As it seems after reading many of the other threads on these boards, I too am involved in a situation where the buyer after purchasing an item from me on eBay, disputed the charge with his credit card company resulting in a chargeback to my account of $500. PayPal is shrugging their shoulders saying nothing more than "Sorry, nothing we can do. It's not technically fraud." The PayPal customer service rep was sympathetic, though, and said he disagreed with PayPals policy. He told me something that I found interesting. He said that if I close my account with the balance still negative, PayPal will take no action against me. My credit will not be affected and they will not withdrawl from my bank account or charge to my credit card. Is this true? Has anyone done this? What are my options? Thanks for the info.
Closing your account does not eliminate your liability for the chargeback. The representative, if they advised as such, is not correct. Sellers are liable for chargebacks if it is not covered under the Seller Protection Program.
(FROM THE TERMS OF USE)-
If you do not qualify for the Seller Protection Policy. When you receive funds through PayPal, if the sender's transaction is reversed for any reason and you do not qualify for the Seller Protection Policy for that transaction, you will owe PayPal for the amount of the reversed transaction plus any fees imposed on PayPal as a result of the reversal. You agree to reimburse PayPal from either your PayPal account or by other means as described in Section IV.2 under "Receipt of Payments."
Receipt of Payments; Risk of Reversal of Transactions; Collection of Funds you owe PayPal. When you receive a payment through the Service, unless you follow the steps necessary to qualify for our Seller Protection Policy described in Part VII of this User Agreement, you are not protected against a subsequent reversal of the transaction. In the event that the sender's transaction is reversed for any reason and you do not qualify for the Seller Protection Policy for that transaction, you will owe PayPal for the amount of the reversed transaction plus any fees imposed on PayPal as a result of the reversal. Examples of such a reversal include, but are not limited to, a credit card charge-back by the sender of the payment, and a reversal of the transaction because the sender of the payment was using a stolen credit card or unauthorized bank account. PayPal will seek to recover the funds from you by debiting your PayPal balance and, if there are not sufficient funds in your PayPal balance, PayPal reserves the right to collect your debt to PayPal by any other legal means. If you open a Premier or Business Account after October 11, 2001, you authorize PayPal to debit your bank account linked to that PayPal account for the amount that you owe PayPal on transactions which were not covered by the Seller Protection Policy and which were not recoverable from your PayPal balance.
posted on October 26, 2001 01:42:10 PM new
Thanks for your response but my question was not answered completly. What will PayPal do if I refuse to pay them? According to Terms of Use, it states "If you open a Premier or Business Account after October 11, 2001, you authorize PayPal to debit your bank account linked to that PayPal account for the amount that you owe PayPal on transactions which were not covered by the Seller Protection Policy and which were not recoverable from your PayPal balance." I opened a Premier Account BEFORE October 11, 2001. Can they deduct it from my checking account? Will they charge my credit card? What will they do? That is my question... not what I am obligated to do because frankly I don't care. They screwed me on this transaction. Thanks for the info.
The chargeback is a legal liability owed by you. I don't have your account records to check the date the account was opened (just to be on the safe side), but collection could entail:
a) charging the credit card on file
b) reporting it to a collection agency
posted on October 26, 2001 01:52:30 PM new
Paypaldamon,
Thank you for your reply. Do you work for PayPal? If so, then perhaps you could explain why PayPal is acting like this. Here is the situation that I am involved in:
I sold an item via eBay to a man in Texas who was VERIFIED by PayPal. A few months later, I noticed that the charge was reversed. I sent 4 e-mails to PayPal who responded with "We need information X, Y, and Z in 3 days or this issue is closed." No information was provided on WHY the charge-back was done. I called customer service and they were clueless. I provided the information requested and waited for 2 months. Finally, they said that the man used a stolen credit card. I wrote to the guy who said it was his own credit card that HE reported stolen and that he no longer wanted nor was he in possession of the item. I sent this e-mail to PayPal and they said they would look into it further. I called them a little while later and they told me that if this man's credit card company supports the charge-back then they do as well. And further, this situation does not fall under seller protection because "It was not a stolen credit card and therefore no fraud was committed." I was utterly shocked. The fact that it was not stolen should strengthen my position. HE was the one to authorize the charge and PayPal didn't care. PayPal's reputation is on the line. The NEED to stand by their customers in situations like this regardless of what some guy's Credit Card company says. PayPal's responsibility is NOT to simply pass on the buck to ITS own customers when this sort of act takes place. To make matters worse, PayPal will not give me any information for the Credit Card company on the other end so I can find out why they decided that the chargeback would stand. Thoughts? Comments?
posted on October 26, 2001 01:54:20 PM new
P.S. If they charge to a credit card on file, I'll just dispute it like the other guy and get it taken off. It seems that PayPal can do NOTHING about disputed charges with the Credit Card companies.
Chargebacks, be it good or bad, are a right granted to consumers by the card companies. PayPal has no say in the issuance of the chargeback, which is decided by the credit card company.
We offer protection from two kinds of chargebacks:
a) Claims of non-delivery
b) Credit card fraud
This protection is extended only if the user follows the Seller Protection Policy. It sounds like the buyer may have filed a merchandise quality chargeback, which is not covered under the Seller Protection Program.
Chargebacks draw a fair amount of attention on the boards, but they are fairly rare. The risk of chargebacks is always present when accepting credit card payments.
I can have the chargeback team offer you some additional guidance (if you send me your account email address to [email protected]).
posted on October 26, 2001 01:56:59 PM new
Sorry, one more question. Is it stated anywhere in the Terms of Use that they can charge to my Credit Card to settle balances? It mentions checking account and Oct. 11 but no Credit Cards? Where did you get this information from? Thanks for your help.
posted on October 26, 2001 02:04:12 PM new
This is a plain and simple case of buyers remorse only 3 months after the fact when he was tired of the product. There is no fairness in this rule. What you are trying to state is that ANYONE regardless of the REASON can get out of paying for ANYTHING when they pay via credit card. THAT is the situation here. Nothing more. The item was delivered and the customer was happy (for a while). I have emails to prove it. It is far too easy for this to take place and PayPal needs to protect the rights of its customers against fraudulent chargebacks. Don't you see a problem with these types of situations? This is an attack at the very essence of what PayPal is attempting to do. This one-sided chargeback undermines PayPals credibility in this industry. At the very LEAST, this sort of situation should be protected under the Seller's Protection Policy. Your comments?
There is no way for PayPal to counter the individual actions taken by a user. Chargeback rights are given to the cardholder by the card company, which is a right that we can't walk away from.It is also nothing that we can change---you would find the same criteria with the other payment services,merchant service providers,etc.
posted on October 26, 2001 02:20:35 PM new
This situation like a trial. I am the defendant, PayPal is my representative, and the Buyer is the plaintif and his credit card company is the prosecuting attorney but only there is no jury. Only I am not allowed in the court room, the prosecution attorney decided that their client was right without hearing from the defense, and decides to hands down the verdict to my attorney: GUILTY. You don't see a problem with this? Please tell me you see a problem with this.
If the seller authorizes a charge in the first place, he must PROVE why the charge-back is necessary to an independent thrid party and then the victim (me) must be allowed to respond. Either that or take me to small claims court. You don't think this is the way it should work?
posted on October 26, 2001 02:25:11 PM new
This unilateral decision to enforce a chargeback by the buyer's credit card company is absurd and the fact that PayPal is doing nothing about it is even more disturbing. PayPal will get no money from me and I will make it a personal mission to see to it that PayPal fails as a company through a class action lawsuit if my Credit is tarnished as a result of this. I am sorry but I have nothing more to say. You were of no help.
posted on October 26, 2001 02:27:57 PM new
Hi dequils,
While I am certainly sorry to hear about the issue (created by the buyer), I will point to the terms of use to back up my statements. There is always the potential for a chargeback accepting credit cards through any method.
Credit Card Transactions: The Buyer Protection Policy does not replace or reduce any other consumer rights Users may have, including chargeback rights that may be granted by a User's credit card issuer. PayPal is the merchant of record with respect to all credit card transactions through the PayPal service to purchase goods or services. As such, we afford customers the rights and privileges expected of a credit card transaction. You acknowledge that PayPal does not control the outcome of any chargeback decision initiated through a User's credit card issuer.
PayPal encourages all buyer purchase disputes to be filed and resolved through the PayPal dispute resolution process, and reserves the right to terminate or restrict account privileges of buyers who file chargeback complaints without attempting to resolve the complaints through PayPal. If a chargeback claim is initiated, whether as a result of a dispute or for any other reason, the parties agree to provide to any requesting party on a timely basis any and all necessary documentation to resolve any chargeback or dispute. PayPal DOES NOT act as the agent of either party in any transaction or resulting dispute, though PayPal does control the outcome of disputes initiated through the Service's dispute resolution process.
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.
posted on October 26, 2001 06:13:05 PM new
The lies of Damon!!
"Chargebacks draw a fair amount of attention on the boards, but they are fairly rare."
Lie. PayPal had so many chargebacks MasterCard fined them.
"PayPal has no say in the issuance of the chargeback, which is decided by the credit card company."
Lie. PayPal, as the merchant of record, has the right to dispute a chargeback.
"It is also nothing that we can change---you would find the same criteria with the other payment services,merchant service providers,etc."
Lie. Chargeback decisions can be appealed - but that is tough, I admit.
"It sounds like the buyer may have filed a merchandise quality chargeback, which is not covered under the Seller Protection Program."
True. And now it seems PayPal simply points to this giant loophole whenever someone gets a chargeback that should have been covered under their *chargeback protection*
posted on October 26, 2001 07:56:05 PM newChargeback rights are given to the cardholder by the card company, which is a right that we can't walk away from.It is also nothing that we can change---you would find the same criteria with the other payment services,merchant service providers,etc.
Why not tell the whole story, damon- that merchant accounts allow a seller an opportunity to present their side of the transaction, and that this ability affords the seller more protection than a PayPal account?
Maybe because it isn't in PayPal's best interests that you do so?
posted on October 26, 2001 08:27:26 PM new
beilcen,
Please choose your words a little more carefully. Company Reps are to be treated with the same respect as other posters and calling anyone a liar will put your posting privileges in jeopardy.
Why doesn't paypal give you more of a chance to defend yourself, like a *TRUE* merchant account actually does. I have a merchant account, someone filed a chargeback about quality of merchandise, the auction they purchased it from clearly stated it was as-is, i sent this to processor and i was cleared because i could PROVE that they purchased it and agreed to the terms... Why isn't that an option with paypal? Seems pretty fair to atleast give your customers the chance to defend against such accusations of a "chargeback". If it's fraud, then your protection policy covers it, how do you determine if it's fraud or not?
posted on October 26, 2001 09:42:30 PM newWhy doesn't paypal give you more of a chance to defend yourself, like a *TRUE* merchant account actually does.... Why isn't that an option with paypal?
It's not hard to figure this out. Defending a seller against a chargeback would cost PayPal money. It's a lot cheaper to just process the chargeback and take the money away from the seller.
Of course, this doesn't stop PayPal from sending out email with a subject heading of:
"PayPal protects you from costly chargebacks"
and saying:
"Just follow a few simple precautions and you can stay chargeback free."
posted on October 26, 2001 10:33:24 PM new
"Just follow a few simple precautions and you can stay chargeback free."
This is joke!!
I did everything "Seller Protection Policy" required!
Ship to confirmed address with FedEx ….
However I have still problem with chargeback for eBay item, I did post on http://www.auctionwatch.com/mesg/read.html?num=47&thread=4551
This happened was after 5 months receiving fund from a VERIFED PayPal user!! The fraudulent buyer filed complain after 3 month receiving item, PayPal denied the complaint, I was told that I qualified "Seller Protection Policy" at that time!
But now PayPal took $310 + $10 chargeback fee from my account.
It was $310 transaction, PayPay charged $7.12 fee. PayPal took total $310 + $10 + $7.12 = $327.12 for a qualified $310 "Seller Protection Policy" transaction!!
I lost my merchandise and shipping cost, plus PayPal fee + PayPal chargeback fee + eBay fee!!
posted on October 27, 2001 08:42:42 AM new
dequils, the reason why your question cannot be answered as you asked it is that it is ambiguous and context dependent. If it's "what will they do tomorrow", the answer is probably "not much". If it's "what will they do eventually", the answer is "probably turn the debt over to a collection agency".
You ask, "what will PayPal do", and the answer is "you are personally responsible for unprotected chargebacks". PayPal, the creditor, has a variety of means available to convince you to live up to your responsibilities. Which means they apply, and the timing of their application is a decision left to the creditor.
posted on October 27, 2001 01:39:55 PM newI have a merchant account, someone filed a chargeback about quality of merchandise, the auction they purchased it from clearly stated it was as-is, i sent this to processor and i was cleared because i could PROVE that they purchased it and agreed to the terms...
This poster's personal experience seems to contradict rooguy's repeated claim that merchant account providers do not get involved in quality of merchandise disputes.
posted on October 27, 2001 04:00:23 PM new
The new processor i have asked if i wanted a "no return policy/all sales final" added to the page where customers fill in their information, i asked what purpose this would server, he said it helps prevent quality of merchandise disputes because the buyer knew beforehand that all sales are final. I havn't had a chargeback with this new account but i have had some in the past with great results. It's usually your merchant who helps decide who's problem it actually is ...I was told that sometimes the bank will actually eat the money rather than the merchant or buyer (sure it doesn't happen often though). Just my experience ...
Chargebacks are rare compared to the overall number of transactions conducted through the system. The only time transactions draw attention is when there is one received.
The comment about chargeback issuance is correct. The credit card companies have final say in the issuance of a chargeback---we do fight chargebacks, but it does not mean that we will win them.
Quality of merchandise chargebacks are not covered under the Seller Protection Program.
posted on October 27, 2001 04:47:25 PM new---we do fight chargebacks, but it does not mean that we will win them.
In the case of the purse seller a while back, you did not. If it's not too much trouble, could you post the criteria you use for deciding which chargebacks you fight?
posted on October 27, 2001 07:05:12 PM newThis poster's personal experience seems to contradict rooguy's repeated claim that merchant account providers do not get involved in quality of merchandise disputes.
If I posted "automobile care is expensive these days", sure enough someone would come along and say "my last three visits to my auto care facility were FREE", and some 3rd poster would say "see, some automobiles really are cheap to maintain, you just need a good one".
Believe as you choose.
But don't misrepresent what I describe. What I said is: credit card companies do not pass judgement on quality of merchandise disputes. If seller refuses to cooperate, and buyer follows the procedure and is persistent, buyer will always win a 100% refund.
I'd be pleased to consider any evidence you might find to the contrary, but it appears that for this forum time is short, do give some thought to what constitutes evidence and what does not.
[ edited by roofguy on Oct 27, 2001 07:06 PM ]
posted on October 27, 2001 07:34:21 PM new
Roofguy,
You are totally correct with that statement, if a buyer files a quality dispute and the seller doesn't respond (whether to paypal or a merchant account) they automatically lose. Atleast with a *real* merchant account you can reply and defend yourself, whereas with paypal if someone files a chargeback agains them, they just take your money and say sorry, we don't deal with this, yet the seller should have an option to send the information to paypal and their processor rather than just sticking it to the seller. Damon? Your thoughts on this ..or just would cost to much time/money for paypal to even worry about? you'd think they'd want to please both of their types of customers whether buyers or sellers ...give sellers a fair chance to defend themselves ...i guess buyers already have the upper hand ..they can just say quality of merchandise dispute and boom, they get all their money back ..and sometimes the item too ...since i havn't seen any real reports of sellers getting their stuff back ...Anyway just more ideas/comments =)
posted on October 27, 2001 07:46:55 PM new
roofguy posted on August 17, 2001 02:51:07 PM
In any case, NO ONE, not a credit card company, not a bank, is going to investigate a series of "he said she said" "which shows that this is true". They are not going to investigate.
OK- I said "get involved" instead of "investigate". In order for my previous post (which you took issue with) to be inaccurate, you have to insist that "investigating" is not the same thing as "getting involved". Either that, or there are multiple individuals posting as roofguy.
edited for spelling...
[ edited by mrpotatoheadd on Oct 27, 2001 07:47 PM ]
posted on October 27, 2001 09:26:01 PM new
Cybercomputing,
You summed it up perfectly and that is why I am having a hard time with this. PayPal did not even contact me to get my side of the story. They just passed along a judgement. I would think they would at least get my information so that they could present it to the Credit Card company. As far as I know, the Credit Card company never even heard from PayPal. And even if PayPal did contact the Credit Card company, what are they going to say? Nothing from me. To make matters worse, PayPal refuses to give me the contact information to the Credit Card company so that I can explain it to them. This whole situation is ridiculous. I am presumed guilty without even the chance to prove innocence. Doesn't Damon see the insanity in this or is he just going to spout some policy of PayPals and then bury his head in the sand.
Again, let me clarify, the buyer was VERY happy with the purchase so Quality was not an issue. I have MANY emails from the buyer thanking me and telling me how happy he was. It wasn't until months later that he felt like he should try and get the money back, which he did, very easily I might add. The problem here is also with the buyer's credit card company which so easily issued a chargeback but PayPal is blocking any progress I might be able to make AND doing nothing for me on my behalf. What service!
