A Cautionary Tale

JHCCoffee

I was in the market for a used Cafelat Robot, to get my feet wet on lever machines. I looked and posted everywhere.

I am a very scam cautious person, but a clever Reddit based scammer lured me in, through a PM (chat) with false pictures, a good price ($215 USD), and a willingness to ship upon receipt of 50% payment. My initial $130 exposure increased to $260 when the scammer apparently refunded my initial PayPal payment (supported by fake PayPal screenshots), and asked me to send the funds to a different PayPal account. However the refund had not yet been fully processed by PayPal and my bank; I did not verify that deeply enough.

I could have lost $260 USD, but PayPal and my bank collaborated to save the day, by reversing the payments. I will be doubly careful about who I buy from now on.

tompoland

I don’t know how these people can live with themselves.

Thanks for sharing. Helps to keep us all vigilant.

Forums offer more protection when buying from established members.

DavecUK

tompoland Forums offer more protection when buying from established members.

I also don’t know how these people can do that. Indeed forums can offer a “safer” environment to purchase in, especially for expensive kit. However, normal vigilance/caution should still be followed, when buying or selling. It’s not unknown for problems to happen on forums as well as the system being gamed. I have not seen it on this forum yet, but I do watch out for it. In fact the more controlling the sale rules, the more likely it is for “gaming” the system to occur

All said, purchasing from an established forum member has to be better than many other methods.

Amberale

Motorbike sites are even worse.
Never purchase from someone you don’t know via PP friends and family.
It is always a scammer.

tompoland

As I understand it, friends and family is the PP facility whereby a refund cannot be requested of PayPal by the purchaser.

So it may depend on whether you are the seller or purchaser.

If you are puchasing and want protection then you would NOT use the friends and family option. That gives you the right to request a refund if the goods are not shipped or are defective.

If you are selling and you want protection from the classic scam (someone purchases your item then receives it and then makes a claim through PayPal), then you would want to use friends and family to avoid that scenario.

My brain gets easily scrambled scrambled with these things so someone please feel free to point out if there’s an error in the above.

https://www.paypal.com/us/cshelp/article/whats-the-difference-between-friends-and-family-or-goods-and-services-payments-help277

Doram

tompoland If you are selling and you want protection from the classic scam (someone purchases your item then receives it and then makes a claim through PayPal), then you would want to use friends and family to avoid that scenario.

PayPal also has Sellers Protection. You do have to post the item in a trackable way, not everything is covered and there are rules.

Of course getting paid as f&f before you ship lets you keep all the cards, but then the buyer takes all the risk.

If anyone needs protection then the only way is Goods and Services, in which PayPal takes the risk, and charges its fee for it.

JHCCoffee

I may look into this option next time: Escrow

Amberale

One of the first checks as a buyer is a reverse google check on the image of the item for sale.
With motorcycle parts these are usually found somewhere else on the net and the sellers profile is 24 hours old.

Rob1

Some idiot tried to scam me for £20 once. They were selling computer games via facebook marketplace. They’d had an account for a while with pictures and other people commenting so seemed legit. Reverse image search showed the images were only used by them. Paid via friends and family and they told me there had been a delay posting it because they were sick and they’d post next day. Didn’t hear from them again. Used my credit card to fund the friends and family purchase and just clawed it back via the bank.

Paypal have no resolution process in place for f&f but they do have very strict and very punitive rules for their acceptable use policy; sellers circumventing fees by using friends and family can have their entire bank balance seized for months or years and be forced to pay damages due to legal fees and bank fees due to account shortages caused by things like….credit card chargebacks on f&f transactions. A quick google will bring up results from people who haven’t even done anything wrong but have had their bank accounts drained by paypal, their accounts frozen, and they have no ability to contact paypal beuse customer service is non existent.

I now have only a credit card and separate bank account linked to paypal which I keep almost empty just in case they decide to rob me one day.

MediumRoastSteam

Rob1 I now have only a credit card and separate bank account linked to paypal which I keep almost empty just in case they decide to rob me one day.

Same here.

Doram

Rob1 Some idiot tried to scam me for £20 once. They were selling computer games via facebook marketplace. They’d had an account for a while with pictures and other people commenting so seemed legit. Reverse image search showed the images were only used by them. Paid via friends and family and they told me there had been a delay posting it because they were sick and they’d post next day. Didn’t hear from them again. Used my credit card to fund the friends and family purchase and just clawed it back via the bank.

Paypal have no resolution process in place for f&f but they do have very strict and very punitive rules for their acceptable use policy; sellers circumventing fees by using friends and family can have their entire bank balance seized for months or years and be forced to pay damages due to legal fees and bank fees due to account shortages caused by things like….credit card chargebacks on f&f transactions. A quick google will bring up results from people who haven’t even done anything wrong but have had their bank accounts drained by paypal, their accounts frozen, and they have no ability to contact paypal beuse customer service is non existent.

I now have only a credit card and separate bank account linked to paypal which I keep almost empty just in case they decide to rob me one day.

Sorry if this sounds like I’m defending the devil - this is the last thing I want to do - but isn’t that fair play by PayPal?

They have two routes to send money: one without protection and without a fee, meant for sending money to people you trust (friend and family, as the name suggests). This is basically a free service from PayPal. The other way is to pay for something you buy (goods and services) - you pay a fee, and in exchange get protection if something goes wrong.

If you buy something but use f&f to avoid the PP fee, but rely on protection from the credit card company and do a chargeback against that f&f payment (which was actually for goods and services) - isn’t it legitimate that PP doesn’t like it? (Again, I hardly like any of those corporates and how they operate, but in this case I’m not sure if it’s not fair that they try to stop people from using f&f to buy goods.

Rob1

Doram Sure. They take it out on the seller. Charging people a $2500.00 unspecified damages fee and abusing direct debts linked bank accounts of much more of that to hold it ransom is stepping into cowboy territory. These charges they attempt to bully people into paying never stand up in court. But yes, in principle they have the right to protect their business and charge people any fees they dodged, fine them and ban them from using the service. But they are going way beyond any reasonable response eg this: https://www.g2.com/discussions/paypal-is-not-returning-usd-40-000-they-kept-for-180-days-after-account-suspension

Doram

Rob1 But yes, in principle they have the right to protect their business and charge people any fees they dodged, fine them and ban them from using the service. But they are going way beyond any reasonable response eg this: https://www.g2.com/discussions/paypal-is-not-returning-usd-40-000-they-kept-for-180-days-after-account-suspension

As I said, I’m not going to defend what PP is doing to people who break their rules. The only point I was trying to make is that if you use f&f to buy something then you are taking a risk because it’s a free, no-protection service.

If you then do a credit card chargeback on that f&f payment then you are trying to get insurance for something you didn’t insure. If they decide to cut your hand off for that then I agree it’s harsh, but it is smarter not to put yourself in this situation in the first place.

If someone wants to sell something and asks to be paid via f&f, you can offer to pay a little more (the PP fee ~5%) and pay with g&s. If the seller tries to talk you out of it, or disappears, then it’s an alarm bell ringing.

JHCCoffee

I will pay via G&S from now on, and likely use Escrow.com to safely manage transactions for significant amounts.

When selling, I will use G&S with PayPal vendor protection, and still use Escrow.com for significant amounts.

I will do everything according to PayPal rules, so that they have no recourse against me.

I will however likely link to a bank account with more limited funds in it. I prefer using a bank account to a credit card, as my bank provides excellent customer service and is easy to work with (unlike most credit cards). They immediately reversed these fraudulent charges, with little bureaucracy. Mind you, I have been a loyal customer for 40 years!

Rob1

Doram you can do that. My point was it’s stupid to try to scam somebody or even genuinely sell something using the f&f option because the buyer can do a chargeback if they fund the transaction with a credit card. Not 100% but I believe the consequences of paying for good and services using the f&f option is that you don’t get buyer protection; using f&f as a seller is a violation of Paypal’s AUP and can easily get you fined and banned. In my case the ‘seller’ risked a $2500 fine and a ban for the sake of £20.