Fraudulent Paypal chargeback

14 replies
Have you ever suffered from a fraudulent Paypal chargeback? I have heard many different stories of people suffering from a BS chargeback.

I know that these chargebacks tend to be in areas where the scammer knows the person accepting the Paypal payment is selling an intangible item.

Digital downloads, vacation rentals, & services offered seem to be the major "victims de jour".

I know somebody who rents her home to vacationers via the largest vacation rental website. She rented to a "nice family" who paid her $2500 for a week stay in her vacation home. They didn't complain about the property once.

Once they returned home, the renters contacted Paypal, claimed that they never authorized the money sent to my friend. Paypal froze her $2500 in her account and demanded that she now show proof that she "sold" a "tangible" item to the scamming family.

She contacted Paypal to dispute the reversal. Paypal sided with the scammer and said that Paypal does not protect sellers on non-tangible items since nontangible items cannot be shipped. Since it cannot be shipped, there is no proof that an item was sent. Without proof, the scammer's claim was honored and my friend lost her $2500.
#chargeback #fraudulent #paypal
  • Profile picture of the author mattjay
    That is terrible but it happens. In the IM game, it happens sometimes too. I had a major ordeal with paypal chargebacks you can see in my sig below, the main thing is, paypal usually sides with the card company if there is a chargeback. That's a tough one. sorry this happened to your friend I went along fine for about 5 years without a single chargeback, until these episodes over the last two months. But it happens sometimes.
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  • Profile picture of the author taskemann
    Originally Posted by GettingOn View Post

    Once they returned home, the renters contacted Paypal, claimed that they never authorized the money sent to my friend. Paypal froze her $2500 in her account and demanded that she now show proof that she "sold" a "tangible" item to the scamming family.

    She contacted Paypal to dispute the reversal. Paypal sided with the scammer and said that Paypal does not protect sellers on non-tangible items since nontangible items cannot be shipped. Since it cannot be shipped, there is no proof that an item was sent. Without proof, the scammer's claim was honored and my friend lost her $2500.
    That's exactly WHY you should handle such payment either via bank wire or cash.
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  • Profile picture of the author onSubie
    Originally Posted by GettingOn View Post

    ... services offered seem to be the major "victims de jour".
    Services are not refundable through PayPal. In a dispute for a service rendered, simply tell PayPal it was a service that was delivered and they will side with you.


    Originally Posted by GettingOn View Post

    I know somebody who rents her home to vacationers via the largest vacation rental website. She rented to a "nice family" who paid her $2500 for a week stay in her vacation home. They didn't complain about the property once.

    Once they returned home, the renters contacted Paypal, claimed that they never authorized the money sent to my friend. Paypal froze her $2500 in her account and demanded that she now show proof that she "sold" a "tangible" item to the scamming family.

    She contacted Paypal to dispute the reversal. Paypal sided with the scammer and said that Paypal does not protect sellers on non-tangible items since nontangible items cannot be shipped. Since it cannot be shipped, there is no proof that an item was sent. Without proof, the scammer's claim was honored and my friend lost her $2500.
    It sounds like your friend didn't make her case very well and did not protect herself with a receipt or rental agreement.

    Again, renting a room or apartment is a service, not an "intangible product", and not refundable through PayPal.

    Did she tell PayPal it was a rental service, not an intagible product, along with a copy of the signed rental agreement?

    Mahlon
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    • Profile picture of the author GettingOn
      Originally Posted by onSubie View Post

      Services are not refundable through PayPal. In a dispute for a service rendered, simply tell PayPal it was a service that was delivered and they will side with you.




      It sounds like your friend didn't make her case very well and did not protect herself with a receipt or rental agreement.

      Again, renting a room or apartment is a service, not an "intangible product", and not refundable through PayPal.

      Did she tell PayPal it was a rental service, not an intagible product, along with a copy of the signed rental agreement?

      Mahlon

      With all due respect, I believe that you are incorrect.

      Here is a link to the TOS for seller protection on Paypal.

      https://www.paypal.com/us/webapps/mp...ion-learn-more

      It states clearly that "services" and "intangibles" are NOT covered.

      Here is an exerpt from that link:

      When you are not covered:
      • Items are picked up locally or delivered in person.
      • You sell services, intangible items, or digital goods.
      • You receive multiple payments for the same item.
      • You've received a claim or a chargeback, and the shipped item is found to be significantly different than it was described.
        Example: You describe a new laptop, but send a used one.
      • PayPal Direct Payments
      • Virtual Terminal Payments
      • PayPal Business Payments
      • Items that are not shipped to the recipient shipping address on the transaction details page. If you originally ship the item to the shipping address but the item is later redirected to a different address, you will not be eligible for PayPal Seller protection. We therefore recommend not using a shipping service that is arranged by the buyer, so that you will be able to provide valid proof of shipping and delivery.
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      • Profile picture of the author onSubie
        Originally Posted by GettingOn View Post

        With all due respect, I believe that you are incorrect.

        Perhaps you are correct. I have not lost a PayPal dispute, but I am going from what I have heard in others' stories of how they beat PayPal disputes.

        The specifc ones I am refering to are those who offer a coaching service. When faced with a dispute, they tell PayPal it was a coaching service that was delivered, provide the receipt and PayPal sides with them. Two or three people have described this situation in the forums here.

        It seems to me that renting a physical room for a period of real time would not be an "intangibale good or service". Especially with a signed rental agreement.

        I question why anyone would accept PayPal for a rental. If someone does not have a valid credit card, I don't think I would want to rent to them.

        Mahlon
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        • Profile picture of the author GettingOn
          Originally Posted by onSubie View Post


          I question why anyone would accept PayPal for a rental. If someone does not have a valid credit card, I don't think I would want to rent to them.

          Mahlon
          It may not make sense to you why an owner would accept Paypal, but to the other 100,000+ owners who rent out their homes on sites like VRBO, the Paypal option is the most widely accepted form of payment.

          Wire transfers can be reversed, checks can be forged. Western Union and cash are about the only two options which guarantee an owner that their funds are secure, yet both of these payment options scare a large portion of renters.
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          • Profile picture of the author JensSteyaert
            Yeah if they file a claim there is nothing you can do, the money is gone and you have to accept it...

            If they just file a dispute however there is, just read this how to win a paypal dispute as a seller

            I actually won a dispute yesterday from using this tactic
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          • Profile picture of the author mikehuff
            Damn, that family is on some REAL assh*le sh*t.

            You should tell your friend to find them on facebook and look for pictures of them at the property!! Bet there's a couple floating around.
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            • Profile picture of the author Kay King
              She contacted Paypal to dispute the reversal. Paypal sided with the scammer and said that Paypal does not protect sellers on non-tangible items since nontangible items cannot be shipped. Since it cannot be shipped, there is no proof that an item was sent. Without proof, the scammer's claim was honored and my friend lost her $2500.
              Since the comments about intangible products is not true - I find it hard to believe this story. I can't imagine anyone renting a $2500 property with no signed contract ...which would have been proof.

              If a service rented the property FOR your friend - they would have had a contract. The story, as told, doesn't sound right.
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            • Profile picture of the author kellter
              From now on have them sell a "coupon" good for one week stay etc.
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          • Profile picture of the author onSubie
            Originally Posted by GettingOn View Post

            It may not make sense to you why an owner would accept Paypal, but to the other 100,000+ owners who rent out their homes on sites like VRBO, the Paypal option is the most widely accepted form of payment.
            A whole rental sub-niche I was unaware of! Thanks for the enlightenment.
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  • Profile picture of the author onegoodman
    A year ago I got that problem. It costed me over $1000 in fraudulent activities. They are using Credit Cards to make payments and the real owners of these cards request charge back from Bank. I don't need to tell you who when the despite

    I would suggest to disable Credit Card Payments. If the payment is taken place from one PayPal account to another, you will protect yourself from credit card scammers and you have better chance to win a despite if someone opened one.
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  • Profile picture of the author Raydal
    There has to be other legal routes your friend can take
    against this family outside of Paypal. That's really bold
    to rent and then demand your money back with no
    complaint about the property.

    But if there was a signed rental agreement than small
    claims court may be the only option left.

    -Ray Edwards
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    • Profile picture of the author Clintin
      PayPal Dispute and Chargeback is two different things!

      If a Buyer does a PayPal dispute on an Intangible/digital item, PayPal will automatically hold those funds from the Seller. All the seller has to do is either call PayPal or send a message saying that the item was delivered and it was an intangible/digital product.

      PayPal will then release the hold on the funds and find the dispute in the Seller's favor. PayPal disputes on digtial/intangible items, the seller is protected.

      Now, if the Buyer does a Chargeback on their Credit Card on an intangible/digital item, then PayPal will automatically send them their money back and will see this in the Buyer's favor because the seller has no protection when it comes to Chargebacks dealing with intangible/digital products.

      PAYPAL REALLY CONFUSES PEOPLE WITH THIS! Because I had a few disputes which I only had to say that the item was intangible, and I quickly got my money back.

      Now, When I had a Chargeback, that didn't work because the simple fact it was an intangible item.
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