eBay sellers scammed – where’s the protection, PayPal?

by , Consumer Rights Producer Consumer Rights 19 July 2013
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We talk a lot about your consumer rights when you buy goods online, but what if you sell online? We’ve heard reports from eBay sellers who’ve been ripped off by dodgy buyers – have you been a victim?

Man in computer holding buy and sell signs

If you buy items on eBay regularly, it’s likely that you’ve ended up with the occasional dud. I’ve fallen for items like foul-smelling perfume and a ‘new’ dress that was clearly a shoddy factory second.

Regrettably, I kept the perfume, but I returned the tatty dress and was given a full refund. But what happens when you have a bad experience as a seller? Lately, we’ve been hearing more and more tales of dodgy buyers, with eBay sellers reporting some real horror stories.

How you can fall through the net

If a buyer files a claim or chargeback against an eBay seller, unless they said the item was not as described, it’s PayPal’s Seller Protection that kicks in to resolve the issue. However, some fraudulent buyers appear to explain clauses in the small print, meaning the seller receives payment for the items they’ve sold.

Take the Which? member Colin, who auctioned his laptop on eBay. The buyer paid up, and our seller posted the item using recorded delivery, keeping the proof of postage. The buyer then decided to reverse the transaction, using chargeback to reclaim the money from Colin’s PayPal account.

Despite Colin having evidence that the item had been signed for, PayPal accepted the chargeback because the buyer claimed that the credit card associated with their account had been stolen or compromised.

A chargeback claim can be made via a credit or debit card provider, generally to claw back the cash if goods haven’t arrived, aren’t as described, or when the merchant has ceased trading. It’s not enshrined in law, but many banks subscribe to it.

Both PayPal and eBay have comprehensive measures in place to protect buyers and sellers, but it seems Colin fell foul of the terms and conditions. PayPal explained that his listing had not been ‘marked as eligible’ for protection. The buyer was able to keep the money, and Colin was left out of pocket – and minus a laptop.

Stay alert to sneaky loopholes

He was not alone. Another seller, Jane, lost out when she sold an item of jewellery for almost £1,000.

The buyer disputed the transaction through PayPal, claiming that their account had been hacked. Unwittingly, Jane’s sale was not protected because the buyer provided an address for postage that didn’t match one of the PayPal ‘transaction details’ page.

Jane eventually managed to claw back her money. Still, she felt that the terms and conditions of PayPal’s policies were unclear, and found the process of trying to reclaim the money complicated and confusing.

Are you covered when selling with PayPal?

Sellers need to satisfy seven different criteria in order to be protected by PayPal Seller Protection. While some of these are fairly obvious – such as keeping proof of postage – others are a bit more surprising. For example, did you know that if you allow a buyer to pick up an item in person, you won’t be protected if they decide to raise a false claim?

These sellers felt they’d taken sufficient care to protect their sale, so they were surprised to find themselves outside of PayPal’s Seller Protection criteria. While buyers clearly need decent protection when they’re parting with their cash, sellers have just as much at stake.

Our examples show that if you’re selling items on eBay it’s vital to be aware of these criteria. But there should also be clearer instructions for sellers so they know whether or not they’re protected.

Have you lost money to a dodgy eBay buyer and were you surprised to find yourself unprotected by PayPal’s Seller Protection?

10 comments

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a beken

If you want to sell on ebay – and millions do – you MUST agree to offer payment via PayPal. After reading your article I am even more loath to sell anything involving PayPal but I have absolutely no choice. As they are based in Luxemburg ebay (& Paypal) are not subject to UK financial regulations so – no help there. It’s about time someone took an objective look at this monopoly provider – how about it Which?

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NFH

The best course of action is to encourage the buyer, if they agree, to make payment by bank transfer. A bona fide buyer will normally agree, provided they can verify the seller’s identity. Then the seller avoids paying PayPal’s fees as well, receiving the full amount due in their bank account.

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Dave

The problem is that eBay are all about the buyer’s and treat all sellers as if they are running a multi-million pound business and make it to easy for buyers to claim for item not as described or non delivery and PayPal will give money back to people before Royal Mail will class a parcel as lost.
I’ve had personal experience of how bad eBay is. I sold a CD to someone in America and was warned by another eBay seller that they had claim for non delivery only 4 days after buying then they did the same to me.
I then did some homework on this buyer contacting people that had sold to her and 80% had non delivery or items not as described comments against them.
With emails sent to the other seller and to me we worked out that she was a con artist she told me that she had had a bracelet delivered from Thailand in only 5 days but she had claimed for this bracelet as not arrived with this evidence in had i contacted eBay emailed all the correspondents from the other sellers and what did eBay do? GIVE HER THE MONEY BACK
So what protection do i have as a seller selling his own items.

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Dave

Another thing that Which? should look into is the fact that PayPal charge you not only for the cost of the item you sell but charge you on the postage you have to charge the customer as well.
If the postage cost is a third party charge is it legal to make a charge for that service?
I don’t know the law on this but with all the PPI claims could this be the next big claim i have to buy my postage from another company and pay for that so why should i then be charged by PayPal for that payment.
Some overseas parcels can cost £50+ so this makes PayPal a lot of money on something that is a 3rd party payment.
Any no win no fee lawyers fancy having a go at this?

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Jean Anderson

I believe Dave’s comment raises a very pertinent but different issue that Which? should consider opening. It is clearly related to this discussion, but raises a significantly different issue that has much more impact to eBay consumers (sellers and buyers) and the Treasury. It relates to new eBay Europe surcharge being imposed on sellers fees that result in profits received by eBay/PayPal being subsidised by UK tax payers.

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John Torode

Even worse now is the money back guarantee! I sold a £10 item, the buyer stated it wasn’t received, after over 500 positive transactions on ebay ebay sided with the buyer and gave them their money back, including the postal charge and still charged me for selling the item, however I had proof of posting, so I could prove I had posted it but ebay basically said tough, you didnt send with a tracking number you lose, your money, your item and even more because we will still charge you for selling it, I’m too honest to try it but ebay are making it to easy – they should remember ebays customers and how it makes money is through the sellers – well they have lost me as a customer now as it is no longer a viable selling option

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John Torode

Somebody touches on paypal charging a fee on the postage, actually paypal are just charging the fee on the whole amount in the transaction, which I should imagine they are allowed to do but Ebay are now charging their sellers a 10% fee on their postal charge, for example in order for a seller to not lose money they will have to do something like the following:-

This listing postage cost = £0.90, 1st class large letter + £1.10 for recorded delivery (to protect myself from nondelivery) + 20p paypal fee, 10p packaging and 10% ebay fee which would equal 25p so my postal charge for this listing is £2.55, if there is a problem please make a complaint to ebay reference there fees I am just ensuring I don’t lose money.

This still does not stop the buyer saying the item was not as described.

The really bad thing about this is your buyers then also have to rate you on varying things including, wait for it – your postal charges! Which could then see selling restrictions put in place if your rating gets too low!

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Nigel

This is a big problem & I think eBay & Paypal ned regulating.

We are a business & we are getting ripped off more & more.

A common issue is buyers claim non receipt or item not as described, the buyers can claim not as described and eBay simply take their word for it.

eBay or Paypal have no regard for the huge cost it has on business’s like mine where we are expected to refund customers in full and not get the products back.

These 2 companies need investigating and they need to be held accountable for what they are allowing buyers to do to honset sellers.

Like many have said it is only because they are so big that they get away with it, they know that many business’s have to just take it, but why should we?

I hate them with a passion but in all honesty we would not have much of a business without them because many buyers simply will not use other portals that put’s the seller in more control, they like eBay & Paypal because it wllows them to be dishonest.

I might add I have purchased on eBay myself regulary for 9 years, only ever had 1 item not turn up and I don’t think I have ever had 1 item not as described & that’s out of 100′s i have purchased.

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Tami Johnathan

I too have just been scammed on ebay. There are so many complaints online and no one has taken a stand against them. Its time to get some compensation for our loses.
Join the fight today!
https://www.facebook.com/pages/Disgruntled-Ebay-Sellers/304629166385211?ref=hl
My story:
About 2 months ago, i sold a band new mira shower on ebay, 1 month after sale, buyer contacted me saying item was not as described and faulty, although i did not buy the story as it was a month in, ebay asked buyer to return item. On receiving the item, it was a different item, used with so many scratches (bearing in mind buyer had earlier said they had the exact same item) but all accessories were in place, untouched and unopened. My guess, item was swapped with her old shower as all accessories were in place clearly indicating item was never installed but simply swapped with with something old. I explained all to eBay, even sending photo’s. Ebay still refunded buyer and now wants me to reimburse them. This unacceptable. Ebay is bullying sellers into accepting and consolidating losses from fraud! No such this as seller protection, its time to end the myth. We must all come together and act. Enough is enough! If you have been scammed and bullied by ebay, visit the page now and share your story. Together we are going to claim damages and fight against bullying and the illusion of ‘Seller Protection’
https://www.facebook.com/pages/Disgruntled-Ebay-Sellers/304629166385211?ref=hl

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Pedro

Ebay , do NOTHING to protect sellers , I have been selling on there for a few years now , I am a top rated power-seller , but with the new backdated defect system I will be below standard .. thanks to Ebays policy of allways siding with buyers ,
the defect system is as follows
a 1,2 or 3 in DSR’S (the stars) = DEFECT
negative or NUETRAL feedback =DEFECT
Late post =DEFECT
item damaged in post =DEFECT
any case OPENED for ANYTHING =DEFECT
over 2 DEFECTS in 100 transactions =loss of top rated
over 5 DEFECTS in 100 transactions = RESTRICTED
over 8 DEFECTS in 100 transactions = BANNED

all this announced with a 12 month ‘look back’ for sellers like me , in a ‘high risk ‘ area (mobile phones and other tech devices) .. this is a disaster

Customer service are a nightmare , and behave like automatons

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