This is a thought that occured to me. Most hosting companies that rip off people by taking money from them, and then disappering (shaghost, for example) do have some means for accepting payment in the first place, right? For example, paypal, or 2checkout, worldpay etc?

In such a case, wouldn't the actual address, or bank account details, or something be present with the payment services? Using that, wouldnt it be possible to track down the defaulting company?

Sorry if this post is off-topic for this forum.

- Rakhesh

Yes that's correct but these companies could probably get in trouble (sued) if they released this data as it is confidential!!

RFhost is correct. But, since chargebacks will start popping up all over the place, 2checkout/paypal/whatever will track down these people and take their own legal action on them.

Sorry for the dumb question, but what is "chargeback"? :blush:

OK, I figured out what a chargeback is -- something like, I cancel my transaction, and so I get refunded. Right? So, if I go to paypal now, and tell them that I want to cancel the money I paid shaghost (or should I go to my credit card company), will they do anything?

When you disagree with a payment on your CC bill, you ring the bank and get what is called a "chargeback".. this means you get your money back :)

OK - we posted at the same time. :D So, to rephrase my question above, if I call up my bank, and tell them to cancel the money I paid paypal (to inturn pay shaghost, who dumped me), will it get me anywhere? As in, even if I dont get a refund, will the bank/ paypal do something like sueing shaghost?

If you paid through paypal you should first consult paypal.. and explain everything to them. If they won't help, get your bank to do a chargeback and your worries are over :)

"In such a case, wouldn't the actual address, or bank account details, or something be present with the payment services? Using that, wouldnt it be possible to track down the defaulting company? "

Yes, we would have this information. However, we can't release this information without a subpoena (for the same reasons we wouldn't release your information to another party without having a subpoena).

Don't use PayPal. You will regret it. You are so better off getting a murchant account or a account with 2checkout.

May I ask what issues you have had with PayPal? Just curious...

I just think paypal is not good unless your selling auctions. Paypal does not appear to look after any issues reguarding a shop. Yes you have nice forms on the website that try to direct you to vague facts. But you have nothing really to help the Shop who is having trouble with customers.

example: I sell 40 dollars worth of services and run custom software on a server for a customer. The customer messes up their script many times. I tell them I cannot keep reinstalling their software for them for free. They get upset and demand a refund. I tell the customer I am not issueing them a refund because they messed up their own software and it was not my network or hardware which caused the problems. Customer files a complaint against paypal. Paypal issues me a screen where I can give them their money back or give them a tracking number. I don't have either and don't plan to do either. I write paypal several complaints with the complaint number from the paypal page in the subject. No responce from paypal. Does paypal have a number to call? good luck finding it on their site. 7 days later I automaticlly lose my money. Now I have to fax information to paypal.

This is a joke. It's better to just go with a murchant account. Paypal is good for auctions. Thats about all it's good for. Thats why ebay bought you guys right??!

All i know is paypal doesn't provide enough information for their shops. They should have some better way to handle issues like this. I wanted to contact paypal about the customer before he started demanding a refund. Now I'm just not using paypal anymore.

I'm sure other people have just as many problems. http://www.paypalsucks.com

Thanks for the post.

-The number can be found on the web site (logged in) under the HELP section. There is a link for CONTACT US, which will bring you to a link where you can send an email/get the phone number for CS.

The complaints you are mentioning are technically not covered, so I will be taking this forward to our risk management teams.
"This policy applies only to the sale of tangible, physical goods and excludes all other sales and services, pursuant to section 1 above."

I appreciate the fact that you gave me a pretty detailed explanation of a problem you have encountered.

I use PayPal a lot for receiving, however, I will only make purchase by credit card as it is MUCH easier to issue a chargeback with a bank than to follow PayPal's "30 day no guarantee" dispute policy.

A word of caution about chargebacks though, only issue one if you have made several attempts to resolve the issue with the merchant AND have notified them that you will be seeking a chargeback if the problem remains unresolved. This, in most cases, will get you a refund. If you abuse chargebacks you can be sent to collections. Our policy is to always give refunds on credit card transactions and then enter the account into collections if we feel we have a legal right to the money. Just be advised, if you issue a chargeback against a legitimate merchant they will NOT be happy with you and you may be facing bigger consequences.

What is a chargeback?

When you make a payment on your credit card the merchant's software/hardware calls Visa/MC/... and gets an Authorization, if you have the available credit and the card is good - correct AVS info etc, they get this Authorization and continue with the charge.

Visa takes these charges and sends them on to the banks, the bank is then responsible for putting the money into the merchant's account.

When a customer disputes a charge on their credit card it is called a Charge Back. This is when you phone your bank or Visa and tell them about a charge you disagree with.

Visa now sends a "pink envelope" to the merchant containing a small form with a reason for the chargeback, the authorization code so they can track down the payment, your card number, your information, and any other details that you told Visa over the phone.

The business replies to the pink envelope with either "yes its our mistake, please give the refund." or a "its not our fault, here's the proof." If they can't respond with proof (a receipt with their hardware showing 'card swiped' or an imprint of the card AND with your signature) then the chargeback goes through.

It is important that you do not file chargebacks except as a last resort. Each time you make a chargeback it costs the merchant anywhere from $10-25 PLUS admin fees. If you contact the merchant directly they have the power to put a refund on your card without any cost, and it is a lot easier for you.

When you file a chargeback it can take up to two months for a response - the merchants have 45 days to reply to pink envelopes before they are assumed to be valid and charged back. When you communicate directly with the business you disagree with you can have the problem resolved in a matter of hours.

paypal does not help. for example in the case of cyberwings all they did was tell customers "Sorry there is no cash left in that account. We cannot help you further and do not guarantee recovery of funds". thanks for all the form letters paypal. :rolleyes:
stick to paying direct with a credit card like amex that will actually back you up and stay away from paypal.

I realize that users get upset (justifiably) when they are defrauded by an individual. However, I do position it this way...

1. If you had sent a check/money order to the party that defrauded you, would the companies that the payments were drafted from get involved in the dispute (the dispute is between the two individuals). You would have to seek other avenues of recourse once these items were cashed.

PayPal is the payment medium being utilized, but PayPal can't guarantee that an individual you are dealing with will come through as promised.

Hi,

One important thing to note about Buyer Complaints and chargebacks...

1. PayPal has no control over the issuance of a chargeback. This is decided entirely by the card issuer.
2. A Buyer Complaint would be rejected if the buyer filed a claim for merchandise quality. However, we could not stop the buyer from going to their card company (chargebacks are rights granted to consumers).

It is important to understand that accepting a credit card payment does carry some element of chargeback risk.

I hope none of the above was confusing...

Originally posted by paypaldamon
Thanks for the post.
The complaints you are mentioning are technically not covered, so I will be taking this forward to our risk management teams.
"This policy applies only to the sale of tangible, physical goods and excludes all other sales and services, pursuant to section 1 above."

So you agree with me that webhosting providers should not use paypal and get a murchant account?

I think you would find that the chargeback rules are pretty much the same with just about any processor doing credit card transactions on your behalf. You could receive a chargeback regardless of the service you are utilizing.

Having a business that charges clients using PayPal is a bad idea. It is always better to get an individual credit card processor. I only use PayPal for auctions and sending cash for designs and things of the sort, although that is just my opinion.

Paypal is a waste of time, I got conned for a large amount of $$$ with them and all they could say was "Sorry we cannot do anything, its been past the 30 days"...

On a second note : Paypal is heaven for those trying to make money quick and disappear...

:( Which reminds me "paypaldamon" can you contact me, we need to talk, maybe you can help me...


-Shazad

Paypal is the mafia organized under the guise of a corporation.

If you use these people to process your credit cards despite the numerious warnings that have been issued about them, you deserve whatever comes your way. Think I am full of hot air on this one? Well, then all the people who are behind these news stories must be as well.

PayPal Class Action Lawsuit: Stealing Customer's Money

> http://news.com.com/2100-1017-842240.html

Shareholders Sue PayPal: PayPal Selling Out

> http://news.com.com/2100-1017-943136.html?tag=cd_mh

Mastercard Sues PayPal: Theft of Intellectual Property

> http://www.ecommercetimes.com/perl/story/17787.html

More Customers Sue Paypal: "Trigger-Happy Anti-Fruad System"

> http://special.northernlight.com/ecommerce/growing_pains.htm

PayPal Customer Service Stinks Worse than a Dead Cat:

> http://www.pcworld.com/news/article/0,aid,101525,00.asp

PayPal Patent Infringement Lawsuits:

> http://www.gigalaw.com/articles/2002-all/isenberg-2002-02-all.html

And the list goes on and on and on and on and on. A google.com search for 'PayPal Lawsuits' returned 3,100 hits. The processing fees are nuts and the service stinks.

Plus, I hate having to sign up for PayPal's trash (yes, they send spam) just to process a charge for someone I want to buy something from. Any other service is better than thiers. Including snail mail.

"Under the guise of needing to protect consumers from fraud, they themselves are guilty of fraudulent abuse of their customers," Koff said.

Thanks for the detailed explanantion on chargebacks, refcom. :D

- Rakhesh

To Paypaldamon:

Why is it that now when I attempt to purchase items via my credit card on a Paypal Auction, the "other payment options" no longer allows it? it only points to my bank account as an option. Paypal will cease getting my business if this is not fixed, as I like the security of using my credit card.

Save yourself the trouble and quit them now.

refcom, yes, thank you for that explanation

Regarding my explanation of Chargebacks:

I hope my information was correct - I am basing that info on our experiences with Visa and Mastercard for over three years using a MOTO account. (Mail Order/Telephone Order.) Three years ago banks were not up to Internet standards in Canada and that was our only choice - a MOTO account (now coming into the name of "signatureless merchnat account" instead of "MOTO.")

While we hard our Merchant accounts in Canada they were in US dollars through US banks - so I expect that the principals were the same, though maybe some of the timelines varied slightly.

I must urge you to remember - Chargebacks look VERY VERY bad on a merchants review - and banks consider that more than 1% chargebacks is VERY BAD - they will consider terminating merchants with more than 1% chargebacks because their idea is that "if the customer could not resolve the issue with the company directly and had to resort to a chargeback 1 in 100 transactions is too many."

So - the point - ONLY issue chargebacks when the company you have purchased from will not deal with you directly. Give them at least 3 or 4 days before getting mad - processing refunds isn't always easy - there is a LOT of paper work to track through sometimes! For example, some of the refunds I issued (for whatever reason, there are always customers who made a purchase and want to return it, etc.) could take me THREE OR FOUR hours to track down and process! The longer you wait the harder it is to track down the receipt and issue the refund.

If you want a refund, get on it asap with the merchant, wait three to four days, if they dont have the courtesy to let you know at least something in that time, go to your credit card company and ask to have an "investigation into this transaction, this date, this merchant, in this amount (you don't have to chargeback the full amount)." They send the pink envelope out and <<45 days later you get a result in the mail>>.

Also - Credit Card Companies ALWAYS ALWAYS side with their customers, and they give merchants a "guilty until proven innocent" status on Chargebacks. Chargebacks are a serious thing, do not abuse them.

One last thing - even if your credit card company (Visa, etc) DOES side with you the merchant can STILL refer you to collections if they feel they have a right to that money. Visa's point of view IS NOT A legal decision on the validity of the transaction, the merchant can still take other routes even if the chargeback is authorized.

I always wondered - can I legally do chargeback to credit card payment made through paypal? I have heard that paypal's TOS prohibit chargeback, and paypal will sue you if you attempts to chargeback. (e.g. the marchant disappeared). Also, will it have any bearing on your paypal account?

Peter

Peter - It's common sense there... If you put Money in your PayPal account and then send it off to someone, but then do a Chargeback to PayPal - PayPal STILL has a legal right to that money. They followed through with their service - they deposited the money into your account so you could send it off to others. That's all you have asked PayPal to do.

So - if you do make a chargeback against PayPal I expect that they will return the proper proof that they put the money in your account. This proof is very easy with PayPal - you logged into your account, saw the money you put in, and sent it off to pay for something.

So - will PayPal sue you if you initiate a chargeback? I doubt it because they will win in the chargeback - you won't get your money back from PayPal since they did everything you wanted. It WILL look very bad on your PayPal account, and it will also look extremely bad on your credit report when you go apply for a loan and people see that you "initiated a fraudulant chargeback" in Visa/etc's little paragraph of text.

Well, are you sure the depositing of the money and the sending are seperate? I think there is only one transaction, not two. Afterall, the receiver/marchant is charged with the processing fee, not you. (the sender). The payment through credit card is not just a simple deposit; it is an actual purchase.

Peter

That is an interesting point. I suppose there are two ways to use PayPal - and from a legal point of view PayPal would say there is only one way to cover their own assen.

1) PayPal takes card and deposits money into Merchants account.
2) PayPal takes card and deposits money into customers new account (thats why you have to agree to their TOS when you sign up, is because you ARE creating an account) and as a bonus automagically forwards the money to the merchant on customers behalf.

As far as who pays the fees, the merchant is paying PayPal for the use of their service... here's where my knowledge starts to end - does PayPal charge a different rate to merchants for transactions funded from a PayPal account balance than they do for transactions funded by a Credit Card? If not, PayPal can argue point #2 and win, if they do charge different rates then there is a lot more to this scenario.

I expect that PayPal would in any legal case argue point two and that they would win with that argument in a legal court of law - however on a cival case things could be different... But, then we're talking thousands in legal fees over a transaction less than PayPals roof limit which I expect is probably around $1000. In this case like most others justice just costs too much.

I think it is point 1, because on the charge that appears on my credit card bill, Paypal's name plus the marchant's name is on it. This implies that paypal is some kind of marchant payment gateway, in cooperation with the marchant.

Peter

That's very true, but I don't expect it would get far if you issued a chargeback against PayPal. In my opinion they did what they were supposed to, they sent the money to the Merchant. I honestly don't think it would get too far.

It would be great if someone could contact PayPal and ask for more information on this - though I have a job and won't be sitting on hold for 4 hours to ask about it. I also won't be emailing them to get no response or a completley irrelevant response (I side with those who mention that PayPal has no support whatsoever.)

Another route you can take with a company that won't respond is to go through the Better Business Bureau. They offer excellent dispute resolution services - however, this won't work at all for a company who has dissapeared.

But... Bottom Line, Call PayPal and ask, tell them what's happened and see what they say. If they won't refund the money and you honestly believe it should be refunded, issue the Charge Back to PayPal. Let us know where you get with this and best of luck - the credit card companies will however be on your side, they always side with the consumer.

Paypaldamon:

Why is that your staff always hibernates when there are probelems to be solved? And tell me, why did you lock my account with more than $5,000.00 in it in 1999 when I got a chargeback for less than $100.00. I provided you the proof of shipment and signature delivery as you requested. But no. You locked the account anyway. If you thought that I was an unscruplious merchant, you could have just taken the amount of the charge out of my account. But no, $100.00 wouldnt be enough. You would rather have all $5,000.00.

Your company hung up on me when I called. You ignored my e-mails. Your company ignored my certified letter, sent to the vice president of PayPal himself with restricted delivery (meaning only he could sign for it) and he did indeed sign for it. Yet you never responded.

Then your company had the nerve to threaten to report me to law enforcement for fraud. I complained to the FBI about your company, it did no good (which dosent surprise me, I know how lazy cops are when it comes to helping some shrimp like me -- yet they bend over backwards to stop fraud against a corporation).

Do you think I have fogotten about this? I most certainly havent. Some day very soon I will come for my money, and I will either get it or have the satisfaction of knowing that your company sunk like the piece of dung that it is.

Your employer is a fraud. Your company is in violation of so many banking laws it is pathetic. Companies like yours will get what is coming to them. Your paycheck is drawn on other people's money and you know it. Everyone at your company knows the stunts it pulls, and you all know that it is wrong.

For a little bit of money, you sold your damn integrity. For a little bit of money, your company has hurt more people than it can imagine.

People have lost thier entire business because of your company. But you dont need to worry. Many, many people are upset. And pretty soon, you will be in serious financial trouble as your company is buried in one lawsuit after another. They will cut the rainforest down to make paper so your company is driven into the ground with one lawsuit after another after another.

</rant>

Here's an example of what happens when Chargebacks are issued and how seriously they can be taken - though I do agree that this was a <i>HUGE</i> over-reaction on PayPal's part... I would have expected nothing less than what you have told us though.

PayPal is known for this kind of action. There are things you can do:
Take them to the BBB - if PayPal refuses to respond to something that THEY find satisfactory (ie you prove they owe you the cash, paypal refuses to give it back OR doesn't do anything about it all) the BBB will give them a bad rating. If PayPal gets enough bad ratings like this from public mediators like the BBB then the news reporters can really start to get onto it - it gives them a LOT more ammo and it gives them archives of people who paypal commited fraud against. Once the reporters have this kind of ammunition... things can start to change.

The BBB is a joke. Take my word for this. I am working on putting up a website (complete with copies of my taped telephone calls [which you can download in streaming audio format] to them in which they admit they really dont give a damn about customers)

Oh no, God forbid the BBB gives someone a lower rating!!! That would be devistating. :/

Most people aren't up to date with the BBB when the buy things or use services...

I wrote: To Paypaldamon:

Why is it that now when I attempt to purchase items via my credit card on a Paypal Auction, the "other payment options" no longer allows it? it only points to my bank account as an option. Paypal will cease getting my business if this is not fixed, as I like the security of using my credit card.

looks like paypal doesn't answer concerns/tough issues in this forum, either.:rolleyes: :eek:

OK So BBB is a bad idea - I didn't know this - I'd love to hear some of your recorded conversations/etc.

Looking forward to hearing the phone calls kkimmel !!

Actually, my attorney advised me against putting the calls online, he said I could get sued for slander and defamation of character. I am going to do it anyway. I dont even know why I asked him. For me to get sued (and them win) for slander it would have to first be a lie.

Originally posted by kkimmel
Actually, my attorney advised me against putting the calls online, he said I could get sued for slander and defamation of character. I am going to do it anyway. I dont even know why I asked him. For me to get sued (and them win) for slander it would have to first be a lie.

I'd like to hear them :) One of the admin of Flex.com has voicemails on his site and they're a riot to listen to.