I think I'm being scammed by eBay buyer. PayPal unauthorized payment case opened 1 month later

manbearpig on 26/02/2016 - 00:33
Last edited 26/02/2016 - 01:30

I sold a digital game code on eBay a month ago. I sent a picture of the code to the buyer's email address. I still have the physical card in hand. I sent the code digitally as I've always done to make things easier for both the buyers and myself. Now, I knew there was always a risk in doing so, but there are tones of sellers selling codes and sending them digitally, so I didn't think much of it.

I never heard anything from the buyer and he hasn't left any feedback, but just today, I got an email from PayPal saying the following:
(I've omitted some lines that included personal information)

You have received a payment that we believe may not have been authorised by the PayPal account holder.

We recommend that you don’t ship the item until our investigation is
complete. If you’ve already shipped the item, please log in to your PayPal
account and go to the Resolution Centre to provide the shipping details.

In order to continue our investigation, we need some additional information
from you.

Here’s how to provide us the information we need:

  1. Log in to your PayPal account.
  2. Click "Resolution Centre" near the top of the page.
  3. Click "Resolve" in the Action column to view the information we need.
  4. You can either fax or upload your documents to us.

You can fax your documents to us on: 02-8223-9509

Please include a fax cover sheet that includes the email address registered
on your PayPal account and your case ID number.

Here’s how to upload your documents:

  1. Log in to your PayPal account.
  2. Click "Resolution Centre" near the top of the page.
  3. Find your case under "Resolution Centre cases", then click "Resolve"
    next to the request for documentation.
  4. Click "Upload Files".
  5. Click "Browse" to find the file you want to send, and then click
    "Open".
  6. Enter a title for the file.
  7. Select the type of evidence, and then click "Attach This File".
  8. Attach any other files, and then click "Send Files to PayPal".

Please provide this information within 7 days.

This payment will remain on hold and unavailable to you until we complete
our investigation. We will email you when we complete our investigation.

Sincerely,
PayPal

I have 7 days to respond in the case. If this were a claim that the goods hadn't been received, then I'd have no luck since it was digitally delivered, but the buyer hasn't said anything, so is there a way I can get myself out of this without being screwed over?

I just checked his feedback and a couple of other sellers have just left feedback today saying that they got charged back by PayPal. I also checked the code and it's already been redeemed. The buyer is most likely a scammer and I feel that there's not much I can do. Any advice?

One more thing. His house is only 20 mins by car from where I live, providing it's his legit address..

Edit: I googled his address and it's actually just the address of a shopping mall.. Could I use this in my defense?

Gaming

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Comments

  • zolinger on 26/02/2016 - 04:09

    You got royally screwed. Sorry bro,raise it up with eBay but eBay protects buyers not sellers :(

    • whooah1979 on 26/02/2016 - 05:49
      -1

      This is a PayPal dispute. EBay can't intervene.

      Op has no seller protection because op didn't ship the item. If op did then op could just upload the POS.

      • tomclancy on 26/02/2016 - 10:53
        +7

        POS has nothing to do with this case. It's not a claim for missing goods.

        You have received a payment that we believe may not have been authorised by the PayPal account holder

        Buyer has effectively claimed a fraudulent transaction / stolen credit card and PayPal are trying to get their money back from the OP.

        OP, you have 0% chance of any resolution with PayPal. Their case will be decided against you without even considering (or likely opening/reading) the documentation you upload. In the email from PayPal do they ask for any specific information? Because what you've included says "we need some additional information from you" without actually providing a list of information they need.

        As mentioned by LoveBargain15 & whodidthat below, your only chance of not being screwed is to raise the dispute with the Financial Ombudsman. https://www.fos.org.au/ I've done it once and other OzBargainers also report good success with them. I suggest you play the PayPal game and provide information, wait the 7 days out and if PayPal find against you (likely) and take away your money then immediately lodge a dispute with FOS. Within 24 hours you will receive a notice from PayPal that they will be crediting your account in full "as a token of appreciation for your long-standing relationship with them".

        Hope this helps

        • MilkDrinker on 26/02/2016 - 12:44
          +1

          This seems like good advice

        • whooah1979 on 26/02/2016 - 14:36

          a seller can be covered for chargeback and unauthorised transactions by paypal seller protection if they can provide a pos. what op should have done is to ship a tangible cdkey to the buyer and keep a lodgement receipt from the carrier.

          https://www.paypal.com/au/webapps/mpp/customer-concerns

          Resolving disputes, claims and chargebacks.
          We’ll email you if a customer files a dispute, claim or chargeback. Just make sure you respond within the indicated timeframes to ensure you don’t unnecessarily lose out.

          Resolving claims and chargebacks
          If a claim or chargeback is filed against one of your transactions, log in to your account to provide any information we request, like proof of shipment. Once we’ve received all information from you and your customer, we’ll review the claim or work with the card provider to resolve the chargeback.
          If the final decision rules in your favour, you’ll get to keep the money. If the decision is made in the favour of your customer, we may reverse the payment from your account if the transaction is not eligible for Seller Protection.

          Resolving unauthorised transaction claims
          If a customer claims a purchase was made without their consent, log in to your account to review and respond to the claim within 7 days. We’ll investigate and help resolve the issue.
          If you haven’t shipped the item yet, you can refund the payment in the Resolution Centre. If you’ve provided a refund another way, we’ll need you to provide proof of that refund. If you have shipped the item, submit proof of shipment and we’ll evaluate your eligibility for Seller Protection.

          https://www.paypal.com/webapps/mpp/ua/useragreement-full?cou…

          PayPal Seller Protection Policy

          What is the PayPal Seller Protection Policy?

          S3.1 If PayPal deems that you are eligible for the PayPal Seller Protection Policy, PayPal will reimburse you for the full amount of the payment and waive any applicable Chargeback fee.

          Eligibility

          S4.1 You must meet all the relevant basic and additional requirements to be eligible for PayPal Seller Protection:
          ii.You provide us with valid Proof of Shipment; and
          iii.The item is sent to the address we specify on the payment notification or "Transaction Details Page" which can be accessed by logging in to your PayPal account.

        • tomclancy on 26/02/2016 - 14:54
          +1

          @whooah1979: Notice the difference in wording between the "Resolving claims and chargebacks" clause and the "Resolving unauthorised transaction claims"? One of them specifically mentions that they will request POS information… the other doesn't. Under unauthorised transactions claims it says, quite vaguely:

          If you have shipped the item, submit proof of shipment and we’ll evaluate your eligibility for Seller Protection

          Any seller who has ever been through PayPal's dispute process will know full well what this means. As I said above, OP should go through the motions with PayPal and play their little game, then if/when PayPal find against them they need only take it up with FOS and within 24 hours it will be sorted in the fair manner it should be.

        • whooah1979 on 26/02/2016 - 15:14

          @PBG:

          Op still has the tangible item and would've been in a better position to fight this dispute if it was shipped. Op is a seasoned seller and should've known the requirements for pp seller protection.

          A POS is all that's need to fight this dispute. The fos will remind pp of this if op chooses to go down that path.

        • tomclancy on 26/02/2016 - 16:05
          +1

          @whooah1979:

          A POS is all that's need to fight this dispute.

          Have you had to fight a PayPal dispute as a seller? I have. There's not much fighting that happens. In fact PayPal won't even hear your side of the story. POS or not, the OP would never win the PayPal unauthorised transaction claim.

          The fos will remind pp of this if op chooses to go down that path

          LOL. The FOS will uphold the financial responsibility of PayPal to not put unauthorised transactions back onto the seller! rayski57 is spot on. Even if FOS did have to intervene and mediate the claim then they would find in favour of the OP. However, us experienced sellers who have made claims through the FOS know full well as soon as they are brought into the fight PayPal runs scared and settles the case immediately. Just like the TIO.

        • whooah1979 on 26/02/2016 - 19:00

          @PBG:

          i've only dealt with one unauthorised transaction years ago. i issued a refund as soon as the email hit my inbox because i didn't have a pos.

          so what you're saying is i that could still "win" by going to the fos if the same thing happened today? the win would then be based financial responsibility and not on pp's seller protection policy?

        • tomclancy on 26/02/2016 - 20:44
          +2

          @whooah1979: Yes absolutely. FOS are a government run service which, like the TIO, covers their costs from the financial service providers (of which PayPal is one). If PayPal, or any other financial services provider, wants to do business in Australia then they have no choice but to agree to these conditions of the FOS. Again, just like the TIO in the telephone industry.

          PayPal must adhere to the FOS policies and not make up ridiculous self-preservation T&Cs for which users are meant to be held accountable. FOS plays for the little guy and they swing the biggest stick. Anytime a dispute is raised with FOS they invoice the financial service (i.e. PayPal) for their time and costs of chasing up the dispute. Ongoing calls and back-and-forth emails continue to chew up FOS resources which add to the charge that they invoice to PayPal. So whenever a claim is made to the FOS and the charges start racking up against PayPal they will choose to settle the smaller cost asap. I guess if you tried to scam the system/PayPal for millions then they wouldn't back down so easily, but when a small-time eBay seller gets bullied around by the behemoth PayPal Inc it's great to have someone like the FOS on your side.

          The way PayPal has handled these situations in the past (with myself and other reports on OzBargain) was to finalise the dispute against us, but then offer us $x into our PayPal account "as a token of their generosity and to retain the long-standing relationship that we've had with them". Total bollocks of course, but hey the end result is we are rightfully and fairly not out of pocket.

          The system works well with both the FOS and TIO so I'm surprised the government hasn't rolled it out to more industries.

        • manbearpig on 29/02/2016 - 15:35

          Thanks PBG. I used your advice and gave paypal a call. See my post below.

  • whooah1979 on 26/02/2016 - 05:43
    -4

    Just issue a refund and move on. Keep a POS next time.

  • berger on 26/02/2016 - 08:45

    provide proof of data being sent. screen shot your sent email codes, show paypal the proof that sellers have had similar situations via ebay, Paypal should investigate and go in your favor.

    • blighst on 28/02/2016 - 08:35
      +1

      Paypal are notorious for not accepting this stuff.

  • SnoozeAndLose on 26/02/2016 - 08:49

    FOS is the way to go if Paypal doing doggy thing.

    I had experience that buyer send through paypal and i have tracking to proved it has been delivery to his address and Paypal still deem in buyer favor.

    Lodged complaint to FOS then got refund, paypal is a doggy company

  • whodidthat on 26/02/2016 - 09:03
    +3

    After Paypal refund (which they probably will). File at https://www.fos.org.au/

    Then, report buyer to http://www.acorn.gov.au/

  • [Deactivated] on 26/02/2016 - 09:51
    +1

    Sounds to me like the guy has simply closed his paypal off from his bank account and now they are trying to cover their ass-ets.

  • datafellows on 26/02/2016 - 10:01

    If this is a credit card/bank charge back, you will be paying the charge back fee as well (+$20).

    As you sold an item that does not have PayPal protection you will lose 100%.

    Please confirm this from someone else or somewhere but if I am right and if you did not ship the item yet, let's say you were waiting some additional info from the buyer, you will not be paying the charge back fee. But you will lose the original amount.

    Hope someone can clarify :)

  • rayski57 on 26/02/2016 - 10:32
    +4

    I'm reliably informed that:
    If as PP are claiming, the buyer wasn't authorised to make the transaction using that PP account, then it's a financial fraud case and not the sellers responsibility.
    PP must deal with it and if it is actually an unauthorised transaction they should alert the authorities to the crime (yes it's incumbent upon them to advise the police). They are meant to cop it on the nose as part of their risk in operating a financial business….don't for 1 minute think that it's not factored into their business financials.

    All they are doing is just like insurance companies do - trying to reduce their cost of operation by making someone else carry their financial burden.

    Call them and explain that you are not going to accept a refund of the sale price or any possible chargeback fees as you acted in good faith, supplied what was offered and trusted that PP would honour their obligations to you.
    If they try to spin you some crap, ask for their supervisor, say the same thing and if still no dice tell them that the FOS will be dealing with it if you can't get it resolved now.

    • manbearpig on 29/02/2016 - 15:46

      Thanks for your advice. I called paypal and they said their legal team would contact me within 7 days. See my post below.

  • bomberswarm2 on 26/02/2016 - 11:31
    -4

    DO NOT LISTEN TO ANYONE WHO HAS POSTED HERE BEFORE

    DIGITAL GOODS (I.E. GAME CODES) ARE NOT COVERED BY PAYPAL BUYER PROTECTION. THERE IS NOTHING THE BUYER CAN DO, EVEN IF YOU DIDN'T SEND THE CODE.
    PAYPAL WILL NOT OFFER REFUNDS ON DIGITAL GOODS OVER $10. IGNORE EVERY OTHER POST. THEY ARE ALL RUBBISH.

    • spersephone on 26/02/2016 - 12:05
      +4

      You're right, but this may not actually fall under that, instead it appears that it is a chargeback due to unauthorised transaction. The Seller protection policy seems to not apply because it is not a tangible good. I'm not certain whether a seller is therefore obliged to pay the amount in this case. It does not appear clear in their terms.

      • whooah1979 on 26/02/2016 - 14:42
        +1

        I still have the physical card in hand.

        op still have the tangible item, but choose not ship it. op would have been covered by pp seller protection if op bothered to get a pos (lodgement receipt) from a lpo.

    • tomclancy on 26/02/2016 - 13:36
      +3

      LOL your capslock key seems to be stuck. And you are totally off-topic.

      Read the OP again. The buyer has not lodged a dispute under PayPal's buyer protection.

    • [Deactivated] on 26/02/2016 - 13:41
      +4

      IGNORE PEOPLE WHO POST IN CAPS! THEY ARE ALL RUBBISH (other than me)

  • jimbler on 26/02/2016 - 14:43

    What's his Ebay ID?

  • trustnoone on 27/02/2016 - 21:30
    +2

    From what I can gather it looks like said buyer probably got his account hacked. Its pretty typical for hackers to buy up codes so that they exchange the money from a persons paypal account into something paypal can't touch such as Xbox live or music digital codes.
    It also means you are purchasing small amounts so not to ruffle any Paypal security checking due to large amounts.

    Paypal must've been told or caught on that it might've been hacked and seems to be telling you not to send the goods as the owner itself of the account didn't purchase it.

    Based on my understanding of: "You have received a payment that we believe may not have been authorised by the PayPal account holder."

    I think paypal is asking for more details of the transaction to figure out whether payment went through, whether you sent the item or not and who needs to be refunded.

    Thats my understanding from the message anyway.

  • Mysterious on 28/02/2016 - 04:37
    +1

    Unfortunately the customer is always right according to PayPal and eBay. The main lesson here is, never sell digital goods using PayPal and be very careful selling anything above $50. Even if you send an item with tracking and have picture proof, chances are you'll still lose the case because the buyer can make up any story.

  • manbearpig on 29/02/2016 - 15:31
    +3

    Thanks so much everyone for your help and advice. They didn't really specify what 'extra information' they needed, but as I was going through the steps, it was asking me what kind of goods I sold, if I had sent the goods or not, how I sent the goods, etc. After providing the information and giving my side of the story, I submitted everything. The case immediately closed and the payment was reversed. So obviously it was all automated and nothing had been looked at. I contacted paypal and spoke to a rep that seemed to be in the US. The rep just repeated that as I don't have POS, they can't do anything for me. In the end I said that I'd contact the FOS regarding the issue if nothing can be done. He then said "Ok, our legal team will be in contact with you within 7 days".

    I'm going to lodge a dispute with FOS now and see how it goes.

    • tomclancy on 29/02/2016 - 16:18
      +2

      Good stuff OP. Glad you're starting the dispute with FOS already because I can pretty much guarantee the response from PayPal's "legal team" (aka automated script). You won't receive it in 7 days and it's not going to make you happy :)

      • manbearpig on 29/02/2016 - 16:27
        +2

        Thanks PBG. I just lodged the dispute with FOS. Will keep everyone updated.

        • rayski57 on 29/02/2016 - 18:31
          +2

          The thing is that you acted in good faith, you supplied the item and PP can't reverse the transaction unless you did something dishonest - they processed the payment and advised you that you had received the funds, after which you provided the item.
          Had their anti-fraud processes been up to snuff, they would have caught it before advising you that the payment went through.
          It's like someone deposits money into your bank account via a direct bank transfer, they fax you the deposit transaction and you confirm via internet banking that it was received. Then later the bank says that it was a mistake and we've taken the money back - legally they can't do it.

          Just remember that if you don't get satisfaction on first try, keep pushing the FOS to contact PP repeatedly. Each contact costs PP money and they will get sick of it.

  • manbearpig on 19/04/2016 - 02:27
    +3

    So, I hadn't heard anything from FOS after submitting my complaint, but last Friday, after more than a month of waiting, I got an email from FOS saying that the case had been resolved, as well as the following email from PayPal.

    Re: Recent enquiry to Financial Ombudsman Service about PayPal Australia Pty Limited

    PayPal has received notification that you recently filed a complaint with the Financial Ombudsman Service regarding your PayPal account. We refer to your correspondence with the FOS dated 29 February 2016, FOS case number ************. I have reviewed your claim and provided a summary below.

    Your complaint:

    You are unhappy that a recent payment you received has been reversed from your PayPal account.

    Details of the case:

    A review of your account with the registered email address ************, shows that on 24 February 2016 PayPal received notification that a payment you had received was unauthorised; case reference ************. PayPal reviewed the claim and confirmed that unauthorised activity had occurred; as such, the payment had to be reversed to the owner of the financial information used.

    When a payment reversal occurs, it is reviewed for coverage under PayPal’s Seller Protection Policy. This is a free service provided to try to mitigate the threat of reversals for our sellers; however it is not a contract of insurance or a guarantee that your payment may not be reversed. In this case, PayPal was unable to apply Seller Protection to your payment as you advised the item sold was intangible and sent to the buyer digitally. Payments received for intangible items are not eligible for Seller Protection.

    Details about PayPal’s User Agreement effective 1 September 2015 (Terms and Conditions):

    Upon opening a PayPal account, you agreed to be bound by the terms of PayPal's User Agreement. Furthermore, by electing PayPal to process payments on your behalf, you agreed to any updates to the User Agreement as well.

    Please find below sections of this agreement relevant to your complaint:

    1. How this Agreement work

    2. Important things you should know

    Schedule 1. PayPal Seller and Buyer Protection Policies

    Conclusion:

    Mr ************, I can confirm that this case was worked correctly in accordance with the terms of the User Agreement mentioned above. We were unable to reimburse you for this transaction as the item sold was not eligible for Seller Protection. For more information concerning our policies, please refer to the User Agreement by clicking ‘Legal’ at the bottom of any PayPal web page.

    Although correct actions were taken concerning the reversal of this payment, I have issued a credit to your account for the amount of $52.71 AUD. We will be unable to offer further credits for payments which are not eligible for Seller Protection going forward.

    I hope this resolves the matter for you Mr ************. If you have any questions or require additional information, please feel free to contact me at ************. Alternatively, if you are not satisfied with PayPal's resolution or handling of your dispute you can continue to proceed with this matter with the Financial Ombudsman Service:

    Phone: 1300 780 808

    Financial Ombudsman Service

    GPO Box 3

    MELBOURNE VIC 3001

    Fax: (03) 9613 6399

    PayPal is a member of the Financial Ombudsman Service, an independent external dispute resolution scheme covering PayPal's Australian Customers. For more information on the Financial Ombudsman Service you can also consult their website at www.fos.org.au.

    Yours sincerely,

    L******* M*******

    Executive Escalations

    PayPal Australia Pty Limited

    So, I got my money back! I want to say a big thanks to everyone, but especially rayski57 and PBG. I really appreciate you guys helping me out! Truly a godsend.

    • tomclancy on 22/04/2016 - 12:22
      +1

      Pleasure mate. Glad PayPal sorted you out for the funds :). Thanks for coming back and updating us!

  • Cobalt_ on 19/04/2016 - 15:37

    What platform was the digital code for? If you haven't already done so, you should report it to the vendor so the game access gets revoked and the scammer gets away with nothing. I hear Valve are pretty good at revoking stolen game codes

    • manbearpig on 28/04/2016 - 14:28

      It was for Xbox One. I spoke to Xbox chat support and they couldn't really do anything for me.

      • Clear on 29/04/2016 - 09:06

        Xbox support is horrible. I tried every week for 4 months to get a $60 refund out of them due to fraud.

  • ShortyX on 03/10/2018 - 18:30

    Thanks OP. I just sold an Xbox digital code on eBay for Forza Horizon 4 (sent the code via eBay messages) and about an hour later, received a Paypal reversal request email.

  • N1NJ4W4RR10R on 15/10/2018 - 00:22

    You didn't delete the email you sent it in, did you?

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