Paypal sent a collection agency after me...

[chocobo]

What is the name of your state? Virginia

I sold an item online and was paid with Paypal. The buyer received the item, I received the money, the transaction was complete. A couple of weeks later, Paypal tells me a chargeback has been initiated. I emailed them twice to ask for more information and how I can dispute it, they did not reply. Eventually they decided in favor of the buyer, and demanded that I pay them $1000 to refund him.

The buyer, who I had been in contact with via email and IM, stopped responding to emails and logged off every time I sent him an IM. It seems likely that he is trying to scam me by getting his money back after receiving the item.

About once a week, Paypal sent me a form email demanding payment. I repeatedly emailed them back asking for information, asking why they thought I was liable, asking why I am accountable for them allowing a scammer to use their services, asking if this is all a mistake... not once did they ever respond to my questions. Until very recently, email was the only way possible to contact Paypal (they did not give their phone number), so I literally was unable to contact them at all.

Today, a collection agency called me on behalf of Paypal, and demanded payment.

What should I do? Evidently Paypal always decides against sellers, no matter what the situation. Am I legally bound to pay them the money? Can this affect my credit rating? I've never been in a situation like this and don't know what to do about it.

 

[kayak99]

I believe your problem was made worse by your only contacting them through email. They have always had a contact phone number - 1-402-935-2050 listed in their site's help center.

I am surprised there wa snot a way to respond to th echargeback request.

You should have called then if the matter was not immediately resolved asked for an address to send (certified) snail mail.

You may not have been at fault but now you have a larger problem clearing this up.

Call as soon as possible ( 7:00 AM EDT to 1:00 AM EDT every day).

 

[bostonmatt]

If the company that called you was NCO, dont worry one bit. They are a joke and it will not affect your credit score whatsoever. I found a website, paypalsucks.com, just check out the forums on there and you will probably never use paypal again. There are plenty of postings on there discussing paypal collection tactics. You probably dont have much to worry about.

 

[racer72]

Your problem isn't with Paypal, it's with the seller. He is the one that initiated the chargeback. If you had read the Paypal user agreement, which is obvious you didn't, it plainly states that in the event of chargebacks, it is up to you, not Paypal, to go after the person that initiated the chargeback. You have absolutely no legal claim of any kind against Paypal. The proper and only real way of remedying the situation is to pay back Paypal the money you owe and take legal action against your Ebay customer. Anything else will be a waste of your time.

As far as that Paypal sucks website is concerned, half of the idiots that post there were Ebay sellers caught scamming people and were booted from Paypal, half were Ebay buyers (such as the OP's customer) that scammed Ebay sellers and were booted from Paypal and half are jerks that have never used Paypal but post on the website because they have nothing else to do with their pitiful lives.

 

[moburkes]

You're also notified of a chargeback and have about 14 days to respond. The chargeback clearly shows up when you log into paypal. That's how you should have disputed it, directly into the form on the website.

 

[chocobo]

kayak99: Until recently Paypal did not have their phone number available on the website. I called them yesterday, unfortunately the person I talked to was unable to answer any questions and would only repeat "sorry, that's the policy, it says you're at fault"... I will try calling again and hopefully get someone more helpful.

bostonmatt: The company that contacted me was ICS. I have been to paypalsucks.com frequently but have not been able to find out just how I should handle this situation. It does appear that the collection agency can't harm my credit, but Paypal might be able to, and they also sometimes take people to court...

racer72: How would I go about taking action against the seller? I have only his name and AOL email address. I tried to contact AOL and tell them one of their users scammed me, they didn't seem very interested. Not surprisingly, they would not give me his name and address... maybe I should ask Paypal for the buyer's address?

moburkes: I did dispute the chargeback, they ignored me, and told me later that they decided not to fight the chargeback.

So basically what I need to know now... can Paypal really hurt my credit rating? Would they take me to court over something like this? Is there any further way I can dispute this? I signed up for Paypal years ago, and do not remember any new user agreement forms... they might have changed the user agreement after I signed it. Any other advice? I appreciate your replies so far, and any further info would be really helpful for me.... thanks...

I certainly would never have knowingly signed something that states they can give my money back due to any complaint, and without any effort to dispute the charge (or even assist me at all!)

 

[racer72]

racer72: How would I go about taking action against the seller? I have only his name and AOL email address. I tried to contact AOL and tell them one of their users scammed me, they didn't seem very interested. Not surprisingly, they would not give me his name and address... maybe I should ask Paypal for the buyer's address?

Did you ship the item to the seller? That requires an address. I have sold over 1000 items on Ebay and I still have the address for every single buyer. Because of problems such as yours, Paypal is going to make a huge change in policy next year. They are going to start holding back funds just in case there are chargebacks. For a $1000 sale such as yours, the funds will be held for up to 60 days.

 

[moburkes]

You said that you did dispute the chargeback, but in your original message you stated that you EMAILED paypal asking HOW to dispute the chargeback. I'm confused, now, as to what really happened.

 

[JETX]

What should I do?

Send them a written cease and desist letter. As a primary creditor, they are not bound by the FDCPA, but they will likely.

Evidently Paypal always decides against sellers, no matter what the situation.

And exactly what evidence do you have to support that??

Am I legally bound to pay them the money?

Depends on the full facts. If the buyer has a valid claim against you, then yes, you have a legal obligation to repay.
However, if you are absolutely innocent of any claims (fraud, etc), then you have no obligation to PayPal.

Can this affect my credit rating?

Yes.

 

[chocobo]

racer72: I'd rather not get into detail but the entire transaction was done online, he sent the payment and I sent him the item he purchased. He confirmed that he received it and it appeared that everything was fine. Evidently being an experienced scammer, he did not include his street address in the Paypal payment.

moburkes: They sent me an email linking me to the "dispute the chargeback" form. I don't recall if I filled out the form or not, if I did it was an incomplete form and included the statement that I don't have everything they're asking for (such as tracking numbers). I also emailed them repeatedly asking what I should do. I have proof of the transaction (AIM and email records) but I can't get them to look at it. I can't even get them to give a straight answer to any of my questions.

JETX: OK, maybe not "always", but from the many online complaints I have seen, Paypal is very biased towards the buyer. Sellers have done everything Paypal asked, including providing ridiculous amounts of detailed information regarding shipment and receipt of the item, and Paypal still decided against them.

The buyer has no valid claim, but Paypal already gave them the money back. Now Paypal is demanding that I pay them that amount. According to their user agreement, they apparently reserve the right to decide chargebacks however they want. I'm concerned abuot whether I am legally bound to pay them this money.

But they allowed a scammer to sign up, they verified the scammer's information, then processed the scammer's chargeback all while refusing to even answer any of my questions. Don't they have any responsibility in this situation?

Also, would you mind telling me how this can affect my credit rating? Is that if Paypal takes me to court, or what?

 

[moburkes]

It's my understanding that paypal only provides seller protection for items that can be proven that are MAILED by the seller to the buyer:

Follow the Seller Protection Policy guidelines by retaining proof of postage that can be tracked online and delivering to the buyer's address listed on the Transaction Details page.

If the seller loses a Buyer Claim or a chargeback dispute and does not qualify for the Seller Protection Policy, the seller will owe PayPal for the amount of the reversed transaction. In the case of a chargeback, sellers who do not meet the requirements of the Seller Protection Policy will also owe a $10.00 USD chargeback fee. PayPal will seek to recover the funds from sellers by debiting their PayPal balance. If there are not sufficient funds in the seller’s PayPal balance, sellers have a choice of reimbursing PayPal by funding their PayPal account or by other means as described in the Payments (Sending, Receiving, and Withdrawals) Policy.

The Seller Protection Policy does not cover:


Intangible goods, services and sales or licenses of digital content. Only the sale of physical goods is covered.

 

[chocobo]

Thanks to everyone for the help. It really looks like I'm screwed here, I had no idea Paypal could take my money and force me to pay the negative balance just because the buyer says so. The buyer needs no proof, but the seller needs tons and tons of it just to defend himself, and even then Paypal gives themselves the right to decide however they feel like deciding.

I guess I really made a huge mistake using their service without fully understanding how it works. I can't believe I got scammed out of this much money, I thought I was smart enough to avoid stuff like this.

One of the more frustrating parts is how unwilling or uncaring every company is about this situation. Paypal refuses to let me dispute any part of the charge, including extra fees for not paying immediately (which I may have done if they responded to any of my emails in the first few weeks). AOL seems to have no interest in the fact that one of their users is scamming people. Paypal advises me to take legal action against the buyer, but both Paypal and AOL refuse to give me any information about the buyer or the transaction... they are acting like I am the scammer.

 

[moburkes]

Paypal gave you the information about the buyer. You should be able to get the buyer's information from ebay. You should be able to use the contact member form. I've never used it, but my understanding is that its available for people who have a mutual transaction.

Who's fault is it that you didn't read the paypal seller protection policy when you sell something that's not tanglible?

 

[MattDell]

I can't believe I found this thread! I received a letter as well this week from ICS asking for repayment of my Paypal balance. I went through the whole dispute / resolution / appeal process for my transaction. Long story short, like the previous seller, I was screwed out of my money.

However, I just want to make sure this does not affect my credit rating. I take great pride in my rating and it is very high. I DO NOT need a collection agency on there.

Unlike the thread starter, however, I received no notification from paypal that I needed to pay them immediately or that time was of the essence. After the resolution, it just said "Please add additional funds to your account." If I had any awareness whatsoever that this was going to go to a collection agency, I would have paid them at once.

So what should I do? I called Paypal about this and they said that I could mail them a check or money order. They also said that they will notify the collection agency and that it would not affect my credit score. However, I am a bit skeptical and don't want to put my trust (and credit rating) into Paypal's hands.

I intend to pay somebody, but who should I pay? Paypal or ICS?

Thanks for any help and I'm sorry to hijack this thread!

-Matt

 

[moburkes]

I can't believe I found this thread! I received a letter as well this week from ICS asking for repayment of my Paypal balance. I went through the whole dispute / resolution / appeal process for my transaction. Long story short, like the previous seller, I was screwed out of my money.

However, I just want to make sure this does not affect my credit rating. I take great pride in my rating and it is very high. I DO NOT need a collection agency on there.

Unlike the thread starter, however, I received no notification from paypal that I needed to pay them immediately or that time was of the essence. After the resolution, it just said "Please add additional funds to your account." If I had any awareness whatsoever that this was going to go to a collection agency, I would have paid them at once.

So what should I do? I called Paypal about this and they said that I could mail them a check or money order. They also said that they will notify the collection agency and that it would not affect my credit score. However, I am a bit skeptical and don't want to put my trust (and credit rating) into Paypal's hands.

I intend to pay somebody, but who should I pay? Paypal or ICS?

Thanks for any help and I'm sorry to hijack this thread!

-Matt

You won't get an answer by hijacking someone else's thread. Start your own.