We provide unline educational resources and sell via annual subscriptions. A customer subscribed in August 2016 and set up a recurring subscription. The first renewal was paid in August 2017. In November of 2017, the buyer reported an unauthorized transaction taken from his bank account.
This payment, obviously taken by PayPal on our behalf, would have been because the buyer's bank account was the primary funding source for his PayPal account - and I guess his PayPal account had insufficient funds to cover the subscription.
I was notified by PayPal that the claim had been made and was requested to submit 'evidence' to counter the claim.
This wasn't difficult - it's simply a recurring subscription which the buyer had signed up to. He would have been notified (by Paypal themselves) at the time of initially setting up the first payment that this was a recurring subscription. He would also have been told when the first renewal was made.
We've now been advised that the buyer's 'financial institution' have found in his favour and returned the money to him. In turn, Paypal have taken the money from our account without any further explanation as to why!
I have asked Paypal why this has happened. We use their recurring subscription system to administer the selling of our services and one would trust that all of the checks and balances are in place to protect the seller (us) when things like this happen. I further asked Paypal to let us see the 'evidence' they themselves provided the buyer's financial institution in 'defending' this claim....one would assume they would be defending the claim, right?
They couldn't have been less helpful if they had tried. All we get is a canned response email saying that we have to serve them (Paypal) with a lawsuit or subpoena to get further information.
Are we in for a long and costly battle here?
We feel like following through with this just as a matter of principle - at a very simplistic level, the buyer has breached a contract with us and this and both Paypal and the buyer's financial institution have been complicit in assisting in this breach of contract by returning the buyer's money.
Or am I missing something here - any helpful thoughts appreciated.
