Am I safe from a paypal bill? Can they find me?
November 22, 2009 12:43 PM   Subscribe

Am I safe from a paypal bill? Can they find me?

Long story short - I sold an iPhone on eBay. Paypal held the money while it verified the transactions. They released the money to me and I shipped the item. 4-5 months later some dude disputes the transaction on his credit card. When I look closer at the transaction it is clear it was fraud - none of the email addresses match ANYTHING on the ebay account, there are about 3 different names. None the less eBay and Paypal processed the transaction. Now they have hit me with the bill, however, since I had zero money in my paypal account I have a negative balance that they expect me to pay. I will not do this as it is CLEARLY something they should have caught. I disputed the transaction with them and they basically ignored me.

So I DO NOT have a linked bank account and am not "verified" on Paypal. Can I just ignore the money I owe them? Is there any way they can track me me down and hit my credit report?

I certainly don't want to be sent to collections, but my only thought is MAYBE they can find me through my eBay account, but I don't know legally how that would work.

Also any other ideas how I could dispute this?

posted by UMDirector to Shopping (12 answers total) 2 users marked this as a favorite
Response by poster: For what its worth they DO have my address and they have two credit cards on file.
posted by UMDirector at 12:57 PM on November 22, 2009

Keep in mind that eBay owns PayPal so the information may not be that hard for them to get. Was your sale marked as covered by PayPal seller protection?
posted by swhitt at 12:58 PM on November 22, 2009

If you were covered by seller protection you should be able to work it out. Just a tip... never do transactions where someone you don't know pays all or part of the money with a regular PayPal payment to your email address, and not going the proper way through eBay where you get seller protection. I nearly got caught by a chargeback once, but luckily the guy turned out to be legit. (He paid me half cash on pickup and half through PayPal direct to my email address. He ended up paying it all in cash when his debit card payment got rejected by PayPal 2 days later, but it was really suspicious!)
posted by Eastgate at 1:42 PM on November 22, 2009

Best answer: If they have your address and two credit cards, I see no reason they couldn't track you down. It could eventually be sent to collections and go against your credit score, although the case will be reviewed again at least once before that happens. EBay/Paypal are notoriously bad about fraudulent transactions, and you have to realize they deal with such a large volume of it at that they just send automated or cursory reports as long as they possibly can, hoping one side will cave in and pay. I would just keep contacting them until it is sorted out, then cancel your accounts and never use either service again.
posted by sophist at 1:46 PM on November 22, 2009

Response by poster: I am not sure if I am covered by protection or not.

None of these are true:

What's not covered under Seller Protection
• Items picked up locally or delivered in person
• Services, intangible items, and digital goods
• Virtual Terminal or Direct Payment transactions
• Claims and chargebacks where the buyer says that the shipped item is significantly not as described

How these are true: (although my only shipping paperwork is a USPS tracking)

To be eligible for PayPal Seller Protection on eBay items, be sure to:
• Ship items within 7 days after receiving payment. For pre-ordered or made-to-order goods, ship
within the timelines stated in your listing.
• Ship to the address on the Transaction Details page on your PayPal account. To find
transaction details, log into your PayPal account, select History, then select Details for the transaction.
• Retain your shipping documentation and promptly respond to PayPals requests for information.
posted by UMDirector at 2:00 PM on November 22, 2009

Response by poster: On review it would appear that is is a Direct Payment...i.e. they did pay me directly via paypal, not via paypal through ebay. There still seems to be something wrong when they "verified" the payment and then it turned out to be fraudulent...what exactly are they verifying?
posted by UMDirector at 2:05 PM on November 22, 2009

That seems like an awfully long time for a chargeback to be "good for".


Paypal held the money while it verified the transactions. They released the money to me and I shipped the item.

Confuses me. Has paypal changed? I don't remember it working like that. It seems like that if they are going to do that sort of verification, they can't just dump it on you when the transaction goes bad.

Also, always use a track-able shipping method. Priority mail via USPS is my preferred option. Cheap, quick, trackable and the various protections of mail fraud laws.
posted by gjc at 2:12 PM on November 22, 2009

They will track you down. I had a client do a fraudulent chargeback (not for Ebay, this was for some custom screen printing I did) by claiming his order wasn't ever delivered. I had the UPS slip with his signature on it and all kinds of documentation, Paypal still stuck me with the full bill - which I attempted to ignore because fuck them.

I had to pay it about a year later when they sent it to collections.
posted by bradbane at 3:07 PM on November 22, 2009

Yes, they will track you and yes, they will make you pay. The basic principal of taking credit cards over the internet is that all alleged fraud will be at your expense. You have to build in the cost of fraudulent charge-backs and credit card number theft into your prices.
posted by MattD at 3:19 PM on November 22, 2009

My roommate had Paypal ding his credit report over an ancient, disputed seven dollar charge. I'm sure they will eventually hun you down for the $400 or whatever.
posted by meta_eli at 4:27 PM on November 22, 2009

Been there. They will track you down and make you pay. You have absolutely no recourse against a credit card chargeback.
posted by procrastination at 4:51 PM on November 22, 2009

Why is everyone assuming that if it goes to collections it means the bill needs to be paid?

My amateur understanding is that unless selling on paypal entails agreeing to a credit agreement whereby you provide your social security number, etc., and agree to let them be an authorized creditor, they have no recourse against your credit. And neither does a collections agency.

It seems the worst outcome of letting collections run its course is dealing with their annoying attempts to collect, and potentially dealing with legal action (presumably in small claims court). However, if their case is weak, they will likely not waste the time and effort to actually sue you.

Note, I am not a lawyer or any kind of expert. Just my experience in similar situations in dealing with aggressive and unjustified invoices from corporations.
posted by jameslavelle3 at 8:32 AM on November 23, 2009

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