Suggestion: Eliminate chargeback fees for claims of fraudulent charges

HardCover
Contributor
Contributor

Okay. I'm here on behalf of numerous content creators across all fields who have experienced a problem with people claiming "Fraudulent charges" after donating money to people for content they create.

 

Here's one example:

 

A Twitch streamer gets a donation for $30 from someone. Then $20. Then $50. Then $100. Then $1,000. All from the same person! That sounds great right?

 

Then the person wakes up the next day to find they are thousands of dollars in the red because the person has claimed fraudulent charges on every single on of their donations. This is an all too common problem that I've witnessed from multiple streamers.

 

This wouldn't be a problem if streamers only lost what was given to them. But the fact is the charge back fee thrown onto the recipient is abused countless times. Someone could be thrown thousands of dollars into debt because one person wants to be an **bleep**.

 

Refunds based on a dispute is one thing. But to punish the recipient of someone supposedly receiving "Fraudulent" donations is unfair.

 

Paypal, you NEED to develop a strategy to protect streamers from these people. Your service is being abused to harm others, it's something you need to address and understand to prevent it from harming others. If you need contact information for people who have been affected, I can direct you to the most recent case I know about. 

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9 REPLIES 9

sharpiemarker
Esteemed Advisor
Esteemed Advisor

@HardCover

 

First of all, donations in that pattern is a red flag for something fraudulent going on, not something "great". Not necessarily to steal money but to cause trouble and mess with people, like sport. Based on my observations of cases that come through here gaming, donations, gift cards, digital goods, are magnets for these scams and annoyances. Chargebacks are disputes that the account holder where the payments originate from files with their financial institution, not with PayPal. In fact, the disputes are against PayPal but PayPal holds you responsible and charges the fees to handle the case for you. Sometimes the transactions may not even appear on PayPal account at all but on the card or bank account, or the card or bank info was stolen added to a new PayPal account so the disputes can only be filed through the bank or card issuer. 

 

To minimize these issue, put a set amount for the donation so if some scammer does it again, it won't go over a certain amount.


Kudos & Solved are greatly appreciated. 🙂
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HardCover
Contributor
Contributor

No, I'm sorry but that's unacceptable. If someone wants to donate $1,000, I'm not gonna set a limit to stop them.

 

How about this for a different example.

 

Let's say I set a $30 limit on stream. 

 

A 13 year old (the minimum age required to create an account on twitch) takes his mom's credit card and donates 30 of $30 donations. And then the next morning, the mom sees all the charges, calls the bank and says she never did that, disputes it with paypal. The streamer is out of that money, and has to pay fees on top of that. It doesn't fix the problem that fraudulent charge fees harm the person who received the money.

 

And to top it off, I know a streamer who had a longtime viewer do this to him with large sums of money. You're not gonna suspect a viewer you've respected of doing that.

 

So your suggestion is not only ineffecitve, it doesn't fix the core problem that the fraudulent charge fees harm the content creator who most likely won't have a couple thousand dollars to pay off the negative balance they may now have.

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sharpiemarker
Esteemed Advisor
Esteemed Advisor

@HardCover wrote:

No, I'm sorry but that's unacceptable. If someone wants to donate $1,000, I'm not gonna set a limit to stop them.

 

How about this for a different example.

 

Let's say I set a $30 limit on stream. 

 

A 13 year old (the minimum age required to create an account on twitch) takes his mom's credit card and donates 30 of $30 donations. And then the next morning, the mom sees all the charges, calls the bank and says she never did that, disputes it with paypal. The streamer is out of that money, and has to pay fees on top of that. It doesn't fix the problem that fraudulent charge fees harm the person who received the money.

 

And to top it off, I know a streamer who had a longtime viewer do this to him with large sums of money. You're not gonna suspect a viewer you've respected of doing that.

 

So your suggestion is not only ineffecitve, it doesn't fix the core problem that the fraudulent charge fees harm the content creator who most likely won't have a couple thousand dollars to pay off the negative balance they may now have.


If the mom filed unauthorized use, she there is chance she may lose the PayPal dispute if her kid did it because through the same IP address. I'm not sure with a credit card or bank reversal because their terms are much broader but you would be charged the chargeback fee if the mom filed through the financial institution. I'm just telling you what happens. The financial institution makes the decision, not PayPal on chargebacks.

 

PayPal seller protection does not cover you on donations so people need to do risk assessment before they accept PayPal as seller protection is limited and does not apply to all transactions.


Kudos & Solved are greatly appreciated. 🙂
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HardCover
Contributor
Contributor

Side note: If you donate through Streamlabs through PayPal, it can't be charged back, but that doesn't change the fact that that's a 3rd party program fixing your problem. Someone can be harmed by donating through a PayPal.Me link , or something similar.

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sharpiemarker
Esteemed Advisor
Esteemed Advisor

@HardCover

 

Keep in mind, only those who's is marked as Moderator works for PayPal so you're not talking to an employee.

 

It depends on the reason for chargeback too. Some merchants have their system hooked up in such a way to lessen damages and risks because they know PayPal seller protection in certain cases are limited so whether a merchant can be charged back on or not is individual to those merchants and some do not take steps to protect themselves. 

 

In PayPal's user agreement, any payment received that is later invalidated or reverse is the liability of the recipient. We all agreed to this when we registered for an account. I'm not making any moral judgements but each of us can close our account if not pleased with the PayPal's service. 

 


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HardCover
Contributor
Contributor

@sharpiemarker

 

There should still be steps Paypal takes to avoid someone being hurt in these regards. maybe a one time fee for a bulk charge as opposed to a fee for each. To just say "They're abusing our service to put you in debt. That's your problem." is not okay. If one person charges back 20 donations they themselves did of their own freewill with video proof of those donations, and Paypal just goes "Your problem not ours" is not okay. It is your problem, PayPal, because it financially harms others.

 

I know you don't disagree, but this is a rising problem that PayPal needs to address.

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sharpiemarker
Esteemed Advisor
Esteemed Advisor

@HardCover wrote:

@sharpiemarker

 

There should still be steps Paypal takes to avoid someone being hurt in these regards. maybe a one time fee for a bulk charge as opposed to a fee for each. To just say "They're abusing our service to put you in debt. That's your problem." is not okay. If one person charges back 20 donations they themselves did of their own freewill with video proof of those donations, and Paypal just goes "Your problem not ours" is not okay. It is your problem, PayPal, because it financially harms others.

 

I know you don't disagree, but this is a rising problem that PayPal needs to address.


It's all in the user agreement but most don't want to read it unfortunately because it's long and wordy but one'll discover a lot of interesting things in it. 


Kudos & Solved are greatly appreciated. 🙂
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HardCover
Contributor
Contributor

@sharpiemarker

 

That may be true, but the fact is this is being abused. If a policy is being abused, it needs to be changed.

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HardCover
Contributor
Contributor

While talking with a Streamlabs employee, I realized this is false. They can help with credit card charge backs, but not PayPal. So either way, the fact remains Paypal's system is being abused. With a $20 fee on top of losing the funds, people are being thrown into debt over this.

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