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

Man in computer holding buy and sell signs

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?

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?

Profile photo of michellebarritt

i have 100% feedback and pride myself in good selling and decent goods offered. I now have a buyer claiming a top i sent was iron damaged and wants a refund.
i contacted ebay as i know for certain this isnt the case. the top has never been ironed !!!
the buyer is opening a case against me and it seems highly likely when it is the buyers word against mine.
this is so unfair as there are many scammers out there… beginning to think sellin on ebay is soon going to be come a thing of the past for me out of pure principle that the buyer isnt always right…..maddened and sad :-( ;-(

Profile photo of alfa

Will ebay tell you if the buyer or anyone else at that address has a record of claiming against sellers?

It is wrong that ebay seem to be always on the side of buyer scammers.

David says:
8 March 2016

Ebay are so big they are way past caring about small or indeed any sellers, i have been taken to the cleaners by corrupt buyers worldwide, the seller protection is WORTHLESS unless YOU paid the delivery company to insure to full value and can claim, its a dodgy world out there.

Gav says:
23 March 2016

I have been ripped off so many times from dodgy buyers on ebay and lost lots of money and items,mainly its the paypal chargeback scam.The buyer buys item waits 3 months then opens a chargeback claiming unauthorized payment they get their money back,get to keep the goods and then paypal charge me £14 to cover the chargeback case.

I have been scammed this way even if i sent items by recorded delivery,it is a disgrace how the seller has to prove the buyer bought the item and received it ,but the buyer has to provide no evidence what so ever they didn’t received it.

The buyer gets free stuff and their money back and the seller has to pay a fee for being ripped off.I mean its like if your house gets robbed and you call the police they turn up say they can not help then charge you a fee for investigating the robbery.

I have run a part time ebay business for the last 5 years but have now closed my business down due to this scam and i will never again accept a payment through paypal as sellers are wide open to this scam which has been doing the round for a few years now with paypal doing nothing to stop it.

Paypals so called seller protection is a joke as there is none.

rachel Neil says:
27 April 2016

Had the same happen to me today and i am furious!! Ebay buyer bought the item in January and now claims unauthorised card use. He has lots of feedback but none left for others which i now know why! I contacted him, no response, surprise!
The item was only 5.25 GBP so not sent tracked. As i couldn’t prove this was sent, he gets a refund and quite unbelievably i have been slapped with a 14.00 GBP reversal fee from Paypal?! So my fee is nearly 3 times the value of the item?? I have emailed them my disgust not that i’ll get a response but have asked if them i should start giving my items away for free as it will be easier for me.
I think they should have some kind of exemption on items under a certain amount as where do my earnings fit in sending a five pound item fully tracked??

*As a note for others to bear in mind. I have added a comment on my feedback left for this buyer stating that a Chargeback was filed. So this will be displayed on his feedback. I will now be doing this for all my buyers who claim non receipt of reversals.
Just a simple comment to advise others how the transaction turned out. May deter these scammers from doing it if everybody made an additional comment for others to see.
I’m not doing anything wrong. If an item was refunded due to non receipt for example, i want to reflect that in my feedback which is what i will be telling Ebay if they have an issue!

Alexis Cowie says:
7 June 2016

I sold a Brand New DAB radio on ebay. Buyer paid up promptly and I posted radio promptly
5 weeks later buyer sends email to say radio arrived that week and didn’t work so wanted refund. I questioned why buyer waited so long for refund but asked for return of item in new condition for full refund. A week later a different DAB radio arrived. I informed the buyer I would only repay when I got my radio back and asked how the bogus one was to be returned to him. No radio returned. Seller began a claim. I explained to ebay that according to their own rulesI would not pay any money until item returned in the condition it was sent out. Immediately Ebay refund the buyer. He now has my radio and my money and I suspected I had a broken radio . Many emails later to ebay I only got condescending replies about how they must protect the buyer and the seller, but also they started sending me advice as if I was a buyer. Not sure how I was protected. On ebays own advice I then threatened the buyer with the Small Claims Court and eventually he paid up. I have told ebay how disappointed and saddened I was at their poor Customer Care but I do not expect anything worthwhile or an apology back. Been selling for a Charity on ebay for 5 years and not sure if I want to continue after this experience


Interesting conversation everyone! Can I just ask, when selling something has anyone asked buyers to use Paypal gift (aka send money to friends and family)? With ebay you are somewhat forced to use their systems but I recently sold a couple of things through buy/sell forums on specialist photography/hifi websites and asked the buyer to pay me by paypal friends and family. I assumed that this would offer me protection as it seems to remove whole layers of protection for the buyer. However, when I received some money, the paypal transaction included these words:

Please be aware that your payment can still be reversed, (e.g. if it is subject to a chargeback), even after you have sent the item to your buyer. Complying with PayPal’s Seller Protection and following the trading guidelines on our Security page helps to protect you from things like chargebacks.”

This doesn’t look good for me! Has anyone got experience of this?

Claire says:
24 October 2016

I’ve had similar problem with a brand new phone she’s used it for 4 weeks now is saying she wants refund and eBay have given it to her it’s really messed up I can’t resell a phone for brand new price now and haven’t received it back either