Paypal dispute process?
Discussion
Trying to work out a bit of clarity on the Paypal dispute process and how a refund would be funded, in a slightly messy situation.
A couple of months ago or so, a friend approached me with a proposition - he trades in white goods, and an offer had come up that was quite lucrative. Manufacturer was selling an end of line model and he had a discount code to get it exceptionally cheap. He reckoned he could break them down and sell them on as spare parts, at about 70% mark up. The sums added up, but he didn't have the money for the initial outlay, and asked if I'd buy the goods. He'd then do all the donkey work and we'd split the profits, with me getting my initial 'investment' back and share of the profit before he took anything for himself. He reckoned he could sell most of the parts within a fortnight on ebay.
Now, I'm sure you can guess where I'm going with this - it's all gone tits up. For the first few weeks, he was updating me, telling me how much he'd sold, and was about to make a payment back to me, but no funds ever got transferred. Eventually started coming out with excuses about getting ill, not being able to work, and that he'd used the money to live off! He claimed he was due a large, unrelated payment that would clear a week ago, and that he'd be able to pay everything he owed then. So I gave him some breathing space. That day came and went, and since then he'd been in hiding. He's clearly got himself in some sort of pickle, and I don't know exactly what's gone on, whether he even bought the goods with the money I put up, or if the whole thing was a lie. I've searched ebay, and his selling account only seems to have one or two of the parts listed, either for sale or completed/sold listings.
Now, I'm probably a complete idiot for trusting him, but we've know each other for a long time, and he's always been totally straight and honest with me before. And I thought that the worst case would be I'd end up with a load of spare parts that would take longer than expected to sell, or not make quite as much as he expected.
Anyway, he said that the discount code only worked on his account, so I couldn't buy the goods directly. So I transferred the money to him via Paypal. This was done as a goods and services payment to his business Paypal account. I might be grasping at straws here, but I've started a dispute on Paypal (under the premise of goods not received). I'm wondering if I have any chance of getting my money back this way though? Are Paypal likely to uphold the dispute in my favour? Will it matter whether or not Paypal can recover the funds from him (highly unlikely I expect). Is there anything else I should be doing, short of starting a campaign with frozen sausages?
A couple of months ago or so, a friend approached me with a proposition - he trades in white goods, and an offer had come up that was quite lucrative. Manufacturer was selling an end of line model and he had a discount code to get it exceptionally cheap. He reckoned he could break them down and sell them on as spare parts, at about 70% mark up. The sums added up, but he didn't have the money for the initial outlay, and asked if I'd buy the goods. He'd then do all the donkey work and we'd split the profits, with me getting my initial 'investment' back and share of the profit before he took anything for himself. He reckoned he could sell most of the parts within a fortnight on ebay.
Now, I'm sure you can guess where I'm going with this - it's all gone tits up. For the first few weeks, he was updating me, telling me how much he'd sold, and was about to make a payment back to me, but no funds ever got transferred. Eventually started coming out with excuses about getting ill, not being able to work, and that he'd used the money to live off! He claimed he was due a large, unrelated payment that would clear a week ago, and that he'd be able to pay everything he owed then. So I gave him some breathing space. That day came and went, and since then he'd been in hiding. He's clearly got himself in some sort of pickle, and I don't know exactly what's gone on, whether he even bought the goods with the money I put up, or if the whole thing was a lie. I've searched ebay, and his selling account only seems to have one or two of the parts listed, either for sale or completed/sold listings.
Now, I'm probably a complete idiot for trusting him, but we've know each other for a long time, and he's always been totally straight and honest with me before. And I thought that the worst case would be I'd end up with a load of spare parts that would take longer than expected to sell, or not make quite as much as he expected.
Anyway, he said that the discount code only worked on his account, so I couldn't buy the goods directly. So I transferred the money to him via Paypal. This was done as a goods and services payment to his business Paypal account. I might be grasping at straws here, but I've started a dispute on Paypal (under the premise of goods not received). I'm wondering if I have any chance of getting my money back this way though? Are Paypal likely to uphold the dispute in my favour? Will it matter whether or not Paypal can recover the funds from him (highly unlikely I expect). Is there anything else I should be doing, short of starting a campaign with frozen sausages?
mjb1 said:
Several hundred, but less than a thousand. Not a limited company. I paid with credit card, although I didn't think that was relevant as the card payment was made to PayPal?
Can you get the credit card to dispute the transaction, as an unknown or unrecognised entry? They will then take it up with PayPal. If PayPal don't hear back from the 'seller' (your 'associate') within 28 days, they will usually act in your favour as the buyer and refund. If it's more than one payment, if might get tricky as they would see more entries as you knew what you were doing...Hope it gets sorted out
So a few things.
From what you say paypal will likely not side with you because paypal buyer protection specifically excludes any business transactions for purchase of business interests or services.
However its a bit of a muddy picture because your friend was buying goods on your behalf, so perhaps no different from a normal customer buying from a business esp as you are just doing this personally.
So it would be a case of wording your claim very carefully I think.
Secondly the credit card company are taking on the debt, so if lets use an example you buy a washing machine then the credit card company own the washing machine until its paid off. Now, ok just to be clear credit cards are unsecured so its not quite *ownership* but what they do own is the debt. So they have joint liability (up to £30k). So if the washing machine develops a fault after 2 years and the washing machine supplier say "sorry mate outside warranty" then your CC might be able to step in.
So in your case your CC has basically loaned you money to make a purchase which has not happened - although its more complex in your case and I think you might struggle with your CC in your case because of the nature of your claim. You will need to have paid via paypal *directly* using your CC btw. If you simply loaded money from your CC onto your PP account then you are not covered... just FYI.
Your last step is to start a small claims track. I would probably do that last because if he has not got the money to pay you back now the chances of getting anything via small claims is zero. Just more cost for you and a CCJ for him.
From what you say paypal will likely not side with you because paypal buyer protection specifically excludes any business transactions for purchase of business interests or services.
However its a bit of a muddy picture because your friend was buying goods on your behalf, so perhaps no different from a normal customer buying from a business esp as you are just doing this personally.
So it would be a case of wording your claim very carefully I think.
Secondly the credit card company are taking on the debt, so if lets use an example you buy a washing machine then the credit card company own the washing machine until its paid off. Now, ok just to be clear credit cards are unsecured so its not quite *ownership* but what they do own is the debt. So they have joint liability (up to £30k). So if the washing machine develops a fault after 2 years and the washing machine supplier say "sorry mate outside warranty" then your CC might be able to step in.
So in your case your CC has basically loaned you money to make a purchase which has not happened - although its more complex in your case and I think you might struggle with your CC in your case because of the nature of your claim. You will need to have paid via paypal *directly* using your CC btw. If you simply loaded money from your CC onto your PP account then you are not covered... just FYI.
Your last step is to start a small claims track. I would probably do that last because if he has not got the money to pay you back now the chances of getting anything via small claims is zero. Just more cost for you and a CCJ for him.
Thanks for the info. It was done in two transactions, and both as a Paypal 'send money for goods or services', funded directly from CC (not money preloaded onto my paypal account in a separate step). I didn't think I'd have any come back on the cc provider because it was done via paypal, so they've fulfilled their part by providing the funds to Paypal? And I don't think they'd proceed with a charge back on that basis?
If Paypal did decide to refund, where would the money come from? Doubt they can get it back from the business account that I transferred it to, or that they could take it from his bank account (if he has left his account linked and dd in place), even if he had sufficient funds in either account.
As you say, no point trying small claims really, as he (apparently) has no money. I'm just hoping that the impending Paypal case will wake him up to the situation a bit.
If Paypal did decide to refund, where would the money come from? Doubt they can get it back from the business account that I transferred it to, or that they could take it from his bank account (if he has left his account linked and dd in place), even if he had sufficient funds in either account.
As you say, no point trying small claims really, as he (apparently) has no money. I'm just hoping that the impending Paypal case will wake him up to the situation a bit.
mjb1 said:
If Paypal did decide to refund, where would the money come from?
If Paypal issue a refund when there is no money in the account on the other side of the transaction, it'll come from Paypal themselves. The account will be in negative balance and Paypal may or may not chase him to pay it back.mjb1 said:
If Paypal did decide to refund, where would the money come from? Doubt they can get it back from the business account that I transferred it to, or that they could take it from his bank account (if he has left his account linked and dd in place), even if he had sufficient funds in either account.
When Paypal do a chargeback/refund they debit the others persons paypal account. If there aren’t enough funds in the account it goes into negative balance. Paypal will then seek to recover the funds from the account owner at some point in the future (it’s a debt owing like any other). I would be honest with both the CC company and paypal otherwise this could have repercussions beyond the loss of the money; in particular the CC company who will thoroughly investigate that size of chargeback, so the previous posters suggestion that you claim that this was an unauthorised transaction (it wasn’t) is likely to lead to some searching questions. I appreciate your wish to recover the money, but ultimately I doubt that either paypal or the CC company are likely to reimburse for a failed business venture. I started the PayPal dispute process a couple of days ago. I believe he is supposed to have chance to respond and/or then I can escalate it for PayPal to mediate and resolve themselves.
I've no intention of trying to claim it back from cc as an unauthorised transaction - it wasn't and that would clearly be a fraudulent claim. I'm only going the PayPal claim route, which presumably won't ever involve the cc company? Or could PayPal try and push it onto them to try and reverse the transaction?
I've no intention of trying to claim it back from cc as an unauthorised transaction - it wasn't and that would clearly be a fraudulent claim. I'm only going the PayPal claim route, which presumably won't ever involve the cc company? Or could PayPal try and push it onto them to try and reverse the transaction?
I've now been refunded by Paypal, thank goodness. So called friend has totally ignored me, and I got fed up with chasing him. I escalated Paypal dispute to a claim, stated my case (giving as little detail as possible). He then had 10 days to submit a response before Paypal arbitrate. Perhaps luckily for me, he never responded at all, so as soon as the 10 days were up they immediately sided in my favour. I'm not sure what would've happened had he responded and muddied the water on the claim. I guess Paypal are out of pocket at this point, but presume it sits on his account as a debt until he repays them.
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