For Sellers in On-line Auctions

A. G. Maisey · 10th August 2013, 10:29 AM

I recently heard of a scam that anybody who sells on ebay, or other on-line auctions, and accepts payment through Paypal should be aware of.

It goes pretty much like this:-

The seller gives the buyer a choice of shipping options that range from ordinary uninsured mail through insured mail, registered mail and courier delivery.

The buyer selects ordinary uninsured mail and pays by Paypal.

The seller posts the item and receives a post office receipt for the transaction.

The buyer claims that he has not received the item he bought and lodges a claim with ebay against the seller.

The seller produces the post office receipt as proof of posting, and ebay dismisses the buyer's claim.

The buyer has linked his Paypal account to an AMEX card, so when he gets nowhere with ebay he lodges another claim with AMEX stating that he has not received the goods he bought through Paypal, using the AMEX link.

AMEX apparently has a policy that requires a seller to prove that the buyer has received the goods for which he paid. Where a seller cannot prove this, AMEX will use all means at their disposal to recoup the buyer's payment from the seller.

When Paypal accepts a client's credit or debit card to link to the Paypal account, Paypal also accepts the policies of the card company that relate to payment and non-receipt of goods.

When AMEX accepts their client's claim that he has not received the goods he paid for, AMEX lodges a hold on the seller's Paypal account and the seller has a stipulated time in which to prove that the buyer has received the goods. Obviously the seller cannot prove this if he does not have documentary evidence of the buyer's receipt of the goods. Note this distinction:- the seller does not need to prove he has sent the goods by a mutually agreed method, rather he has to prove that the buyer has received the goods.

Paypal is not able, or perhaps not willing, to tell a seller if a buyer has linked his Paypal account to an AMEX card.

The buyer has effectively ripped off the seller because the seller was too naïve to ensure that the buyer acknowledged receipt of the goods supplied to him.

The moral of this story is that it is not real clever to try to be a nice guy and save the buyer a little bit of shipping cost by sending an unsigned for item.

Another way this scam can work is to simply wait the 45 days --- or whatever ebay gives to lodge a claim --- don't bother to lodge a claim against the seller through ebay, and after the 45 days expires, go straight to AMEX.

A lot of businesses in Australia will not accept AMEX card payments, and one of the reasons they will not accept AMEX is because of AMEX policies.

Australia Post appears to be aware of the problem of fraudulent claims of non-receipt of items bought on the internet, as every parcel posted in Australia is now trackable. However, that protection is lost when an item is sent overseas.

The outline I've given above is not a hypothetical, it happened to my son, and the scumbag that ripped my son off has pulled the same scam on other people.

kahnjar1 · 10th August 2013, 10:03 PM

Hi Alan,
I have to agree that there are SOME scumbags out there who will try to rip off others, but to some extent there IS an answer to the above highlighted situation, and that is for the seller to INSIST on a method of shipping that includes insurance AND either a valid tracking number or a signature receipt. Also a perusal of the buyers Feedback SHOULD highlight any unscrupulous happens. I believe that it should be MANDATORY for feedback to be placed against all Ebay transactions, and not just optional as at present. In that way the bad boys would soon be highlighted.
Stu

A. G. Maisey · 11th August 2013, 01:01 AM

Of course you're right Stu. My son was too trusting, no doubt about it, and he got bitten.

However, the problem is not just because of scumbag buyers. It is in my opinion a Paypal problem. When we accept a Paypal payment, we do not know what card company that Paypal account is linked to.

I know a very large number of street front retailers and service providers here in Australia, and many, if not most simply will not accept an AMEX card payment. The reason for this is not only the commission charged by AMEX, but also the propensity of AMEX to back their clients' claims against all sellers.

A claim by a buyer can be on grounds other than simply non-receipt of goods, and it seems that AMEX will back their clients under all circumstances.

I myself do not like on-line auctions, I never sell in them, and I only buy very, very occasionally, mostly if it is something I know because I sold it originally. I do not understand many of the intricacies of the on-line auction world, but I do believe that if Paypal is obliged to comply with a card company's policies, the person who requests a Paypal payment should know what card company he is ultimately dealing with, as it seems to me that in this type of transaction Paypal is only acting as an agent for the card company.

kahnjar1 · 11th August 2013, 05:08 AM

Hi again Alan,
I do not want to comment further about AMEX other than to say I agree with your comments.
The problem you have IMHO is firmly on Ebay's doorstep as I understand that they are the owners of Paypal. If this is correct then surely your son should be able to pursue the problem thru the Seller/Buyer Protection scheme they automatically apply to transactions, assuming of course that this was an Ebay transaction in the first place. IF the transaction WAS thru Ebay then claim on them, not Paypal. It should not matter what type of card is linked to Paypal, the guarantee should still be good!
Like everything out there in cyberspace, one needs to be ultra careful.
Stu

A. G. Maisey · 11th August 2013, 05:40 AM

Stu, I do not have a problem, because I do not sell on ebay.

My son had a problem, he pursued all available routes in attempts to resolve the problem, and he got nowhere. The man is not a fool, he's 43 y.o. and a middle manager in Australia's biggest bank. However, as with many people, in this instance he was sucked in by a consummate conman; I've read the personal exchanges leading to the eventual sale, and I probably would have been sucked in myself.

Yes, Paypal is associated with ebay, but they are separate organisations, and as I have stated, the advice from Paypal is that when they accept a card link, they accept the policies of the card company.

I did not post this little story in order to seek advice nor in order to have a belly ache about any of the commercial organisations involved. I posted it in an attempt to make those of us who do sell in on-line auctions aware of the structure of the scam.

My personal opinion is that if Paypal is only acting as an agent when they process payments, they have a duty of care to make available the identity of the card company before the seller accepts payment from the buyer.

kahnjar1 · 11th August 2013, 05:52 AM

Hi Alan,
I understand that your reason for going to print here, was to state caution to others who use Paypal. I personally was not aware that the so called disputes "tribunal" offered by Paypal/Ebay could be nullified by the terms of the card company involved. We live and learn!
Stu

thinreadline · 17th September 2013, 04:10 PM

Quote:

Originally Posted by kahnjar1

Hi Alan,
I have to agree that there are SOME scumbags out there who will try to rip off others, but to some extent there IS an answer to the above highlighted situation, and that is for the seller to INSIST on a method of shipping that includes insurance AND either a valid tracking number or a signature receipt. Also a perusal of the buyers Feedback SHOULD highlight any unscrupulous happens. I believe that it should be MANDATORY for feedback to be placed against all Ebay transactions, and not just optional as at present. In that way the bad boys would soon be highlighted.
Stu

If its ebay , then a perusal of buyers feedback wont help , as a seller can only leave positive feedback for a buyer .

kahnjar1 · 17th September 2013, 07:43 PM

Quote:

Originally Posted by thinreadline

If its ebay , then a perusal of buyers feedback wont help , as a seller can only leave positive feedback for a buyer .

I have just looked back on some feedback history, and this does not appear to be the case. I have dealt with sellers who have left bad feedback for buyers-not me I hasten to say.

drac2k · 22nd March 2014, 06:07 PM

That was the old policy; now a seller can not initiate negative feedback, only a buyer.A seller can respond to the negative feedback once it has been given, however it does not count as a negative feedback for the buyer.

A. G. Maisey · 19th August 2017, 04:11 AM

Recent events indicate that it is time to bump this thread up for scrutiny again.

colin henshaw · 11th August 2013, 12:10 PM

Useful information from A. G. Maisey, thanks for posting....

10th August 2013, 10:29 AM	#1
A. G. Maisey Member Join Date: May 2006 Posts: 6,892	For Sellers in On-line Auctions I recently heard of a scam that anybody who sells on ebay, or other on-line auctions, and accepts payment through Paypal should be aware of. It goes pretty much like this:- The seller gives the buyer a choice of shipping options that range from ordinary uninsured mail through insured mail, registered mail and courier delivery. The buyer selects ordinary uninsured mail and pays by Paypal. The seller posts the item and receives a post office receipt for the transaction. The buyer claims that he has not received the item he bought and lodges a claim with ebay against the seller. The seller produces the post office receipt as proof of posting, and ebay dismisses the buyer's claim. The buyer has linked his Paypal account to an AMEX card, so when he gets nowhere with ebay he lodges another claim with AMEX stating that he has not received the goods he bought through Paypal, using the AMEX link. AMEX apparently has a policy that requires a seller to prove that the buyer has received the goods for which he paid. Where a seller cannot prove this, AMEX will use all means at their disposal to recoup the buyer's payment from the seller. When Paypal accepts a client's credit or debit card to link to the Paypal account, Paypal also accepts the policies of the card company that relate to payment and non-receipt of goods. When AMEX accepts their client's claim that he has not received the goods he paid for, AMEX lodges a hold on the seller's Paypal account and the seller has a stipulated time in which to prove that the buyer has received the goods. Obviously the seller cannot prove this if he does not have documentary evidence of the buyer's receipt of the goods. Note this distinction:- the seller does not need to prove he has sent the goods by a mutually agreed method, rather he has to prove that the buyer has received the goods. Paypal is not able, or perhaps not willing, to tell a seller if a buyer has linked his Paypal account to an AMEX card. The buyer has effectively ripped off the seller because the seller was too naïve to ensure that the buyer acknowledged receipt of the goods supplied to him. The moral of this story is that it is not real clever to try to be a nice guy and save the buyer a little bit of shipping cost by sending an unsigned for item. Another way this scam can work is to simply wait the 45 days --- or whatever ebay gives to lodge a claim --- don't bother to lodge a claim against the seller through ebay, and after the 45 days expires, go straight to AMEX. A lot of businesses in Australia will not accept AMEX card payments, and one of the reasons they will not accept AMEX is because of AMEX policies. Australia Post appears to be aware of the problem of fraudulent claims of non-receipt of items bought on the internet, as every parcel posted in Australia is now trackable. However, that protection is lost when an item is sent overseas. The outline I've given above is not a hypothetical, it happened to my son, and the scumbag that ripped my son off has pulled the same scam on other people.

19th August 2017, 04:11 AM	#10
A. G. Maisey Member Join Date: May 2006 Posts: 6,892	Bump Recent events indicate that it is time to bump this thread up for scrutiny again.

10th August 2013, 10:03 PM	#2
kahnjar1 Member Join Date: Aug 2007 Location: CHRISTCHURCH NEW ZEALAND Posts: 2,739	Hi Alan, I have to agree that there are SOME scumbags out there who will try to rip off others, but to some extent there IS an answer to the above highlighted situation, and that is for the seller to INSIST on a method of shipping that includes insurance AND either a valid tracking number or a signature receipt. Also a perusal of the buyers Feedback SHOULD highlight any unscrupulous happens. I believe that it should be MANDATORY for feedback to be placed against all Ebay transactions, and not just optional as at present. In that way the bad boys would soon be highlighted. Stu

11th August 2013, 01:01 AM	#3
A. G. Maisey Member Join Date: May 2006 Posts: 6,892	Of course you're right Stu. My son was too trusting, no doubt about it, and he got bitten. However, the problem is not just because of scumbag buyers. It is in my opinion a Paypal problem. When we accept a Paypal payment, we do not know what card company that Paypal account is linked to. I know a very large number of street front retailers and service providers here in Australia, and many, if not most simply will not accept an AMEX card payment. The reason for this is not only the commission charged by AMEX, but also the propensity of AMEX to back their clients' claims against all sellers. A claim by a buyer can be on grounds other than simply non-receipt of goods, and it seems that AMEX will back their clients under all circumstances. I myself do not like on-line auctions, I never sell in them, and I only buy very, very occasionally, mostly if it is something I know because I sold it originally. I do not understand many of the intricacies of the on-line auction world, but I do believe that if Paypal is obliged to comply with a card company's policies, the person who requests a Paypal payment should know what card company he is ultimately dealing with, as it seems to me that in this type of transaction Paypal is only acting as an agent for the card company.

11th August 2013, 05:08 AM	#4
kahnjar1 Member Join Date: Aug 2007 Location: CHRISTCHURCH NEW ZEALAND Posts: 2,739	Hi again Alan, I do not want to comment further about AMEX other than to say I agree with your comments. The problem you have IMHO is firmly on Ebay's doorstep as I understand that they are the owners of Paypal. If this is correct then surely your son should be able to pursue the problem thru the Seller/Buyer Protection scheme they automatically apply to transactions, assuming of course that this was an Ebay transaction in the first place. IF the transaction WAS thru Ebay then claim on them, not Paypal. It should not matter what type of card is linked to Paypal, the guarantee should still be good! Like everything out there in cyberspace, one needs to be ultra careful. Stu

11th August 2013, 05:40 AM	#5
A. G. Maisey Member Join Date: May 2006 Posts: 6,892	Stu, I do not have a problem, because I do not sell on ebay. My son had a problem, he pursued all available routes in attempts to resolve the problem, and he got nowhere. The man is not a fool, he's 43 y.o. and a middle manager in Australia's biggest bank. However, as with many people, in this instance he was sucked in by a consummate conman; I've read the personal exchanges leading to the eventual sale, and I probably would have been sucked in myself. Yes, Paypal is associated with ebay, but they are separate organisations, and as I have stated, the advice from Paypal is that when they accept a card link, they accept the policies of the card company. I did not post this little story in order to seek advice nor in order to have a belly ache about any of the commercial organisations involved. I posted it in an attempt to make those of us who do sell in on-line auctions aware of the structure of the scam. My personal opinion is that if Paypal is only acting as an agent when they process payments, they have a duty of care to make available the identity of the card company before the seller accepts payment from the buyer.

11th August 2013, 05:52 AM	#6
kahnjar1 Member Join Date: Aug 2007 Location: CHRISTCHURCH NEW ZEALAND Posts: 2,739	Hi Alan, I understand that your reason for going to print here, was to state caution to others who use Paypal. I personally was not aware that the so called disputes "tribunal" offered by Paypal/Ebay could be nullified by the terms of the card company involved. We live and learn! Stu

22nd March 2014, 06:07 PM	#9
drac2k Member Join Date: Jun 2013 Posts: 1,230	That was the old policy; now a seller can not initiate negative feedback, only a buyer.A seller can respond to the negative feedback once it has been given, however it does not count as a negative feedback for the buyer.

11th August 2013, 12:10 PM	#11
colin henshaw Member Join Date: Jan 2008 Posts: 1,430	Useful information from A. G. Maisey, thanks for posting....