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Chargeback Reversed - yet overwhelming evidence transaction was friendly fraud?


Chargeback Reversed - yet overwhelming evidence transaction was friendly fraud?



I am rather frustrated about the way a chargeback was handled. In addition to the fact that PayPal seem to find it appropriate to give Merchants as little information as they can about the resolution of a chargeback case (merchants should be entitled to this information), but this Chargeback case was our first one (well, 4 from the same customer) in almost 3 years of holding a PayPal merchant account because of the rigorous vetting and checks we do on all our customers to prevent chargebacks.


After having a phone call conversation discussing our service to the customer (recording of call provided to PayPal), the user agreed through email to a 12 month minimum term contract. The customer then decided they could no longer afford the subscription, and then commenced a chargeback against one of the transactions. After trying to negotiate with the customer to a resolution, of which we were on the verge of doing, it would seem the customer figured out charge backing every single transaction with us would be an easy way to get more money. And so, a month after the first chargeback, after admitting to us that they claimed an "Item/Service Not Received" chargeback was in fact because they couldn't afford the service, went ahead and initiate a chargeback against all of the three other payments for the same reason.


In accordance, we provided PayPal the following:


1 - Phone call recordings


2 - Email correspondence which included

    a - Confirmation the chargeback was due to financial difficulties

    b - The fact service was rendered and received

    c - Their willingness to accept a payment arrangement to conclude the 12 month contract whilst a chargeback case was open.

    d - A promise to close the current chargeback case, and advised that they told their card company they won't submit any further cases.

    e - Various emails demonstrating their satisfaction with out service.

    f - Written confirmation of their agreement to a 12 month contract.


3 - As we provide a software solution, and so we sent on contact details for all the people who used our software on our clients websites and submitted them as witnesses to the fact that they used our service and that the service was in fact rendered, around 50 full names contact numbers and postal addresses.


4 - Copies of emails our software sent with the users name in the signature field and a copy of all the login logs utilising our service.


We then, very quickly, received all 4 chargeback case resolutions at once stating: "

As you know, we have been using the information you provided to dispute a

chargeback filed against the transaction detailed below. Despite our best

efforts, the buyer's credit card company decided in favour of the buyer."


So, what is actually required to win a chargeback if blatant evidence the chargebacks have been lodged fraudulently isn't appropriate? Maybe a DNA sample with a video recording that they approve the transaction and get them to repeat this every month to say they are satisfied with the service? Maybe I could also get a court official to supervise the use of our service so they can vouch services are rendered, that's on the basis that 50 witnesses is less supportive than 1 Court official, of course, given 50 independent witnesses was not enough collaborating evidence. Perhaps I should get a written letter from our customers which has been witnessed by a police officer? I am really saddened at the injustice in this issue.


What more must I do? It's also extremely daft that PayPal will not supply the "counter-claim" documents received, which they state they get in the chargeback notes and then decide "They are unable to fight this claim" based on this information.


I feel passionately about this because of the fact the customer has blatantly committed fraud and admitted this in writing to us. The fact the customer is in Canada and I am in the UK makes things difficult, although I have already got a Canadian debt collection agency chasing the customer but that also could go either way.






Re: Chargeback Reversed - yet overwhelming evidence transaction was friendly fraud?

I too have had very similar problems involving credit card chargebacks on 4 different transactions all from the same person. All cases were closed with what else of course but the credit card in favour of the buyer. I was purposely shammed from a personal friend or who I thought was a friend! As a favour I agreed to let him transfer money to my account due to the fact that he did not have his own account. Money was withdrawn and he was given all cash. He had money transferred 3 more times, each done without my knowledge or consent but the money was given to him each time. This led to the end of our friendship. A month or so later the chargebacks were filed claiming "Unauthorized use of card," payments were reversed and taken out of my account leaving me with a negative balance of over $1400.00 and a hold or freeze on my account. Meanwhile he is getting money handed to him again.


I also received the same statement in the notice of resolution ....." As you know, we have been using the information you provided to dispute the chargeback detailed below. Despite our best efforts, the buyer's credit card company decided in favour the buyer. As a result, this payment has been deducted from your PayPalbalance. Although we cannot dispute this transaction any further blah blah blah blah blah..." This is totally ridiculous and makes absolutely no sense at all. Why? Why not? Why can't Paypal fight for us honest, long-time account holders? They are obviously aware of this increase in fraud, admitted to me by several paypal legal representatives while spending countless hours on the phone each call ending with the same results --no help whatsoever! I was told "It's business and that's the chance you take," was also told "we call it friendly fraud," I was even hung up on at one time. I had given them enough evidence and proof that he was committing fraud, not to mention that if this card was indeed stolen than it only proves that he is the one that stole it, all evidence is right there in the files in black & white! He should be investigated for either fraud or credit card theft and be prosecuted to keep him from doing this to more innocent people. It is beyond me why paypal does absolutely nothing and continues to let these criminals get away with this. I have had it and I am fed up with the disrespect and the complete lack of help that I have filed a complaint against paypal with the BBB and encourage anyone dealing with these same issues to also file a claim with the BBB, it can easily be done using their online forms. As posted from another member lf enough of us complain they will have no choice but to take action.

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Re: Chargeback Reversed - yet overwhelming evidence transaction was friendly fraud?

Hi guys,


I can only imagine how frustrating both of your experiences must have been. Even though you both have done as much as you can to try and prevent these from happening, there still has been chargebacks filed on the transactions you received.


Firstly, I need to advise that a chargeback works differently then a dispute that a buyer would open directly on their PayPal account. A buyer would go directly to their credit card company to dispute the transaction and not through their PayPal account. 


We always try to dispute chargebacks that we feel we have legitamate grounds to try and dispute with the credit card company. In a lot of cases, we are successful in disputing a chargeback with a credit card company but this is not always the case.


Even though the payment was received and processed to you through PayPal, we are required to comply with credit card companies disputes processes and decisions. They have the option to dispute a transaction that has been debited through the PayPal system for anywhere up to 6 months after a transaction has taken place. They would also make the final decision on the outcome of the chargeback. We do try and dispute the outcome in cases where we feel that the decision is incorrect, but the credit card company can either accept or refuse our request to appeal the outcome.


I honestly understand that you both have been affected by the chargebacks negatively on your PayPal accounts. My best advice for you would be to consider contacting your local police in order for them to proceed with an investigation externally. If they need, they can contact us directly and request any information concerning the case that they require and we will be more then happy to assist them.


I realise that this may not be the answer that you were hoping for but I hope the information clarifies some of the decision making process for you both.


Please let me know if you need anything else in future.




Re: Chargeback Reversed - yet overwhelming evidence transaction was friendly fraud?

I very rarely get chargeback disputes, however unfortunately once again I've received another not so "friendly" fraud chargeback case, once again, 4 in a row, and despite overwhelming evidence including this time GPS Logs, it was still found in the buyers favour by the card company.


Even more frustrating, I raised a chargeback dispute myself last year, and it was the biggest pain ever because PayPal decided to take my LEGITIMATE case through to arbitration, it took almost a year to get my refund of a petty amount. It's kinda amazing, when I have friendly fraud cases, they are never sent to arbitration, yet when I submit a legitmate chargeback case as a consumer due to being charged in the wrong currency and PayPal refusing until the last minute to refund the difference, that they decide to fight it with all they have got.


I only got prompted to this post again becuase I wanted to see on google if there was anything else people do when they have a large amount of evidence against a fraudulant customer abusing the chargeback procedure, yet ironically enough, this forum thread from back in 2012 is number one in google and seems to be the only source of information for people.


Love being a business merchant with PayPal!


Re: Chargeback Reversed - yet overwhelming evidence transaction was friendly fraud?

I've had a very similar problem and currently owe PayPal £30 because they'd rather take his word against the mounds of evidence I submitted proving I am right.


As it's theft of good and services you can report it to the Police. I also logged a case with Action Fraud, who investigate cyber crimes such as these through eBay.


Re: Chargeback Reversed - yet overwhelming evidence transaction was friendly fraud?

Thanks for your comment! I've made reports to ActionFraud each time on instances of friendly fraud over the years and is a total waste of time sadly. I've also reported other things, such as attempted hacking from ex-employees, to no result also. Sadly, reports made to ActionFraud only help their statistics, they have little care for individual cases as not one of my cases have ever been actioned.