The Paypal Dispute and Claim Gotcha - Escalating Your Claim Gets It Dismissed - 6,645 Views, 10 Comments
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Here’s something that we just learned the hard way - from direct personal experience. If you file a dispute with Paypal - and then escalate it to a claim, as Paypal encourages you to do - there is only one situation in which Paypal won’t then immediately dismiss your claim, making it a win for a non-compliant, non-responsive, or just plain sleazy seller. When you file a dispute with Paypal, you can file it for one of several pre-designated reasons, which include that you ordered merchandise and it was never received, or that it was received damaged, or that it was received but was not as advertised. In each of these cases, you are asking for a refund of some or all of the money that you paid to the seller via Paypal, or for some other resolution with the seller. In our case, we had received merchandise that was so substantially not as advertised as to render it unusable. In fact, we didn’t even open the packaging. Instead we closed the box right back up, and called the vendor (a business). We called several times, and every time got voicemail (and left messages). There was never actually anybody there to answer the phone (the message on their voicemail always said to call back during normal business hours, even though our calls were always placed during normal business hours). We also sent several emails to their email address. After getting no response from them, we opened a dispute with Paypal. We selected the “we received the merchandise but it was not as advertised” category because, well, that’s what the problem was. The way this is supposed to work then is that Paypal sends a copy of your dispute to the other party, and they have a certain number of days in which to respond. In this case, they never responded, and Paypal sent us this message:
“Your dispute over the payment you sent to [ ] will automatically Because your seller has not yet responded, you should consider escalating We will assume that the dispute is resolved and will automatically close it So, we dutifully escalated the dispute to claim. Within an hour of escalating our dispute to “claim” status - at Paypal’s behest, mind you - we received this response:
“You have chosen to escalate your dispute to a PayPal claim. By ending Our investigation into your claim is complete. As stated in our User So what does this mean? It means that if you pay somebody with Paypal, they can ship you anything - they could even ship you a sack full of manure - and so long as you receive something from them, you have no recourse to get your money back. Take heed.
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close on Jan 13, 2009.
to a claim soon to ensure that your case remains eligible for PayPal
review. By escalating to a claim, you are asking PayPal to review the case
and decide the outcome.
unless you log in to the Resolution Center and escalate it before Jan 13,
2009. A closed dispute cannot be reopened or escalated to a PayPal claim.”
communication with the seller, you are asking PayPal to investigate the
case and decide the outcome. As part of our investigation, PayPal reviewed
any communication you may have had in the Resolution Center.
Agreement, the claims process only applies to the shipment of goods. It
does not apply to complaints about the attributes or quality of goods
received. Therefore, we are unable to reverse this transaction or issue a
refund. ”
The Paypal Dispute and Claim Gotcha - Escalating Your Claim Gets It Dismissed
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It’s a shame if anyone finds this surprising. For its entire existence, Paypal has made a consistent and mostly successful effort to provide services that replace those commonly provided by regulated financial services companies in ways that allow them to avoid being subject to those regulations. In the US and many other countries, we have come to expect protection from blatant mail-order scams from credit card issuers because they are required to provide such protection. When one chooses to work with a company like Paypal whose business model and competitive advantage are dependent on saving money by operating outside of the scope of consumer protection law, one should not expect that company to do costly things that they are not required by law to do. Eating the cost of a scam or even seriously investigating it to get a refund is not something they are required to do, and it is unremarkable that they choose not to spend that money.
Of course, as a Paypal customer you really already knew this because you’ve read all the service terms they’ve ever offered you (and as a lawyer you understood them all) and so you agreed that you’d take the risk of being scammed by anyone you do business with through Paypal. Welcome to Libertarian Paradise! :)
Comment by Bill Cole — 1/14/2009 @ 8:17 am
I’ve been there too.
Unfortunately, Paypal has no way of knowing who is correct. Before this policy, I know some sellers who have had buyers reverse the payment claiming the item was incorrect or damaged. There are scammers playing both sides of transactions and Paypal has no way to know who is lying. The proof of delivery (automatic if you print the shipping label through paypal) is the only verifiable evidence that Paypal has. Everything else is the unverifiable word of the buyer and the seller.
The sellers who have been ripped off by buyers were just as angry as you.
For the buyer, it is no different than buying a sealed box at a flea market or from a magazine ad - you have to understand the risk and decide if you can afford to lose - if not, pay more at a vendor where you can inspect the item first. I learned the hard way too.
Comment by B — 1/14/2009 @ 9:42 am
I’ve escalated claims on paypal previously (using the ‘not as described’ criteria) and had a successful outcome.
Could this just have been a bug in the PP Disp. Reso. system? A call may be in order, or if it was partially funded w/ a CC a charge dispute since PP is the causing the problem this time.
Comment by Consumer — 1/14/2009 @ 10:38 am
A call to whom? Paypal’s highhandedness is matched only by their ability to hide out when an attempt is made to reach them by telephone.
Customer service communication with them reveals their uncanny ability to identify outsourcing companies with no understanding of the actual meaning of English sentences.
For those instances when we have to use them, we find their rules confusing and arbitrary. They are the paradigm of what customer service in a bad economy SHOULD NOT be.
Comment by PBCliberal — 1/15/2009 @ 9:10 am
I have found the immediate call to Paypal and a request to talk to a supervisor or mananger is the most help in situations as above… or ask for someone in the dispute department and talk to their supervisor… be insistant and keep calling… You have to actually talk to someone who has authority to do something… Thats the best advice that I can offer… also if you can, make sure to return the merchandise… if you keep it, then you are liable for it. Then you can say that technically you never received it…lol.
Comment by Joe C — 1/16/2009 @ 1:10 pm
I paid the item I won on ebay immdeiately but seller never shipped the item, and the seller gave incorrect contact info to contact and I have escalated the paypall dispute based on item never received, the seller is non responding dont know what happens ? will i get back my money? I dont know how far the paypall wiill be doin justice to me.
Comment by Shaila — 1/20/2009 @ 8:35 am
I thought I’d add to your post - apparently, if you try to do a chargeback as well, Paypal will then freeze your account.
If you try to CLOSE your paypal account, you can only close it if your bank or credit card information is STILL in your profile. If you try to delete it and then close your account, they will freeze the account instead of letting you close it.
The number of ‘gotchas’ and sneaky underhanded little tricks they have is amazing, really.
The world needs to find other routes for selling, or go back to more stable ways. People like paypal are just absolute cheaters.
Comment by SickofGreed — 5/27/2009 @ 10:31 pm
I have not had the same experience with paypal as most of you had. I purchased a phone that was said to be “LIKE NEW NO SCRATCHES” and the phone came all beat up and with a bad ESN which before bidding I asked the seller if she can guarantee it had a good ESN and she responded yes. So I followed paypals rules, the seller still said NO refund, and I escalated it to a claim immediately after she said no. Then I called about 2 days later (paypal) and got the claim expedited.
No problems here. Just go into it with a nice attitude no matter what country the people are from on the other line, they’re only working for a paycheck, so just be nice, they dont own the company.
Attitude can take you far or hold you back depending on what kind of attitude you portray.
Comment by Gee — 6/1/2009 @ 4:54 pm
I’m a power seller on ebay and I have a person filing a claim against a item i sold with pictures showing the phone worked fine, even tested again before shipment, put in water proof plastic wrap, inside padded envelope, buyer never paid for ins through the us mail service i used, and never contacted me about item just did a dispute claim. Now paypal has taken the amount they disputed directly out of my checking account. Paypal needs to quit being shady and I’ll be disputing charges with my bank. I wish there was a alternative to paypal.
Comment by tedness — 6/8/2009 @ 2:57 am
Paypal gotcha !!
Similar thing happened to me after sending a dispute to chinese seller with no reply and after escalating the claim this is the reply i got. I will henceforth never use pay pal for payments for goods.
Hello,
You have chosen to escalate your dispute to a PayPal claim. By ending communication with the seller, you are asking PayPal to investigate the case and decide the outcome. As part of our investigation, PayPal reviewed any communication you may have had in the Resolution Center.
Our investigation into your claim is complete. As stated in our User
Agreement, the claims process only applies to the shipment of goods. It does not apply to complaints about the attributes or quality of goods received. Therefore, we are unable to reverse this transaction or issue a refund.
Comment by A Malapaka — 11/12/2009 @ 6:38 pm