Ebay transaction, fradulent Paypal Unauthorized Payment Claim, Loss of money and item

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Hermie

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Hello,

In June I sold a Canon DSLR on Ebay for $800. The buyers were French citizens travelling through the US and requested overnight shipping to their current location. I agreed, and charged $130 for shipping after estimating the costs by UPS. They agreed and paid the $930 total through Paypal. I informed them I would need to wait until I recieved the funds in my bank account before shipping because of the high shipping costs and withdrew the funds from my Paypal account as soon as I recieved payment. After hearing that, they asked about the US Postal Service. I found out I could afford the shipping costs before I recieved their payment, and shipped it. I have proof of delivery with signature confirmation. The buyer left positive feedback on my account.

A few days later, they filed an Unauthorized Payment Dispute through Paypal. I sent Paypal the proof of delivery with Ebay messages and emails showing the transaction was clearly authorized and completed. Paypal wrongfully reversed the payment, putting me out of $900 and my camera.

I filed a complaint with the Internet Crime Complaint Center and filed a non-paying bidder dispute on Ebay. Ebay refunded me the $50 final value fee and placed an Unpaid Item Strike on the buyer.

Paypal is now calling me to collect funds from their error. I informed them the Unauthorized Payment Dispute they filed was fraudulent and they should investigate it.

My question is, what are my rights in this situation? Will I be forced to pay for Paypal's error and the buyer's fraudulent actions, or is there a legal way to tell Paypal that they're responsible for their own actions?

Thank you for your help.
 
Wow... I am sorry to hear about your case but am happy to hear at least you were smart about it. Here are my thoughts:

1) It is certainly possible that fraud was committed. I will never send anyone money or an item over $100 to any tourist or person passing through the U.S., etc. Since there is no address that can be tied to a buyer, receipt by the buyer cannot be verified, e.g. being sent to a store, hotel, etc. where anyone can pick up the item. If it is sent to someone's home address, they will have received the package, signed for it and cannot complain they never saw something they didn't order. So here is a critical question:

Did you have Paypal seller protection to a verified address?

2) You've got a good question for Paypal. This person who filed for fraud evidently had both their ebay and Paypal accounts breached? What are the chances of that? Certainly possible but highly unlikely. Did you check the seller's history on eBay, when they had last transactions, etc.? It seems like you did.

With regard to the answer - unfortunately you need to look carefully at the fine print of your agreement with Paypal. I haven't looked through it again at the moment but you should demand that they provide you where in the agreement it says that you have to pay for their errors, including after the funds were released to you.

I've noticed these items:

10.1 Your Liability. You are responsible for all Reversals, Chargebacks, Claims, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by or arising out of your breach of this Agreement, and/or your use of the PayPal Services. You agree to reimburse PayPal, a User, or a third party for any and all such liability.

Liability for PayPal Claims. If you are a Seller and PayPal makes a final decision that you lose a Claim filed directly with PayPal, you will be required to reimburse PayPal for your liability. Your liability will include the full purchase price of the item and original shipping cost (and in some cases, you may not receive the item back). PayPal Seller protection may cover your liability, see section 11 below.

Liability for claims filed directly with eBay through the eBay Buyer Protection resolution process. If you are an eBay Seller, eBay requires that you comply with the eBay Buyer Protection resolution process. As such, you have provided eBay with permission to make a final decision on a claim that a buyer files against you directly with eBay. If eBay makes a final decision that you lose a claim, you agree to allow PayPal to remove funds from your PayPal Account in order to reimburse eBay for your liability. "Item not received" claims filed directly with eBay are not covered by PayPal Seller Protection. See eBay Buyer Protection policy for more information. If your Balance isn't sufficient to reimburse eBay, PayPal will place a hold on your Account until the earlier of: (1) sufficient funds are added to your Balance to reimburse eBay for your liability at which time we will reimburse eBay in full, or (2) 40 days from the date of eBay's decision that you lose the claim at which time we will remove your Balance to partially reimburse eBay for your liability.

11.1 PayPal Seller Protection.

PayPal Seller protection is protection we provide Sellers from Claims, Chargebacks, or Reversals that are based on

* Unauthorized Transaction or
* Item Not Received

Seller protection is available for eligible payments from buyers in any country.

#

Unauthorized Transactions Additional Requirements:

* The payment must be marked "eligible" for Seller protection on the Transaction Details Page.
* You must have a Proof of Shipment or a Proof of Delivery.
 
Thanks for the reply.

1. The package was delivered to a home address. They were staying with friends in South Carolina, and I have singature confirmation and an email from the buyer confirming delivery.

Paypal's listed address for the buyer was in France, and since it wasn't shipped to that address, I'm not eligible for the Seller Protection.

2. However, Paypal's fine print does not mention anything about me being liable for their error. I have saved the Ebay messages and emails and will send them to Paypal again. It's extremely doubtful their email, Ebay account, and Paypal account were all hacked at once and communication was kept without their notice. I'm going to go out on a limb and guess it was buyer's remorse.

In the meantime, I will be looking for fraud victim's rights laws and see what I can do.
 
1) How do you know that the buyer signed the package and not a person in that home using someone's fraudulent account? Here's a good idea if you're curious. Why not call the home address phone number (if you can get it) and ask to speak to that person. If the person answering the phone says that they left, then you can report to Paypal what you've discovered. ;)

2) Paypal's fine print is very vague. From their standpoint, they have committed no error. Just because you were able to withdraw the funds doesn't mean that you're free and clear. What they are saying is that, if you do withdraw and a chargeback is placed later during the specified period one can be made, you'll be liable to pay back the chargeback.

Again... I highly doubt that all the accounts were hacked. Getting the confirmation the people stayed at the home is a good idea. If you send back correspondence to these tourists, you might mention these facts. If it was me, I might also state that reporting this to Paypal and eBay may result in an investigation into criminal matters. Just because they are in France doesn't mean an investigation won't occur there and/or they may lose their Paypal and eBay accounts permanently due to the complaint and investigation. They may wish to retract the claim of "unauthorized transaction" unless they are able to explain everything... Any of these things is possible...

Regarding fraud victims' rights laws, I don't know what will help you. At the moment you have a contractual issue with Paypal and eBay. The real defendant is in France and suing them (and collecting) is a virtual impossibility and cost in time and money is more than the dispute, unfortunately.
 
I see. I still have the address I sent it to, and will be sending a letter to the address asking to confirm the delivery to the buyer. I also have saved their address and phone number in France and will also be contacting them.
 
I see. I still have the address I sent it to, and will be sending a letter to the address asking to confirm the delivery to the buyer. I also have saved their address and phone number in France and will also be contacting them.
You're missing the point - the people at the address cannot confirm delivery. They have nothing to do with the transaction and can only confirm the people who signed for the package stayed there. The only people who can confirm who signed is the overnight carrier. If you have their phone number in France you can call and determine whether it's the same voice, assuming you spoke to them. You may want to call to discuss before you tell them what you're going to do and they can deal with the consequences of filing a fraudulent report.
 
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