Alert PayPal major security problem
Hi,
Remember my last post about Paypal?
It's even worse than I thought!
In a national newspaper some days ago I read an article about a major security leak in PayPal.
Since PayPal directly accepts credit cards without a prior deposit on a PayPal account, it seems that fraud has exploded. PayPal by NO MEANS can verify if a credit card transaction is valid. And if it goes wrong, than it's the seller who pays for the fraud!
So if you sell something and accept PayPal as payment system, you have no guarantee that you will get your money (be sure to check the PayPal user agreement and I doubt that you will stay longer than 1 microsecond on their site). You'll even have a large possibility that you'll be fined by PayPal itself because PayPal has opened a highway for fraudulent buyers.
Bye, bye PayPal, nor longer my Pal...
Eric
There are no more certainties, not even PayPal
Hi,
This time I can report you about an unexpected failure. A failure that now makes me really worry about e-biz.
The story:
Some months ago, early May 05, I sold an item (gift certificate) on Ebay with the PayPal option Buy Now. The same buyer had bought in the previous weeks other items on Ebay and had received good ratings.
So nothing to worry, cause PayPal stand for SECURE Payments (LoL). Ebay owns PayPal, which is one of the major internet payment intermediaries. As soon as received the 'secure' payment, I send the gift certificate to the buyer and start spending the money I had received.
Then suddenly more than 6 weeks later (remember these 6 weeks!) I received a nice message from PayPal that they blocked my account because the buyers credit card had been 'abused' (no idea what this means), no only they blocked my account, they also debited my account with the money of the sales.
What they (nor Ebay, nor Paypal) did NOT do is to refund their owns fees they made on my transaction!
I was at that time quite convinced that the SECURE PayPal payment would finally result in a refund on my PayPal account and an apology.
Silly me ...
PayPal took its time to investigate this 'minor' problem, and finally closed the case by charging me (YES ME) an additional $10 of cost THEY had to pay to the credit card company of the buyer of my Ebay Item.
So I lost:
1. The money of the item I sold (> $100)
2. The Ebay fee
3. The PayPal fee
4. $10 additional fee by PayPal
What I did wrong?
Nothing, well ONE THING, I USED THE SECURE PAYPAL system to sell an item on EBAY.
My tips for you:
1. DON'T EVER SELL AN ITEM ON EBAY WITH PAYPAL
2. Buy as much items as you can using your credit card on PayPal, then ask for a charge back. The items are yours, and no doubt PayPal will refund you!!
In the meantime I filled an buyers complaint at Ebay, but ... unfortunately you have to do this within 6 weeks or so ...
So this is my story, in case you've shares from PayPal or Ebay, sell them (but not on Ebay ...) cause this kind of fraud supporting activities won't last very long.
Eric
