Paypal $1 ONE DOLLAR no purchase payment and chargeback scam

[SunnyDays]

Someone is sending $1 payments to Paypal account holders for NO goods or services purchased and NO explanation what the money is for, and then they immediately submit chargebacks (reported as unauthorized transaction, which does not make any sense other than some kind of a stupid way of some sort of revenge) even if they receive the $1 refund on the same day as the money is sent out.

The email address and a "shipping address" used in the scam transaction are the following:

Shipping address:

<full name removed>
<address removed>

<email address removed>

This could also allegedly be even someone at Paypal allegedly making business from account holders by "investing" $1 and getting $20+ as a Paypal chargeback fee. If you do this to 1 milion members you got $20M in chargeback fees, which is nasty, but good "business" income for Paypal. This is alleged, but why would Paypal allow a chargeback to go through even if the money was refunded within an HOUR (!!!) or less after the receipt of the $1 (!?). Also (!!!) I called p[aypal immiediately I received this $1 to ask them what to do. They sugested to REFUND the $1 which I did right away!

I even suggested a great imporvement feature to paypal - to let Paypal account holders block certain senders and to set minimum amounts, for example I would like to block anyone from being able to send me less than $5 via Paypal.

Paypal thanked me for this suggestion, which they said it is very nice one, yet instead of thanking me in some way, Paypal allowed the chargeback on this transaction that has been refunded right away 10 days ago?

The only explanation that the chargeback was allowed through was that the mad sender of the $1 "payment" filed a chargeback in a lightning speed right a milisecind after they sent the $1 to me. Even then, there must be some kind of protection from such RIDICULOUS chargebacks! There should be a time frame where the "buyer" should not be able to submit a chargeback on the same day or even within a week of a "payment". A really nasty one, which could potentially cost me $20+ in chargeback fees and it is still being resolved, which status I will update soon.

If you receive $1 or any other amount bearing the above details, it is best you refund it immediately and report it to Paypal since Paypal seems to allow the chargeback to go through even if the money is immediately refunded to the mad $1 sender. Also get a SUBPOENA from your local PD to find out who the mad sender is and what they are trying to achieve by this silly game that seems to be purposed to have you hurt by a Paypal chargeback fee.

[SunnyDays]

UPDATE: In my files I just found another similar $1 "payment" transaction on 28th August 2011 (as usual, refunded by me immediately upon receipt) that came from the following:

<email address removed>

Shipping address:

<mailing address removed>

See the pattern? Same domain KEPTPRIVATE.COM and same state (NJ = New Jersey) with both locations around New York City.

I suggested to Paypal to provide Paypal account holders with the following functionality:

1. Being able to block certain amounts from beimng received ($1 etc.)

2. Being able to block certain users (especially repeat offenders), certain domains, certain IP addresses, etc.

[PayPal_Olivia]

Hi SunnyDays,

Chargebacks are filed by a cardholder, with the issuer of their credit card. The chargeback fee that PayPal charges is a portion of the cost that the credit card company charges PayPal. PayPal does not earn money on chargebacks, and in fact loses money. PayPal works very hard to prevent fraud from occurring in the first place, not only for your protection, but to prevent anyone from experiencing loss and inconvenience.

If you ever see a transaction from someone whom you do not recognize, please feel free to refund the payment. PayPal's security measures work to prevent fraudulent transactions, but it is not always possible to predict the intent of a person sending a payment. Is someone sending me $1.00 because we were at the vending machine and she didn't have change for a soda and I bought one for her, or is it a fraudulent payment? The security measures may have to see a few transactions before it detects fraudulent use.

You may notice that some information has been removed from your post. We definitely encourage discussion of scams to help others avoid them, but there are limits to what types of information may be posted in the PayPal Community Help Forums, for good reasons.

Since it is impossible to discern what names belong to the fraudsters and what names belong to the victims of identity theft who are being used as a cover for the activity, please make sure that you are not ever posting anyone's full name, address, phone number, email address, or any other personally identifiable information.

I understand that it somewhat limits the ability to discuss the scams if you can't compare the contact information, but the fact is that some information that has been shared previously has actually belonged to people who were themselves being victimized by the scammers in fraudulent situations. All posts must comply with the PayPal Community Forums Posting Guidelines. Posts that contain information that violates these guidelines may be edited or entirely removed.

I hope this helps!

Olivia

[SunnyDays]

Hi Olivia,

Good to know that Paypal is unable to profit from chargeback fees and I'm glad some of the info such as keptprivate.com and the originating state (New Jersey) was left in my post, so other people can somehow potentially protect theselves from these kind of  "payments".

Now would be nice to see such functionality in Paypal where account holders could block certain IP addresses, certain email addresses, certain ISPs, certain amounts (up to $X, or exact amounts) certain domain names, as well as certain names and (shipping) addresses, same as we can with our real merchant accounts (accepting credit cards).

Regards,

Andrew

[PayPal_Olivia]

Hi SunnyDays,

Thank you very much for your response.

For feedback, I definitely recommend making a post with your ideas in the Feedback Forum. Posts in that section may or may not receive replies, but the information is seen by folks who are working on improvements. It's the best place to post to have your ideas heard. The Help section is for member-to-member questions and answers. If you have some time, please feel free to poke around the Help Forum and see if you can answer some of the questions other members have, and help the Community thrive. 🙂

Olivia

[SBV]

Someone has started sending me $1 payments. It's freaking me out. They've sent about 6 now and it's on the same day of the week once a week. At first I thought it was a donation since I have a donation button on my website but then when more came it started seeming weirder and weirder. They have not done a 'chargeback' as far as I know. The email address the money was sent from seems to come from a genuine email address - but I emailed them to say thanks the other week and ask why they have sent a few and got no reply. I definitely think something weird is going on. Why would someone send $1 every week on the same? Weird... I wish we had the option of blocking email addresses.