How Paypal Condones Fraudulent Sellers
Recently someone of Digital Point Forums was selling the code for a video blog. I thought I’d give it a shot. I sent him the money via Paypal and he sent me a link to download the code.
Unfortunately, the code was incomplete and didn’t work at all. I sent him several emails asking him to fix the code. At his request, I even set him up with an FTP username-password so he could copy the code over himself. Apparently I’m not bright enough to unzip a file and upload it to my own server!
He never uploaded any code and he stopped responding to my emails.
Anyway, after more than a week I got tired and contacted Paypal. I opened a dispute and they sent the seller an email which he ignored. After 2 days I escalated the dispute to a claim.
But Paypal denied the claim! Here’s their canned response:
You have chosen to escalate your dispute to a PayPal claim. By ending communication with the seller, you are asking PayPal to investigate the case and decide the outcome. As part of our investigation, PayPal reviewed any communication you may have had in the Resolution Center.
Our investigation into your claim is complete. As stated in our User Agreement, the claims process only applies to the shipment of goods. It does not apply to complaints about the attributes or quality of goods received. Therefore, we are unable to reverse this transaction or issue a refund.
———————————–
Transaction Details
———————————–Transaction Date: Feb 14, 2008
Transaction Amount: -$11.00 USD
Your Transaction ID: XXXXXXXXXXXXX
Seller’s Transaction ID: XXXXXXXXXXXXX
Case Number: XXXXXXXXXXXXX
Seller’s Name: syed sinofer
Seller’s Email: silas_in2006@yahoo.com
Luckily it wasn’t a large amount, but it still left me pretty pissed. I suspect that the seller had bought a piece of software that generates a video blog and was just zipping up the resultant code and illegally reselling it. By its inaction, Paypal is condoning these fraudulent sales. Basically you can sell anyone complete crap and Paypal won’t do a damn thing! So long as you actually send the buyer something, you’re safe to continue scamming people!
Until today I was under the impression that Paypal would protect me against fraudulent sellers. Doesn’t seem like this is the case.
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February 25th, 2008 at 2:22 pm
I could not agree with you more about this. Paypal does NOTHING to protect both parties of a transaction. I have also been on the bad end of a buyer who scammed me. They requested a charge back from their credit card, GOT the money back without me being able to dispute it, AND they sent a box back with delivery confirmation, so they could confirm that they sent the item back, when they really did not send it back.
Paypal has horrible customer service, and their policies are horrible. If you read the fine print, credit card companies have authority over them to do whatever they want. It’s ridiculous. Great post. STAY FAR AWAY FROM PAYPAL!
February 25th, 2008 at 2:24 pm
I use Paypal, but I ONLY use the option to pay via Credit Card. Then you can always reverse the charges through Visa (which actually protects its users).
February 25th, 2008 at 5:11 pm
Paypal (and it’s conjoined twin eBay) are dangerously unregulated, usurious, full of thieves (both buyers and sellers), unfair and arbitrary in their decision making.
However they also provide great convenience (try finding another auction site where you’ll sell enough inventory to run a business – or another micropayment system other people actually use).
Much as I dislike eBay/Paypal, the advantages still outweigh the disadvantages for me. But given a viable competitor I’d switch in a heartbeat.
(Having said that, yet more fee raises, the destruction of the feedback system and a couple of recent scams I’ve been hit with are making me seriously consider cancelling my account)
February 25th, 2008 at 5:15 pm
Erik: Please don’t confuse Paypal with a credit card company.
Credit card companies are, for the most part, covered by some quite strict consumer laws. Although the merchant still gets screwed in a chargeback situation, the consumer is well protected and the CC companies have to answer to a regulatory body.
Paypal is an entirely unregulated beast who can do whatever they please.
February 26th, 2008 at 2:34 am
As frustrating as this situation is, I’m not sure what PayPal can really do about it. Are they in a position to judge the quality of code or anything else that’s bought and sold using their services?
February 26th, 2008 at 8:14 am
Are there any real substitutes to paypal? BTW, there was some code floating around wickedfire for a while to do this, not sure if it is still there or if it worked either…
March 1st, 2008 at 4:10 am
Sorry to hear about your loss. Paypal does seem to live in a strange no man’s land.
On the other hand, it can be almost as bad when such sites crack down too heavily in favour of protecting the buyer. I had problems recently when I opened a new eBay account to clear out some space in my office. Apparently, the goods I was selling (games, dvds, other pirateable goods) were flagged in its system as fraudulent (because I didn’t have a long history I guess) so they suspended the auctions immediately. There is a lengthy appeals procedure, but it seems quite time consuming just to make 100 bucks.
So getting the balance in this wired world of ours isn’t easy.
March 11th, 2008 at 8:06 am
Gawd. I got charged four times in one month for two DVDs from Columbia House, via my debit card. One of the charges expired before it went through; three went through. Columbia House played dumb. With the last transaction they triggered some kind of internal alarm at PayPal, which promptly put a limitation on my account. I can receive funds there but not send or withdraw them. I took the steps they asked me to take to secure the account and prove I was who I said I was, and nothing, and it’s been since Feb. 20. I have emailed them twice now asking what else, if anything, I need to do. No response.
Fortunately I only have about a dollar and change in that account because I’m about to abandon it. If it’s got a limitation on it nobody can charge the debit card anyway.
It’s weird because they used to be a lot more responsive when I had a question or an issue. I’ve had an account with them for six or seven years now and they’ve made plenty of dough off me from my Premier account fees. I don’t know what they’ve got stuck up their nether regions but they need to get over themselves.
There’s at least one new competitor for PayPal now, but I forget what it’s called. Seems like half the PF blogosphere has its ads on their websites, though, and right now there’s a $25 bonus for signing up. Sending and receiving money is free. Darned if I know how they’re going to make any money at it.