Is it right that PayPal breaks federal law by circumventing seller policies?

[amacmedic]

I have had the unfortunate pleasure at being on the receiving end of PayPal's unwavering ideal (again!) that it can break federal law when it sees fit. I'll explain.

eBay warranty policy states:

"If you list items on eBay that are valued at more than $15 and you include either a written warranty or a service contract with the items, you need to include one of the following in the item description:

• The full text of the written warranty

• A statement explaining how to get a free copy of the written warranty upon written request

• A link to a page with the warranty details

This policy is based on the Magnuson-Moss Warranty Act, a federal law enforced by the Federal Trade Commission (FTC).

Make sure your listing follows these guidelines. If it doesn't, it may be removed, and you may be subject to a range of other actions, including limits of your buying and selling privileges and suspension of your account."

I have done the first on every item that I have on eBay, but PayPal has, on more than 1 occasion, ignored my auction policies and awarded refunds to buyers who didn't deserve it.

My return policy is explicit and spells out the time line for claiming a warranty. The warranty type is written into the item description as is all the policies of my auction sites.

Case in point. A buyer purchases an item through one of my eBay auction sites. Receives the item and leaves positive feedback on the day of delivery "very nice. thanks".

The warranty on the item, as written in the item description, is ''Repair/Replacement''. The return/warranty policy period, as written in the item description, is 5 days after receiving the item. I never receive any emails from the buyer that suggest or hint that anything is wrong.

22 days after receiving the item, the buyer files a cash refund claim with PayPal siting 'Significantly Not as Described: Internal Damage" (Jan 29). I respond on the second day (Jan 31) with the facts of the sale, including all applicable warranty information.

I get an email today (Feb. 2) that says that PayPal has found in favor of the buyer and will refund the auction amount when the buyer has provided proof that that item has been shipped back to me. My response: You got to be kidding me!! The last time this happened, I called PayPal and was told by a PayPal representative that the policies that I (and other sellers) place on our auction sites don't matter. WRONG!

I am, quit frankly, tired of it. I did some digging and have found the opposite of what I was told is true. Don't any of the PayPal representatives know the eBay seller warranty policy guideline? Don't they know that my auction policies (and other sellers) are protected by federal law when they meet the requirements as stated by eBay? I'm sure that we all have heard and said (I know I have said this) that the buyer is entering into a legal contract with the seller when they purchase an item? Its true! By eBay's own written policy regarding seller warranty policies. eBay even mandated that all sellers have a return policy written into their auctions sites or risk having their items removed! (Even that was ridiculous since eBay places, by default, warranty options that the seller has no say in, except to have no returns at all) The implication was that the return policy was left to the individual seller to write! Never did eBay mandate a specific return policy for sellers to write into their item descriptions.

I think it's time that sellers remind PayPal who they are. And what is PayPal? Answer: A service provider. Plain and simple. When a claim is made to PayPal by a buyer, PayPal becomes an arbiter and has a fiduciary responsibility to uphold seller policies that are written into eBay item descriptions if they meet the requirements as specified by eBay warranty policy guidelines and federal law.

I invite any seller that has been wronged by PayPal (or eBay for that matter) to respond to this post. Let them know that what they do is not only wrong and unjustly, but illegal.

Rich

[Lovethebluesman]

Yes, I fully agree with you. I have an exchange warranty policy as follows: If customer works directly with me we settle warranty exchange even after my 7 day exchange period, sometimes 59 days, if Ebay stays out of it. If customer wants money back they send dispute to Ebay stating item as not described, ignoring my warranty policy. My funds are held after 7 days as dispute becomes claim with Paypal. Paypal makes decision refunds money to customer ignoring my refund policy and notifying me after they make decision and refund. Many times I never get my merchandise back, customer get free ipod, plus refund for purchase and I am **bleep**ed. Customer can send empty box as long as they have delivery confirmation. I have over 5000.00 in losses accredited to Ebay/Paypal Buyer Protection Refund Policy. The new policy also covers this as they can hold funds for 3 weeks to cover any negative balance they may incur. That's why I never leave any balance in Paypal. I get it out with my debit card as soon as possible from the ATM as Paypal freezes it at their will and I may never see my money! Here's another scam that is happening, Customer gets refund for purchase thru Paypal. Then on 59th day files chargeback with credit card company. Paypal holds your funds again for 90.00 original purchase amount getting interest on your money. Paypal sides with customer give an additional 90.00 back to thief's credit card company as chargeback was not decided in my favor. Total lost 180.00 and Paypal has allowed another thief to ripe me off with the Buyer Protection Policy. Who has the power to enforce my warranty policy? not me Ebay/Paypal does. Is all this the truth, **bleep** yes! Can't say **bleep** Yes in court because that is contempt of court. I have lost 500.00 in France with an identical situation. Ebay/Paypal does not support the seller like the Warranty Policy Rule. It is just for show and the decision power rest with the ebay/paypal dispute employee, who is not legal person as shown by your marvelous explanation of "PayPal breaks federal law by circumventing seller policies" Chargebacks can be initiated by anyone who purchases on Ebay. A lot of scam operators love this policy. Paypal could care less if you lose you money, only business you know!! Ebay shows your seller totals, but does not deduct all your losses and ripoffs. You would be shocked at your bottom line profit if you have been selling for any period of time on Ebay. Most of the pure Profit goes to Ebay/PayPal as they call the shots and all of us are little customers who must abide by their rules which are getting unfair and unrealistic. But, its Big Business you know, wonder if the Bank of China owns this operation? It is a secret you know!!!! My brother is an International Lawyer and has made me aware that Banks have Great Power as witnessed by the Government Bail out in America. The citizens had nothing to say about it as all the decisions were made in Washington. The Banks made the decision, not Washington, that was only for show. Ebay/Paypal is also attempting to show great power as the Banks do, but the people have a say so with this one, not the Banks. So, it is simple lets put Ebay/Pal Out of Business. I'm doing my part, how about you? P.S. Make sure you copy what your write so you can paste it as PayPal will log you out and your will loss all your word power. Rise up people don't sit back and that this unjustice at the hands of greedy businessman.

[amacmedic]

Thanks for sharing your experience. You are not the only one out there that has been the victim to eBay/PayPal.

I have done more research since I last posted this topic. Unfortunately for us, eBay/Pal does not really want to deal with disputes. Their unwritten policy is to settle a dispute as quickly and painlessly (for them) as possible. This means that there is no investigation into any dispute. They simply find for the party that opened the dispute. Google PayPal and read the Wikapedia material. It's an eye opener for those who don't know anything about PayPal.

There is one thing that the material that I have seen to date, does not seem to cover. That is eBay/PayPal's responsibility as an unbiased arbiter in a dispute. Earlier I used the term 'fiduciary capacity'. For those that may be confused about that, Google or Yahoo 'fiduciary'. The meaning that I was intending to convey is that eBay/PayPal have responsibilty as arbiters to gather evidense/information and make a decision based on that information. Federal law madates that  a warranty must contain certain criteria for it to valid. Read Title 50 USC for a breif on the Magnuson-Moss Warranty act and Title 16 CFR to get the nitty, gritty details.

eBay's seller warranty police guidline is short and simple. Meet just one of the requirements and eBay supposidly places it's stamp of approval on a seller's auction policies. Too bad eBay/Paypal overlooks that fact when dealing with disputes.

In any case, there is an avenue of recourse that sellers, who have been burned by eBay/PayPal, can take. It's not cheap and it's not quick, but it gets the job done. All there needs to be is a coming together of minds and wills (and money) to make eBay/PayPal stand up and take notice. It has been done in the past, and it can be done again. The truth is out there.

That's all for now. I'll post again soon with more tidbits of interest on the debocal that is the eBay/PayPal dispute/resolution process.

[karanngoroo]

This also happens in reverse. My son paid a seller for an XBox. He realized the credit card number had changed and contacted the buyer to let her know it could take up to 2 weeks to verify payment, etc. So they BOTH agreed to cancel the sale.

Neither Ebay nor Paypal informed my son that they decided to pay the girl regardless of the agreed upon cancellation. They charged his credit report and have sent collection agencies against him for over 3 years.  I explained to the credit agency that he had cancelled the purchase with the buyer. The buyer took the money from paypal for an item that was never sent.

Paypal told me - my son's credit was good so they "fronted" him the money for the sale when they saw the CC was inactive. And they expect him to pay it. We refused and will continue to refuse. They should have taken the money back from the seller.

KG

[amacmedic]

Thanks for posting to my topic. Update: I eventually lost my battle with PayPal. The reason - the incident report (a.k.a. Information report) that I faxed to PayPal was not specific enough, although I included all the information that I was told to put in the report! I found that PayPal dispute/resolution phone support division is separate from the PayPal dispute/resolution specialist. The specialist actually makes the decision on who wins the dispute case. They do not give any weight to any of the notes that are put into a dispute file by the phone support personnel. I spoke to a supervisor in the phone support division and he offered me a settlement, 25% of my loss, and told me that I needed to move on with my life. Note to the wise. If you plan on fighting PayPal, it's an uphill battle. PayPal and eBay will do everything in their power to find for the first person who escalates a complaint to a dispute. No matter if that person is right or wrong. Also know that there is a HUGE disconnect between the phone support division and the specialist! DO NOT depend on what they tell you. They may sympathize with you, they may agree with you, but in the end they have say in how your case will turn out. Anyway... The PayPal User Agreement contradicts itself in 3 policy sub-sections concerning the process for 'Significantly Not As Described' (SNAD) disputes. First in § 13.4 Dispute Resolution, 13.5 PayPal Buyer Complaint Policy and 13.9 Relationship between PayPal’s protection programs and Chargebacks. In §13.4, 4th bullet, it states "For Significantly Not as Described (SNAD) Claims, PayPal may require you to ship the item back to the seller - or to PayPal - or to a third party at your expense, and to provide proof of delivery." The first part of the sentence (in italics) clearly indicates a SNAD dispute that was escalated to a claim, which is in direct conflict with the next section. In §13.5 (A) states "...– but you may not escalate a Significantly Not as Described Dispute to a Claim. You may not file a dispute for a Personal Payment. and (B) states "... You should not escalate a Dispute for Significantly Not as Described (SNAD) to a Claim because PayPal will not make a decision on a SNAD Claim under the PayPal Buyer Complaint Policy." In both paragraphs A and B, the buyer is instructed that they may not and should not escalate a SNAD dispute to a claim. In §13.9 states "Before contacting your card issuer or filing a Dispute with PayPal, you should contact the seller to resolve your issue in accordance with the seller’s return policy as stated on their auction or website." Again, PayPal instruction contradictions confuse the issue of what the buyer must do. In this case, following the sellers auction site return policies. By using the term "You", PayPal does not clearly define whom this particular section is addressing. It can be said that the implied party is the 'buyer' since most all of the sub-section 13 addresses the buyer, but this arguable. Also, by using the term "should", PayPal's policies are only suggesting or expressing a desired action that the buyer do a particular thing. This leaves room for more ambiguity. To even further confuse the issue, PayPal gives a consequence for not following their suggestion without providing a clear referance to why the buyer "should" make the "right" decision. For example: in §13.5 (B) states: "You should not escalate a SNAD to a claim because PayPal will not make a decision on a SNAD Claim under the PayPal Buyer Complaint Policy." It should read: The buyer shall not escalate a SNAD to a claim because PayPal will not make a decision in favor of the buyer on a SNAD Claim under the PayPal Buyer Complaint Policy, "§13.5 (A), para 2, sent 3, which reads in part: you may not escalate a Significantly Not as Described Dispute to a Claim. "The buyer" indicates clearly who the section is addressing. "shall not" is a command or giving instruction "§13.5 (A), para 2, sent 3", which reads in part: you may not escalate a Significantly Not as Described Dispute to a Claim. says without a doubt what the consequences are for the buyer who escalates a SNAD Dispute to a claim. The last thing is the fact PayPal (and eBay) suggests that the buyer contact the seller first and try to work things out before filing a dispute. Furthermore, both PayPal and eBay suggests the the buyer contact the seller and work things out before escalating a dispute to a claim. To bad it's only a suggestion. What makes this part confusing is that PayPal and eBay both stipulate that the buyer must wait 7 days before escalating a dispute to a claim, but the flaw of the resolution system will allow the buyer (or seller) to file a dispute and immediately escalate it to a claim if the dispute is filed sometime after the 14th day following confirmation of the payment having cleared to the seller. I intend to bring these issues to PayPal's attention. I don't think it will get me anywhere, but there is only one way to find out. I'll post more later.