5 ms·

Actually that doesn't even work. When they don't have a payment method on file that they can abuse, they'll be happy to send your PayPal account into overdraft

Actually that doesn't even work. When they don't have a payment method on file that they can abuse, they'll be happy to send your PayPal account into overdraft and start threatening legal action to bully you into settling the balance. Really the only thing to do, as soon as you see a "pay with paypal" screen is to go away screaming. Here's the anecdote: I had had a company with a bank account and PayPal account, then dissolved the company and closed the bank account. Months after that, a former supplier of the now nonexistent company who had PayPal authorization deducted funds fraudulently from the PayPal account, claiming they had rendered services that were never rendered to a company that obviously and provably no longer existed. PayPal sent the account into overdraft. When they couldn't deduct payment from the bank account that no longer existed, they started sending threatening communications to get me to settle the balance. I took things up with their fraud unit to get the transaction cancelled. Their fraud unit dismissed my case without looking into any particulars regarding the services that the vendor didn't render or the company that should have received services that no longer existed. To them the only thing that mattered was that, years ago, I was, in actual fact, stupid enough to click on "Pay with PayPal", the ramifications being that vendors are entirely within their right to use PayPal as an instrument of fraud and legal intimidation against me. It's your own damn fault, sir, for being so stupid and using PayPal. Knowing that taking the legal route would have been way more costly than the amount of the transaction, and wanting to sleep soundly again against the backdrop of PayPal sending threatening communications, I wired money from my personal account to settle the balance and jumped through a shitload more hoops to make sure the PayPal account was properly closed and couldn't come to haunt me again in the future. I think that's how they get away with it: Since the transactions they handle tend to be small, no one will take legal action.

ikeboy 7y ago
I would have just ignored them. Let them sue a non-existent company, let them win, who cares? You can't collect from a defunct company.
noxToken 7y ago
I'm starting to notice a trend in PayPal fraud cases: a user has an issue with fraud. User contacts PP. PP's fraud department won't discuss the matter. PP does something oafish to lose a customer. The critical point seems to be that fraud won't talk to customers. It makes sense that PP moves quickly when fraud is suspected. What doesn't make sense is that they're so secretive about the events that take place on a user's account. For all we know, user's could be facing legitimate fraud issues that can be addressed with cooperation between PP and user. However, a user cannot cooperate when they have no idea what's going on. If you can't discuss cases of fraud with your customers out of fear of revealing information to the defrauding party, you may need to do more in vetting the identity of users. I don't mean the intricacies of fraud with customers like patterns and markers for fraud. I mean getting to the bottom of the disputed transaction. You're shooting yourself in the shoot in any other case. PayPal is concerned more with user count and transaction volume than individual account retention. You would think that you want your customers to be proactive in cases of potential fraud. It seems like they never learned from their every-user-is-a-credit-card-holder days.
- stratosgear 7y ago
  OP here. The fact that I am actively engaging in conversation with them, to resolve this, should bump me up a notch on their trust level (of course I could be playing an "iocane trick" [https://www.youtube.com/watch?v=U_eZmEiyTo0 https://www.youtube.com/watch?v=U_eZmEiyTo0] but there is no way to honestly prove this). Also the fact that they reply to my initial question about the refund, with an absolutist "After investigating, YOU have logged in and YOU have initiated the refund", when I know I have done not such thing, immediately makes me think that I've been hacked or somehow have fallen a victim of fraud. Further inquiries to clarify the issue, only leads me to get my account blocked/locked. I have no idea how this can be considered fraud protection from their side! And all this means that all in all I agree with you about the lack of competence of the fraud protection team...
  - ccrush 7y ago
    I had an ebay transaction where I sold a piece of equipment, and the buyer was shopping around and didn't want to keep my product despite listing it as "no refunds." The buyer claimed the product was defective and they allowed him to ship it back at my expense. I told ebay that I tried to help the buyer resolve any issues and they didn't even bother dealing with it and just closer the dispute. I called them and they claimed I agreed with and initiated the refund. I didn't. I called PayPal and they bluntly said that this is an ebay issue and that they're not involved. This is despite the fact that they froze the funds in my account. They straight up said they aren't involved. Both eBay and PayPal are complete shit and shouldn't be trusted. The fact that they cornered the market allows them to do this kind of crooked shit. It's absolutely ridiculous and I'm not paying the balance. They can close my accounts at this point. I don't give a shit.
IAmGraydon 7y ago
Did you take the vendor (who made the fraudulent charge) to court to get your funds back?
- philpem 7y ago
  > Knowing that taking the legal route would have been way more costly than the amount of the transaction That reads like a "no" to me.
- stakhanov 7y ago
  No, because of the same consideration: The amount at stake was just too small to justify a court battle. But I really think that the banking regulator should take note of user stories such as the ones that are regularly all over HN and get to the bottom of it. After all PayPal, at least in Europe, is subject to the same regulation as other banks and payment processors. And if that's not the job of a banking regulator to take note when a financial institution has such shitty processes that consumers regularly suffer damages, then I don't know what is. Also, maybe a private lawfirm should put together a class action or something on the basis of all those user stories. I realize that cases tend to be rather different to each other, but I'm finding it hard to believe that there aren't some things that happen so frequently and so systematically that it should be easy to take a stab at in court on behalf of a larger group of users who have suffered damages.
  - ryandrake 7y ago
    How much was in dispute and how much would it have cost? Most attorneys offer free initial consultations. Did you get a quote? For a lot of these kinds of disputes, you can do the paperwork yourself and not even involve court. For example, (if you're in the USA) many common disputes involving companies claiming you owe them money fall under the Fair Credit Reporting Act, which I've found to be very consumer-friendly and incompetence-unfriendly. Remember, your opponent generally also does not want to spend more money than they believe is owed in order to resolve the dispute.
    - stakhanov 7y ago
StavrosK 7y ago
Do they use accounts linked for withdrawal to transfer money as well? I have an account linked so I can withdraw PayPal money to the bank, but I don't want them to get money from my bank account to PayPal. Does anyone know how I can avoid that happening?
- stakhanov 7y ago
  The point I was trying to make that is actually more general than PayPal was: When you want to take back control over convoluted and untrustworthy systems that end up accessing your account in some way, you can't really do it at the level of the payment mechanism. I've done this a fair amount in the past: When I would do business with a vendor that I don't trust all that much with the way they do their billing, I would give them a credit card number for a prepaid credit card with tightly controlled balances, instead of giving them anything that's linked to my main bank account. But it doesn't really help. When the untrustworthy party wants to deduct a payment from the mechanism you've given them and it can't, then they will instead just turn to bullying and threatening legal action, and you end up paying them whatever is in dispute because you won't want to risk them taking legal action. Another consideration that enters into this is the dark and murky territory of consumer credit rating. If there's an account that's in your name, regardless of whether it's PayPal, a prepaid credit card, a bank account or whatever, and there's a charge that hits the account and there's no balance, then this is an event that they'll collect data about, and that may be disseminated in ways that you may not realize, and it may come back to bite you in the ass when you want to apply for a mortgage or something. So it's best not to go that route. At the end of the day, the only thing you can do is to not do business with certain kinds of entities at all. And PayPal is definitely on my list of entities not to do business with.
- edoceo 7y ago
  You need a second bank account, they can pull from the linked one. Protect ya neck!
johnchristopher 7y ago
> Really the only thing to do, as soon as you see a "pay with paypal" screen is to go away screaming. I recently bought some piece of clothes and paid with paypal (had some money in it and I wanted to spend it before Paypal decides to close the account for whatever reason). There was a panel saying "you allow the clothing company to ask for whatever amount of money there is in the account and if there isn't enough we will take it from the credit card linked to the accound". That credit card is the one I used to put money in the account in the first place. A few days ago I decided to give money to a charity a friend set up on facebook for his birthday. Had a choice between paypal and my credit card. Same kind of Paypal panel but I felt better giving facebook my credit card than linking Paypal and Facebook. I am nervous and I am going to buy a pi or something and close the Paypal account forever. My credit card is a "fill it to use it" kind. You need to put money on it from your bank account and then it acts as real Mastercard. So there's always 0 euros on it except when transfering money from bank account to buy something online. And I can put the money back from the cc to the bank account, no fees. With Paypal I can't, it's like I am forced to spend it now.

ikeboy 7y ago

I would have just ignored them. Let them sue a non-existent company, let them win, who cares? You can't collect from a defunct company.

noxToken 7y ago

I'm starting to notice a trend in PayPal fraud cases: a user has an issue with fraud. User contacts PP. PP's fraud department won't discuss the matter. PP does something oafish to lose a customer. The critical point seems to be that fraud won't talk to customers. It makes sense that PP moves quickly when fraud is suspected. What doesn't make sense is that they're so secretive about the events that take place on a user's account. For all we know, user's could be facing legitimate fraud issues that can be addressed with cooperation between PP and user. However, a user cannot cooperate when they have no idea what's going on. If you can't discuss cases of fraud with your customers out of fear of revealing information to the defrauding party, you may need to do more in vetting the identity of users. I don't mean the intricacies of fraud with customers like patterns and markers for fraud. I mean getting to the bottom of the disputed transaction. You're shooting yourself in the shoot in any other case. PayPal is concerned more with user count and transaction volume than individual account retention. You would think that you want your customers to be proactive in cases of potential fraud. It seems like they never learned from their every-user-is-a-credit-card-holder days.

stratosgear 7y ago
OP here. The fact that I am actively engaging in conversation with them, to resolve this, should bump me up a notch on their trust level (of course I could be playing an "iocane trick" [https://www.youtube.com/watch?v=U_eZmEiyTo0 https://www.youtube.com/watch?v=U_eZmEiyTo0] but there is no way to honestly prove this). Also the fact that they reply to my initial question about the refund, with an absolutist "After investigating, YOU have logged in and YOU have initiated the refund", when I know I have done not such thing, immediately makes me think that I've been hacked or somehow have fallen a victim of fraud. Further inquiries to clarify the issue, only leads me to get my account blocked/locked. I have no idea how this can be considered fraud protection from their side! And all this means that all in all I agree with you about the lack of competence of the fraud protection team...
- ccrush 7y ago
  I had an ebay transaction where I sold a piece of equipment, and the buyer was shopping around and didn't want to keep my product despite listing it as "no refunds." The buyer claimed the product was defective and they allowed him to ship it back at my expense. I told ebay that I tried to help the buyer resolve any issues and they didn't even bother dealing with it and just closer the dispute. I called them and they claimed I agreed with and initiated the refund. I didn't. I called PayPal and they bluntly said that this is an ebay issue and that they're not involved. This is despite the fact that they froze the funds in my account. They straight up said they aren't involved. Both eBay and PayPal are complete shit and shouldn't be trusted. The fact that they cornered the market allows them to do this kind of crooked shit. It's absolutely ridiculous and I'm not paying the balance. They can close my accounts at this point. I don't give a shit.

IAmGraydon 7y ago

Did you take the vendor (who made the fraudulent charge) to court to get your funds back?

philpem 7y ago
> Knowing that taking the legal route would have been way more costly than the amount of the transaction That reads like a "no" to me.
stakhanov 7y ago
No, because of the same consideration: The amount at stake was just too small to justify a court battle. But I really think that the banking regulator should take note of user stories such as the ones that are regularly all over HN and get to the bottom of it. After all PayPal, at least in Europe, is subject to the same regulation as other banks and payment processors. And if that's not the job of a banking regulator to take note when a financial institution has such shitty processes that consumers regularly suffer damages, then I don't know what is. Also, maybe a private lawfirm should put together a class action or something on the basis of all those user stories. I realize that cases tend to be rather different to each other, but I'm finding it hard to believe that there aren't some things that happen so frequently and so systematically that it should be easy to take a stab at in court on behalf of a larger group of users who have suffered damages.
- ryandrake 7y ago
  How much was in dispute and how much would it have cost? Most attorneys offer free initial consultations. Did you get a quote? For a lot of these kinds of disputes, you can do the paperwork yourself and not even involve court. For example, (if you're in the USA) many common disputes involving companies claiming you owe them money fall under the Fair Credit Reporting Act, which I've found to be very consumer-friendly and incompetence-unfriendly. Remember, your opponent generally also does not want to spend more money than they believe is owed in order to resolve the dispute.
  - stakhanov 7y ago

StavrosK 7y ago

Do they use accounts linked for withdrawal to transfer money as well? I have an account linked so I can withdraw PayPal money to the bank, but I don't want them to get money from my bank account to PayPal. Does anyone know how I can avoid that happening?

stakhanov 7y ago
The point I was trying to make that is actually more general than PayPal was: When you want to take back control over convoluted and untrustworthy systems that end up accessing your account in some way, you can't really do it at the level of the payment mechanism. I've done this a fair amount in the past: When I would do business with a vendor that I don't trust all that much with the way they do their billing, I would give them a credit card number for a prepaid credit card with tightly controlled balances, instead of giving them anything that's linked to my main bank account. But it doesn't really help. When the untrustworthy party wants to deduct a payment from the mechanism you've given them and it can't, then they will instead just turn to bullying and threatening legal action, and you end up paying them whatever is in dispute because you won't want to risk them taking legal action. Another consideration that enters into this is the dark and murky territory of consumer credit rating. If there's an account that's in your name, regardless of whether it's PayPal, a prepaid credit card, a bank account or whatever, and there's a charge that hits the account and there's no balance, then this is an event that they'll collect data about, and that may be disseminated in ways that you may not realize, and it may come back to bite you in the ass when you want to apply for a mortgage or something. So it's best not to go that route. At the end of the day, the only thing you can do is to not do business with certain kinds of entities at all. And PayPal is definitely on my list of entities not to do business with.
edoceo 7y ago
You need a second bank account, they can pull from the linked one. Protect ya neck!

johnchristopher 7y ago

> Really the only thing to do, as soon as you see a "pay with paypal" screen is to go away screaming. I recently bought some piece of clothes and paid with paypal (had some money in it and I wanted to spend it before Paypal decides to close the account for whatever reason). There was a panel saying "you allow the clothing company to ask for whatever amount of money there is in the account and if there isn't enough we will take it from the credit card linked to the accound". That credit card is the one I used to put money in the account in the first place. A few days ago I decided to give money to a charity a friend set up on facebook for his birthday. Had a choice between paypal and my credit card. Same kind of Paypal panel but I felt better giving facebook my credit card than linking Paypal and Facebook. I am nervous and I am going to buy a pi or something and close the Paypal account forever. My credit card is a "fill it to use it" kind. You need to put money on it from your bank account and then it acts as real Mastercard. So there's always 0 euros on it except when transfering money from bank account to buy something online. And I can put the money back from the cc to the bank account, no fees. With Paypal I can't, it's like I am forced to spend it now.