I've been using paypal for at least 12 years. Recently, I've had a few chargebacks, but have been protected and have not been held liable for any of them. These are chargebacks initiated by ebay buyers through the bank that holds their Credit Card. Now for the red flags. I have found the following common facts in each of the cases on my account: RED FLAG 1. The ebay buyer did not have or did not use an ebay account. They were allowed to make a purchase as a 'guest' user, and ebay automation assigns them a user name. These user names are easy to recognize as a 'guest'. They do not look anything like what a logical human being would come up with as a user name. Examples are (not actual, but just so you get the idea of what they look like): ceddpu_ythizwx4fy rofyo8_irlf88sd Usually with (0) feed back or a very low feedback score. (Why ebay allows this is a question for their forums) RED FLAG 2. Ebay buyer's actual name does not match the name of the payer on paypal. I mean, not even close. Sometimes the ebay buyer will be a woman's or a man's name and the paypal payer's name is obviously a spouse, same last name. But the red flag is when Joan Smith bought the item on ebay and Fred Jones pays for it on paypal. RED FLAG 3. The name on the shipping address does not match the name of the paypal payer and/or the ebay buyer. Yes, one of my transactions had different names in all 3 fields. In each case paypal showed that I had seller protection because the address was confirmed. I shipped the item, provided tracking, item was delivered to the confirmed address and then about 45 days later I get a charge back. I contacted the buyer to ask what they are doing, in each case I get an apology, "big mistake, didn't recognize the charge, will take care of it immediately" and nothing happens. The disputes stay open for several months, and then I get notified that the buyer won the case, but since I had seller protection I'm not responsible. What's not clear to me is who pays for this. The buyers bank or paypal? Actually I shouldn't care as long as it's not me, but I do care because it isn't right. After identifying the red flags, I got another one, that fit each of the 3 red flag points above. I called ebay and pointed it out to them. Ebay told me how to identify a guest user which they said is a red flag for these fraudulent chargebacks. With my authorization ebay was able to look at the paypal transaction. Ebay advised me to cancel the transaction on the basis of a bad address from the buyer. Doesn't exactly fit the situation, but that's what ebay told me to do. So I did. And no complaint or communication what-so-ever from the buyer. I called paypal and pointed out the red flags to them. They agreed, they know about this kind of scam and said I did the right thing by canceling the transaction and thanked me. So, the question is, if it so easy to spot, why does paypal accept the payments - and - in fact show the shipping address as 'confirmed' when obviously it is not the address of the credit card holder. I'm not suggesting a human being even has to intervene, it should be done programmatically, if the names and addresses don't match, don't accept the payment. What really makes my blood boil, is that on one of my chargeback disputes (prior to understanding the red flags), the original transaction looked OK, it said address confirmed, seller protection eligible. Then I get a chargeback dispute which says the payer is 'Unverified'. Double checked the original transaction, which said nothing about the payer being Unverified. Again, why does paypal allow this? If I knew the payer was unverified I would have canceled the transaction - and paypal would have thanked me again. Hope this helps other paypal members, and if there are any other tips to help identify the chargeback scams, please post them. In general, this is a form of 'friendly fraud' as a paypal representative told me. Google 'friendly fraud', it's kind of scary.
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