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?

20 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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doreen

I’ve just fell foul of the eBay money back guarantee too. I don’t have a business, I mostly buy but sell personal items when I need a bit if extra cash. Here’s how it went, advertised buy it now motorcycle jacket £25 + £12 postage Economy. Actual cost to me £13.75 royal mail second class Got and kept proof of postage, but with this no tracking! Lesson learned the hard way, lets just say if I ever do sell on eBay again the buyer is going to stump up more for my peace of mind. Everything signed for in future!
Anyway sent next day and marked up as dispatched, then left feedback for buyer for an “easy transaction” a month goes by, the buyer has not left feedback, but then some don’t, next thing the buyer raises a dispute saying they can’t wait any longer and demand a refund, which after a few days of messages going back and forth, scan of proof of postage, checking post office from my end etc, Has it been left with neighbours, have you checked with post office depot, why leave it so long, why not contact me before raising dispute etc, etc? No answers, just pigeon English I want money back now no can wait, buyer escalates case, ebay issue refund and demand money from me! DidI mention, buyer is registered in Usa,address is in London, and since buying my jacket has accrued over 300 positive feedbacks as a buyer when not leaving any feedback themselves, been a member of eBay for less than 3 months and having ready changed their username to one with the word seller in it

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stevemuir

Below is a cut and paste of my post on Miles Brignall’s Guardian Money article, Sat 9 Aug 2014

http://www.theguardian.com/money/2014/aug/09/paypal-buyer-protection-ebay-fraud?commentpage=1

I no longer sell on eBay, but about 2 years ago, experienced a scam that highlights a significant and fundamental flaw with eBay’s process for dealing with cases under its eBay guarantee for buyers/PayPal protection for the sellers initiatives. More disturbingly, a review of recent posts in eBay’s discussion boards shows that this flaw continues to be exploited.

eBay/PayPal terms and condition that have been accepted by a seller, and any eBay decision cannot override a seller’s legal obligations (responsibilities) under the Law. In this case the eBay automated system (technology) decision and immediate payment to the buyer from the PayPal account had done so as a seller’s legal obligations to provide a refund under the Sales of Goods Act is conditional on the buyer returning the items. No return no legal obligation to refund.

The Case/Scam:
Received email from buyer saying items (4 mugs) received but broken and attached were 2 photos showing the extensive damage (all 4 were in bits) – one general shot and the other a close-up. Knew it to be a Scam. Firstly, they had been double wrapped with bubble-wrap with additional packing used to line the parcel box and separate them– the parcel box shown in the general photograph had no sign of any damage/crushing. Secondly, the production number stamp on the bottom of one of the mug fragments in the pictures was different from those actually sent. So a polite reply was sent stating full refund would be given on return of items.

Buyer opened an item not as described case in the eBay Resolution Centre. Replies were given to all Resolution Centre messages from the buyer restating that full refund would be provided on return of items. Resolution Centre sent message to buyer confirming that seller agrees to full refund and for the buyer to return the items.

Buyer reported with details of concerns and justifications for believing the buyer was attempting a Scam. Also reported details of another seller contacted who had confirmed receipt of a similar email from the same buyer for some plates. He was a business seller and had given a refund having decided the hassle associated with the buyer raising a case against him was not worth it.

On the last day of the Resolution Centre time limit, buyer escalated the case.

One minute after the date/time stamp of the Resolution Centre automated message advising of this escalation a message with the decision was received: eBay had reviewed the case and found in favour of the Buyer and the Buyer was refunded from the PayPal account.

Attempted to follow the eBay’s appeals process However, after 3 attempts to get through on the telephone and finding the email route far too proscriptive and difficult to complete, ended up sending a complaint to PayPal.

Few days later the PayPal account was credited with the refund amount.

Buyer reported to Action Fraud and Royal Mail.

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Apedin

I have also been a victim of buyer fraud. I sold a laptop with mild wearing on the track pad. A case was then opened due to alleged faults. When my laptop was returned I found it had in fact been stripped for parts. eBay still insisted the full amount be returned to the buyer. I am now out of pocket and the laptop is beyond repair.

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Carol

I am in the process of a scam. My buyer bought a designer bag and claimed I sent a different designer bag and eBay agreed. I’m waiting for the bag to come back. eBay won’t budge and I don’t know how but it looks like this buyer is going to get away with fraud.

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Les

I’ve made many complaints to eBay. They don’t even bother to reply to correspondence. Surely, if the Government can bring in protection legislation for other companies, then they can do it with eBay & Paypal. eBay & Paypal are continually changing the terms & conditions. So much so, that that you can’t keep up with them all.

They both need investigating & put a stop to all the illegal buying & selling. Fraudulent buyers & sellers have got it made on eBay & Paypal. I think there are 2 answers to this problem. 1) The old fashioned BRITISH way, arrange a pre-determined month for all sellers to stop selling. This may have to be mostly private sellers though, because it’s not a business for us. The lost revenue should have quite an impact. And if it doesn’t, we’ll do it again. 2) The Government investigates them; but not just write a report on it & make false promises; actually do something for a change.!!!!!!!!!!!

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Len

There are several flaws in eBay that guarantee free items to would be thieves.

1. Buyer claims they got an empty or weighted box. Buyer opens SNAD case, wins, and keeps the item. Seller has no way to prove the item was in the package. Even video taping packaging of the item and then handing over the the postman will not be enough proof, since it could all be faked.

2. Buyer purchases an item in order to return an already broken item of same type. Unless seller has proof of the original item’s serial number, the buyer wins. In some cases, buyer still wins since proof of the item’s serial number could have been faked by the seller.

3. Buyer opens SNAD case for some bogus reason. eBay will not give a refund without receipt of returned item to the seller. Buyer simply returns an empty box or box with rock in it. Refund is issued automatically as soon as tracking shows returned item is received by the seller. Buyer keeps the item and gets his money back. When seller complains, he has no way of proving he did not switch or remove the item from the package himself.

eBay is heavily slanted towards protecting the buyers and often leaves the sellers hanging out to dry. Sellers cannot even leave a negative feedback for buyers after getting robbed.

Buyers could be blocked or prosecuted for a pattern of this behavior, but that does not help individual sellers. Amazon is probably even more slanted towards protecting the buyers. Either site can lose lots of sellers and still do fine, someone else will just take their places. A few sellers getting robbed here and there is better in their eyes than many buyers getting scammed by fraudulent sellers.

Thankfully most buyers are not brave enough to risk felony charges for some free items….

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wavechange

Do what I do and use eBay to buy rather than to sell, Len. I doubt that many would buy via eBay if they did not have good protection. Anyone in business knows that there is a small number of people who deliberately defraud sellers and have to take this into account.

Hopefully eBay will become fairer to those who sell, but if there is any uncertainty, the purchaser should be given the benefit of the doubt.

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Geraldine

There is to much risk to sell on eBay.then you have to deal with PayPal ,you really must be mentally deranged to enjoy the full experience of these to greedy twisted money collecting bullying bove the law b?s?a?ds.

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natty

This is going to get worse and worse I never sell on eBay ever again after buyers scamming me left right and centre eBay needs to change their buyers money back guarantee protection to a limit of 2 claims a year same for pay pal and give sellers more rights and protection I have been on eBay for over 5 years and only had 4 items that never arrived whilst some buyers claim more than that in a month eBay and pay pal need to wake up and smell the coffee but its more like smell the money sellers are getting a rough deal

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Sharon

sent item to buyer who then said didn’t receive item (bearing in mind all other items sent were received). Had to refund,,,, I am out of pocket for £90. How do I protect myself eBay & PayPal don’t protect seller, only the buyer. Yet, they charge extorortiant amounts from the seller. Fed up with paying them to protect buyer.

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