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Chargeback horrors with Paypal

I listed a Gold Austrian Philharmonic coin for sale on eBay. Someone sent me $1,500 on PayPal and asked to purchase the coin for that amount. This was contrary to eBay’s procedure and I told the buyer that in an email. The buyer also asked for the coin to be shipped to an address in Japan. I told the buyer I couldn’t ship it to Japan unless I receive another $25 from him or her. I was ready to cancel the transaction and refund the buyer’s money. The buyer then purchased the coin on eBay. I shipped the coin to an address provided by eBay and refunded $19 of the buyer’s money. It turned out to be the incorrect address. I requested of the recipient that it be returned to me, and it was.

After consultation with eBay representatives, I asked the buyer for an additional $55 to pay for shipping to Japan. The buyer sent $55 to my PayPal account the next day. I shipped the coin to the address in Japan last Saturday by USPS Priority Mail Express International, as the buyer had instructed.

Three days later, PayPal informed me that a chargeback for $55 had been submitted, to which I was requested to submit a response. I did, by providing the tracking number along with an explanation. PayPal sent me an email the next day, telling me they were unsuccessful in disputing the chargeback. My PayPal balance went from $0 to -$75. A fee of $20 was added to the chargeback amount.

While discussing the result with a PayPal representative, another chargeback for $1,437 (the $1,500 less the PayPal fee and my refund for shipping charges) appeared in my account.

I don’t have any confidence in PayPal’s ability to dispute the second transaction successfully. First of all, PayPal would only forward my response and evidence supporting my shipment of the merchandise to the Credit Card company. There is no appeal procedure if I lose the dispute. Secondly, PayPal apparently provided me with false information concerning the buyer’s shipping address after they reviewed the payment, according to my research. The shipping address PayPal provided for the buyer doesn’t match the address that eBay provided me with. Third, PayPal won’t provide any meaningful information about the card holder, or the case number that the credit card company said they provided to PayPal. According to the Credit Card company, they won’t release information about the dispute unless I provide them with the case number. Consequently I have no way to dispute the matter with them.

The transaction isn’t entitled to seller protection, according to PayPal. Concerning that, their user agreement states that I should ship to the address on the transactions detail page. Yet on the page linked to “Tips to Sell Securely” on the transactions detail page, it says to ship to the address the buyer specifies during checkout, which is what I did. On PayPal’s transactions detail page it says that they have no shipping address on file for the credit card holder. However in their e-mail to me after the payment cleared their review, a shipping address was provided, which appears to be incorrect.

There was other conflicting information. The e-mail address for the cardholder on PayPal isn’t the same as the e-mail address used by the buyer. Both addresses appear to be fraudulent. I tried calling the buyer several times, prior to shipping the coin, using the phone number provided by eBay. No one answered. The buyer had two eBay IDs, and when I asked the buyer about that, he or she replied that the first ID belonged to his or her cousin. The only constant between eBay and PayPal in the entire transaction was the buyer’s name, which is Japanese.

I’m sure you’ll agree that this is an apparent case of fraud. I made the mistake of trusting eBay and PayPal and being lulled into a false sense of security after receiving PayPal’s post-review e-mail that stated at the top: Payment Review Outcome: Cleared, OK to Ship. It doesn’t appear that either PayPal or eBay even bothered to investigate this member and the member’s address to determine their legitimacy.

I’m very concerned that PayPal will withdraw the charged back funds directly out of my bank account, despite their assurance that they would only refer a negative balance to collection. Even if they don’t withdraw the funds, this is bound to have a negative effect on my credit rating and history. I’m afraid that if I respond to the second chargeback dispute, I won’t be able to dispute the chargeback directly with the credit card company. There’s also the possibility that another gold coin I listed for sale on eBay will sell, that I’ll have to collect the payment using PayPal, since that’s the only payment method listed, and that PayPal will hold the funds from that transaction. I could then be forced to ship the coin to the buyer and lose the money I could realize from the sale. Thus I don’t really want the coin to be sold on eBay.

When I spoke with PayPal representatives, including at least two supervisors, I found them to be evasive, and what they said to be contradictory. The discussions were heated. See above.

Had I known that all this could happen after receiving the purchase price for the coin in my PayPal account, I would’ve investigated the source of it more carefully. I wouldn’t have refunded the money right away, as I told the buyer I would. I wouldn’t have shipped the coin anywhere. Not only did I lose a valuable coin that I worked hard to obtain, but PayPal seeks to punish me even more by threatening to make me pay back what I rightfully earned. The vision of hindsight, however, is always 20 / 20.

Posted: September 22, 2014 at 6:55 pm

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