mrbusinessman
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posted on January 16, 2002 01:13:13 PM
I sold a domain name to a customer who paid with PayPal (almost $500). After the funds were deposited in my account, I tranferred the domain registration to the new owner.
A couple of days ago I get an email from PayPal saying that the customer had lodged a complaint for goods not delivered or not as described.
I clicked the link that PayPal provided to respond to the complaint. I filled out their forms and stated that the domain had been transferred and that they could verify it by checking the whois registration. Problem solved (I thought).
I logged into my PayPal account a while ago and saw a pending reversal for the total amount less the PayPal fee.
Remember when PayPal told us that they will NEVER go into our bank account without our explicit permission? Well, now I know better. They DO NOT have my explicit permission to reverse the deposit (go into my bank account) for ANY reason, especially over a transaction that has been completed with the whios info to prove it.
I guess unless you're selling a tangible item that must be mailed (providing you with an opportunity to ship to a confirmed address), you're out of luck if the buyer complains even if you have proof that the transaction was completed.
It's a DOMAIN NAME for goodness sake! It's literally impossible for it to be "not as described"!
The only "shipping" required is the transfer of the registration of the domain to the new owner!
Thanks a bunch PayPal. Not only will you lose the hundreds of $$$ per month in fees that I regularly pay you, but I now have a new hobby: Telling every customer and business associate that I have ever had and ever will have in the future (and trust me, it's quite a large number) what happened with your "seller protection plan". I know, I didn't "ship to a confirmed address". But let's be real here. This is a domain name, not a priceless heirloom that has to be shipped. Your "seller protection plan" is a joke, as is your company's means of doing business.
After this reversal is completed, I'll promptly close my PayPal account and move on. Oh, and the hundreds of emails that my company sends out each day will all have a new signature line. I'll leave it to you to take a wild guess as to the content. And of course all of my websites will have a "Beware Of PayPal" page with copies of your correspondence to me and vice versa as well as the whois information on the domain name.
The $500 isn't the issue here. I could eat that and go on with life. The issue is the lie: "PayPal will NEVER go into your bank account without your explicit permission". This time it was only $500. The next time it might be serious money. Well, there won't be a next time. And what's up with doing a reversal TWO DAYS after I respond to your "Case Inquiry"? And not even an EMAIL to let me know that you're doing it! I just happened to see the pending reversal when I logged into my account to check the status of some other items!
This IS NOT the way to gain trust with your users PayPal. Thanks for nothing. The regulatory gods will act before long. I'm sure of it...
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rarriffle
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posted on January 16, 2002 01:26:12 PM
have you checked with your bank? my credit union says no withdrawals will be authorized unless I come and give written authorization to them.
this is the reason I set up a separate account just for paypal at my credit union. $5.00 balance is required and that is all that is ever there. I withdrawal paypal transfers as soon as possible and put them in my regular account.
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tomwiii
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posted on January 16, 2002 01:38:05 PM
eBay has rules...Yahoo has rules...
Do you FOLLOW THOSE rules? Or do you pick and choose the rules you "like" and only follow those? Kinda like Dubya's buddies over at Enron?
PayPal's protection (which is minimal but still > BillPoint's) EXPLICITLY EXCLUDES electronic deliveries.
KNOWING THIS IN ADVANCE & BEING A "MR BUSINESSMAN," why on earth would you use PP for a $500.00 transaction?
P&Ming after the fact when ya knew the rules strikes me as not MR BUSINESS-LIKE!
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mrbusinessman
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posted on January 16, 2002 01:39:00 PM
I think I'll just empty that account and then close it if it isn't too late by the time I get there (10 minutes away). It was opened specifically to accept PayPal payments anyway. And since I'm going to close the my PayPal account... Back in a few...
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mrbusinessman
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posted on January 16, 2002 01:41:47 PM
tomwiii:
This wasn't an auction transaction. It was a sale from one of my websites. But you're absolutely correct about me getting caught with my pants down on this one. But I can assure you that THIS issue will never arise again.
A lesson learned. And I'll certainly teach it to all who will listen...
[ edited by mrbusinessman on Jan 16, 2002 01:42 PM ]
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trai
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posted on January 16, 2002 01:43:06 PM
"this is the reason I set up a separate account just for paypal at my credit union."
This will not save you if paypal says that you owe them $$$$$.
MR B.
Why would you allow someone to pay you via a online payment service when you know that you need a signature and confirmed addy for sales 500.00 and up???
I do agree that this is nuts, but what you or I think makes no difference.
Your buyer is the thief here, not paypal.
See if you can get this crook into small claim court.
Hope this works out for you. Do keep us updated.
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tomwiii
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posted on January 16, 2002 01:47:08 PM
Mr Businessman: Please forgive me for getting carried away there!
However, the recent spat of PP bashing on these boards has gotten a little over-the-top!
PayPal WORKS 99.999& of the time when ya follow the rules!
About 10% of my shipments are to UNCONFIRMED addresses. Each time I have to make a decision whether to ship or not. If I get BURNT -- I'll blame ME...not PayPal!
Two days ago I had my first PP complaint for non-delivery! Damon can verify this! I provided the DC NUMBER + I provided the GLOWING POSITIVE FB from the "customer" ...
Within 24 hours, the complaint was DISMISSED IN MY FAVOR because...
I FOLLOWED THE RULES! 
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REAMOND
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posted on January 16, 2002 01:47:55 PM
If you look at the TOS at Paypal, you grant them permission to take money from your bank account.
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mrbusinessman
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posted on January 16, 2002 01:57:24 PM
I just closed the bank account over the phone, effective immediately. PayPal's reversal won't take place.
I agree that in retrospect I shouldn't have accepted this payment. But I'm the type of person that believes my customers are honest until given a reason to believe otherwise. I get burned every once in a while, but this one really stings.
Regardless of what PayPal's stated policy is concerning a "confirmed shipping address", they have concrete proof that the transaction was completed in a speedy manner. I would have no problem with a reversal had PayPal waited for the buyer to complete a chargeback and then TELL ME that they intended to do a reversal. As it is, the buyer will NOT have a chargeback on his record. His PayPal account will remain in good standing even though PayPal has concrete proof that he defrauded me.
I'm not upset about PayPal following their own rules to the letter. I'm upset because PayPal, after receiving proof that the buyer perpetrated a fraud, immediately did a pending reversal ON MY bank account without my explicit permission (something that Damon repeated here that would NEVER happen). And they did it without requiring the buyer to make false statements to the bank in order to obtain a chargeback. This is inexcusable for a company that handles other people's money and trust.
Regarding Small Claims Court, I would sue in a heartbeat but I'm in Virgina and the other party is in Nevada. Too expensive to make it worthwhile. I do plan to pay a visit to the sherriff in the morning to see if anything can be done in regards to a criminal fraud complaint. The evidence is black and white. The sale (stated as such in the PayPal transaction) was for a simple domain name to be tranferred to the purchaser after the funds were deposited into my account. I have irrefutable proof that the domain has been transferred to the buyer. We'll see what happens.
[ edited by mrbusinessman on Jan 16, 2002 02:16 PM ]
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mrbusinessman
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posted on January 16, 2002 02:02:26 PM
REAMOND:
You're apparently correct about PayPal's TOS giving them permission to take money from our bank accounts. It's now quite obvious that Damon's promise that they won't do it without explicit permission is simply a smokescreen to get users to believe that their money is safe with PayPal. Explicit permission is apparently given when you verify your back account.
[ edited by mrbusinessman on Jan 16, 2002 02:03 PM ]
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mrfoxy76
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posted on January 16, 2002 02:10:27 PM
if you read previous threads have none at hand paypaldemon advises paypal does not have access to your bank account!
i agree paypal is an awesome idea just appears that there customer service is not "fair at times"
also too many people seem to be able to use it as a heaven for fraud
example
http://cgi2.ebay.com/aw-cgi/eBayISAPI.dll?ViewFeedback&userid=alleyvids
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paypaldamon
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posted on January 16, 2002 02:27:12 PM
Hi,
Chargeback recovery from a bank account only applies to users that opened their account after October 11,2001.
The pending reversal would be against your PayPal account.
The Seller Protection Program does not apply to intangible products, which a service would be considered.
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mrbusinessman
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posted on January 16, 2002 02:37:18 PM
Damon:
I understand that your "Seller Protection Policy" doesn't cover intangible items. The issue here is why did PayPal do the reversal
1) without even sending me an email to let me knowwhat was up?
2) without requiring the user to do a chargeback when you have irrefutable proof that he perpetrated a scam?
I would have no problem whatsoever with a reversal had PayPal, after receiving a complaint from the buyer, required the buyer to jump through the hoops of filing a chargeback with the bank (and having to make proven false statements in the process). Instead, you just did the reversal on my account 2 days after I replied to your case inquiry with proof that the buyer perpetrated a fraud. You now have a user in GOOD STANDING when you KNOW that he perpetrated a fraud.
This story WILL get out and in hurry.
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rarriffle
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posted on January 16, 2002 02:38:15 PM
even though the TOS gives them permission, my bank says that is about as good as toilet paper without my written authorization at my bank.
trai, I may still owe them the money, but they will not be able to just try and take it. I have also protected my main bank account in this way, that number is given to no one.
There have been threads here where people leave thousands in their paypal account then get upset when the account gets locked. I will not have that problem because I keep the paypal account under $100.00 as quickly as possible. It is called CYA!
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paypaldamon
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posted on January 16, 2002 02:39:35 PM
HI,
A chargeback creates a pending reversal automatically. You are advised of the issue via email, as it will display the transaction information.
Have you contacted the buyer to see why they filed a chargeback?
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mrbusinessman
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posted on January 16, 2002 02:43:59 PM
Chargeback recovery from a bank account only applies to users that opened their account after October 11,2001.
Then it appears that I closed my PayPal-only bank account for naught. It's just as well though, as I won't be using PayPal anymore anyway.
I have removed PayPal from my websites so I won't be getting any more payments through you guys. I guess that means that PayPal and the fraudster will have to spar over the $500. I wonder if you'll require him to do a chargeback now?
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mrbusinessman
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posted on January 16, 2002 02:49:28 PM
Have you contacted the buyer to see why they filed a chargeback?
Yes, repeatedly with no reply. I'll assume that PayPal knows why he initiated the chargeback. Surely he had to give a reason.
This reversal couldn't possibly have been the result of a chargeback by the buyer. The transaction was just completed less than 48 hours ago. It takes much longer than that for a chargeback to be filed and make its way through the system. This is simply another smokescreen on PayPal's part
[ edited by mrbusinessman on Jan 16, 2002 02:50 PM ]
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trai
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posted on January 16, 2002 02:53:39 PM
"I will not have that problem because I keep the paypal account under $100.00 as quickly as possible. It is called CYA!"
 ] Make them work for it.
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paypaldamon
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posted on January 16, 2002 03:05:10 PM
Hi mrbusinessman,
Do you have the account email address? Please send it to me at: [email protected]. It sounds like a Buyer Complaint was filed, or an actual chargeback was filed.
If it was the former item it would be rejected, as we do not get involved in quality disputes. If the latter, this is a true chargeback that is not covered under the Seller Protection Policy.
This issue was created by the buyer. Chargebacks are created when the buyer contacts the card company to dispute the item in question. This is part of the potential risk in credit card payments.
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mrbusinessman
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posted on January 16, 2002 03:09:21 PM
Thanks but no thanks Damon. I've already closed my PayPal-related bank account and the funds in my PayPal account are negligible. I'll just wash my hands of the situtation and let you work it out with the buyer.
Since Chargebacks are created when the buyer contacts the card company to dispute the item in question, I no longer wish to put my hard-earned money at risk with your company.
We both know that given the timeline this reversal couldn't possibly be the triggered by a chargeback.
Rather than go round and around with PayPal (again), I'll just use my PayPal-related time in other ways...
[ edited by mrbusinessman on Jan 16, 2002 03:13 PM ]
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nufsaid
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posted on January 16, 2002 04:48:26 PM
Let's face it, unless Paypal changes some policies it is just risky to use. But so is accepting personal checks which I do so I guess you have to decide if it's worth the risk. All someone has to do say they aren't satisfied and your stuck. I assume that there are many sellers closing their paypal accounts or just not accepting it anymore. I think they will need to address seller protection somehow. Until then you are fool if you let them have access to your real bank account.
The fact is there are buyers who will pick up on this scam and take advantage as often as they can. How about letting the seller know how many charge back requests a buyer has done. And let seller decide to accept payment or not.
I know for a fact that there are a lot of dishonest buyers out there. A while ago I used to send items priority mail w/o delivery confirmation. The number of "lost items" was running 3-5 out of 100. Well I decided use delivery confirmation on every thing and now over 1000 items later none have been lost. Interesting.
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paypaldamon
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posted on January 16, 2002 05:25:48 PM
Hi mrbusinessman,
That is your choice, but I have offered my assistance. I need to see what kind of pending reversal is in place to advise you correctly.
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kiddo2
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posted on January 16, 2002 05:28:31 PM
If you had no money in either your paypal account or your checking account for a charge back...wouldn't Paypal just hit up your credit card on file or is that illegal for them to do??
kiddo2
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paypaldamon
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posted on January 16, 2002 05:31:07 PM
Hi,
Yes, a credit card on file can be charged for chargeback liability. Users are liable for chargebacks received.
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kiddo2
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posted on January 16, 2002 05:42:57 PM
Damon?
Chargeback recovery from a bank account only applies to users that opened their account after October 11,2001.
Well if you can hit up the credit card what about the above statement? Not the bank account but still the credit card?? You get us one way or another?? With or without permission??
kiddo2
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paypaldamon
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posted on January 16, 2002 05:46:30 PM
Hi kiddo2,
A chargeback is a liability that is owed to PayPal. Permission for recovery is in the terms of use-
"If you receive funds through a PayPal transaction funded with the sender's credit card, in the event the credit card transaction is charged back and you do not qualify for the Seller Protection Policy, you agree to hold PayPal harmless for the chargeback amount and to reimburse PayPal from either your PayPal account or by other means"
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rarriffle
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posted on January 16, 2002 06:48:41 PM
here again, the credit card I have on file with paypal has a very low credit limit. if there is ever a chargeback on my account, i will still be liable for it, but Paypal won't be just locking up my funds without me having some knowledge of it.
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rawbunzel
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posted on January 16, 2002 09:38:14 PM
I am not at all knowledgable about these things. Here is a question I have had for awhile.
If you did not pay anything through Paypal using a credit card but then Paypal charges your credit card for the amount of a chargeback can't you charge that back? At the very least can't you dispute the CC charge?
I don't quite see how they can just charge some amount to your CC card and you would have no recourse.
Does this make any sense?
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JACKSWEBB
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posted on January 16, 2002 10:11:38 PM
WOW!!! WHAT A THREAD! AND I THOUGHT I WAS SCREWED WHEN I LOST A MEASELY $30.00. PER LACK OF CONCERN FROM PAY PAL. SOME HEADS SHOULD ROLL ON THIS SITUATION. BUT........THEY WON'T.......AND THE BEAT GOES ON..........AND THE BEAT GOES ON...... DU DU DU DU. BUMS STILL YELL, HEY!, BUDDY HAVE A YA GOT $500.00! DU DU DU DU DU DU. AND THE BEAT GOES ON..............AND THE BEAT GOES ON. HAHAHHAHA, MY BANK (W.F.)CHARGED ME $6 BUCKS THE OTHER DAY FOR DEPOSITING, THEY SAY, $4000.00 IN CASH!!!!! HAHAHAHHAHA. THE LAST THING I WOULD EVER DO IS DEPOSIT $4000.00 IN CASH. WHAT A JOKE! THEY GAVE $10,000.00 TO THE IRS 10 YEARS AGO AGO AND NEVER GAVE ME A WARNING E'R NOTHIN'. I OWED THEM SQUAT!!!! BUT PROVE IT!!! HA! AND THE BEAT GOES ON.......OH! I GOT THE 6 BUCKS BACK HAHAHAHHAHA. WHAT A JOKE THESE INSTITUTIONS ARE. BE DAMNED CAREFUL!!!!!!! OH! AND JUST 4 WEEKS AGO, I TURNED BACK INTO THEM W.F 2 $100.00 DOLLAR BILLS "THEY" GAVE ME IN CASH WITHDRAWAL WHICH WERE WERE BEAT UP CURRENCY. MIXED WITH $3000.00. I TOOK THEM BACK...........OH SAY, A MONTH LATER. AFTER NO ONE WOULD ACCEPT THEM FROM ME AND LOW AND BEHOLD IF THEY DID NOT NOTIFY THE FEDS THAT I WAS IN POSSESION OF,,,,,,COUNTERFIET CURRENCY!!!!!!! HAHAHAHAHA. I GOT MY STINKING $200.00 BUCKS BACK AND THE BANK DEPOSITED IT TO MY ACCOUNT. THAT BANK BIG SHOT WOULD HAVE KEPT MY $200.00 IN A HEARTBEAT HAD I OF NOT DEMANDED THE MARKER TEST AND ALL OF "HER" INFO AND PHOTO COPIES OF THE "COUNTERFIET FUNDS" B.S. WHY I WROTE ALL THIS IS REALLY BEYOND ME BUT I WAS IN THE MOOD. BE CAREFUL!!!!!!!!!! TRUST NO ONE WITH YOUR MONEY!!!!!!!!! A FOOL AND HIS MONEY ARE SOON DEPARTED. GOD I HAVE BEEN DEPARTED WITH............YOU KNOW. I AM NO FOOL BUT I SWEAR,,,,,,,,,,YOU NEVER KNOW WHERE THEY ARE COMING FROM. A LESSON TO BE LEARNED EVERY STINKING DAY!!!! WHEN IT COMES TO M O N E Y!!!!! THINK, 15 TIMES!!!!!!!! AND GET SOME OPINIONS. I HOPE MANY READ THIS, JUST AS FOOD FOR THOUGHT. BE CAREFUL, BE CAUTIOUS, TRUST IN YOURSELF AND GET EVEN JUST A FRIENDS THOUGHTS. A FRIEND TOLD ME TO GO BACK AND GET THE PEN TEST AND I DID, THEY OF COURSE DID THE HEM HA. BUT THEY HAD ALREADY RAISED THE RED FLAG TO THE FEDS. IT WAS OUT OF THEIR HANDS AND INTO THE FEDS. SEE HOW W.F. PROTECTECTED ME!!!!!!! THE BANK!!!! HA!
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rgrem
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posted on January 17, 2002 02:29:02 AM
I believe somewhere along the line here, you said you made the mistake of accepting paypal for 500 for an electronic delivery. Why would you do that? Do you expect PP to eat the 500 you mistakenly accepted? If you took the payment on your own CC account, or if you accepted a personal check, or if you took the buyer's IOU; you'd be in the same boat. I think you failed to follow PP rules and got stung. Sorry about that, but you have no cause to blame PP. JMHO.
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