nobody would.I don't know how to rephrase it any better for you. This would only occur if YOU, the user, had initiated it. The statement you are referring to is authorizing us to do so only, and if only, you authorize it. Under no circumstances would PayPal withdraw from your bank account without your permission
posted on October 6, 2000 05:52:23 AM
PP did not touch her bank account, they reversed the electronic deposit that was on it's way to her bank.
Sorry, not gonna cry for this PP user. She did something incredibly stupid. This is what happens when people don't think and use common sense. She allowed her PP account to be used to accept payments for another person who lived in a totally different country, and then she'd take the $ out and western union it to the person in Romania .. minus her 7% cut/commission. Apparently these funds have added up to quite a bit if we're talking 3K.
Doesn't that senario send multiple alarm bells through most people's heads?
For some reason, PP has flagged this account for possible fraudulent (?) activity. Perhaps it's a money laundering scheme, using stolen CC's here in the US. There's many different senario's here, none of them legitimate.
$3000 is a big chunk of change to anyone, including a business such as PayPal, and honestly.. in my opinion.. yes, freeze this account! Recover your money! I don't want my fees raised because 1 or more users don't use common sense in their business/money dealings and can't recognize potential fraud when it's right in front of them.
Yup, I know, I might get some flames for this.. and be told "when PP freezes your account.." If that ever happens to me, I'll deal with it then but at least I know it's not because *I* did something that was potentially fraudulent.
posted on October 6, 2000 06:00:03 AM
The electronic reversal was on the $3000 amount. That is not the issue. The issue is the $1000 amount that was originally deposited on September 5 and reversed/withdrawn on October 4th or 5th. A month later. She said her bank balance showed the money in her bank account earlier in the day. This is not a pending electronic deposit, it is a withdrawal, now called a reversal of deposit.
If PayPal considers all deposits reversable, then I suppose the only funds not accessible by them are funds in excess of your total PayPal deposits.
Yes, the user in question made a big mistake and did something foolish. That is not in question. The issue for all PayPal users is this 'reversal of deposit' on past deposits. They say no 'Withdrawals' will be made without authorization, but turn around and use their access to your account to 'reverse' deposits.
I have no interest in debating the user or their mistake or whether or not to feel sorry for them. If you use PayPal, and you think that your funds are safe, even if fraud is commited against you, think again! THAT is the ONLY point I'm trying to make out of it. http://www.millionauctionmarch.com/ [email protected]
"This gets worse by the minute. I went to the grocery store today and my debit card was declined. I knew something was wrong because the last time I looked I have over $1000 in my account. You guessed it! There is an x.com reversal of nearly $1000 right out of my checking account. I may as well cut my wrist and give them all my blood."
I'm going to suggest that this person contact the FTC ... and the COLORADO banking authorities. X.COM's banking privileges come from a small bank in Colorado. That's the pressure point. That and as much of a public stink as possible.
BTW - apparently this person was doing a stranger from Romania a favor by accepting payments via PayPal and sending them the money via Western Union. DO NOT LAUNDER MONEY FOR ANYONE ... no matter who they are.
posted on October 6, 2000 06:11:03 AM
Not only was this person doing something stupid but also highly illegal. In addition to laundering money for stolen credit cards(which I can not believe this person didn't know), they were also converting credit card purchases to cash advances which only a bank can do and only at the cash advance interest rate.
Anybody with as much brains as God gave houseplants knew this was a money laundering scheme and I doubt(and I bet the the person is praying) that the government officials and banking authorities will be contacted.
[ edited by mark090 on Oct 6, 2000 06:15 AM ]
posted on October 6, 2000 06:11:38 AM
I think it is absolutely irrelevant what kind of stupid or even illegal things that this user did.
The only relevant factor to me is whether funds were actually REMOVED from a bank account. If so, Paypal is in the wrong, even it this user were personally involved in the fraud.
Look, my landlord has a key to my apartment for emergencies. But no matter what I do -- not paying rent, violating my lease, whatever -- my landlord can not use that key to come in to my apartment and collect any of my possessions or money that they feel they are entitled to. Even though I might owe them that money and more, if they just come in and take it, it is still stealing.
If Paypal actually removed funds from a user's bank account, that user needs to look in to filing criminal charges.
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All rights reserved. All wrongs reversed.
posted on October 6, 2000 06:14:37 AM
I've got to agree with Rosie. With the information we've been given, this deal stunk to high heaven from the beginning (if the seller was unaware that the merchandise was going to Romania when she accepted payment and shipped, then PLEASE give us all the facts to begin with), the seller accepted the risk of getting involved and got burned. The PP fraud protection clause SPECIFICALLY prohibits international shipments/transactions. (Of course, I'm sure it's not the seller's fault that she didn't know that, right???) No tears for someone who exercises a lack of common sense by accepting large sums of money by PayPal and doesn't allow some clearance time for any problems to show up before spending the $$$. I've never had a $1000 deal, but I hold my breath even on the $250 deals and give the buyers time to receive their merchandise and approve it before I touch their money. Also, it's still not clear whether the seller's bank ever credited her account with the deposit from PP. Had the deposit actually been made, or was the seller counting on that additional $1000 to cover the checks she'd written on the previous $1000 balance and ran into trouble because the PP deposit never made it into her account?
posted on October 6, 2000 06:26:19 AMIF PayPal did in fact remove funds from the user's account without her permission, PayPal is WRONG! Their TOU states that they will NEVER do this and PayPalDamon has said the same repeatedly here on these boards.
The fact that the user may have been stupid or in cahoots with the criminal in Romania isn't even relevant to this thread. This belongs in another thread.
PayPal has no right to extract funds from ANYONE's bank account without due process, even if their TOU states otherwise (which it doesn't). The ONLY issue relevant to this thread is whether PayPal took funds from a user's account.
This is a confusing situation here. First we hear that PayPal took funds from the bank account. Then we hear that they didn't. Then we again hear that they did. Please, if you're going to start this type of thread, give all of the relevant details up-front.
[ edited by abingdoncomputers on Oct 6, 2000 06:27 AM ]
posted on October 6, 2000 06:32:20 AM
Is this user a verified user? I read that she had upgraded to a bs account and then downgraded to a personal account..... but I don't recall reading that she's verified.
If she's not verified, she has no protection.
Directly from PP's site:
[b]What is the Seller Protection Guarantee?
Starting August 23, 2000, Verified Sellers will not be held liable for charge backs due to fraud (including payments made by stolen credit cards and false claims of non-shipment) when they 1) can provide reasonable proof of shipment, 2) do not accept payment for a single purchase from different PayPal accounts, and 3) do not ship internationally until X.com releases international payments (coming soon) and a list of approved countries. Please review the Consumer Protections section of our Terms of Use for details on our current and future plans for this guarantee.[/b]
It would seem to me, that this particular seller isn't verified.
Sorry guys, to me, the ENTIRE story is relevant (ie: what the seller did, how she did it, etc).. not just bits and pieces of it.
posted on October 6, 2000 06:34:24 AM
Never underestimate the capacity for naivete in America. Look at how many fall for the magazine company sweepstakes pitches, the pleas of the less-than-honest televangelists, conman roofers and driveway repair people... the same scams year after year after year.
IF this woman's story is true, PayPal removed a deposit from her account, which we've all been promised --over and over-- it would not do.
I hope we eventually hear the whole story, form BOTH sides.
posted on October 6, 2000 06:35:49 AM
While I want to know if PayPal will take money from an user's bank account, and I do think that is the important question being asked here, I agree with Rosie.
Someone who breaks the law and violates the rules of the site cannot take the high moral ground and claim that they have been victimized or unfairly treated. I also think it's despicable that we are being told that it could happen to us too.
I think it's fair warning that any credit card charge can be reversed and any electronic deposit can also be reversed.
Perhaps the woman would have some recourse with her bank which allowed the withdrawal from her bank account, without her permission.
However, if she money-laundered as claimed, she will probably be too busy dealing with the feds to worry much about a withdrawal from her bank account.
If I understand this right, this woman broke the law and now she's claiming she's been wronged? It's like the guy who wanted sympathy for being an orphan after he murdered his parents.
posted on October 6, 2000 06:37:20 AM
So even though Paypal says they will NEVER remove funds from your account without your permission, it is OK for them to actually remove funds IF they think they have a good reason?
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All rights reserved. All wrongs reversed.
posted on October 6, 2000 06:43:21 AM
I've never seen the question answered of whether the funds were actually IN the account. They couldn't be "removed" if they weren't there......
posted on October 6, 2000 06:46:56 AM
Any time there is a hint of fraud, a financial institution will LOCK DOWN THE MONEY ... and make sure the transaction history can't be changed or erased.
It is possible that the only way PP can do that is to back it up and delete it from web access.
posted on October 6, 2000 06:50:04 AM
According to #9. in PayPal's Terms of Use, which was last modified on 9/11/00:
"No Cash Advances. You agree not to engage in behavior that could reasonably be construed as providing yourself a cash advance from your credit card, and agree not to assist users who engage in behavior that could reasonably be construed as providing themselves a cash advance from their credit cards. Such behavior includes, but is not limited to, a User paying someone by charging a credit card, then receiving the funds back from the original Recipient and attempting to withdraw the funds from an account. X.com reserves the right to reverse all such transactions and to terminate any accounts that are associated with such behavior."
posted on October 6, 2000 06:51:20 AM
As has been pointed out here many times, Paypal's "verification" process does very little to verify the actual identity of a user and could easily be circumvented by any competent criminal.
Fortunately, there IS a way that Paypal could institute a verification process that actually would verify a user's identity.
This process would involve verifying the user's actual home address. The process would be very simple and could be completed in just a few days.
All you would need to do is send Paypal a key to your front door. Then, when you are out, a Paypal representative would come to your house and leave a small amount of change next to your computer.
Then, you would just email Paypal with the amount of change you received, and you would be "verified."
And, of course, Paypal would NEVER use your house key to come in and take your possessions without your permission.
And this is all for YOUR security, of course...
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All rights reserved. All wrongs reversed.
posted on October 6, 2000 06:52:27 AM
The woman states that she believed she was perfoming a service that would be almost a mirror of what BidPay does.
She accepted credit card payment on behalf of someone who was not able to accept it, and did so through PayPal. She was told that the payments were for goods sold, and she was given some evidence that this was in fact happening.
She converted the credit card payments into Western Union Moneygrams through PayPal.
She was duped, and it seems she was duped by someone who did a pretty good job of duping her. She was foolish, yes, she sure was.
Apparently SHE has contacted the FBI, California Attorney General, etc. about this and has pretty well laid her story out.
Again though, her actions are wrong, there is no doubt that she acted foolishly and she has stated that herself.
PayPal's actions are another story. If her account had not been 'verified', then the amounts in question would not have been possible, and PayPal would not have access to her account.
Consider that PayPal, under the new rules, will not allow transactions beyond $250 without verification, giving them access to your account.
If you are going to do business with PayPal, and you are a victim of fraud, you may find funds 'reversed' out of your account.
I don't know if all this is true or not, but Damon has stated in another thread:
quote:
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This issue has been directed to the account management team. For proprietary reasons I can't go into detail on the customer account. I have not missed it and the issue is being handled by the proper department.
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posted on October 6, 2000 06:52:55 AM
pickersangel, according to the one post about the $1000, it was transferred to her account on 9/5/00.
Please also note, this is the second time in a 4-6 week period that this user's account has been frozen. We're not clear as to the reason why it was frozen the first time.
amalgamated2000, I look it as more of a matter of repossessing. If a company issues a charge card (Dillards, Sears, etc) , and later finds out that the person using the card, was not actually the person it was issued to, they have every right to go and repossess the items that were bought/stolen and according to PP's own TOS:
No Cash Advances. You agree not to engage in behavior that could reasonably be construed as providing yourself a cash advance from your credit card, and agree not to assist users who engage in behavior that could reasonably be construed as providing themselves a cash advance from their credit cards. Such behavior includes, but is not limited to, a User paying someone by charging a credit card, then receiving the funds back from the original Recipient and attempting to withdraw the funds from an account. X.com reserves the right to reverse all such transactions and to terminate any accounts that are associated with such behavior.
That is exactly what happened.. they repossessed their money.
Repossessions are legal only because the buyer specifically agreed to it in a contract.
I do not believe that it is acceptable for a lender to repossess an item if your contract with them specifically says that they will NEVER repossess that item.
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All rights reserved. All wrongs reversed.
[ edited by amalgamated2000 on Oct 6, 2000 06:58 AM ]
[ edited by mark090 on Oct 6, 2000 06:15 AM ]