Hello lilobear and skellymo, and welcome to the forums!
@lilobear -
PayPal Purchase Protection is designed to cover buyers in transactions for goods and services. Personal payments fall outside of this coverage.
Misclassifying a transaction makes it impossible for PayPal to offer you protection. When making a purchase, in order to be covered by Purchase Protection, the transaction has to be correctly labeled as a purchase. That way the terms of the transaction are recorded correctly, and the seller can be held responsible for the delivery of goods. In a personal payment, there is no record of an agreement to deliver goods.
Buyers can help ensure protection from fraud by scrutinizing abnormal requests. When someone asks you to do something out of the norm, it's important to think about whether or not they can explain the legitimacy of the request. What legitimate purpose does a seller have for asking a buyer to misclassify their payment?
There are plenty of possibilities for a lack of legitimacy. Is he doing this to circumvent fees that a seller pays to receive payment? Is he doing this because it would be reportable income and he doesn't want it recorded? Is he doing this to deprive you of your purchase protection in the event that the item doesn't arrive or arrives broken?
Asking yourself questions like this can help you make informed choices to avoid risky transactions.
@skellymo -
I am sorry to hear that you experienced a chargeback.
It sounds like the chargeback you experienced may have been due to an unauthorized transaction. The person with whom you communicated wanted you to send the item to a completely different address than the one registered, which is a common request when a transaction is made fraudulently.
It is vitally important to always ship to the address in the PayPal transaction, so that PayPal's Seller Protection can cover you. Shipping to an address other that the one in the transaction details makes it impossible for PayPal to ensure that the transaction is safer, and can open you up to risk that is outside the scope of PayPal's protection.
@lilobear and skellymo -
PayPal's protections are designed to ensure safer transactions. The requirements are in place because they prevent the types of exploitation that you both experienced.
Again, I am sorry to hear that you both experienced these situations. Here are some additional resources that may you may find helpful:
PayPal Security Center - http://www.paypal.com/securitycenter
Internet Crime Complaint Center - http://www.ic3.gov
National Fraud Information Center - http://www.fraud.org
Department of Justice - http://www.onguardonline.gov
Olivia
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