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Beware of PayPal!

Writer Wishes To Remain Anonymous

Around September 2004 I sold  (Video game account) which is considered by Ebay a non-tangible item therefor not covered by Paypal insurance against frauds.

Shortly after the winner  won my auction, i waited about 1 days to see if  his payment  was sent to my Paypal account. When i did received the money from the winner i immediatly transfered the fund too my Bank institution and waited 2 more days to make sure the money was in my real bank before giving out my Login name and password to the winner.

After 2 days of waiting, the descrition status went from pending to complete. In other words, the money that was in my Paypal account has been succesfully transfered to my bank account. according to paypal webpage. The balance was showing 0 which is normal.

Happy with the sale i made, i logged into my bank account to see if the money was really there but the money wasn’t there yet.  So i presumed that my bank institut will  refresh their database over the night so i waited another day.

Meanwhile i gave the Login name and password (the non-tangible item) to the winner of my auction. Since i did receive a fund from the winner and it did say complete on Paypal site regarding the transfer to my bank institut i had nothing to worry about… right?

Well, guess what.  The next day i checked my bank account and still nothing from Papayl eventhough it stated Transfer Complete on Paypal site.  So i checked my Paypal account again just to be sure i did read that,. And guess what !,  the “Complete status” was changed to “Transaction Held”.  I checked my email and there was an email from paypal telling me that the fund i received from the winner was under investigation as the payment from that winner could have been a fraud. and they were going to investigatie.  Meanwhile they will not transfer the fund to my bank account eventhough it stated Transaction complete a day before.

I called them on the phone which cost me probably 20 bucks of long distant call, and the representative told me that i have a very low chance to win but i will have to wait for the investigation results.2 days later i checked my bank account and the money that was held by paypal was finally in my Bank account.. woohoo.  In other words, they tried to stop the transfer but it was too late for paypal. The money did arrive to my bank.

My balance was now showing red as the money did transfer to my bank but there was a Chargeback from Papayl.  In other words, Paypal are asking me to give them back the money they transfered to my Bank institut.

About 3 days later, i received an email from Papayl. In that email they say: “We have conducted a review of a payment that you received. In this case, returning the funds to the sender was determined to be the appropriate action, and we have completed a reversal of the payment. The funds from the following transaction have been debited from youraccount: ”

What basically means is that the money the winner sent me which is now in my Bank Account must be returned to Paypal. As for the non-tangible item i sold on Ebay, it is not Paypal’s problem at all since it wasn’t covered by insurrance fraud.

I called Paypal again which cost me about 12 bucks of distant call and the representative told me that they can not tell me why the money must be returned to them. The result from their investigation was confidential and only a subpena from the court would be allowing me to know why i must return the fund to paypal. I asked about my item that i legitmately sold and the representative told me that there is nothing they can do because it was not protected by fraud protection issurance.

About 3 days later i received another email from Paypal except this time they are asking me to pay them within 120 days. “Your PayPal account balance recently became negative. Negative balances are contrary to PayPal’s User Agreement. Please add funds to your PayPal account as soon as possible to bring your balance to zero or any positive amount. You may add funds via check, money order, or an electronic transfer from your bank account.”

The same day i contacted the video game company and retreive my Video game account.  In other words, i regained the item i sold.

I’ve choosen not to give Paypal the money back eventhough i have retreived my  non-tangible item i sold.  The reasons are simple.

First, The money the winner sent me has not be proven to be a fraud or atleast paypal were unable to prove me that the money the winner sent me was a fraud. Secondly, i beleive that the entity who receive money has the obligation to verify where the money comes from thus Paypal. Since the seller has no way to verify such thing.  Because buyers are giving their credit card numbers to paypal and not to the seller.. only paypal has technically the power to verify the credit number.

As of today, i have my Video game account (unfortunately some items are missing, but i can live with that) and more importantly i have the 1100 bucks that the winner of the auction sent me.  On the other hand, i am -1100 bucks in the red negative in my Paypal account because Paypal did a charge back and now want the money back because they are saying that this fund should be returned to Paypal for a reason they refuse to tell me.

What i found very suspicion in this case is that the person who bought my video game account sent me an invoice through Ebay system which clearly stated that the item was non-tangible and not covered by any insurance from frauds.

I did not know we could buy item on ebay and describing item as non-tangible. How can Ebay detect an item being sold as non-tangible when it is.

What i suspect is that whoever tried to buy my Video Game account did know what he was doing and for some reason i suspect Paypal, Ebay to be behind this fraud.  Something is telling me that some special department at Paypal (senior employes)  are using a loophole within the Paypal system to fraud people.

I hope my story will help people to make the right decision.

Do not accept any money from Paypal, Do not use Paypal to sell non-tangible. There are other ways to receive money.  WesternUnion for instance or direct wire transfer from bank to bank is ton safer for the seller.

To resume, beware of Paypal.. Stay far from that company.

Posted: April 19, 2012 at 1:15 pm

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