Victim of Illegal Chargeback Fraud, being put into debt

[AMProducts]

Recently, I have sold lots of digital items on eBay (codes to activate games, also known as CD keys). I diversified to increase sales and to provide my eBay business with plenty of items to sell. However, I soon became a victim of ‘friendly fraud’ (also known as chargeback fraud) whereby the buyer contacts their credit card company and claims the payment for the item is unauthorised. This is a huge flaw in e-commerce. I wasn’t aware of this up until around two weeks ago when the first fraudulent buyer requested a chargeback.

The person bought Mafia III twice over a three day period, which seemed a little suspicious, but I went and sent the second code anyway. Days later they requested a chargeback saying the purchase was unauthorised and I thought this was a genuine claim. However, I checked my eBay page and they left positive feedback. I was fuming. I went ahead and filed a dispute in the Resolution Centre on PayPal and attached plenty of evidence to suggest that this was a false claim. I wait a couple of weeks and, annoyingly, I receive a charge of £14 which was debited from my PayPal account.

Here is some of the email:

In addition, a £14.00 GBP chargeback fee has been debited from your PayPal account.

If the financial institution decides the case in your favour, we'll notify you when the payment is returned to your PayPal account.

We understand that you may not have been expecting this case. If your PayPal account balance now shows an amount owing to us, please restore your balance.

We'll email you if we need any further information from you.

Thank you for your patience.

Yours sincerely,
PayPal

By the time I received this email, I had other chargeback claims made against me.

The second claim related to another unauthorised purchase. Someone bought Call of Duty: Infinite Warfare off me 7, yes seven, times. Little did I know, this buyer was attempting to get almost £200’s worth of games. I was furious when a chargeback came through. At the time when they purchased, the 7 codes they bought were the last ones in stock and I messaged them suggesting whether they would want any more keys and the reply was something like “7 is enough.” I had now received confirmation that they were ready to receive the codes so I gladly proceeded and sent five of them and the buyer asked about the remaining keys; the other two would be sent the following day, and they were. Move on another couple of days and there you have it: another chargeback.

Now the list is growing. The most recent claim was yesterday (2nd December 2016). This person had just bought one Call of Duty: Infinite Warfare code. The purchase was made at around the same time as the person above.

Here’s the shocking email I receive:

The sender of the payment outlined below has requested their financial institution to reverse (part, or all of) this payment. They've cited the following reason:

The buyer stated that they did not authorise this purchase.

Here are the case details: 

• Sender's name: []
• Sender's email: []
• Sender's transaction ID: []
• Payment date: 20 November 2016
• Payment amount: £26.75 GBP
• Disputed amount: £26.75 GBP

If you've any information to help us dispute this case, please log in to your PayPal account, go to the Resolution Centre to send it to us within the next 10 calendar days.

Thank you for your cooperation.

Yours sincerely,
PayPal

I have reported this chargeback fraud to the police and expect to receive all the money I should be allowed to have. How is this even legal?! And why do PayPal tolerate such behaviour?

[kernowlass]

@Store0

But they do point it out to you, in the small section on seller protection that you are supposed to read before you start to sell.

You just didn't read it 

[Store0]

That is no excuse, they should send this via mail about the protection and not just put some small letters on the bottom off a page.

[kernowlass]

@Store0

Well they could do that and send you an email about buyer protection + other protections + all the other things you need to read

OR

you could risk assess your own transactions by reading it before you open your paypal account like most of us do.

[sellerben]

I ran into this exact problem, the equivlavent of a buyer purchasing a television set off of Walmart's website only to claim fraud once it arrives in the mail.

There should be seller protection on digital goods too in the 21st century, I am never using eBay again for this purpose sadly so they are losing out on a lot of money.

[sellerben]

If PayPal had chargeback protection for small busniesses dealing with e-commerce, I would have no problem paying a monthly fee for such a service.

[OmegaRacer]

Apparently there's no protection for selling physical items as well. I just lost 550$ because the scammer ordered (and received) a motorcycle seat, then claimed it was significantly different than advertised (it wasn't ) and opened a charge back case with the credit card company. No answers to my emails to work out a return or refund, yet he now has the seat AND the money. It's a bloody disgrace that something like this is allowed to happen. Paypal takes no responsibility and it's not possible to contact the buyer's bank to warn them about the fraud. I'm possedere off

[kernowlass]

@OmegaRacer

If it was a chargeback then it was not a paypal dispute but done directly via the buyer and the buyers credit card company.

In that situation the card company makes all the decisions BUT if you lost paypals seller protection should reimburse you if you met all the criteria for that protection.

If you have not been reimbursed then go and read up on seller protection and see where you may have missed out, if you can't see anywhere why not give c.s. a call and appeal?

[OmegaRacer]

Thank you for your message.

I've read through the Seller Protection. Unfortunately, the buyer (scammer) said the item was "significantly different as described", for which there's no protection. 
It just boggles my mind that not Paypal nor the credit card company would demand the buyer to return the seat, even at my expenses. If it was really so different from the description (which it isn't), why would he want to keep it??

Examples of Items/transactions not eligible for PayPal Seller Protection

• Vehicles, including motorcycles, caravans, aircrafts and boats.
• Claims or Chargebacks for Significantly Not as Described.

[kernowlass]

@OmegaRacer

Paypal can't do anything as its a dispute via the card issuer and not via paypal.

And card issuers rarely ask buyers to return items, they just get them refunds if they think they have received an item 'not as described'.

HOWEVER that does not stop you seeking redress via the small claims court to recover your item OR get your money back as they may find in your favour if you go down that route.

However if you inform your buyer that you will be taking it to the small claims court if you do not receive your item back then he 'may' just decide to return it. Worth a shot?? 

[OmegaRacer]

I'm based in Thailand and I don't think there's something like a small claims court here. I would be very surprised. Buyer is in the USA.
Since it's all in the banks hands, it would be appropriate to disclose the name of that bank for transparency's sake. At least we sellers could forward our evidence and prevent them for being a pawn in this scam.
I might try to send him (another) email...I do have some things I would like to get off my chest grrrrrr