posted on November 9, 2000 03:27:50 AM new
Last month I had a customer notify me that a package sent by mail did not arrive. I told the customer that he could fill out an insurance claim form and get a full refund. The customer refused to fill out a claim. Instead, he filed a fraud complaint with Paypal.
Paypal asked for proof of shipment. I could not provide this because there is no documentation. (It was a $12.99 item.) However, the item was insured by U-Pic.
Paypal has now locked my account. I'll have to pay for this item out of my own pocket even though it was insured. At the time of the complaint, Paypal required users to first file an insurance claim, but that requirement has since disappeared from their terms of use.
Paypal is holding several hundred dollars of mine in a locked account over a $12 dispute. What's even more shocking is that any payments coming into the account are automatically flagged as completed. That means that I can't refuse the payments, and the senders can't cancel them and get their money back either. I know from one customer's report that Paypal is going ahead and charging the money to customers' credit cards, without my even accepting the payments. Then the money goes into my locked account. In this way, several hundred dollars have accumulated, mostly late pays from auctions that ended weeks ago.
I sent the complainer a refund via Paypal, but somehow the transaction was never recorded. Perhaps I can't send money from a locked account. So I wrote to Paypal support and told them to go ahead and refund. I've heard nothing back and my account is still locked.
Paypal has not abided by its own terms of use. I suppose Paypal figures that if they change the terms of use every day, then they can do whatever they want. Now Paypal is accepting money in my name and preventing me from accessing it. My customers are getting charged without my having an option to refuse payment.
This goes beyond following the terms of use. I believe what Paypal is doing is illegal. I will be filing a formal complaint against Paypal for online fraud as soon as I can find the link. If this is not resolved quickly, I will take the matter to small claims court. I live in the same county as Paypal so there should be no jurisdictional problems.
People, this can happen to you! All it takes is one $10 item lost in the mail. You will be forced to send out packages to customers for weeks with no money coming in. Beware of Paypal!!
P.S. When I wrote to Paypal that I had sent a refund to the user (which of course didn't work from a locked account), they didn't even have the courtesy to tell me that I couldn't make a payment from that account. They only told me that I never made any payment. Not only were they not helpful, but they apparently want to make this as confusing as possible.
posted on November 9, 2000 05:07:06 AM new
Man, another chapter in this gawdawful novel. PP continues to show no signs of intelligent life. Have the St. Bernards been dispatched to locate Damon? A lot of us have the idea that Damon is our only friend at PP, but he is, after all, one of them. And I think that they have either put a muzzle on him or buried him in the bowels of this out-of-control corporation.
posted on November 9, 2000 05:44:30 AM new
Twinsoft:
I thought you closed your paypal account on October 12th, "On the plus side, my Paypal account is empty and the account is closed" and also opened a different checking account, "Just today I closed my checking account and opened a new one. Paypal is quickly becoming just a bad memory" and were having good results with PayDirect.
What made you decide to go back to PayPal again after your previous experience of them freezing your account?
posted on November 9, 2000 07:46:51 AM new
Damon has been restricted because someone didn't buy his explanations and did a charge back for "item not as described."
posted on November 9, 2000 08:55:39 AM new
[b]Last month I had a customer notify me that a package sent by mail did not arrive. I told the customer that he could fill out an insurance claim form and get a full refund. The customer refused to fill out a claim. Instead, he filed a fraud complaint with Paypal.
Paypal asked for proof of shipment. I could not provide this because there is no documentation. (It was a $12.99 item.) However, the item was insured by U-Pic. [/b]
I'm sorry but as a buyer (I'm mostly a seller), I can totally understand their stand. If I submitted payment and the item did not arrive, I would want the seller to investigate why it had not arrived.
Also if it was insured through U-Pic (I'm not familiar with them) that a documentation is necessary for proof of insurance. The buyer has no record.
Lastly, get on the phone with PayPal. I had a dispute with them and I did not rest until it was resolved - which it was.
I would want the seller to investigate why it had not arrived.
I don't see anything in the original post to indicate that the seller would not do this. He asked the buyer to fill out a claim form, which is required of him by U-PIC. From the U-PIC website:
You must also submit a signed affadavit from the consignee (if you were the shipper), or the shipper (if you were the consignee) stating the item was damaged or lost.
I don't think providing this for a seller is too much to ask.
[ edited by mrpotatoheadd on Nov 9, 2000 09:47 AM ]
posted on November 9, 2000 10:02:52 AM new
mr potatoehead,
Like I mentioned, I am not familiar with UPIC. A USPS insured items, it is the seller who retains the insured receipt and up to the seller to investigate since they are the only document holders.
I was unaware that it is a policy that a buyer were to fill out a claim form. Why is it that you cannot show proof of insurance to PayPal though through UPIC?
posted on November 9, 2000 10:14:14 AM new
For a USPS insurance claim, the seller fills out a portion of the claim form and mails it to the buyer, who must fill out a different portion and sign it, and return it to the seller, in order for the claim to be processed.
Why is filling out a USPS claim form any different than filling out one for another insurance company? Why would any buyer refuse to cooperate with a seller in order to recover the cost of a lost item?
posted on November 9, 2000 10:21:59 AM new
[*i]
avmom:
"I was unaware that it is a policy that a buyer were to fill out a claim form. Why is it that you cannot show proof of insurance to PayPal though through UPIC?"
[*/i]
PayPal, through its purported protection guarantees, routinely interferes with auctions and terms of those auctions.
Many sellers utilize USPS insurance, U-PIC insurance, or even self-insure. If an item does not arrive, or arrives in damaged condition, the insurance covers the claim.
Buyers can benefit from filing an insurance claim with the carrier, then file a claim with PayPal resulting in a frozen account for the seller (PayPal's claim that restrictions can be placed on individual transactions, as in this case, demonstrates that statement is untrue), and they can effect a chargeback from the sellers PayPal account or, if verified, checking account, by simply calling their credit card company.
PayPal's website claims buyers "receive money instantly". What they don't tell you is that all your money can be frozen just as quickly.
So just how has PayPal simplified the auction process?
PayPalDamon .... whereeeeee areeeeee youuuuuu ?????
[ edited by dimview on Nov 9, 2000 10:25 AM ]
posted on November 9, 2000 10:25:18 AM new
mr potatoehead,
The question is, is the buyer familiar with UPIC's policy that a claim must be filed by the buyer? It seems apparent that this isn't so. Otherwise the fraud investigation wouldn't have been filed.
I told the customer that he could fill out an insurance claim form and get a full refund. The customer refused to fill out a claim.
The seller never said that the buyer was required to file the claim. The seller told the buyer that he needed to fill out a claim form, and that the customer refused.
I'll ask again- Why would any buyer refuse to cooperate with a seller in order to recover the cost of a lost item?
posted on November 9, 2000 11:42:27 AM new
mr potatoehead,
The customer is always right. I don't want to agrue about that. The customer always ends up winning in the end. Having a good customer service would abide in that. The customer waited over a month to find no product.
I still can't understand why proof of shipment /insurance couldn't be provided to PayPal either. If there was a record of insurance, why no record of shipment?
Because money was sent through PayPal, and the item was not rightfully produced, I don't see why the customer tries to get their money back from the source they sent it.
posted on November 9, 2000 11:57:14 AM new
You said you are a seller, so tell me how you would go about filing an insurance claim if the customer refuses to do his part by filling out the appropriate forms.
The customer waited over a month to find no product? The customer was asked over a month ago to fill out an insurance claim form, and refused.
This is copied directly from PayPal's Terms of Use:
If you pay a seller who does not ship the promised goods, you should first contact the seller and attempt to resolve the dispute directly with the seller
Based on the information provided, the buyer has violated PayPal's policy. How is a seller able to resolve this issue, if the buyer refuses to cooperate?
edited... ubb
[ edited by mrpotatoheadd on Nov 9, 2000 11:59 AM ]
posted on November 9, 2000 12:08:42 PM new
Well, the buyer did file a claim ... with PayPal.
I ALWAYS treat a customer how I'd like to be treated. 100% customer satisfaction. Is it worth $12.99 to go through so much grief?
I don't think the customer understood the U-PIC policy. Why isn't U-PIC an active source? It seems as though the customer has do to all the footwork for something they didn't receive.
I don't think I'll be using U-PIC after seeing this! At least with USPS, I am an active party to help my customer find the product.
avmom
Off to the post office. I've got a business to run.
posted on November 9, 2000 12:21:01 PM new
All the customer has to do is send the seller an e-mail stating the item did not arrive.
That's IT. They don't have to fill out ANYTHING.
U-PIC is the easiest insurance service to work with.
The buyer does less work than with a USPS claim.
This customer is just being a jerk.
Candi, if you're around, please explain U-PIC's claims procedures.
posted on November 9, 2000 12:25:48 PM new
The customer had to do more work to initiate that charge back than to make the insurance claim. This leads me to wonder why. Maybe because intiating the insurance claim would show that the item was in fact delivered.
These kinds of customer rip-offs happen all too often. When you have your own merchant account or use a reputable service, they first ask the customer if he has done his part (filled out the claim form, contacted the seller, etc). They then ask the seller if he has done his part (provide proof of shipping, contacted the shipper). Only then do they make a determination. Even if they feel the seller is at fault, they only take back that amount, which in this case would be 12.99.
A lazy service like Paydirect will just take back the 12.99, no questions asked.
A crooked service like Paypal will lock the entire account.
posted on November 9, 2000 01:17:06 PM new
MrJim, Paypal never froze my account previous to this. I closed my account a while back, but payments kept trickling in, mostly late pays from auctions that ended over a month ago.
avmom, the item was insured. It is not practical for me to add that much extra paperwork (i.e., delivery confirmation for 100 $10 packages per week). If the customer wanted a refund, he should have been willig to fill out the insurance claim form. At the time this happened, that was the required procedure for Paypal. Paypal jumped the gun and locked my account without requiring the customer to file the claim. And I suspect that since the customer refused to fill out an insurance claim, that he is lying about the lost package.
avmom, you wrote, "the customer waited a month and received no product." USPS also has a 30-day waiting period before an insurance claim will be accepted. In that way, U-pic and USPS are the same. Also, Paypal's terms of use plainly stated that the customer MUST fill out the insurance claim FIRST. Paypal ignored their own terms. Since then, apparently this requirement has been dropped by Paypal. It no longer appears on their Terms of Use page.
dimview, I did post appropriate feedback for the buyer. The buyer accused me of fraud in his feedback profile and also published my personal information. eBay removed the feedback and I can not post feedback for him again. What's more, the buyer's own feedback shows that he refused to refund to a customer who claimed non-receipt of an item. His reason (as stated in his own feedback follow-up) was that he didn't like the customer's attitude.
MrPotatoHead, "Based on the information provided, the buyer has violated PayPal's policy. How is a seller able to resolve this issue, if the buyer refuses to cooperate?" Yes, that is exactly the issue.
avmom, there is no "footwork" involved. The customer claimed the package never arrived, but refused to sign an insurance claim. Is that so much to ask? I understand both buyer and Paypal should be protected, but you are failing to account for a whacko buyer who is probably attempting a scam of his own.
The end result of this is that my Paypal account, which contains several hundred dollars, is locked. Paypal is now charging my customers as soon as a payment is made. I can not refuse the payments, and customers can not cancel their payments either. So I am being forced to mail out the packages without receiving any monies. Obviously, this is strong-arm tactics. This has been going on for weeks, and all over a $12.99 item. I attempted to send the customer a refund from my Paypal acct. but was unable to do so. I didn't know I couldn't send money from a locked account. When I contacted Paypal, they only told me "you never sent a refund." They didn't even have the courtesy to explain that I couldn't send money from my account. I told Paypal a week ago to go ahead and refund the money (out of my own pocket, despite the insurance), but I have heard nothing and my account is still locked.
I believe what Paypal is doing is illegal. They are accepting payments in my name without my permission, and keeping the money. Right now they're holding hundreds of dollars because of a $12 dispute. Someone please post a link to the FCC or FBI's online fraud claim and I will file an online fraud complaint against Paypal. If this is not resolved quickly, I will drag their butts into court.
posted on November 9, 2000 01:22:12 PM new
Here's the advice I give people whose paypal accounts have been frozen. Contact anyone who has sent you money and tell them that paypal has frozen your account. You can not get the money nor can you refund it and therefore you suggest that they all charge it back. If everyone did this, paypal would be getting hundreds of charge backs a day and their own merchant bank would be hitting them with severe penalties or cancelling their merchant account entirely. It's time they paid the price for their vicious, heavy-handed and (I believe) illegal practices.
posted on November 9, 2000 01:31:55 PM new
<I>
yisgood:
"Here's the advice I give people whose paypal accounts have been frozen. Contact anyone who has sent you money and tell them that paypal has frozen your account. You can not get the money nor can you refund it and therefore you suggest that they all charge it back. If everyone did this, paypal would be getting hundreds of charge backs a day and their own merchant bank would be hitting them with severe penalties or cancelling their merchant account entirely. It's time they paid the price for their vicious, heavy-handed and (I believe) illegal practices."
</I>
A most excellent idea. Hoping its not needed, but filed away for future reference.
<I>
twinsoft:
"Paypal has now locked my account."
</I>
And send an e-mail to PayPal's customer support (term used loosely) giving them 48 hours or 72 hours notice that you intend to ask those who made payments into your restricted account to initiate a chargeback.
posted on November 9, 2000 01:40:57 PM new
Yisgood, the problem is that anyone who makes a chargeback against Paypal gets their account frozen as well. That's written in the ToU.
avmom, thanks. The money won't bankrupt me. I'm more upset by what amounts to Paypal thumbing their nose at me. Right now Paypal's site is down. X.com is no more, probably because the feds caught up with them. I suspect they will shut down Paypal pretty soon too. I hope I can get my money out before those scammers go belly-up.
posted on November 9, 2000 01:50:23 PM new
>>the problem is that anyone who makes a chargeback against Paypal gets their account frozen as well. That's written in the ToU<<
You mean the TOUOTM (Terms of Use of the Minute). Yes, I know. Did your buyer who made the original charge back have his account frozen? So far I think PP has only done this to sellers. I would mention this to my buyers before recommending that they make a charge back. But I would not ship them merchandise when PP is holding the money. I would also recommend that they complain to the Banking Commission. After all, when someone makes a payment through Paypal, PP is the merchant. PP is providing the service of taking that money and passing it on to the seller. However in this case, PP is taking the money and keeping it since you can't get it. Sounds to me like you or your payers have a clear case of fraud here and can report PP to the FBI, the Attorney General and all the other agencies that regulate Internet fraud. If enough victims complain, PP may finally have to change their insane behavior and some agencies may finally decide that these services have to be regulated to give consumers some protection.
posted on November 9, 2000 01:57:37 PM new
I would add the Federal Trade Commission (regulatory authority) and the California Better Business Bureau (private organization) as additional places to file complaints.
Since PayPal has diverted funds from its rightful accountholders when entire accounts have been frozen, that might well fall under wire fraud statutes, therefore your other places to file complaints are excellent.
And PayPalDamon ... whereeeeee areeeeee youuuuuu ?????
posted on November 9, 2000 02:04:39 PM new
Yes, that's right. Paypal is accepting the money in my name. They are acting as my agent and presently keeping the money. As far as I'm concerned, as long as they don't turn over the money, they are liable to complete the eBay transaction.
Unfortunately, I can't in good conscience put my customers or their accounts in opposition to Paypal. How many accounts and how many millions of dollars does Paypal maintain in "frozen" accounts? I guess Paypal figures they will just float themselves a little loan at my expense.
I don't want to put my own customers at risk. I stopped accepting Paypal a month ago. The payments in the account now are late-pays from auctions that ended prior to that, and a couple of customers who ignored the instructions in my invoice. In fact, I did tell one customer yesterday to cancel their Paypal payment. (Oops! ) I'm sure I'll be hearing back from that customer soon that I already accepted their payment. This is total BULL****.
If anyone out there is still using Paypal to accept online payments, think again. I am using Yahoo PayDirect and have had no problems. There is no verification requirement unless I want to transfer money from my bank account to my Yahoo account. They don't bad-mouth me to my customers because I don't give Yahoo permission to go into my checking account. There are no chargebacks. One customer even told me Yahoo is easier than Paypal. Yahoo is free and easy, the way Paypal used to be.
posted on November 9, 2000 04:22:54 PM new
HI twinsoft,
You are more than welcome to send me the information to [email protected]. I will refer the information directly to the buyer/seller protection group and they can provide a more accurate explanation than I can.
