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Thread: who should I sue for illegal chargeback - Legal Links and advice
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 who should I sue for illegal chargeback - Legal Links and advice
Sent: 07-02-2003 15:51

See my post about \"Use Paypal to get anything free on Ebay. I think you have a case against least some sellers do, because the language on Paypal\'s website (See below) misleads people into thinking they have more protection then they do. The language about protecting against fraud and fraudulent buyers is overly broad, when in fact the actual protection against fraud is ~very~ narrow.

Not only are there misleading terms of non-existent protection, there is negligent omission of the frequent losses Paypal seller\'s incur when fraudulent \"quality of merchandise\" and fraudulent chargeback\'s are enacted.

Paypal has a legal obligation to make it clear that a.) Chargebacks are common and that b.) Seller is out of luck and stands to lose almost unlimited amounts of money and goods and that Paypal offers no protection whatsoever from this frequently used device of near-do-wells.

But Paypal does not come out and say this, because the majority of Paypal transactions are credit card based, and customers, like me, would simply ask the buyers to Express Mail a money order or cashier\'s check, or even a personal check, which is safe, while Paypal is not.

It does not hurt to add Paypal as a defendant in your case, you can always remove them later, you could call Bloomberg and the Associated Press and tell them of your suit, they love this stuff, and explain what I\'ve said here. It\'s only about $150 to file an action in civil court, and there are PLENTY of example filings you can use as templates and LOTS of legal links and information on the web.

I have taken on Network Solutions, some famous movie stars, and one more very large corporation...all wishing to settle, and I did it Pro Se, which means without legal counsel. The internet library makes this possible. Read some similar cases on the web.

You would file an action against Paypal under a \"Detrimental Reliance\" claim, which means you relied on Paypal\'s misleading statements and contractual relationship to your detriment. You have a reasonable expectation to keep the money Paypal gives you when you have given goods to a customer, but Paypal unduly allows for those funds to be taken back, with no regard to the possible fraudulent nature of chargeback claims.

In your action, you would assert that you ONLY send merchandise and valuable goods to customers because you have a REASONABLE EXPECTATION based upon Paypal\'s terms of service and other language on their website, that you get to indefinitely keep the money Paypal sends you. If one does not have an expectation to indefinitely keep Paypal monetary transmissions, there would be no reason to send goods based on this. Right there is a case for \"detrimental reliance.\"

And if Paypal funds are not yours to keep permanently, but are in fact merely loans, Paypal should make this VERY CLEAR in conspicuous places. Paypal should state: \"Paypal funds dispersed to sellers based on credit cards, are potentially temporary loans, frequently subject to retraction, based upon the whims of the credit card holder. Please be warned, Seller, that it is a frequent occurrence that Sellers send goods, receive payment, but then have to forfeit the same payment amount, back to Paypal, and as frequently happens, lose their money and goods.

In fact, Paypal says they protect against fraudulent buyers, and against fraud, but a fraudulent chargeback is fraud, and they offer no protection at all. I think you have a reasonable case, at minimum. I think I could make a case, based on their claims, counter-posed to their actions.

Do\'s only $150.00 and they will have to hire attorneys for thousands and thousands and thousands of have no idea how much it will cost them...and you can file motion after motion, and requests for information, and get the information about how frequently chargebacks occur, and other info you couldn\'t get otherwise.

Use the court system to make it costly for them to operate an a way that is unequitable and misleading to their profit.

Good luck.



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Subject: Law references: good luck mate! GREAT OUTLINES on Civil Procedure personal jurisdiction subject matter jurisdiction, etc.

Eastern District Opinions


But here is the misleading rhetoric that gives sellers the impression of being protected from fraud - This is on a page describing the Seller Protection Policy here -

Seller Protection Policy

PayPal wants to protect our sellers against chargebacks due to fraud. <OH GOOD!>

Although the vast majority of payments occur without problems, there is always the risk that you are dealing with a fraudulent buyer. There is a risk, for instance, that your buyer may be paying you with a stolen credit card. <OKAY, PROTECTED FROM FRAUDULENT BUYERS!>

Who takes on this risk? Most payment companies simply pass on 100% of the transaction liability to the seller. PayPal is different. We give sellers the opportunity to protect themselves from liability. <WOW, YOU WILL DO ALL THAT FOR ME?>

We can do this because we know that if you follow certain guidelines you dramatically reduce the risk that you are dealing with a fraudulent buyer. They are: <OKAY...I\'LL FOLLOW ALL THIS!>

Be a Verified Premier or Verified Business Account (U.S.)
Ship to the buyer\'s Confirmed Address
Timely Shipment
Retain reasonable proof-of-shipment that can be tracked online
Ship tangible goods
Only accept single payments from single PayPal accounts
Ship to domestic (U.S.) buyers at U.S. addresses
Timely Response

The Seller Protection Policy (S.P.P.) was developed for those sellers who want to limit their risk. We give sellers the opportunity to be protected from chargebacks if they follow the guidelines. Sellers who decide not to follow them make the decision to take on risk and will be held liable for any chargebacks. <AW RIGHT! LIMIT RISK, PROTECTED FROM CHARGEBACKS: SOUNDS GOOD!>

WHAT *** THEY **** DON\'T **** TELL **** YOU ***** Is that, unlike in their above description of the S.P.P., you are not protected from fraudulent chargebacks in general; most chargebacks done through a credit card company based upon fraudulent, mis-leading, and deceptive reasons and claims of poor quality of merchandise, are successful, and the seller must simply let the buyer keep his money and the seller\'s goods.

What Paypal should say is the truth: Seller\'s are ONLY potentially protected in the most rare and specific and limited of narrowly defined chargeback situations involving stolen credit cards, or someone using a card without authorization - quite uncommon relative to most CC sales.

But the MOST COMMON fraud, that of receiving auction goods, keeping goods, claiming goods bad, getting free refund and keeping goods, is the exact kind of seller protection that does not exist, and although Paypal is aware that many of their clients are burned this way every day, there is not a whisper of it in their policy - no warning, nothing but misleading statements about being protected from fraud, omitting seller is not protected against the easiest and most common and convenient fraud - fraudulent chargeback claims.

This kind of fraud is also sometimes known as \"quality of merchandise\" fraud. Buyer claims merchandise is poor quality, gets a chargeback, and the price \"paid,\" or should I say, loaned, is refunded back to his credit card.

So, in summary, you don\'t have to be rich to afford nice expensive things on Ebay: Just buy whatever you want, and then claim it\'s no good to your credit card company, tell them you can\'t reach the seller or he won\'t respond, and keep his stuff for free :)

You can also \"rent\" anything on Ebay for free - just buy it, use it, then charge it back: Even if you ship it back to the seller, you still enjoyed the use of it and can ship it back in used and shoddy condition made all the worse from all the banging around UPS will do with it :)

Paypal endorses this, otherwise they would mention and warn sellers about it in their policy, instead of misleading them :)



<Joe Smith>
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 who should I sue for illegal chargeback, Paypal or buyer?
Sent: 07-01-2003 15:00

<blah blah>,
You can't sue paypal for this, you have to go after the person.



<blah blah>
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 who should I sue for illegal chargeback, Paypal or buyer?
Sent: 06-28-2003 00:35

anyone else has any input?



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 who should I sue for illegal chargeback, Paypal or buyer?
Sent: 06-27-2003 08:14

<blah blah>, Praying that you have proof of shipment and invoices on the products, you will sue the person that you sent the products to. Being that the amount is $30,000 you cannot sue them in small claims court, you will have to to sue them in civil court. Depending on the circumstances, there may be criminal counts that can be filed against the party that received the merchandise. The crimes that can be looked into are theft by depection and US Postal Fraud. Look into contacting the police in the town that the person lives in and explain it to them.



<blah blah>
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 who should I sue for illegal chargeback, Paypal or buyer?
Sent: 06-26-2003 15:05

One person who lives in another state purchase a lot of stuff from us using Paypal and did a charge back. He was a regular customer and never had a confirmed address, but I still trusted him. The value of the products sold to him was over $30000. Now, Paypal gave HIM back the $30000 and I want to know who I should sue, the buyer or should I sue Paypal?




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