Paypal unauthorized transaction scheme to revert payment

[alexandre_fs]

Some days ago i had my first experience as a seller in Paypal. I was selling an intangible item - bitcoins, thru a platform called Localbitcoins.com

The buyer agreed a price with me, and sent me the money in paypal. When i checked the money was in my account, i sent the bitcoins to that user and left my computer.

When i got back some hours later, i saw some e-mails from Paypal with some dispute raised by the buyer. I thought it was strange since i was pretty sure everything went OK.

So they buyer started a dispute of item not received. 6 minutes later, he closed that dispute saying it was settled. 5 minutes later to that, the buyer claimed "unauthorized transaction" on his account, and Paypal hold my money while the investigation was under way.

1 hour and 11 minutes later, Paypal sends me an e-mail saying that the case was solved and even stated: "Thanks for your quick response about the following transaction:" although i was never contacted. The case was closed in favour of the buyer and money was reverted back to the buyer.

So basically after all this, my money was taken from my Paypal account and given back to the buyer. And also i was left without my bitcoins that i had previously sent to him. After this I saw that the buyer did this to other users on localbitcoins.com, because 2 or 3 persons were leaving feedback stating the same experience i had.

So basically, this was my first and most probably last experience as a seller with Paypal. It really seems unprofessional to settle a case like this without even consulting me. I totally lost my confidence in this system, even though i'm using it for years as a buyer...

after google search (search terms: "paypal unauthorized payment and reverse payment scam") i found that i'm not the only one that has been thru this... and paypal seems to always decide in favour of the buyer...  i even found stories like mine with 6 years already and still they are not protecting sellers against this???

[snowshoe]

Unfortunately items of this nature are "not" covered for seller protection.   Scammers rely on the fact that most PayPal members don't take the time to read thru the User Agreement and they know they have nothing to loose.    Sad to say, it's way to easy to get scammed when dealing with intangible items or services.   You are correct in your assumption that you are not the only person who has run into this issue.  

Although PayPal clearly states their policies,  no one takes these policies to heart except the scammers.   The solution would be simply not to permit sales of intangible items or services but, no one here believes that is going to happen anytime soon.    (The percentage of folks who get scammed is quite a bit smaller verses the number of people who don't. so we don't believe there will be any changes down the road.)

[alexandre_fs]

i can understand that it's difficult to track down these scammers.

but wouldn't it be more reasonable that a proper investigation would be conducted, and both the seller and buyer be consulted to present their case?

why is the buyer automatically given back the money? even if the buyer is saying the truth that somebody else accessed their account or their credit card, (the so scalled "unauthorized transaction" claim) why is the seller the one who looses the money ?

even if the buyer has that insurance protection, and the seller has not, that doesn't justify the fact that is the seller that has to put his money forward in case of a problem that was only of the buyer. if paypal wants to insure the buyer, than paypal should put their own money forward....

[snowshoe]

No arguments there.