Fraudulent PayPal transaction
 

Wondering if anyone here can shed some light on a new situation I encountered over the weekend.

We had a large ($945) fabric order come through, paid by an e-check through PayPal.

Yes, that is WAY more than our average order. So, of course, I start wondering about fraud. Obviously we are not going to ship anything until the e-check clears, so I have a couple of days to do the fraud screening. At first glance, though, all seems ok, because the ship-to address is a CONFIRMED address according to PayPal.

But yesterday I see that the e-check has cleared, and the funds are now available in my PayPal account. But... the customer calls, and says that she has spoken to PayPal and her bank, and the transaction is fraudulent, so we should not ship.

Ok. So we won't ship, and I immediately refunded her money.

Then I start to look more closely at the transaction.

The billing address for the order (which does not appear anywhere in the PayPal transaction detail) is different than the ship-to address. And... doing a reverse address lookup, the billing address does tie in to the customer's name. But the ship-to address ties to four people, none of whom have the same surname as the customer. However, both addresses have the same zipcode, so they're just across town from each other.

But - because I'm concerned for this customer, I decided to call her back and ask her to be sure that her bank reports the e-check to PayPal as being fraudulent, because otherwise PayPal won't bother to investigate. (This I was told by someone I spoke to at PayPal.)

Mind you, this is only three hours after the customer had called us, and now I get a Verizon message saying that the phone number has been changed or disconnected. (I used caller id lookup to return her call, so I know I didn't misdial.)

Puzzled.

But still worried about the customer, because it seems possible that someone hacked her PayPal account, and I wanted to warn her to cancel any credit cards that were associated with her PayPal account, and check all her other online accounts if she by chance used the same password for multiple accounts (banking, credit cards, Amazon, eBay). I figure we all should be looking out for one another, and I might be able to warn her/save her more trouble. So I sent an e-mail to her personal address as well as her PayPal address.

Funny thing is, I would have expected some sort of acknowledgement of the e-mail, maybe a tiny thank-you-for-the-suggestions. Not that I want her to be grateful, just forewarned.

But no communication at all.

This is so strange! I wonder if it really was fraudulent, or if she just had buyer's remorse and was to embarassed to ask us to cancel the order, or ... if there is some other scheme at work that I wasn't aware of?

If you send an e-check, and the funds are returned, do they go back into the actual bank account, or just your PayPal account? Could a fraudster send out funds via e-check, then ask for the funds to be returned, and then use the PayPal balance to buy the stuff you *really* want? Like maybe downloads (which probably aren't traceable)?

I have no way to know if the phone number belonged to the customer or to the fraudster. It was a mobile phone, and you can't do a reverse phone lookup on those.

Any ideas?

And how did that other address wind up as "confirmed" in PayPal?

I'm hoping someone here has some knowledge about these things.

Sounds really fishy to me! Another call to PayPal would be in order.

Yup, I agree. And ask for someone above the first or second person you get. Higher levels should get you more experienced/knowledgable personnel.

sounds fishy to be me too. and that makes me so damn mad that some low life thinks its ok to rip people off. Lazy jerks! I hope you get some resolution to this...keep us posted. Sorry this happended to you.

You need to talk to a supervisor at Paypal...This may be somekind of pfishing and getting into your info.
The whole thing raises a red flag.

Sound really fishy. Talk to paypal. Hope you are not out any $$$$. I would check your account for a while.

We aren't out anything, though I would have liked to make that sale!

Makes me glad that I don't sell electronics, or something else where there generally is a lot of fraud and theft.

We did get taken once on a large order ($350) and I learned a whole lot about fraud prevention and order screening after that. And I've become very protective about "shipping safely", insuring, and getting signature confirmation.

PayPal is so safe that I'm thinking perhaps buyer's remorse here....but I agree with some others, you should definitely follow up with the PayPal people and see if you can figure this out together.

I am hearing of this happening more and more . A co-worker had this happen with something as small as a stroller that was purchased over the internet with pay pal. Her situation too was a slight address diffrence .Money was refunfed but not to the correct party etc,etc,. As far as I know it is still a battle to get that straightened out . The transaction was all completed through paypal as well . Seems paypal is not as safe as it used to be .

Paypal is not safe! Someone hacked into my account (I was not phished) and was busy buying on ebay with money from my checking account. Somehow they were able to bypass any confirmation emails to me whenever they were in my account even though paypal said my email was the only one registered to my account. Frankly, I suspect that it was a paypal employee who was stealing from my account. The creep added four names and four addresses to my account without me ever knowing. I discovered the fraudulent charge when I was looking at my checking account balance on-line and reported it to paypal. They did next to nothing to help, it was my bank that took care of everything. They refunded my money immediately with no questions asked. Paypal's customer service was horrendous and I ended up canceling my account with them. Will never use it again!

I use pay pal here and one on goodwill.com I pray everything works out makes me scared to use mine again,but this is how I get my stuff mostly......ugh what to think....God bless jess

All I know is that my husband has three credit cards and ALL THREE have had to be replaced in the past TWO months. Favorite Fabrics, you should report this to PayPal and whether they do anything or not, at least you have done your part. On the third credit card, my husband asked who pays the debt. The credit union told him they turn the "bill" back to the vendor that accepted the card. So you would have been stuck with the bill and no material!! One bill was to a bakery in NYC for almost $500! Most financial institutions now have fraud units. PayPal should, as well. If not, you may want to reconsider doing business with them.

There's a lot of credit card fraud here in FL. The news says it is centered in Miami, but who knows? The only way we found out about the credit card fraud was that my nephew came to visit and asked if we wanted any computer help. My husband fessed up that he'd bought a program earlier in the day to help him "clean up" the computer and make it run faster. Nephew went through the roof! Scammers sell these and then can collect your inofrmation...passwords, anything you do online they can capture. Firewalls are there for a reason, but if you subvert them yourself, be prepared for a world of hurt. Luckily, they worked together to resolve the situation, but it took the next day to get with the credit union and we are still working to get our money back from the "speed up" program. You are right to be suspicious of large transactions. Or a transaction for under $10 followed by a large order. (The scammer wants to see if the card is good, then if you are dumb enough to bite on the bigger order.) Interesting thing: my nephew knew just from the name of the program that it was bogus. To us, it sounded fine, but he's been trained in this...thank God!

Sounds like another fraudulant scheme including the person that called you.

A friend has this idea for safely ordering thru the mail.
She opened up a free account at a different bank than her own. She got a debit card. She figures out how much she'll need for a purchase, puts that much money in that new bank account (always leaves $10.00) and uses THAT account to make purchase. They can not access more than she has in the account -- I believe there is a setting that won't let anyone charge more than what's in the account. That way, if she DOES have a fraud then they don't affect her living expenses.

And it doesn't just happen online. A friend was RVing across country with her DH. She used her CC to pay for parking in St. Lake City ---- within days she got a call from her bank. Seems someone had accessed that account and charged over $5000. in New York City!!! That was the ONLY time she'd used her card in months.... They had to abandon their dream of traveling around the US and had to come home to file fraud charges with the bank and the police department! So, be cautious no matter where you are or how you purchase.

I think your friend's idea is a good one. It puts really tight limits on the risk. Plus, if her debit card has the MasterCard/VISA logo on it, she is also protected by their terms of service, which is very customer-friendly.

But it is very, very, VERY unwise to use debit cards that are tied in to the bank account(s) that you are using for meeting your living expenses! Because if someone uses it, that money is GONE from your account for several days until the bank fixes things. Whereas, on a regular credit card, you aren't out any money and you can just dispute the charges.

Lately, I have considered buying those credit cards - like you see at the checkout counter - Visa and Mastercard - you pay for the card $4.95 - but you can get $ 100 or $ 200 card - I have been thinking this might be the way to avoid these kinds of messes - the card only has the set limit and it only works until all the money is used up - it seems like a safe bet to me. Has anyone else tried this?

I think the prepaid Mastercard is a good idea, but sometimes they don't work online. That can be frustrating. Think I'll go check out my Paypal account and make sure there are no new addresses added...

Do the pre-paid cards cost more than the face value? I think I bought one for my son at Christmas and was disappointed to find out that there was an extra fee. As to why they might not work online, it could be that there is no address verification available for that type of cards. Some merchants might have their websites set up to reject transactions that don't have an address match.

I have to wonder if you should have refunded her the money. I wonder if they are now in your account or if she ever actually paid you before you refunded her. Something is not right.

I like to believe that pay pal does all they can to keep us safe. I am saddened however to hear that you really did try to help someone from fraud--and they didn't even have the time to say thank you??? Don't remember the actual gospel, but goes something like, "where are the other 9"....how sad.

Very disheartening to hear this.. I am so glad you suspected something was amiss before the "fraud" had the chance to play out. There is way more to this story than I think you might ever know. Do let us know what Pay Pal has to say about this , if there is more follow -up. So many of us have gotten used to this convienience believing it was the safest way to transact on-line.
My guess is that if someone hacked the pay pal account they also hacked the e- mail address. But that whole phone issue .. and now its disconnected... HMMM thats the part that really makes all of it very very suspititous.
You may want to consider calling the Police Department for that Town/City.

I don't think there is any way that the fraudsters could gain access to my account, so I'm not worried about that. I did block the IP address from which the transaction was placed, so they will not be able to order using that particular computer again.

I did wonder whether I should wait for PayPal to just take the money back (assuming that the person did actually report to PayPal that there had been a fraudulent e-check)... but after checking to see that the shipping address did not seem to have any connection to the billing address, I would not have shipped the order anyway. So there was IMHO nothing to be gained by waiting to issue the refund.

BTW... whenever I have a REALLY valuable package - or a situation that makes me uneasy - I send the package via USPS restricted delivery, which means that only the person to whom the package is addressed can sign for and claim it. They also have to show government issued photo id to claim it. I believe this is the best way to insure safety for both buyer and seller. For the buyer: nobody else can lurk in their yard, and steal the package when it's delivered. For the seller: there's no chance that the buyer can take delivery and then claim that he/she did not receive it (or that a third party forged the buyer's name when signing for the package).

All of those cards have different terms, Some have fees charging you every month , once you activate the card , and there is a balance. I got a card as a gift , and low and behold a $4.95 fee is charged every month.

I've tried that route in the past... and I think this is so common that they are just not interested in hearing anything about it.

At this point, since no money has changed hands (I refunded the payment), they probably would view it as no crime having been committed.

sorry but i do have to disagree with you- i've been using my paypal account for almost 10 years---and have found it to be the safest way to conduct alot of business transactions- and i have dealt with customer service a couple times- they are very knowledgable and fix things right away when there is any issue- i had an auto place run my card 3 times for a transaction once---they said it didn't go through the first 2 times- when i checked my paypal accout there were in fact 3 payments---i called them right away and within minutes they had fixed it- cancelled 2 of the transactions and reimbersed my account- they have been more than helpful, friendly and acknowledable...my mom who is in her 70's has been using her paypal account for a number of years to pay all of her bills- she no longer deals with checks at all- pays everything though her paypal- and has also never had any kind of problem- or dissatisfaction with customer service- when she did have a problem is was something she did- and they still fixed it right away- it only took a few minutes on the phone.

Not too long ago I was ordering something on ebay and intended to pay for it with my PayPal account. I was told the account was frozen and I couldn't use that account, nor would they let me put anything on a personal charge or debit card. I was furious because I thought they were telling me my credit was bad. They suggested I call PayPal and find out more information.

Apparently, PayPal was acting on my behalf by freezing my account. They informed me of an attempt to use my account by someone in another country. They were alerted somehow. We went through some security questions, changed the password, etc and they reinstated my account. I was so relieved they had discovered the fraud attempt before it happened.

I have never had any trouble with paypal and i have used it for years

I have been using Pay Pal as a buyer and seller for about 15 years and never had a problem. Had one eBay sale that wasn't properly handled and Pay Pal fixed the issue and gave me my money back. I have less worry about Pay Pal handling my money than the guy at the gas station, Pay Pal will be there years from now, that guy could be gone tomorrow.

Super scary! I do have to say, that I will not order anything online if they do not take paypal. Paypal is the only way I pay for anything online, I have had them for years and never any problems that did not get cleared up quickly. It is sad that we have to deal with such people!

I was going to get the prepaid cc to use online. I did research then went to walmart. Cost me 3.00 to buy it, then found out it would cost 3.00 every month! Plus you have to activate the card!! To do that they want your dob and ss#!!! They said because of homeland security! No way do i give that out!!! Luckily they refunded my money i had on the card and cost of the card . Dont do it!!

I only use a credit card for any on-line purchase and it is not linked in any way to my bank accounts. I have found Pay-Pal to be excellent, so far, and our bank has very good terms for credit card users in case of fraudulent transactions. The situation you describe certainly does sound fishy.....trust you find some resolution/answers. Being constantly vigilant is so tiring....but these days essential.

This is another reason why I don't answer any emails "From" paypal or any one else saying to click on a link to update my account. Most if not all are scams but people do it all the time. I just got one from Bank of America saying there were too many unsuccessful attempts to login to my account so they put an extra procedure on my account for me to log in and to click the link. I had just been in my account and had no problems getting in. If I'm in doubt about any one I owe I'll type their address in the bar and go to their site and most of them have a message center to leave you a message if needed. If I were the real customer I'd let paypal know and cancel that account and create a new one. I like my bank; any time I log in it sends me an email and a text message to let me know a login has just been made. I can handle that; knowing is always good.

If you are truly concerned, call the police department in the town where woman lives. If it's Identity Theft, they should be interested in pursuing. If the woman just had buyer's remorse, she won't do it again.

" Apparently, PayPal was acting on my behalf by freezing my account. They informed me of an attempt to use my account by someone in another country. They were alerted somehow. We went through some security questions, changed the password, etc and they reinstated my account. I was so relieved they had discovered the fraud attempt before it happened. "

DH had a similar experience with Pay Pal but he couldn't get his account unfrozen so he discontinued using Pay Pal.

"sorry but i do have to disagree with you- i've been using my paypal account for almost 10 years---and have found it to be the safest way to conduct alot of business transactions- and i have dealt with customer service a couple times- they are very knowledgable and fix things right away"

Well, you are free to disagree with me, but I am just telling you about my experience. They stole almost a $1000 dollars from me and paypal was going to have my money tied up for months and treated me as if I was the thief. I called them many times and always with the same unhelpful results. They even denied that my not receiving email confirmations on the fraudulent transactions was possible. They claim it was my email settings or that it went to my spam folder. Neither was the problem and I received all the legitimate emails about my transactions from them immediately so somehow the thief was able to bypass the notifications. The only thing they did is remove the fraudulent names and addresses but even that took a couple of weeks. Thank goodness, for my bank. They did everything that paypal wouldn't and didn't treat me like I was the one at fault. If you have had good results from them, that is great. But I have heard many stories similar to mine. I hope you continue to have good results from them and never have to deal with what I did.

I'de be curious to know if pay pal will be charging you the % rate for the purchase since the money actually reached your account?

I got that message and I don't have a Bank of America account!! LOL!

A valid question!

When you issue a refund, PayPal does remove that % fee. The only thing they do not remove is the 30-cent fixed fee (which is on every transaction). My guess is that the fixed fee is similar to the "gateway" fee that a merchant incurs for all credit-card transactions. The gateway (commonly Authorize.net or Verisign) is the go-between that communicates between the merchant's account and the customer's account, and it checks to see if there are enough funds to cover the transaction and if so, charges the card .

Dear Favoritefabrics,

I hope this problem works out for you. Maybe fabric can be shipped a little later. I would like to suggest this might be why some businesses have a five day waiting period before returning money. They are using those cheap throwaway phones. They (who?) got money from one of my sons about a car part.

p.s. They didn't want the fabric just the money. If the fabric was shipped it was a bonus.

Several weeks ago, I received a call from a young man who identified himself and asked if I knew "this" person. I/We did not. He said he was purchasing a motor cycle from "this person's boyfriend" on eBay and gave our address as her address. Seems "this" lives in Pittsburgh and we live in a very small village in the center of the state. How did "this" select our address. We are both in our mid-70s, do not own a motorcycle and I doubt it was a girlfriend. I assured the caller that we had no knowledge of the transaction. I understand from the caller that the eBay fraud group as well as the state police are involved. -- Am wondering how this turned out.

I wish these fraudsters would spend as much time in legitimate activity as they do in ripping us off. Obviously, they are "smart" folks.