Saturday, 28 January 2012

Getting conned: eBay/Paypal fun

After seeing, this article about "How secure is Paypal for eBay sellers" in this morning's Guardian, I'll share my personal experience with you.

In October, I sold my first generation MacBook Air on eBay, and got a buyer within a day for the £500 "Buy It Now" price. "Buy It Now" requires using Paypal, and the £500 (minus commission) appeared in my Paypal account¹. After a bit of to and fro, the buyer got in contact, and suggested that he come and pick it up. Saving about £30 of shipping, and sorting out the sale faster, strike me as good ideas.

The "buyer" said he couldn't come, sent one of his "employees". A very courteous man came to pick the laptop. In hindsight, he seemed slightly uncomfortable, and looked like he was very happy to see how easy it was going to be.

The spooky thing is that within 40 minutes -- note, not 3 hours, not a day after, not the day before) -- within 40 minutes of the laptop getting picked up, the holder of the eBay and Paypal accounts submitted an "unauthorised account activity claim", leading to "payment reversal" (me owing £500 to Paypal²).

During my call to eBay's customer support, I was told that "I had nothing to worry about" (I'm guessing that would be the case as long as I repaid the £500). Paypal promptly sent a mail mentioning they needed my help, but with very little possibilities from my side ("no courier tracking number? Give us the money now").

Surrey Police failed to find the culprits, with the 2 mobile numbers associated with the con only being pay-as-you-go phones (topped up in a little convenience store in North London that only keeps a day's worth of CCTV).

So my advices:

  • If you sell anything via eBay using Paypal, send it recorded, and keep the receipt.
  • If you bought a MacBook Air first generation with the serial W88500DJ12G, it's stolen, send me an e-mail.

And as opposed to Mssrs Lodge and Reakes, Paypal didn't reimburse me anything, and I'm £500 out of pocket.

¹: I'll pass you the details on eBay referring to a closed Paypal account that meant I got conned two days later than the "buyers" anticipated.
²: On an account that was already closed, see ¹.

Update: Added mention of eBay's ludicrously bad customer service.


Luke Hutchison said...

Happened to me, too -- you were a victim of an evolved version of "reshipper fraud" / "reshipment fraud". I didn't even know you could get scammed as a seller on eBay until this happened.

In my case, I was told that the laptop was a gift for the purchaser's friend's birthday. The buyer's address was in NY, but I was asked to ship the laptop to the "friend's" address in Philadelphia via overnight shipping. The buyer not only corresponded with me via her PayPal account, but also from a legit-looking Yahoo account using exactly the same email address. Turns out both accounts had been cracked (no doubt, both shared the same password). However, I only found out after the real owner of the account contacted PayPal the day after my laptop had been delivered to Philadelphia, and after I had already withdrawn the funds from my PayPal account -- and again, PayPal required me to repay them.

I had no way of contacting the recipient in Philadelphia, and the police there laughed at me when I suggested that they go knock on the door of the recipient -- they had too many homicides every year to worry about a stolen laptop. I traveled 8 hours to Philadelphia to try to get my $2200 laptop back, and discovered that the recipient's apartment was in the worst possible neighborhood -- the police strongly suggested I don't even knock on the door. I talked to the manager of the apartment complex and they didn't care about my laptop. It took me a month of followup phonecalls to convince them to talk to the tenant. By that time, my laptop was long gone.

The recipient in Philadelphia had been hired through as a reshipper for a company in Russia -- the company told them that a lot of companies in the US won't ship to Russia, so they needed workers in the US to ship to them. However, the link in the ad went to a fake storefront website hosted in Belize.

Anyway, long story short -- when this happened, the police in Boston wouldn't help me because the recipient was in Philadelphia, the police in Philadelphia wouldn't help me because the "crime happened in Boston" where I was based (?), the FBI wouldn't help me because the value was less than $50,000, the Secret Service wouldn't help me because the value was less than $75,000, and the government's international Internet fraud center wouldn't help me because they get 4.5 million reports per year of Internet fraud.

The worst part though was dealing with PayPal -- they wouldn't help me either, because I satisfied only 6 of the necessary 7 conditions for qualifying for Seller Protection -- the one I missed was delivering to a PayPal-approved shipping address. However, at that time to get the list of requirements for qualifying for Seller Protection, you had to click FOUR LEVELS DEEP of "click here for more details on Seller Protection" on the website -- they intentionally buried the info. eBay and the USPS couldn't/wouldn't help either, because they fulfilled their contractual obligations.

Anyway, I lost my laptop and my $2200, but came away from all this a lot wiser.

Anonymous said...

I don't like what happened to the both of you as much as the next (honest) guy but have you guys even bothered to Google and read up on all the paypal horror stories?! I really don't understand why anyone in his/her right mind would ever want to do business via paypal. I hope your stories are yet another warning for unsuspecting people to have a real hard look at payment options before they decide which one to use.

PhilipCohen said...

“When Do We Start Calling eBay A Payments Company?”

A picture is worth a thousand words, so they say. This linked “Business Insider” article contains a graph of eBay revenues since 2003. It shows quite starkly how eBay’s Marketplace revenue has stagnated since 2008, about the time that the headless turkey from Bain & Co, John Donahoe, got hold of the tiller and started his “destructive renovations”. eBay’s share price has effectively moved little in the same period.

Conversely, Amazon’s marketplace has not stood still: it has consistently moved ahead in leaps and bounds; ergo the eBay Marketplace has effectively been in decline since 2008.

The graph also shows the eBay-underpinning increases in revenue eBay has received from PreyPal during the same period, that is, from roughly when the “eBafia Don” effectively mandated PreyPal’s use on the eBay Marketplace. Business Insider apparently thinks therefore that eBay’s future lays in PreyPal.

Well, if anyone thinks that the retail banks are going to let such a clunky, parasitic, flea-sized, upstart “merchant of sorts” such as PreyPal—who after all does no more than ride precariously on the back of those banks’ own payments processing systems—continue to nibble away at one of the banks’ principal areas of business for any length of time, all I can say is, dream on …

The aspect about PreyPal POS “mobile payments” that most worries me is, are people actually leaving their funds “on deposit” with this unlicensed, prudentially unregulated, clunky, PayPal “bank”, that is itself not even licensed to provide credit? Otherwise, how are the funds for such mobile payments being sourced from the user’s real bank?

And, unfortunately for eBay’s chief headless turkey, Visa’s professional online offering “”, when it is up and running later this year, will put paid to whatever success that the clunky PreyPal has had with online merchants outside of its mandated use on the eBay Marketplace—and soon thereafter both these unscrupulous and clunky entities will commence their long-deserved journeys down the gurgler.

Scott Thompson saw the writing on the wall; John Donahoe remains delusional, that fact confirmed by the many sightings of him waving his mobile phone about and mumbling about UFO sightings over San Jose.

Scott Thompson abandons the struggling eBay for the struggling Yahoo

PayPal claims PayPal not a debit card or payment network!

eBay / PayPal / Donahoe: Dead Men Walking

Anonymous said...

The main thing I don't understand: *why did you give the money back?* You sold a laptop, you have the money, hopefully you didn't do anything stupid like letting PayPal have access to your bank account, so you could simply refer them to the police and treat any attempt by them to extract money from you as attempted theft.

PhilipCohen said...
This comment has been removed by the author.
PhilipCohen said...

*why did you give the money back?*

He didn’t, PreyPal gave the money back, and they could do that because their unconscionable terms of business say they can; indeed everything they do to supposedly protect the buyer, they do, not to protect the buyer, but to protect themselves when they, by their lack of any real mediation process, in effect, knowingly facilitate such fraud.

Frankly, their whole system is so “clunky” compared to that of the banks, they really should be statutorily barred from handling anyone else’s money and from being in the “banking” business, which they are practically nowhere in the world licensed to be in anyway. PreyPal is effectively no more than a another pick-pocketing arm of the online Mafia, eBay.

eBay / PayPal / Donahoe: Dead Men Walking

Unknown said...

Situations like this are why I prefer Bitcoin for online transactions:

Free or nearly free, irreversible transactions recorded in a peer-to-peer distributed ledger secured by the worlds most powerful distributed computing network.

Anonymous said...

@PhilipCohen: Never *leave* money in a PayPal account; pull it out the instant it arrives, and maintain a balance of 0.

PhilipCohen said...

“Never *leave* money in a PayPal account”

If only it was that simple. If you are selling regularly on eBay you are bound by eBay/PreyPal’s terms and conditions, otherwise you will be given the boot. eBay/PreyPal’s unconscionable terms are a matter for governmental consumer affairs regulators to do something about (as was done by the ACCC in Australia). If your consumer affairs regulator can’t see the unscrupulousness in the terms of these two now most despised commercial entities, then they are not doing the job they were charged with doing.

eBay / PayPal / Donahoe: Dead Men Walking

mensajes claro said...

Boitcoin is a new way of using money online for sure , But that big deal is that not all of the people use that service.

Anonymous said...

When selling on ebay, there are payment options other than paypal, which many cant afford or use because they dont have a high volume of sales or make enough to have the visa,mastercard & etc.. machine which costs money. Leaving Paypal the only option for payment. Ebay only accepts payments from 4 electronic Co.Or by Credit card or debit card processed through the seller's Internet merchant account.
Additionally, payment upon pickup and Bill Me Later are valid payment methods as well
Sellers cant ask buyers to do the following below:

Send cash through the mail

Send cash or money orders through instant, point-to-point cash transfer services (that are not banks) such as Western Union or MoneyGram

Mail checks or money orders (except for items in categories specifically permitted.
Pay through bank-to-bank transfers except for items in some categories.

Pay by "topping off" a seller's prepaid credit or debit card

Pay using online or other payment methods not specifically permitted in this policy
Payment methods may be used only in the listing categories that are stated in the policy.

Bank-to-bank transfers (also known as bank wire transfers and bank cash transfers)


Money orders

Online payment services: with a choice of about 8 other electronic services.
I have been a victim when using paypal, many horror stories online Re: paypal horror stories

Anonymous said...

This happened to my frien in 2006. Seems the old cons always work. They were clever. They won the bid, called the seller and said we will pop round and collect - pay chash, thereby getting his address. Put th money in via paypal and called back and said there is a taxi comming give it to him. He said no - they said "we know where you live .. blah blah" threats. And then he gave the laptio to the taxi. Next day paypal took the money back. Follow the rules and you will be fine.

Daniel Rooney said...

Even the authorities are hard pressed with these loop schemes as perpetuated. Even an epos systems deployment would have done not any better via refund as they exploit refund schemes. This happens too on cracked credit cards.

PhilipCohen said...

And the ugly reality for consumers dealing with the eBafia/PreyPal complex ...
“Shill Bidding Fraud on eBay: Case Study #5” ...