NEW SCAM - HOW TO WIN EVERY EBAY AUCTION FOR FREE - No I'm not kidding

[gearsmithy]

Some of you may have read about the SNAD-Chargeback scam that is plaguing the seller community.  Well, PayPal is doing nothing about it so I'm taking this opportunity to educate as many people I can about how to perform this scam so you can protect yourself (but you can't, you'll see why).

HERE'S HOW THE SCAM WORKS, find a buyer and win an auction, pay with your credit card via paypal.  When you get the merchandise initiate a SNAD (significantly not as described) paypal dispute and a chargeback through your CC company.  You may win or lose the paypal dispute, but it doesn't matter, the CC company will still process the chargeback and since you initiated the dispute as SNAD the seller is not covered by PayPal's "Seller Protection Policy."  Voila, now you've got the merchandise AND the money. 

You see folks, PAYPAL AND THE CC COMPANIES RELY UPON THE BUYER TO DETERMINE THE TYPE OF DISPUTE.  So sellers have zero chance of winning in the end because PayPal's Seller Protection Policy does not cover SNAD claims or chargebacks, and the BUYER gets to classify the dispute.  Essentially, THE BUYER GETS TO DETERMINE WHO PAYS FOR THE MERCHANDISE.

This happened to me. I sold a phone on ebay, buyer initiated a SNAD (significantly not as described) claim against me in paypal (he claimed that the phone was stolen by UPS and even sent photos of a damaged box without phone inside).  I won the Paypal dispute by providing 45 pages of emails, numerous photographs proving that the item was shipped as described through UPS and confirmed delivery to the a confirmed address.  But I lost the chargeback why?? Because the BUYER calls the shots in this game.   Even though paypal's web page states the following:

"Chargeback coverage with PayPal Dispute Resolution.
If you resolve a dispute through the Resolution Center, Paypal will protect you 100% against any future claim, chargeback or bank reversal the buyer may file for that transaction."

You can read this here: https://www.paypal.com/cgi-bin/webscr?cmd=xpt/Marketing/securitycenter/sell/ChargebackGuide3-outside

That looks like flat-out false advertising to me, and this whole double jeopardy system is clearly unethical.  So feel free to abuse the system all you want, Paypal doesn't care, ebay doesn't care, the CC companies...they sure as heck don't care. 

[gearsmithy]

Or I could email fox news, I'm sure they'd love to hear about this GAPING EBAY/PAYPAL HOLE that fraudsters are actively exploiting to steal merchandise from the little guy.

[gearsmithy]

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@profdata wrote:

E-mail AMANDA@PAYPAL she has helped others in the past

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Amanda's track record for helping victims of chargeback fraud is not impressive.  Just search for "chargeback amanda" and you'll see what i mean.

[profdata]

What happened to you has happened to many others and Paypal covered them under DJ.

I post a lot on the Ebay boards and have heard from sellers  that have been covered under DJ

[gearsmithy]

I just got off the phone with a supervisor in the dispute/chargeback area.  He said the same thing that everyone said "DJ doesn't apply to my situation".

I think at this point, I'm done trying to work with paypal. For some reason nobody seems to care that THE BUYER CHOSES WHETHER THE SELLER IS COVERED BY PAYPAL'S SELLER PROTECTION POLICY.  

[profdata]

Here is a thread from the Ebay/paypal discussion board. http://forums.ebay.com/db2/topic/Paypal/Chargeback-38-Closed/510160536&#msg513244661

See post # 5

The "double jeopardy" is mentioned in the PayPal Chargeback FAQ's... here's the text and link...

If a seller amicably resolves a PayPal dispute or wins a claim, is the seller covered against chargebacks?

Yes, if you amicably resolve a dispute through the Resolution Center, Paypal will protect you 100% against any future claim, chargeback or bank reversal the buyer may file for that transaction.

To be covered, however, the seller must honor agreements made with the buyer during the dispute resolution process. And, if the chargeback comes in before the dispute or claim is resolved, the seller will not be covered.

[gearsmithy]

Ok so, what are my options?  Call the hotline again, not a chance.  every time I call them I get the same response, and it takes me a half hour just to find somebody who knows what they're talking about.  The 888 number is useless, and you're telling me this Amanda person can help if I email her?

[Siterack_net]

I'm glad I only sell web hosting, and not tangible products.
When I get a chargback case, or fraudulent PayPal case, I can suspend and terminate the account.
No product lost.

I couldn;t imagine the headaches if I sold a tangible good.

[gearsmithy]

I got a response from the "Office of Executive Escalations" .... "executive escalations?"  are you kidding me? I couldn't think of a more patronizing thing to call this "office" it's down right insulting, see for yourself

---------------------------------------

Dear Mr. [gearsmithy],

My name is April and I work for the office of Executive Escalations. Thank you for your inquiry. Your concerns were recently forwarded to our office for review in the hope that we might be able to assist you further.

I'm so sorry for the difficulties you have been experiencing in regards to your PayPal account. In reviewing your Account, I see that you recently contacted us in regards to the following Chargeback:

Buyer's Name:[redacted]
Buyer's Email:[redacted]
Transaction Date:Jan 15, 2010
Transaction Amount:[redacted]
Case #:PP-000-958-434-363
Your Transaction ID: 59V01029SC9011603

I'm very sorry for the frustration this issue has caused you. PayPal's Seller Protection can protect sellers of tangible items from reversal liability resulting from a Buyer's unauthorized use of a credit card or false claims of non-shipment of goods.  A review of the disputes filed by the Buyer's credit card company shows that the reversals were initiated for quality issues, disqualifying you for PayPal's Seller Protection.  The decision to dispute the charge was made solely by the Buyer’s credit card issuer.  As such, please understand that PayPal does not control the outcome of any dispute decision initiated through a credit card issuing bank.

I understand that the buyer previously filed a Claim with PayPal in regards to this transaction, and the Claim was found in your favor. However, because the Claim was initiated for quality issues, PayPal's Seller Protection did not apply.

Mr. [gearsmithy], I understand you are frustrated regarding this situation. I see from the tracking information you provided that UPS was investigating your damage claim as of February 19, 2010. I recommend that you continuing working with UPS to resolve the issue.

Again, I sincerely apologize for the difficulties you have encountered while using PayPal.  **personal information removed**

Sincerely,
April
Executive Escalations
PayPal, an eBay Company

[gearsmithy]

Well it's been 9 days since I responded to an email I recieved from "the office of executive escalations."  No reponse, not even a confirmation message.  I think it's safe to say that paypal clearly doesn't give a lick about this issue.

[surplusdealdude]

Stop being such a drama queen about this.

Stripped of all the moaning, groaning and baseless accusations, this is what has happened;

The buyer bought a cellphone.

The buyer received an empty box.  The carrier is a likely suspect.

The buyer filed an incorrect dispute for "Item not received" and lost because they received something and DC showed it.

The buyer filed a chargeback for the right reason this time.

Paypal won't cover you for a different chargeback filed.  You're trying to stretch the definition of item not received to an extent that it wasn't meant for and, of course, that does not work.

"Item not received" has a specific meaning - it means the buyer got NOTHING - no phone or package, nothing ever came.

It does NOT speak to whether the buyer got what your listing promised, which you, the seller, have a legal duty to ensure.  You have not ensured that - the buyer does not have their phone.

Paypal is acting correctly and so is the CC company.  Your dispute is with the carrier - rant at them.