PayPal - Fraudulent Transactions

Consumer Complaints & Reviews

AJG of new york, NY on Jan. 23, 2012

Satisfaction Rating: 2/5

I made a payment on on Thursday, and PayPal and cancelled it within minutes. I realized I spelled the email address wrong. I got an immediate notification that the transaction was canceled, and the money returned to my bank account. Then, on Monday, PayPal withdrew the money from my Chase account, causing my account to overdraft.

PayPal says that it has no control over this, that the transaction was already in process, and that it is up to the bank to refund the money, and look into my "dispute". They're saying that I will likely be refunded the money within three to five days. PayPal offers no good explanation as to why they explicitly told me the money was returned to my bank account, when this was clearly not the case. They keep telling me that they system is automated, and they can't control it.

Didn't they build the system to begin with? Isn't their whole business instant money transfer? Shouldn't they be able to rectify the situation with a transfer made as quickly, as the one they made erroneously made a transaction they'd assured me wouldn't happen, to begin with (otherwise why would they give me that immediate notice, that the transaction was "cancelled" and the money "returned to my account". That message still appears there when I go to my account, but its clearly incorrect).

I just spent an hour on the phone with both PayPal and Chase. Neither can offer any solution to how to fix this now. Both say it will be rectified by the end of the week, but in the meantime, I now have an overdraft fee to pay, and I have zero dollars in my account until they fix this. I feel really powerless, and disappointed in the actions of two companies, who seem to be claiming being powerless when it comes to dealing with a system, and machinery that they built themselves.

Edna of Forestville, NY on Dec. 4, 2003

On Sat. Nov. 9, 03 I received an email from Pogo with my Paypal password right on the monitor screen. Could not believe what I was seeing. I notified paypal but only got an automated response and a long distance telephone number with automated service. I changed my password and security questions. I also have closed out my credit card. Am waiting for 2 transactions to come in. One is good but not sure about the other one.
I will never, ever use Paypal again. Only use money orders and cashiers checks. I did not become verified with my bank account. So glad of that. I have heard of other happenings, but never thought it would happen to me. Paypal had to give out my password, no one else had it anywhere. I have nothing godd to say about Paypal. More like dirt-pal to me.

Still haven't received a reply other than they are investigating this. Right, take a number and wait!

Achim of Rochester, NY on May 8, 2003

I have recently received payment on my PayPal account from the Philippines. Once payment had arrived on my PayPal account I shipped my laptop to the Philippines (which I had auctioned) and transferred the proceeds to my local bank account. PayPal has now reversed the payment because it came from a fraudulent source. Now PayPal wants me to balance my PayPal account which is obviously deep in the minus because of the reversed transaction (was at 0 before the transaction reversal).

My argument:

PayPal should not have cleared the funds onto my account before they actually were drawn to the relevant bank. No major fin. institute does it that way, which is the reason for the longer processing time. PayPal knows that most clients use PayPal to find out if funds have been transferred. Declaring transactions as completed without verifying their legitimacy and reserving the right to withdraw the funds at a later stage is deceptive and not usual business practice. As a result their business conditions are not enforceable.

PayPal is not in accordance with the electronic funds transfer act which requires that a fraud victim be provided with all available information about the fraudulent transaction within 10 days. I still do not know who, how, what bank, what kind of fraud etc. As a result PayPal has no claim on my funds (as described by the EFT act).

I qualify for the protection policy PayPal has. First PayPal claimed I did use non traceable delivery (express mail). When I proved them wrong, they changed strategy and told me that the reason I do not qualify is that the payment I received had no confirmed address. I could find neither of the conditions mentioned on their web site, although they might be there somewhere. Their argument: I checked the box "I agree".

The disputed sum is $537 (leftover of initial $560 transfer after they took 4% commission)

Miguel of Palm Beach Gardens, FL on April 5, 2003

Someone hacked in the Paypal account, stole over $5,000 dollars from my bank account, in several amounts like $1,000, $800 and $500. Thank God my bank was quick enough to let me know about those unauthorized transactions. Called Paypal, they told me to change my password and security questions but did not do anything else, the hacker was still able to access my account. Paypal treated me like I was a criminal when I am the victim here.
I do not know if that person or persons who hack into the account did any further damage yet, hopefully it did not but I am considering legal action against Paypal, because they violated my privacy and information.

Good luck, Miguel. You can't take legal action against PayPayl because their 25-page service agreement requires you to submit to binding arbitration in lieu of legal action.

Michelle of Oakdale, MN on Feb. 21, 2003

From the end of September 2002 until October 22, 2002, someone withdrew $2900 from my checking account through the PayPal service. As soon as I received my monthly checking statement my husband called PayPal to report the fraud. The money was taken in increments of $50, $100, $200, $500 over several days during that month. PayPal changed our password right away once we called them. Since then, no other unauthorized money was taken out of our checking account.
My husband has called PayPal every Monday since we found the fraud asking for the status. Each time they say they are checking into it and will let us know. After over four months, I feel I should be reimbursed for the $2900 minus my $50 liable. According to their website, they are suppose to resolve all fraud complaints within 45 days. Obviously this is not the case since I have yet to see any of the $2900.

Because I am out $2900, this has been an economic impact as it would be to anyone when you are talking about this kind of money. I can't understand why they don't know where the money was transferred to. Don't they keep records of their transactions?

Charles of Novato, CA on Jan. 27, 2003

I was defrauded in an Ebay transaction, $1130. I was notified shortly after I paid by paypal by another victim of this thief that I was also probably a victim. I notified paypal, ebay, the ifcc, my credit card, all to no avail. Paypal told me at first to wait, and that they had "special ways" of getting my money back. I never got it back, and all I get is a runaround from Paypal and ebay. They will not tell me if they used their "special ways" to get my money back, they may have it, but I never see it. It is also notable that after I notified Paypal and ebay, the same seller sold the same item again under his own name, and then under another name -- all while Paypal and ebay were playing with my comlaints. There must be a half dozen victims of this fraud at least.

I lost $1130 and will never do business with ebay or Paypal again, and suggest that others be warned. I wish I had read this column and paypalsucks.com prior to doing business with them. A hard lesson learned. I will, however, take them to Small Claims Court and see what happens.

Maureen of Mount Kisco, NY on Jan. 15, 2003

Yesterday I found my checking account cleaned out by numerous Paypal transactions totaling over $7000. I have not used my Paypal account since November, nor have I purchased anything over the internet. I spent all day trying to get the charges reversed by Paypal and Paypal has done this for now. Then I had to dispute the charges with my bank and to credit me for the overdraft charges $203. I only had a balance of around $9 in Paypal and luckily only $134 in my checking account. My husband's paycheck will be deposited tomorrow and I'm afraid all these charges will leave me with no money. I was unable to stop the direct deposit of the pay for this week, but have done so for next paycheck, and will probably have to cancel my checking accounts.

Richard of San Diego, CA on Oct. 27, 2002

I won an Ebay auction for a fancy camera, and immediately got two DIFFERENT e-mails from two diffrent people asking for payment. Each e-mail had these exact same words: "i am seller of camera on ebay. pay only by paypal". One e-mail had the total $494. The other e-mail had the total $497. Confused, I responded to BOTH e-mails that I would pay directly with Paypal, but asked WHICH was the amount. I recieved no answers at all for two days from either party. I wrote again. No answers.
Frustrated, I went back to Ebay and pressed the "Pay Now" with Paypal button. There was only one request for payment there. In the same broken english were the same words: "i am seller of camera on ebay" with the amount of $494. It seemed okay. So, I TRUSTED Ebay and Paypal and followed their directions. $494 was taken out of my charge card account. I waited two days and went back to the auction site which showed that "Buyer has Checked out". Again I sent lengthy e-mails to the two e-mail addresses provided, asking about the camera shipment. I got one brief response. "No payment received." But I thought I HAD paid!
I went back to Paypal's site and found ANOTHER request for payment in the EXACT same wording: "i am seller of camera on ebay" with the amount of $497! Above it was the now PAID item for $494, paid to an unverified unknown female party OVERSEAS. At this moment it struck me like a ton of bricks: Was I was a victim of a transaction interception? My funds had been given to a woman OUTSIDE of the auction, and outside of the country! I had to do the right thing. I went back to Ebay and found the real seller's ID (a man) and e-mailed him immediately, and paid him his funds of $497.
Within hours I got a brief e-mail with the words: "Camera has been shipped". I then wrote the man two more e-mails asking about the lady overseas who got the previously sent $494. No answer in four days. I was still suspicious. I contacted Paypal and Ebay, and requested they get my funds back for the fraudulent first payment, and that I was very suspicious about the two identical wordings and their timing. It was possible that those two parties were working together to scam me out of more funds. I suspected this because of the terse answers and the identical wordings in poor english. Ebay answered with a form letter, stating it was a Paypal issue. But I HAD pressed the Ebay button to pay, TRUSTING this was the way it was done. Two more e-mails were ignored.

I contacted Paypal and they said they would "investigate" for ten to thirty days! I called my bank and their comment was that it "looked very much like the parties were working together". SUMMARY: My trust in Ebay and Paypal is gone. They together allowed unverified parties to recieve $494 in funds taken from my charge card. I hold them mutually and legally responsible; but my funds are gone. This is not right.

Kal of San Diego, CA on Sept. 11, 2002

I have used PayPal three times, and two out of three I lost my money to sellers running an obvious scam (total of more than $500). Everytime, Paypal has washed its hands clean of all of my troubles, and quite frankly, they should not be allowed to facilitate online payments if the buyers have no recourse. It is impossible to get hold of their customer service, and when you do, they are rude, unprofessional, and not helpful at all.

In the latest interaction, I paid for a discontinued perfume from a vendor in Italy via PayPal. It was my sick mother's wish to have one last bottle of this perfume because it reminded her of the good old days when my father was still alive. I had wanted so badly to give my ailing mother what could be her last wish, it would have made her and me so happy. I never received the perfume and seller refused to refund or to reship (claims he has no more of the perfume I wanted). PayPal, of course, is the one that "facilitated" this theft and then stood by the sidelines smelling like a rotten sewer.