Was scammed $3,000 using PayPal!

Not sure if this type of thing is allowed here, but at this point, I feel it necessary to alert everyone else about it. I recently lost about $3000 using PayPal. I sold an item, received payment through PayPal, and shipped the item with tracking and signature confirmation. The buyer decided to file a claim saying that he never received the item. I provided PayPal the tracking information. A copy of his signature confirmation was even provided by USPS. Then, the buyer claimed that somebody forged his signature for pick up. Bottom line, he really had no case, and his request for a refund was denied by PayPal, and the claim was closed. Next thing I know, the buyer filed a chargeback directly with his bank. PayPal locked my funds again and asked me for supporting evidence. So I go through the same ordeal again. A few days later, I get an email from PayPal saying that they've reversed the funds back to the buyer because the buyers bank ruled in favor of the buyer. Really? Being on the outside of the case, how can I be certain that PayPal actually submitted my evidence to the buyer's bank? I know nothing about what sort of conversation or agreement occurred between the two parties. However, what I have found out is that if someone files a chargeback directly with their bank, PayPal has little power against it and the bank naturally favors their own customer. So now I'm without the item I sold and $3,000. I was essentially reverse scammed, where the scammer pretends to be the buyer to scam the seller. And who ever suspects your buyer to scam you as the seller?

What I also found out about the guy who scammed me is that his PayPal name isn't even a real name, but an alias. There is nobody by that name living in the US. With PayPal, you can actually use a fake name for your account. When you set up the account, yes, they confirm your SSN and bank info with the name you provided - your real name. However, once the account is set up, you can have your name changed by claiming that you made a typo and requesting a name change. They don't keep a record of how often or when you requested a name change, so really you could do this as many times as you want. They allow you to change up to two letters of your name and will change your name if it's a close approximation. For example, if your name is Brian Smith, you could request a name change to make it Brean Smeth, then to Brenn Sneth, to Brent or Brenna Aneth, then to Brenda Aneti. And you're now doing business with someone that you think's name is Brenda Aneti, even though his real identity is Brian Smith. Not even the same initials. In this day and age, they don't question any name or the gender of the name, since there are so many people with unusual and foreign names.

Changing the name like this allows scammers to do their thing using PayPal without revealing their true identities. Most everyone caught onto the Western Union, MoneyGram, and MoneyPak scams, so now they've moved onto PayPal. People tend to trust people when they use PayPal, because they figure it's connected to your real identity - SSN, bank account, etc. This is true, but unless you have a subpoena or court order, PayPal won't release that info to anybody. All you have is the name assigned to the account, and their address, phone number, and email address if you're lucky (if they put it on their invoices).

Then, if these scammer buyers keep opening enough claims, PayPal considers you to be a high risk customer, and ends up putting your account on limitation - your account is locked and you can't send payments or transfer the money into your bank account. They ask you for all sorts of documents to confirm your identity - photo ID, tax forms, utility bills, bank statements, and invoices showing where you originally bought the item you're selling, to prove that you actually own the item you're selling. Who always keeps that stuff, especially if it's been a long time after you bought it. Or, what about if you're breeding and selling these reptiles? How do you prove that you own them? Nonetheless, you go through the process of sending all these files with all your personal info. A few days later, they'll send you an email saying they've looked at your documents and they have found you to be too high of a risk to continue doing business with, and will automatically shut down your account. Once this happens, there's absolutely no way that you can appeal it. And, the funds that you had in your account? They hold it for SIX MONTHS and then mail you a check. Sometimes you just can't wait six months to access your money. I don't know how it's legal for them to hold somebody's money for so long. Who gave them that kind of power? Well, we did as their customers.

I've come to find out that PayPal is really nothing but a scam with loophole after loophole. They never follow through with what they promise, they say one thing and do the other, and they always act in ways that benefits them and in a way where there's absolutely no loss for them. Later, they claim that those conditions were stated in the agreement that you agreed to at the time of sign-up, and that they are not doing anything illegal. You could possibly file a personal lawsuit against them, but how many people are actually going to bother with that, not to mention how expensive the process would be.

Bottom line, by using PayPal, we are allowing them to take advantage of their customers, while allowing scammers an easy way to steal money without revealing their true identities. Hopefully, less people will start relying on PayPal so that they can't keep taking advantage of their customers. After all, there's no such thing as a free service - they're doing it to make money, too. And their large number of customers are making them a successful business. I know of so many people that rely heavily on PayPal for their business transactions. However, it's far from secure and you don't want to be putting your business at risk like that. I wouldn't be surprised if they get shut down down the road for poor business practices. I found more horror stories on paypalsucks.com and facebook page "PayPal sucks" and the stories are all similar - lots of victims, and some of the stories are unbelievably unfair.

This is why I hate paypal and never use it!

What do you use, if you don't mind me asking. I've been looking into PopMoney.

Removed from the BOI.
While one could make an argument that it is a "bad guy thread" about PayPal, it seems more like a General Business Discussions topic...especially since it started out with mention of transactions with an anonymous party, and the OP is asking recommendations for other payment options - neither of which are permissible in a BOI thread.

If there is a practical and viable alternative to PayPal for internet payment processing, I sure would like to hear about it.

Originally Posted by BoBlueSleeves

recently

Was the item deemed an eligible item for Ebay Buyer Protection?
Was the item signed for (tracked to) your home or post office or where? Is there a possibility that your buyer actually did not receive the item?

I've been using Paypal for a long time and feel it is an excellent service, more so since a few years back I was an identity theft victim with the perpetrator making several unauthorized purchases from my checking account. I like how my information is no longer available for use that way.

I sympathize with the chargeback loss. Are you still within the time frame for an appeal?
Had there been an opportunity to advise during the investigation phase (if this was an eligible item) I would have requested his signature (the alias signature) from the bank and paid a handwriting expert to compare that with the allegedly forged signature.
Unfortunately, you have to do some work and maybe spend some money to get that bank to decide in your favor. I don't know that a bank would favor its own customer if there was hard evidence, but in this case, if the buyer claims he did not receive due to forgery, I don't think there was any evidence presented that it was not a forgery.

You can still fight this on your own, and I believe that you may be able, if not successful, to use the loss as a deduction, consult a CPA or tax lawyer.

Originally Posted by BoBlueSleeves

What do you use, if you don't mind me asking. I've been looking into PopMoney.

Have you read the fine print?
https://www.popmoney.com/legal.html

Is there a way you can hold paypal legally responsible?

Originally Posted by Reptile Frenzy

Is there a way you can hold paypal legally responsible?

For what? The chargeback from a bank?
How is that Paypal's responsibility?

Originally Posted by Lucille

For what? The chargeback from a bank?
How is that Paypal's responsibility?

Idk thats why I asked the question... I guess there is no way for him to get his cash back?