Paypal Fraud for Unauthorized Transaction

Your case is a classic affiliate fraud scheme. The fraudulent affiliate uses a stolen credit card number, then makes the purchase for which the affiliate receives the commission. By the time the card owner finds out, the affiliate is long gone with the commission. The card owner in your case is most likely not the buyer. You could try and dispute it, but make sure you don't spend the funds you received because in the end, PayPal will most likely debit your account and return the funds to the credit card owner.

I added an answer to my original comment, but will paste it here: "Yes, You could try and dispute it, but make sure you don't spend the funds you received because in the end, PayPal will most likely debit your account and return the funds to the credit card owner"

At this point you should let PayPal handle the refund transaction. Let them do their investigation first. You never know and might get lucky where the purchase could have been made by the card owner, who may also be the buyer and the affiliate, and simply claimed the unauthorized transaction just because they can. (however that is a very small chance).

If you however want to refund the buyer yourself right away, make sure you do it through the Paypal resolution system so that it all balances out for your account in the end.

Regarding the affiliate, you could alert warrior plus regarding this affiliate so they can look into it, and make sure that PayPal is aware regarding the affiliate's PayPal account.

I wonder if that affiliate is Nigerian lol

I'd like to see someone try that with me; I'd file a criminal case w/police. Affiliate cc fraudsters = criminals and collectively I think it's a good idea to report that to law enforcement; why not? If they stole your money they're criminals and should be prosecuted. I know I will if that happens to me. Most police departments (at least in big cities) have 'cybercrime' divisions set up to help with that.

I've actually had the same problem 3 times this week.. I refunded the buyers in all cases and I've blocked 2 of my affiliates. (Both affiliates where responsible for the 3 sales.)

I guess that's what happens when you just accept all the affiliate requests in W+, without doing any research on each of them. Lesson learned!

Do you track the IP addresses with your customer or make the customer confirm their email address when they sign up? If you do both it is almost impossible to lose a case with PayPal for digital goods, especially if the email address confirmed is the same email as the Paypal email.

If you are not doing this now I would recommend you set this up for the future so this does not happen again.

That is good for the customer side, for the affiliate side, I would recommend you not approve any affiliates for instant commission until they have a minimum amount of good sales.

I feel for you. I had a similar experience yesterday. My product is digital/downloadable.

A "buyer" notified PayPal that the purchase wasn't authorized by him.

A brief conversation with him convinced me that it wasn't worth the time to pursue it any further.

Quickest thing to do at that point is just issue a refund and keep that buyers info for future reference.

In the case of an unscrupulous affiliate....it is never a good idea to set someone you don't know to 'instant payment' status.

It comes back to bite you in the ass way too often.

I have been here before. I'll tell you this... don't take it lightly, don't ignore it to... Paypal will likely rule in favor of the claimer, that is what Paypal do. Paypal is quite annoying... everybody is a suspect both the buyer and the seller... especially if you sell make money online eBooks... Paypal screwed me up before... so dont take it lightly

What exactly is a chargeback and how much does it cost? I reversed the transaction from the Paypal side and I think I'm charged like 0.72 USD for the reversal. Are there any other costs to this reversal or chargeback?

Unauthorized transaction mean someone make an order with the consent of the original account holder. You will never won if its a unauthorized transaction.

for digital products, in this case credit card owner is strong,
you can't do anything except moving on.

There's not much you can do as paypal does not cover the price of digital items in a charge back. What will happen is you will lose your money, and have to end up paying the affiliate. I recommend moving away from affiliate marketing sites where something like this can occur.

This is affiliate fraud and I have seen an increase on the forum targeting WSOs. The fraudsters are getting more savvy in making what appear to be legitimate WF accounts with a few posts. They also appear to be "drip feeding" unauthorized transactions across different sellers to try and hide their tracks.


Steps to take:

1. In PayPal, file an unauthorized transaction claim against the affiliate and request that PayPal terminate their account. This is to get your money back.

2. In W+ ban the buyer and block access.

3. In W+ report the affiliate.

4. In JVZoo block the buyer's email address. Since this blocklist is shared with other sellers it can help stop more fraud.

What we need is a place to lookup affiliates with unauthorized transactions filed against them.

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Don't approve anyone you don't know well for instant!

If someone has a problem with delayed payments, they will never sell anything anyway.

good thread, will not do immediate payouts to unknown affiliates, thanks for sharing this

I've had the same problem last week. My cousin told me to write about it at vcharges.com and they will give the details. I found there a lot of paypal frauds, to be honest I was surprised and did not expected them to be so many

Use the form available in the PayPal Resolution Center to file an unauthorized transaction report.

You can also report such unauthorized charge on Unauthorized Transaction Reports - vCharges.com

I've previously had a couple of PayPal customers erroneously claim "Unauthorized Transactions" as a result of them not actually realizing/recognizing the name of my company on their Credit Card statement at the end of the month after they purchased one of my products.

These were genuine mistakes by the buyers, and in both cases PayPal sided with me (the seller), however, the frustrating thing in both instances is that according to PayPal's dispute T&C's they can take up to 75 days to resolve! In both my cases, it did take that long, during which time the original funds were taken from my account.

Whilst I eventually got the funds back in both cases (after 75 days though!) I was landed with an administrative fee both times which the original buyer's credit card issuer's levied against PayPal, who in turn passed it onto me!

So I ended up slightly out of pocket in both instances, even though both claims were found in my favor! (I was able to bill the original customers for these additional charges, who paid this additional "fee" I charged them)

However, one very important thing that is worth noting relates to the sale of "intangible goods" through PayPal (i.e. things like Digital Software, E-Books, or other downloads etc).

In the past, PayPal didn't offer Buyer or Seller protection in respect of "intangible goods" so in the event of such disputes, both the Buyer and Seller have equal chance of winning.

But from 17th June 2014 (in the UK at least), PayPal are introducing Policy Updates which WILL now give Buyers (but not Sellers!) protection in respect to "intangible goods"!!

So software vendors/e-book publishers beware!! - These upcoming PayPal policy changes potentially put you (the Seller) at increased risk!!