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Thread: PayPal Inquiry/Temporary Hold??
lawsuits
Moderator

From: N/A
Messages: 558
 PayPal Inquiry/Temporary Hold??
Sent: 09-19-2007 14:53
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memog,

Paypal's system is a mess. They are incapable of handling it. Just too much business. Simple as that.

 




memog
New User

From: N/A
Messages: 2
 PayPal Inquiry/Temporary Hold??
Sent: 09-19-2007 14:45
  Reply



lawsuits,
Yeah, I follow you. I did have one transaction that was stated as a "Chargeback". All others were reversals that stated "Inquiry by PayPal" under the reason for the hold. I called PayPal to as them what the "Inquiry by PayPal" meant and they were unable to tell me. The rep said that it could be a number of reasons "chargeback, bank reversal, etc". I agree that it could be a chargeback that they do not want to investigate so they simply do a reversal to get out of paying their chargeback fees. I looked at the details for the chargeback and could not find any evidence of them charging a fee even though they said they did. The message they sent indicates that they determined that I did not have enough information for them to fight the chargeback then it goes on and contradicts itself by saying they were charged for investigating the chargeback and I was charged a fee:

We have completed our investigation. After reviewing the details of this case, we have determined that it is unlikely that we will be able to successfully dispute this chargeback. To cover this chargeback, we have debited your account a Chargeback Settlement of $39.00 USD. We were charged a fee for processing this chargeback and have debited your account a Chargeback Settlement Fee.

The other strange thing is that this person bought about 5 items from me and only did a chargeback for one.

 




lawsuits
Moderator

From: N/A
Messages: 558
 PayPal Inquiry/Temporary Hold??
Sent: 09-17-2007 18:22
  Reply



Quote:
lawsuits,
I too have had similar issues regarding digitally delivered items. I was having no problems for a while then it seems that I became a fraud magnet. Fraudsters know that PayPal does not cover digitally delivered items and will often do chargebacks after receiving the item. I fought every single one using the resolution center and ended up loosing every single case even after I provided PayPal with copies of the e-mails I sent to buyers including the full headers with links to their purchases. I also provided responses I received back from the buyers indicating they were happy with their purchase and proof of positive feedback from Ebay. After loosing around $200 to about 6 buyers, I decided to stop selling digital items even though I was making a pretty nice profit.

The strange thing was in these cases is that the reason for the hold only stated "PayPal Inquiry" and nothing about a chargeback or unauthorized funds. I made multiple inquiries to PayPal and never received a response.

It seems that in this day and age, PayPal should look at e-mail as proof of delivery for digital items since they are not physically shipped.

Of course they should. The courts allow emails to be admissible in court. I think there is another underlining reason for it. Follow me on this and let me know what your thing. We need to investigate this further.

Someone who worked for Paypal told me that Paypal has to pay about $250 for each charge back from a credit card company. I'm not sure if this is true. But I believe they do have to pay them something.


Now. I'm wondering when you used the word "charge back", you really meant "reversal", These are very different terms in Paypal's contract. Charge back is initiated by the credit card company that can cause a reversal while a reversal by itself is initiated by Paypal.

Here is what I'm thinking. Paypal knows that these buyers can file a charge back with their credit card companies and it will then be out of Paypal's hands, which will cost Paypal money if the credit card company reverses the payment. So, Paypal reverses the payment just to reduce their risk. Even if your correct, they will still reverse the payment because they are afraid the buyer will go to their credit card company and it will cost Paypal. Doing it this way, Paypal reduces their financial risk and can still charge you a free for the reversal. Paypal then has a win-win situation.

Did Paypal charge you a reversal fee for each reversal? How much was it for each?

 




memog
New User

From: N/A
Messages: 2
 PayPal Inquiry/Temporary Hold??
Sent: 09-17-2007 17:05
  Reply



lawsuits,
I too have had similar issues regarding digitally delivered items. I was having no problems for a while then it seems that I became a fraud magnet. Fraudsters know that PayPal does not cover digitally delivered items and will often do chargebacks after receiving the item. I fought every single one using the resolution center and ended up loosing every single case even after I provided PayPal with copies of the e-mails I sent to buyers including the full headers with links to their purchases. I also provided responses I received back from the buyers indicating they were happy with their purchase and proof of positive feedback from Ebay. After loosing around $200 to about 6 buyers, I decided to stop selling digital items even though I was making a pretty nice profit.

The strange thing was in these cases is that the reason for the hold only stated "PayPal Inquiry" and nothing about a chargeback or unauthorized funds. I made multiple inquiries to PayPal and never received a response.

It seems that in this day and age, PayPal should look at e-mail as proof of delivery for digital items since they are not physically shipped.

 




lawsuits
Moderator

From: N/A
Messages: 558
 PayPal Inquiry/Temporary Hold??
Sent: 09-17-2007 02:45
  Reply



One thing that I wanted to add that I'm still investigating:

I believe that Paypal has implemented an automated process that "reverses" payments back to the sender when its Anti-Fraud software freezes an account

This is a way to limit Paypal's liablity. Instead of freezing the money and causing the sender to file for a charge back that Paypal has to pay money to the credit company for, Paypal simply reveres the funds and then tries to deal with the frozen accounts later.

But here is the problem with this. Paypal says that it is just a money-transfer-service and does not get in the middle of the consumers transactions. What do you call this reversal then? They are absolutely interfering. If a buyer loses a sale because of what Paypal did here, Paypal may be liable for that lose under legal theories like "Tortious Interference of Business Relationship". Paypal would have to prove that they had GOOD CAUSE for the reversal and the statements they made that caused the harm.

Again, Paypal has taken another step that harms its consumers for its own benefit.

Paypal should disclose this defect in its software to unwary consumers; but it intentionally conceals it.

In my opinion, Paypal's fraudulent concealment, which is meant to induce new members to register and not disturb the flow of profits, is a viable cause of action to have their entire contract rescinded. That means you can sue them in any State. Just make an argument based on this fraudulent concealment and their fraudulent inducement to cause you to enter into contract with them by concealing this vital and "MATERIAL" fact, which is one of the legal exceptions to enforcing a forum selection clause. Use Google to research the law for the other exceptions. Just type "forum selection invalidate"

 




lawsuits
Moderator

From: N/A
Messages: 558
 PayPal Inquiry/Temporary Hold??
Sent: 09-17-2007 02:27
  Reply



mastermint,

You may have been another victim of a "False Positive". That's when Paypal's Anti-Fraud Detection software uses pre-defined patterns of behaviors of a fraudster would do and scans all the accounts for similar behavior. Here is the problem we are all having with this:

1) The software cannot distinguish between an illegal and legal act. It only identifies "patterns" of behavior. Thus, the software freezes many innocent member's accounts. For example, fraudsters use a stolen credit card to send money from one Paypal account to another where they then immediately transfer it out of the account. This means if someone NEW sent you money and you tried to IMMEDIATELY withdraw the funds from your account, Paypal's software could freeze your account and spit out an automated email that there is an investigation of "suspicious activities" or "fraud".

2) To remedy this defect within their Fraud Defection Software, Paypal uses human reviewers to review frozen accounts to identify "false positives". The problem is that Paypal is incapable of timely reviewing the frozen accounts because it doesn't have enough staff to hand the thousands of frozen accounts. People are being severely harmed due to this. In the worst case, people have been wrongly arrested because they were thought to be fraudsters due to Paypal's emails scaring the hell out of the recipients of the emails, which caused them to take action with legal authorities. This is Paypal's gross negligence.

3) Paypal knows that it is incapable of reviewing all these frozen accounts in a timely manner so to reduce any problems that they might have from their consumers, Paypal has intentionally concealed these facts from their consumers and has omitted it from their user agreement.

In the words of Eric M. Jackson, an ex-marketing manager of Paypal, stated in his book "The Paypal Wars":

Paypal's success in fighting back fraud also produced false positives that inconvenienced honest users...as bad as the false positives experience for innocent users and resulting negative publicity for the company might have been, it was an acceptable cost"

2) Paypal knows that consumers are still being harmed to date; but they continue to conceal this "defect " in their software so that they don't disturb NEW consumer registrations and the flow of profits.


Q: Is it legal what Paypal is doing? NO. Then why are they not stopped?

A: Because every time a class action lawsuit is filed against them, Paypal throws millions of consumer dollars at the Plaintiffs' attorneys who jump to settle the case at any amount. GREED.

Q: So why doesn't our Attorney Generals make them stop?

A: Because they don't understand the defect in Paypal's software that causes "false positives" to understand what Paypal is actually concealing from consumers in its user agreement and how that defect is causing consumers serious harm. Therefore, the Attorney Generals haven't made a move, or they are just too busy with other things.[/b]


I'll give you an all too familiar example of how Paypal's defect in their Anti-Fraud Detection software can cause serious harm. This is what I want you to do. I want you to look at the took transactions and determine which one is illegal and which was is legal.

FRAUDULENT TRANSACTION

1) A fraudster uses a stolen credit card in a "feeder account" on Paypal to send money to another Paypal account called the "middleman account".

2) The fraudster then immediately transfer the funds from the middleman account to their bank account.

SOFTWARE FREEZES ACCOUNT: Positive


LEGAL TRANSACTION

1) A buyer buys an item on eBay and then pays the seller via Paypal's service.

2) The seller then immediately tries to transfer the funds into their bank account.

SOFTWARE FREEZES ACCOUNT: False Positive


Do you see how the two patterns are IDENTICAL?


You see, Paypal's software can't distinguish between an illegal and legal transactions so if a lot of patterns engaged by the fraudsters are also similar or identical to the pattern engaged by honest consumers, a "False Positive" will be produced. Paypal then uses human reviewers to determine which one is a false positive. Due to Paypal's negligent human review process in identifying false positives, they are incapable of timely reviewing frozen accounts. Thus, even if a consumer gave all the documents to Paypal that it requested before the account was unfrozen, Paypal would tell them they now have to wait 180 days because the buyers are now filing claims for refunds and charge backs and Paypal want to secure its position. What Paypal further conceals from consumers is that it was due to its own negligence in failing to timely review and identify false positives that resulted in the refunds and charge backs, which includes the emails Paypal sends to the buyers stating that the seller is under investigation of "suspicious activities", "suspicion of fraud" or "fraud", which only aggravates the situation by causing the buyers to file claims for refunds and charge backs.

SHAME ON YOU PAYPAL! BUT EVERYONE IS STARTING TO WAKE UP NOW TO WHAT YOU ARE AND HAVE BEEN DOING AND THE HAMMER IS ABOUT TO COME DOWN ON YOU VERY HARD"


Now let see what happened in real life to a consumer who had her entire business destroyed and reputation, which also caused her to get fired from her job because buyers were accusing her of fraud and her marriage broke up. The last time I spoke with her, her phone was being disconnected.

Sarah, had an eBay business that she built up to a 100% feedback rating with over 400 responses. She went to an auction site to bid on electronic equipment. She won. The auction site gave her so many days to pay for the items. She then went to eBay to sell them. She sold them fast and was about to make a good profit. Because of Paypal's false positive, her account was frozen and an email sent to her buyers telling them that she was under investigation for fraud. Because of this email, the buyers started filing claims for refunds and charge backs. She supplied Paypal with the requested verification; but Paypal failed to release her account. The buyers started accusing her of fraud and even harassing her on the phone until she got her phone cut off. He job got a hold of the accusations against her and fired her.


I believe that besides the false positives and negligent review process, Paypal is deliberately refusing to release accounts with thousands in it because they fear if the person is a fraudster, they would be liable, which includes eBay with their buyer protection program. So, to cut their liability, Paypal intentionally locks down the account when there is a lot of money involved


So, if you want an answer from Paypal, you got it. YOU ARE AN EXCEPT ABLE COST

 




mastermint
New User

From: N/A
Messages: 1
 PayPal Inquiry/Temporary Hold??
Sent: 09-16-2007 16:28
  Reply



Hello,

I sell software and always confirm PayPal payments before providing download links to the buyer.

Today, one payment from an "Unverified" buyer was placed on temporary hold and I have an "open case" in my account. When I clicked to see if this was a claim filed by the buyer (which is was not), the follwoing message appeared:

"This transaction has been reversed."

Clicking on the case ID it says:

"This payment has been selected for review and we have opened an investigation.

This is a security measure meant to protect you from problem transactions.

We have placed a temporary hold on the funds until the investigation is complete.

Please provide some additional information about this transaction.

Response deadline: Sep. 23, 2007"


...Uhh, what the heck should I tell PayPal if they┬┤ve already reversed the payment (and for what reason)??? I haven┬┤t lost anything really since I┬┤ve not delivered the buyer download link for my software, besides loosing this customer of course.

Has the buyer tried to scam me with a stolen credit card or something???

Please let me know what you think!

Thank you,

Regards,
M

 






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