Why Does PayPal Allow Chargeback Fraud?

[EganMedical]

Why does it seem that in about four out of every five fraudulent chargebacks (defined as those in which the scam artist keeps the product and steals the merchant's money back via their credit card company and PayPal's chargeback "resolution" system) on average, PayPal sides with the scam artist, handing over their (PayPal's) customers' money to the crooks and theives defrauding them?

Why won't PayPal defend its customers as aggressively as the corrupt credit card companies, which always and without fail find that "after reviewing the evidence, their client's chargeback claim is legitimate", even though any objective observer can see clear as day that "their client" belongs behind bars.

Why is it that a merchant can provide proof-of-shipment, all sorts of additional documentation proving that it fulfilled its end of a mutually agreed upon transaction, only to have the scam artist file a fraudulent chargeback after receiving the merchandise, and PayPal STILL helps them steal from the honest party --- the only acting in good faith?

Since PayPal has developed a reputation as "soft" in terms of defending its own clients against fraud, a criminal racket has developed that take advantage of this fact by defrauding companies that lack the resources to see that they are prosecuted --- which also happen to be those most afflicted by such petty fraud.

Why won't PayPal utilize its resources to help ensure an arrest is made and the scam artist prosecuted in chargeback fraud cases?

It seems to me that that would be a far more effective means of putting a stop to it than handing over the hard-earned money of vulnerable small businesses whose own merchant services provider has stabbed them in the back.

[kernowlass]

If you meet the requirement of seller protection then you should not lose your money. 

However if a buyer files with their c.c, company for unauthorised access of their account who are you to say they are lying, 

[Espen_83]

There are big companies that works as fronts for scams of this kind. It's well documented and it's been going on for years.

How do you get away with this bigtime? Operate a proxy bid site for users that are outside of the ebay market and bid on their behalf. Get the items, get tonnes of items. Claim that a certain amount never made it to you and because you move such amounts of goods nobody at the paypal/ebay conglomerate will bother taking a deeper look no matter how much information is provided. Combine this with the fact that sellers cant leave negative feedback on ebay and you have a continous scam going on.

I'm guessing that if these chargeback holes are not patched then alternatives to paypal wil show up, because as it is now more and more scammers are becomming aware of this loophole which gives out free merchandize without questioning.

Why is this going on? because some fatcat thinks that it will save paypal money, but in the end i think it will be their downfall.

[EganMedical]

Actually, for the most part the fraudulent chargebacks are credit card customers buying off-Ebay. We sell maternity support garments, and often after the customer has given birth, she will attempt to claim she either never received the item (in hopes that we're so aloof we keep no records), that it was unauthorized or not-as-described (all shipped new in manufacturer's original packaging).

PayPal enables the activity by refusing to represent its clients with the same vigor the organized crime gangs (credit card companies) do their clients. They always say the same thing: "After reviewing the information you've provided, the buyer's credit card company still maintains the buyer is owed a refund."

They say this regardless of the circumstances, and no matter the evidence. The only way we can win is if we appeal and buyer forgets. As long as they persist, PayPal will bend over on our behalf and make us take it, while the buyer makes off like a thief.

We know what's going on. These women - once they no longer can use the item (i.e. they've already given birth) - try to get their money back knowing that PayPal is soft and won't defend its sellers, so they wind up stealing the product in essence and PayPal is crinially liable for acting as an accessory to the crime.

[EganMedical]

We know that these instances are not for unauthorized access.

If I can find the buyer on Facebook, confirm she is in fact pregnant (or at least was at the time of the transaction), and that the timing of her attempt at committing fraud coincides directly with her giving birth and thus no longer retaining use for the product purchased (almost always maternity support undergarments), then... Yeah, it's a pretty safe bet that we know for a fact she's lying about the whole "unauthorized use" claim. Besides, those incidents typically involve bulk order of high-end items - not single units of a product designed for a person fitting the exact demograpic of the credit card holder specific to that very stage of her life.

In any case, more often than not they decide four months after reciving the item that they never received it, or that it was not as described (all shipped new, in original packaging). PayPal is just spineless by-and-large and won't represent its clients with the same intensity and vigor that the organized crime rings (i.e. credit card companies) will represent their lying, thieving clientele.

[jnipe]

Recently I received a notice that, first, a customer hadn't received the item, then later, that the customer's credit card had been charged by an unauthorized person. Paypal contacted me and pretty much intimated that I had to refund the person's money. I wrote back that I knew the person had received the item and that I shouldn't have to refund the money. Paypal never replied and simply refunded the money and then actually charged me a $20 refund fee. A day later the person who had made the claim against me left positive feedback on ebay lauding both my shipping speed and the quality of the product. I contacted the person. He said he would "get back to me", but I haven't heard from him. I have tried to contact Paypal now three times but they refuse to respond. I suppose I will have to go to small claims court. I will NOT however let this drop.

[EganMedical]

I'm continuously amazed at how brazen PayPal is when serving as an accessory to fraud for a crime committed against its own clientele whose best interests PayPal is supposed to represent. Please accept my regards as I genuinely can empathize with your circumstances.