Paypal Scam: Friends and Family Payment for a goods transaction

[kcflanders]

Has Paypal ever assisted anyone who was scammed by being asked for Friends and Family Payment for a goods transaction?

Paypal is very aware of this scam, for the average user the first time they've even heard of this time of transaction is when another member asks for them to send them money in that form. Usually something like "hey, can you send the money as friends and family? I can drop the price a couple bucks since I won't be charged the fee." 

Paypal can easily eliminate this problem by requiring a person to check a box acknowledging, 

1. This payment is not for a good transaction. 
2. I am aware I have no ability to dispute this transaction once sent.

So why has Paypal made this so easy for scammers?

What actions will Paypal take if there is a problem?

What are the chances a State Attorney General might take some action to make the two bullet points above happen?

[kernowlass · Accepted solution]

Surely if you are not sending to a mate or a family member then you would not use that option anyway??

If you are buying stuff you would use the goods option.

Why would paypal tell you its not for goods if it clears states you are sending a personal payment to family and friends??

[kcflanders]

kernowlass, are you saying you would never purchase anything from a friend? or someone you thought was a friend could never **bleep** you over in this way? 

Regardless, the solution I mentioned above could very easily be implemented by Paypal and I see you didn't bother to address that.

[mishy1950]

My payment wasn't processing under Goods & Services and as it was outside Ebay, ie. before conclusion, I thought I must be doing something wrong and since I had the person's email address, I usedit under F & F and it processed.  Suspicious, I cancelled it and put it under dispute when the seller failed to respond to any Ebay or PPal emails over the next day or so.

[DPCreations]

@mishy1950

You are adding to another person's subject and I can't figure out how your new problem relates to the OP.

It looks like bought something from an eBay seller but decided to help the seller avoid payment processing fees by paying with the friends/family option. This is not a scam,  your choice to violate PayPal policy and terms of service to use friends/family for purchased goods.  You can't just cancel money sent as friends/family such payment is not suspicious as you willinging made the payment.  There is nothing to displute as you, yourself, made the payment freely with no expectation of goods/services.

[kcflanders]

What exactly is your problem with adding a warning statement to any Friends and Family payment before it is sent? Something along the lines of "Warning: Friends and Family payments cannot be disputed" ?

There is no question that there are people out there who request payment thru F&F in order to defraud others. Paypal has given them a very lucrative avenue to do just that.

Your argument that ignorant people deserve to be defrauded is actually quite offensive!

[Loverboy82]

They do it like that because they don't make no money off us sending it as friends and family but if we send it as goods and services, they make money. They make money off our money. If they don't they lock up or accounts for 3-6 months talking about suspicious activity

[kcflanders]

That's exactly the reason why they SHOULD place a warning before people use the F&F option. Then Paypal WILL receive  their fee, and the scammers won't have an easy avenue to scam people. Noone has yet to state any reasonable reason why this should not be done. Just the same couple Paypal supporters, whining that everyone should already know, and if they don't they deserve to get **bleep** over once to learn their lesson.

[sharpiemarker]

People don't read or don't care. There is a line of text under Pay For Goods and Services button, that says "Covered by PayPal Protection For Buyers".  If a seller tells the buyer they can save a few bucks or some other bs line by sending payment as F&F, they will do it.  Not all, but some have post here and indicate that they did it.  PayPal don't protect against bad judgement.  You can have all the warnings in the world, there's always gonna be someone making a bad decision.

[kcflanders]

Here is what is displayed when you choose to make a payment thru F&F

You're sending with

 

PayPal Balance (USD)$0.02

Change Payment Method

Fee

$0.00

You'll Pay$0.02

View PayPal policies and your payment method rights.

Send Money NowCancel

If you click the Paypal Policies link, this is the portion of the page describing "Purchase Protection" 

" Payment Method Rights and Remedies PayPal Purchase Protection

PayPal Purchase Protection (also known as PayPal Buyer Protection) applies for certain, qualifying purchases regardless of the payment method. For these qualifying purchases, PayPal will cover you for the full amount of the item plus original shipping costs if you do not receive the item or if you receive an item but it is significantly different than the description the seller provided. To receive reimbursement for items that are significantly not as described, you will be required to return the item to the seller, or in some cases to PayPal, and to pay the return shipping costs. PayPal Purchase Protection is not available for personal payments and other ineligible purchases.

To be eligible for PayPal Purchase Protection, you must file a Dispute in the PayPal Resolution Center within 180 days of the date you sent the payment, escalate the Dispute to a Claim within 20 days of the date you filed the Dispute, and meet the eligibility criteria as listed in the PayPal User Agreement."

Nowhere does it say "Friends and Family option is ineligible." That would be a simple fix.

The way I see it is this.

If I were Paypal and knew there is a group of people using my system to scam people. I would not want to be on the hook for their criminal actions (Having to reimburse a customer for the sale of an item and shipping costs that never is actually shipped) for an example. So why not create a second payment form where Paypal accepts no liability for resolution?, and to incentivize the crooks to use that system, why not allow the crooks to pay no fees for the service?

Now paypal is not on the hook for the criminal actions and Paypal will still collect the 2.9% fee when the crooks make "Legitimate" purchases from their Paypal accounts. After all, won't the crooks want to spend that money as soon as possible? They certainly wouldn't want to transfer it to their bank account.

That's all good for the crooks and good for Paypal.