Hi,

I made web design services for a client more than two months ago. Everything was ok, he payed me, etc. Now, over two months later, I received a charge back notice via email. Yesterday I had the notice that PayPal "Lose" the chargeback and they will take out my money, plus a $10 dollars fee!

The reason for the chargeback was stated as "Unauthorized payment". I'm surprised, how can someone make a chargeback 2 months later, and using the reason of "unauhorized", I really didn't even know it was possible. This guy is probably a scammer who pays the designers and months later gives them this chargeback.

Are the designers/workers so vulnerable using paypal? Is this licit/legal to them to take my money out after almost 3 months?

Looking for replies from you,

Thanks

all of the merchant services including PayPal have policies for charge back which sometimes can accept chargeback after even 6 months from the time of the charge.

I would recommend that you file any papework that you may have to PayPal's attention, specially if you have an agreement for services with the client and you can prove the result of the agreement.

We deal here and there with clients which try to manipulate us with charge backs for custom work we provide and when you have the proper documentation the chargeback doesn't go through

Have you contacted your customer to find out what was unauthorized?

BTW, chargebacks can happen usually up to 6 months for credit cards, about 2 months for debit cards with the Visa or MasterCard logo on them. It all depends on the issuing bank.

Accept payments by check - this way nobody defraud you. PayPal, 2CO and etc is not best payment options. If you plan to receive credit cards - get your merchant account and ask customers to sign agreement - this way you will be protected (at least better then paypal).

Regards

Steven

Most cardholder agreements allow the cardholder to initiate a charge-back within 6 month BUT most merchant agreements allow for at least 2 years -- and I have personally seen a merchant receive a charge-back after 30 months!

I don't know PayPal's current agreements that they have in place but from what I remember, theirs is tougher on both sides than a real merchant account. By "tougher" I mean that they make it almost impossible for the cardholder to issue a chargeback through their back and they extend the limit beyond the standard 2 years on the merchant side. READ YOUR AGREEMENT CAREFULLY.

I had a chargeback at PayPal a few months back, also claimed as "unauthorized". Turns out the buyer just didn't recognize the charge in their statement. (You can control this under preferences, I found out later.)

PayPal was no help at all in trying to resolve the issue, in spite of their reassuring emails ("PayPal understands that chargebacks can be frustrating and we're here to help you work through this situation. With your cooperation, we will assist you in disputing this chargeback. ... It is PayPal's standard practice to dispute wrongful chargebacks. One of the benefits of using PayPal is that our team of chargeback specialists will gather the necessary information from you and work with the card issuer until the chargeback is resolved.")

Total BS! They did nothing and in fact got in the way of my attempts to resolve the issue with the buyer. I felt so betrayed I closed my business account with them.

Today I got an email that the chargeback has been reimbursed. It took months but I guess I'll finally get my money back! They won't get my business back though! (I just have a "personal account" so no one can pay me using a credit card through PayPal.)

What if we charge montly fees, like a few bucks per month?
After 10 months, can Paypal make a chargeback, saying that someone else has used the credit card for 10 times without getting noticed?

That'd be a total BS.

To be clear, if you are notified of a "chargeback" by PayPal it means the customer issued a chargeback by contacting their credit card company. (If they issued the complaint through PayPal, it would show up as a Buyer Complaint.)

In the case of a chargeback, PayPal is responsible for disputing claims with the customer's issuing bank. PayPal relies on information provided by merchants (such as tracking information for packages shipped) in order to effectively dispute chargebacks.

If the original transaction was marked as Eligible for PayPal's Seller Protection Policy, you will be protected against chargebacks for fraudulent use and non-receipt if you follow the SPP guidelines (e.g. ship physical goods using a method with online tracking). If you are not covered by SPP, you will need to rely on PayPal's chargeback dispute process in order to recover any funds charged back.

The fact is: A Scammer can pays for web design services for who he wants using paypal, and simply making a chargeback (even months later) and he will have his money back.

As I have clients(and this one was the first scammer I found) that the only way they have to pay me is using paypal, I'm interested in one thing you said, Shawna888.

If my account in PayPal is Personal, I can only receive payments via other paypal account? In this case, the people to pay me would have to register on paypal, fund their account with money, and then pay me, right? Would this proceedment protect me from chargebacks? (I guess paypalrb could answer that)


And Shawna, "PayPal understands that chargebacks can be frustrating and we're here to help you work through this situation."
After reading this, I really thought paypal was going to help me... :/

Well PayPals warm and fuzzy intentions to protect sellers from chargebacks is total hogwash. They can't do it because they have to answer to the card banks just like everyone else.

They were recently caught admitting they have limited power in that case. Read here:

http://www.theregister.co.uk/2005/06/20/paypal_slip/

If you look around, you will also find screenshots from their website that show it.

In my case PayPal could easily have won the chargeback. They just chose to do nothing, since it involved an "intangible item." My efforts got the payment reinstated, not theirs. In other words, I don't really think they have warm and fuzzy intentions at all. It is just hogwash to keep you out of their way while they do whatever they're gonna do, or more likely, not do.

Azteka,
If you just have a personal account you can't accept credit card payments. When people try to pay you using a credit card you get a notification of a pending payment giving you the choice of either denying the payment or upgrading to a premier or business account to accept the payment.

If you have a personal account you can only receive $500 a month though!

After I got my merchant account I noticed a lot of people were still choosing to pay through PayPal, and with a business account, there was no way I could tell what method of payment they were using, and I couldn't block credit card payments. Now, with just a personal account, I can be sure.

Funny thing is when people have their transactions declined using my payment gateway, they still try to pay me using credit card through PayPal where they are a lot more likely to be to have the transaction accepted. It seems PayPal's AVS checks are more lenient than they could be, allowing US customers to slip through with zip or address not matching, for example.

People can still pay you without being verified members though. You can check on this by clicking the link to view details of the transaction. I'm going to start refunding those payments and only accept payments from verified members. Presumably, whatever problems might still come up wouldn't result in "chargebacks".

Well PayPals warm and fuzzy intentions to protect sellers from chargebacks is total hogwash. They can't do it because they have to answer to the card banks just like everyone else.

Just a note to clarify - PayPal's Seller Protection Policy does not prevent your customers from filing chargebacks with their banks. However, if you have a purchase eligible for SPP and follow all of the requirements, PayPal will protect you against chargebacks for fraudulent use and non-receipt of goods even if the customer does issue a chargeback. If one of those types of chargeback is received, and you provide the necessary tracking info, PayPal will allow you to keep the funds from the purchase. PayPal would continue to dispute the chargeback with the issuing bank; however, even if the chargeback dispute is not decided in PayPal's favor you will not be held liable for the purchase.


If my account in PayPal is Personal, I can only receive payments via other paypal account? In this case, the people to pay me would have to register on paypal, fund their account with money, and then pay me, right? Would this proceedment protect me from chargebacks?

I'm not sure it would have the intended effect. As Shawna mentioned, your Personal account would be limited to receiving only $500 per month (and you are not allowed under the User Agreement to have more than one Personal account). You could still be subject to Buyer Complaints issued through PayPal or chargebacks issued for bank transfers. Personal accounts are never eligile for the Seller Protection Policy, since it requires you to have a Verified Premier or Business account. (SPP can apply to payments made via any payment method, not just credit card.)

In addition, if you make any sales on eBay and indicate that you accept PayPal as a form of payment, you must accept credit card payments (and upgrade your account) if any buyer attempts to pay you using their card. (This is a recent eBay/PayPal policy change.)

If you deal in intangible items you don't qualify for seller protection.

You can always tell whether a buyer is a verified PayPal member by clicking on the link to view details of the transaction. You can refund the payment based on that if it makes you feel safer.

I chose a personal account because I don't want to accept credit card payments through PayPal since they don't provide information adequate to make a decision about the transaction. I tried to find other options to either get information about or control over methods of payment, but was unable to, and support was absolutely no help, as usual.

It's a pretty radical thing to do and I'm sure I'll lose money because of it. That $500 allotment gets used up pretty quick!

Originally posted by paypalrb
Just a note to clarify - PayPal's Seller Protection Policy does not prevent your customers from filing chargebacks with their banks. However, if you have a purchase eligible for SPP and follow all of the requirements, PayPal will protect you against chargebacks for fraudulent use and non-receipt of goods even if the customer does issue a chargeback. If one of those types of chargeback is received, and you provide the necessary tracking info, PayPal will allow you to keep the funds from the purchase. PayPal would continue to dispute the chargeback with the issuing bank; however, even if the chargeback dispute is not decided in PayPal's favor you will not be held liable for the purchase.

And to clarify further, that is all words with no substance because if the transaction was legit and you have the documentations to prove it, the card banks won't charge back anyways.

PayPal might as well claim they are protecting sellers from fire breathing dragons... they would have 100% success in doing that too! :)