PayPal refund scam maybe its not a Bank?!?

Where to start! Well normally a PayPal Refund Scam would not be that interesting but this one is perpetrated by PayPal. I can't be sure why since the investigation is still going on but there appears to be a problem with PayPal's core banking systems. I'm describing this in banking terms since this is my expertise and because PayPal is a Bank based in Luxembourg. Perhaps its not really a bank and just pretends to be one, either way what it is and the trust it should have is up to you and the regulators, The Commission de Surveillance du Secteur Financier (CSSF) to work out.

The Transaction

On the 12th of January (11th for the transaction) I made a purchase from PayPal Merchant ItalSpirits 4029357733 for ￡67.75? eventually a package arrive a week later than the special delivery I’d paid for. The goods inside was a box of broken glass which was not what I ordered. So I refused delivery. The package was returned to sender. I emailed ItalSpirits several times and they did not respond in order to request a refund. So I contacted Amex and raised a dispute. I then emailed ItalSpirits telling them I raised the dispute.

The Responses

Amex immediately rescinded the payment to carry out an investigation. So, my card was credited with ￡67.75 by Amex. In the interim ItalSpirits refunded the ￡67.75 through PayPal. On the 29th of Feb at 3.01am Amex let the original transaction go through since ItalSpirits has refunded me through PayPal. So that should be the end, but no PayPal are pursuing me for a debt of ￡67.75 !!

What I Think Happened

So, what I think happened is that the Amex repayment was not linked by PayPal to their refund as it would be in a bank with assured core banking systems and processes. I expect this is because PAYPAL are saving on infrastructure by closing the transaction history once it is refunded and have not linked the two transactions the original purchase and the refund. If PayPal want this edge case fixed let me know, I’m currently available for a contract.

The Incident

I got an email from PayPal saying my account was in debit. This was very strange since I don't have a PayPal Account, just the guest logout I advised that PayPal recently used. I forwarded the email to the PayPal Phishing team and was advised that PayPal had not contacted me and to ignore the email. I received several other emails from PayPal debit collection, eventually as I was becoming very concerned about the matter I phoned PayPal. First I was told to ignore the emails again, then I was finally put through to debit collection.

So, after 14 calls to PayPal and 4 calls to Amex. First, I have decided to pay PayPal because I want PayPal to try and explain to the auditors why they have this money. However, there are problems with me paying them money I don’t owe, the issue appears to be because I used a Guest Account my email was never verified. The second problem is that I can’t pay this money with the Credit Card associated with the transaction but must use a Debit Card. Okay, but since I don’t have a PayPal account I need to change the card on my non PayPal account. I’m supposed to do this by verifying my email address.

So, I don’t have a PayPal account, so I thought I’d solve this issue by setting up a on the email address, I do this, then I’m told that won’t work by PayPal. Okay I deleted the account.

I’m just off the line from PayPal and this gets worse and worse. They cannot verify my email, so they offered to transfer the debt to another account. The problem is I don’t use PayPal, so I don’t have one. The last option is to send a cheque to PayPal Europe in Dublin.

The Tragedy

So just to be left alone I sent a cheque to PayPal in Dublin as requested by PayPal Collections.

Unfortunately PayPal returned my cheque because they could not find an associated account !!

I emailed the following accounts a copy of the American Express letter confirming that they had reapplied the payment, since PayPal had refunded the card direct.

https://karlsmith.info/never-use-paypal-guest-payments/

It get's Worse

I was contact by a debt collection company to get PayPal their ￡67.75 back from me.

That I don’t owe them. For an account I don’t have.

I paid Westcot Credit Services because I want to stop being harassed over this money.

Thats the -￡67.75 I paid ItalSpirits with a box of broken glass refused delivery, the +￡67.75? Amex reversed based upon me raising a case, the +￡67.75 PayPal refunded me that ItalSpirits requested, the -￡67.75? Amex repaid the original transaction, PayPal perused me to repay the -￡67.75 which I paid on Monday the 14th of April.

So ItalSpirits has ￡67.75 they should not have that PayPal has no record of even though it was credited through the PayPal Payment Gateway. And Westcot has ￡67.75 I paid them today, to stop the harassment from PayPal.

So I’m now ￡67.75 out of pocket the original transaction.

So why call this a Scam, well because PayPal hounded me for a repayment that had already been made by Amex see the letter on the link above.

I actually feel quick sick from the stress since it has taken me 30 years to build a good credit rating and PayPal want to take that away from me for money I do not owe.

You be the judge of their behaviour and practices.

I still don’t have a PayPal account and never ever want one.

On the positive side I have been contacted by the PayPal complaints department since I have raised a complaint about this whole episode. But they did not follow though and that is why I'm sharing this on LinkedIn just in case anyone cares about PayPal.

I still have an open case with Amex which will be even more interesting now that PayPal has stolen ￡67.75 from me.

Still going on

I have reopened the Dispute now describing it as Fraud with Amex since PayPal has been sent the money and cannot find it (and perused me for money) so I have reported a fraudulent transaction.

Summary

1. Clearly their are serious issues with PayPal's record keeping.
2. Half the of my PayPal engagements were with people who told me it was a PayPal Scam
3. The other half of my PayPal engagements were with PayPal staff carrying out the Scam.
4. PayPal is supposed to be operating in a regulated environment and be acting like a bank. As point 1 indicates they don't keep proper records.
5. I wonder how many other people have experienced this?