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How can eBay & PayPal stop sellers being scammed?

By Chris Dawson July 7, 2010 - 5:52 pm

This isn’t an unusual situation, but yet again a casual seller has been scammed. Having sold a brand new Apple iPad on eBay and been paid via PayPal it’s no surprise that after the buyer collected it turned out that it was a hijacked eBay/PayPal account and the funds were reversed.

What seemed like a quick way to make a buck has turned into a loss of £599.00 and PayPal aren’t covering the loss as the buyer collected in person. The seller even went so far as to get a signature on collection, but of course that’s no use as the buyer isn’t who they said he were.

Most experienced sellers on eBay are well aware of the requirements to qualify for PayPal seller protection, but casual sellers and this one in particular may not be.

The seller in question is quite rightly angry and upset that they’ve been scammed but ultimately it’s their own fault for not following the rules. Sadly they’ll probably spend the next few years telling everyone they meet about how they got scammed on eBay which leads to the question do eBay and PayPal do enough to protect their customers?

The PayPal user agreement lays out what you need to do to qualify for seller protection but quite honestly have you yourself read the eBay and PayPal user agreements in full? If you have when was the last time you read them? If it’s not since June 1st when the agreement was last updated then you’re not aware of the latest changes.

PayPal’s tag line is “PayPal. Safer. Simpler. Smarter.”, and it is, but only if you know what you’re doing. Most people don’t read the small print, and I guess it’s fair to say we only have ourselves to blame when we don’t. That doesn’t mean we’ll always blame ourselves when things go wrong though, so what should eBay and PayPal do to protect innocent but naive sellers who aren’t as familiar with online trading as ourselves?

  • BigPoppa
    7 years ago

    Seller protection simply doesn’t exist on eBay, even if you follow the t’s & c’s, there are a wealth of ways that you can fall foul of some sub clause etc…

  • “Most people don’t read the small print, and I guess it’s fair to say we only have ourselves to blame when we don’t.”

    I agree in a sense but most people don’t read it because companies like paypal purposely make it impossibly difficult to understand / extraordinarily long winded, even if you did read it from start to finish it’s been written by a $10,000 an hour lawyer with the sole purpose of protecting it’s clients ass and confusing the average reader.

  • 7 years ago

    PayPal should stop touting themselves as suitable for collection transactions. They’re not. Full stop. They and eBay should acknowledge that.

  • 7 years ago

    Sorry Sue,

    What is a “collection transaction” ?

    Kind Regards

    • Sue
      7 years ago

      A transaction where the buyer collects the goods.

  • 7 years ago

    ebay doesnt care about sellers, to them they arnt customers. Just people who use the site. If they cared this wouldnt be a problem.

  • northumbrian
    7 years ago

    casual sellers should not be casual about their money

  • 7 years ago

    Rule #1: Cash is King when it comes to collections

    • 7 years ago

      I am a top rated seller and have 10 years selling experience. I know EXACTLY what to do as far as signature, delivery confirmation etc. But buyers opinions are causing me to lose money last few months. I called ebay and Paypal and told them how upset I was and they said to file a claim. I said that is a waste of time because in the end, since Paypal doesn’t trust a Top Rated seller over a scamming buyer based on their “opinion” then in the end, I will be worse off! After I file a case, Paypal can’t determine without inspecting item physically themselves who is right so they give them money back and buyer is mad so they negative me. I told them I now consider Paypal a risk and that I am now adding other selling venues to avoid the Paypal risk. Their original intention of this system was good, but since they don’t use real, physical inspections to determine that I am right, their policy makes them refund. Total joke. Ebay has two options, either change refund policy, or set up a shop in major cities for buyers to take their items that they complain about to get a REAL inspection. But of course that will cost eBay/Paypal too much money so they won’t do it. So in the end, it won’t be fixed and ebay will probably fade from a “once was” good company, into a hasben company with little or no desire for buyers or sellers. I feel so disrespected by ebay that I can barely stand it. If their was a site that allowed “used” items to be sold, I would be there instantly. A business model that is all risk, is not a business that I need to be into.

  • Steve
    7 years ago

    Ok, so most of us regulars know the risk, but it doesn’t help the person in the article, and despite all the propaganda, ebay and paypal need to highlight the risks as well as the protection – as well as allow a workable function to advertise cash on collection without falling fould of the permitted payments policy.

    • june
      7 years ago

      Ok
      I have been selling on ebay for a few years am a Powerseller / top rated and I have no idea how to protect myself from such fraud. What did the seller do wrong?
      They got signature, what else could /should they/we do?

  • Emily
    7 years ago

    I have a lot of old shop furniture that I am selling – collection only as I do not have a van. I HAVE to offer paypal, eBay insist in this. Is there any way I can protect myself…. I know most people buying 2nd hand shop furniture are unlikely to rip me off as much as for an ipad but still….

    • 7 years ago

      You could offer a deposit through paypal then the rest in cash on collection as most car sellers would do.

      Stu

  • mutley
    7 years ago

    The potential for this to happen was highlighted as soon as Ebay made it mandatory to offer paypal.

    At the time the head of Ebay T&S rejected concerns by suggesting it was very unlikely anyone who had had a cup of tea and a chat with the vendor would rip them off.

    Whilst Paypal has to be offered but offers no protection for collected items this will happen time and time again.

    Either the requirement to offer paypal for good to be collected has to be removed, or a workable safeguard which will satisfy Paypal has to be put in place. Until then, sellers are wide open to fraud.

  • MickeyFinn
    7 years ago

    Unfortunately for the casual seller, the risks are not known. I have no love for Paypal – but the fact of the matter is, even if the seller had taken a credit card payment through their own merchant facility, they would have still lost out when the real owner of the account filed a chargeback.

    However, the sad truth is that Paypal are no more helpful EVEN WHEN an experienced and knowledgeable seller follows their requirements to the letter, comma and full-stop. In fact, Paypal’s procedures are so inept that defending claims against them of aiding and abetting fraud is an impossibility.

    Here are two stories from the same seller who trades in a high-risk category which includes mobile phones and laptops. The first is brief and the second is detailed – but both condemn Paypal’s procedures…

    iPhone: http://www.ozroundtable.com/index.php?topic=2573.0

    Laptop: http://www.ozroundtable.com/index.php?topic=1754.0

    It is beyond me how Paypal is allowed to continue with such amoral arrogance.

  • Sue
    7 years ago

    The short answer is that if a buyer pays with PayPal and collects the goods, the seller has NO protection whatsoever, NOR any way to protect themselves.

    As “don’t offer PayPal” has been removed as an option, either
    1) don’t offer goods for collection via eBay (use Gumtree instead, for example), or
    2) when buyers contact you re. collection, tell them no way on earth are you taking PayPal, and deal with the inevitable fallout.

  • Lino
    7 years ago

    eBay & Paypal should be taking much more responsibility for this. It’s accounts on THEIR sites that were hacked, they would have told the seller the goods were safe to ship. How is this the seller’s fault?

  • Bigpoppa
    7 years ago

    I don’t care what anyone says, if you lose or otherwise let your Paypal password be known then you pay the price.

    It’s not the sellers fault, it’s not Paypals fault, it’s you the owner of the real accounts fault.

    Maybe you had a trojan virus on your computer, still your fault, get virus protection.

    Maybe you responded to a spoof email, downloaded an attachment and gave them all your details, your fault as Paypal tell you they never ask for this information etc.

    Maybe you told your aunt Gladys the login and she blabbed to the whole neighbourhood, who cares it’s still your fault.

    Paypal should give this seller his money back full stop.

    There is a similar system in place now for credit/debit card transactions that shifts liability to the card owner and away from both the bank and seller via a password system…Verified by Visa and Mastercard secure code.

    The same should apply with Paypal.

    • Jimbo
      7 years ago

      Is that the same argument as: if you leave your back door open while watching tv you deserve to have your kids eaten by foxes.

    • BigPoppa
      7 years ago

      Don’t be silly…

    • Terry
      7 years ago

      Foxes are nice – I want a pet one – seen them on you tube – awwwwww

  • 7 years ago

    Another tremendous reason to use a professional seller to sell your stuff for you.

    The reality is, in Stuff U Sell’s experience, that this sort of fraud is very rare and most folks are decent and honest. In fact, I struggle to remember an instance of Paypal collection fraud against us.

    There are other problems, of course, but if you’re trading as much as we are then you can afford to take on one the chin every now and again for the convenience that Paypal offers.

  • 7 years ago

    Asking to see valid ID on collection perhaps?

  • Jonathan
    7 years ago

    I always with collection items say cash on collection, its worded in my items description as to not fall foul of the “no paypal” phrase which i once did in one of my listings on a collection only item and was then removed by ebay.

    Most people i explain to them all about it and they are fine about it.

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