PayPal! It's Finally Happening To ME!

kjp55 · Joined: 18 Aug 2001 Posts: 1972 Location: East of Rockies

Here's the gist of the story and I am looking for opinions.

Back in May, I sold [for a relative] a (we thought) original Gibson vintage guitar on eBay for $1200. Buyer paid to my PayPal account with an Instant Purchase option and we shipped the guitar.

A week later, we found out that the guitar was not really an original (as we thought it was) and the buyer wanted a refund. So far, so good. We sent the buyer a check (luckily

) for the full refund. Buyer got the refund and sent back the guitar. My relative took the guitar back to where he originally purchased it and got a refund from them (a music retailer).

Everything seemed complete. That was then, this is now (September).

Yesterday I got an e-mail from PayPal stating that the same buyer had filed a reversal on the payment for the guitar, in the amount of $1200.00. What the #$##@$, I exclaimed! So, I go to the link PayPal provided and it takes me to a fax page, which I am supposed to fill out and fax to PayPal with proof of the refund. Luckily, we have the cancelled check......so I faxed it to PayPal today (took two times to get the fax through, though). {{By the way...every e-mail from PayPal clearly states DO NOT REPLY TO THIS EMAIL}}. Yeah, right! They just debited $1200 from my account but I can't say anything??? Little do they know I live only 50 miles from their national consumer affairs department, in Omaha. Um, PayPal....I've got the Attorney General of Nebraska just down the street.

I got home from work tonight and there is another e-mail from PayPal stating they received the fax and it could take an average of 5 days before they make a decision on my account.

A decision!?? Next I go to my account login and, low and behold, my account shows a (-$1198.00) balance (they took the $2.00 I had in there) and shows a 'Pending Claim' issue.

Within the fax I stated that the guy got his refund in full back in June, that I was forwarding a copy of the cancelled check, and that it appears they have someone who is attempting to defraud PayPal [and me] by trying to get a double refund.

Question........would you go and close your bank account before something more serious happens? Or would you wait and see what PayPal's response to the fax and proof of refund will be? I have had my bank account for several years and hate the thought of starting anew. If I inform the bank of this scenario, could they put a temporary freeze on withdrawals by PayPal, just in case. I meant to open a separate account just for PayPal several months ago, but just never did....geez! Am I worrying too much in advance here??? $1200.00!!! That's not chicken feed, folks.

Any suggestions will be greatly appreciated, but make it snappy

Don't have much time to make decisions here.

dsteiner · Posted: Thu Sep 18, 2003 8:15 pm Post subject:

Kim,

Do you have any direct deposits going into this account? Also, is there a possibility that someone could pay you for an auction with PayPal before this is resolved? (assuming it's resolved in the next 5 days, as stated)

You might want to keep the account open to see if it's resolved to your satisfaction. Just out of curiosity (and really not meant to rub salt in the wound, because it IS a lot of money) why didn't you reverse the PayPal payment after the customer returned the item?

Dave

Tradguy · Joined: 15 Sep 2002 Posts: 519 Location: Florida

Not trying to sound glib here...but...

Why didn't you just use the paypal refund option for the $1200? Paypal gives you 30 days to refund any payment made to you.

That way the seller would of gotten the refund immediately, plus paypal would have record of the refund, AND you would of completely avoided the paypal fees (which in this case were significant)?? By issuing a check you put yourself in a very tenuous position - you basically gave someone cash in exchange for an uncleared credit payment.

Had you been using a standard merchant account you would of had the same exact problem. The proper procedure would be to credit the original credit card (if it was in the allotted time period) - not to issue a refund. With a merchant account you would of been stuck with a chargeback, and they might of raised your monthly fees or even asked for a hefty additional security deposit.

Chances are that this guy actually filed for the chargeback quite some time ago - I believe paypal has a strict time limit on these filings - but paypal is notoriously slow about reporting back to the users about these things.

I feel confident that paypal will get this straightened out - but it won't happen in a day.

Unrelated story - my bank of 22 years double issued a house closing cashiers check leaving my account balance at -$32,000 - 23 bounced checks later, we realized the error. Until we figured out what had happened, they weren't altogether pleasant to me. Took a few days, but we got it straight.

Just take a deep breath....(and cross your fingers)

Rich

JC · Joined: 15 Feb 2002 Posts: 217

kjp55 · Joined: 18 Aug 2001 Posts: 1972 Location: East of Rockies

By mistake, when I listed the auction for my relative (he doesn't do too good at computer stuff) I neglected to change the PayPal payment ID in my bulk upload program to HIS PayPal account.

When the auction was over and payment was made, I transferred the funds to my bank and wrote him (the seller) a check so he could send out the guitar and close the deal. I probably should have put the $1200 back in my PayPal account adn refunded it that way, but that was then....this is now. Hindsight is great, eh?

The cancelled check does have the eBay Item number on the front (stating refund for eBay Item # xxxxxxxx). I'm giving PayPal the benefit of the doubt on this one and hoping they resolve this (in my favor, of course) in a timely matter. If not, I'll be making a quick trip to Omaha to visit them in person. Bet that'll be a new experience for them, eh? My concern is, if this reversal was entered against my account back in May or June, why has it taken this long to show up? And, if it wasn't issued back then, what happened to the time limit on chargebacks? Am I missing something here?

No matter what happens, I will be adding a new checking account just for PayPal. I could just kick myself for not doing it earlier! And, yes...David...I do have auto deposits going into that account. Ouch!

dsteiner · Posted: Thu Sep 18, 2003 10:59 pm Post subject:

Yes, unfortunately hindsight is usually 20/20, which doesn't do you much good now...

Have you tried recontacting the buyer? If, as Rich said, this is possibly a chargeback that was filed a while ago, and is only now being processed by PayPal - perhaps the buyer would assist you in clearing this up?

I know that Izzy Goodman has successfully fought some chargebacks - I'll send him a link to this thread.

Dave

JC · Joined: 15 Feb 2002 Posts: 217

Yisgood · Joined: 31 Jul 2001 Posts: 250 Location: New York

Was the check from the same recipient of the PP payment? If PP payment was made to Jim and check is from Bob, you probably have a problem.

According to PP's rules, they will not go into your bank account if your PP account was opened before October of last year. So you probably do not have to close your bank account. Even if they did go into your bank account your can probably get it reversed. But nothing stops them from accessing your PP account, so unless you are prepared to stop using PP, you will have to deal with this.

Have you emailed Damon@paypal.com? He seems to be one of their few employees who actually tries to correct problems.

This is one of the problems of using a third-party payment service. If you had accepted a credit card directly, you would be able to call the buyer's issuing bank and dispute the charge directly. When I had charge backs made against me, one of the boxes on the form was "a refund has been made" and you can enclose a copy of the check. Of course, nothing is a guarantee, particularly if payment was made to Jim and refund came from Bob, but when you are talking to a live person (as opposed to faxing repeatedly to a company known for losing faxes), they can usually see that the amount matches and the ebay item is written on the check. And when dealing directly, you would have the customer's information and his credit card number and you can remind him that what he is doing is fraud. But with paypal getting in the middle and their policy of not revealing any information about the fraudster to the victim without a subpoena, it will be an uphill battle.

good luck and be sure to come back here and let us know how it worked out.
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mbright1 · Posted: Sat Sep 20, 2003 9:47 am Post subject:

1. Contact the buyer and get their input. Are they trying to get a double refund, or is it the result of slow processing on an old claim? Has the buyer received the money from Paypal? If the buyer hasn't received the funds, I'd be after Paypal in a heartbeat and talking to my attorney about it.

When dealing with Paypal, you're not dealing with a licensed financial institution, so they probably have their own set of rules, and dealing with them is the same as if you're dealing with any other business. And regardless of what their "rules" are, if they step outside legality, i.e., attempt to take funds from your bank account illegitimately, etc. they can be held accountable for the aggravation, time and effort, lost business, etc. in getting it straightened out. At least that's my take on the matter.

2. Open a new bank account and have your auto deposits go into that one, and do not offer that account number to Paypal. You may want to speak with your bank and see what they recommend. In fact, you may want to open that new account at another bank entirely. And possibly switch it back later, after the issue is resolved.

3. Call Paypal on the phone and see if you can get it straightened out over the phone, immediately. Also, don't accept Paypal payment on any sales until the matter is resolved, otherswise those funds will be going into a black hole while your balance is still in the red.

5. Contact your local district attorney, they should be able to help you put in motion or get in contact with someone who can help you. With or without proof of a refund there are time limits on these things, as you already mentioned, and I'd be questioning Paypal on that, as well as finding out from the buyer when the claim was filed.

Give us an update on the progress/outcome. And if you're an eBay Powerseller, contact your eBay rep and see what they have to say...
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mbright1 · Posted: Sat Sep 20, 2003 9:53 am Post subject:

One more thing, from the point where you're logged in to your Paypal account, how many clicks does it take you to go about doing a refund on a transaction?

And on a scale of 1 to 10, how easy/hard was it to figure out how to do so?

A while back I wanted to do a refund and gave up trying to figure it out, and just went ahead and sent them a money order. So my rating would've been a big fat zero - never did figure it out. But you're right, you're supposed to be able to do a refund within 30 days, AND get a credit on the original fees.
_________________
I have Flat Fingers... So what's your excuse?
Friends use the Back Door - eDale-Trading.com

Tradguy · Joined: 15 Sep 2002 Posts: 519 Location: Florida

This has turned into a VERY informative thread!

As for paypal refunds - there is an option on the bottom of every transaction record to issue a refund - so not very hard if you started by looking at the transaction itself.

Login > recent transcations > specific transaction > refund - not many clicks.

But...I would imagine it would be very hard to find if you were looking for it on one of the menus.

Rich

kjp55 · Joined: 18 Aug 2001 Posts: 1972 Location: East of Rockies

Update: 9-20-03-->

I received an acknowledgement of the fax (with the copy of the cancelled check) I sent to PayPal. In the e-mail acknowledgement, it states it could take an average of 5 days for a response from PayPal on the matter.

I started doing some further investigation on this matter and found some real intersting info. On the page where PayPal lsits the details of the claim, it states that the payment was made on May 19, 2003. Right after that, it states that the reversal was made on May 20, 2003.

That means, if it is correct, the guy filed the reversal only one day after he made the payment, before he even received the guitar! Now I'm really getting concerned.

After doing some further checking, I found that he only had one prior eBay transaction before the one he had with us, and that the transaction he had with us was his last since May (at least under that bidder ID). I sent him a long, detailed e-mail last night and haven't heard anything back. I do have his phone number (if it's his real number) and will call him on Monday if I don't receive a response to the email.

All I can say so far is I'm real glad I had recently emptied my PayPal account balance. I had a whopping $2.00 in their when they hit me with the $1190 charge back. I cringe at the thought that if I'd had more in there (up to $1190), it would now be gone....or at least on hold in PayPal's hands. What a scam!

Either way, even if they can go into your bank account....I won't give them the chance. Izzy, I will e-mail Damon and see if he can help. Also, I remember being a bit sceptical in the past about people complaing about being taken by PayPal, and now I'm eating crow. I always strive to give people (and businesses) the benefit of the doubt but this (taking my money-if there was any there) is beyond reproach. If they'd actually taken the $1190 from my account, I'd already have been to the Nebraska Attorney General's office. I mean, c'mon...not even a friendly warning letter or inquiry e-mail until after the fact? Talk about slime tactics!

This ain't over yet. I'll keep everyone posted.

JC · Joined: 15 Feb 2002 Posts: 217

kjp55 · Joined: 18 Aug 2001 Posts: 1972 Location: East of Rockies

kjp55 · Joined: 18 Aug 2001 Posts: 1972 Location: East of Rockies

Update 10-1-03:

Well folks, here's the results of PayPal's findings regarding the chargeback mentioned above. Never thought I would fall victim to the horror stories mentioned in prior articles and threads within and on other sites, but guess I thought wrong.

This seems to be a case of out and out fraud on the buyer's part, whom I've attempted to contact with no success. According to the records provided by PayPal, the chargeback was made the day after the payment was made, (before the moron ever received the merchandise!). I never got notification of the reversal until 4 months later????????? And here is the result of PayPal's investigation on my dispute of the chargeback.........