PayPal Profiting from Fraud at the Expense of Merchants?

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Thread Title:
Fraud - Whose responsibility? (PayPal)
Thread Description:

JohnScott over at V7N is talking about an interesting clause in the PayPal agreement which essentially covers chargebacks, there are some particularly intriguing arguments in the thread but what it boils down to is you get charged $10 if someone lies to paypal - sounds a might iffy to me and John certainly thinks so:

How does PayPal suppose that we are to avoid it? PayPal is the one who knows the credit card number, the address associated with the credit card, the three digits on the back of the credit card, etc. By being a payment processor, I'd think they were be in the ideal position to assess the legitimacy of a credit card purchase.

They always come through as "un-authorized", so it's not a matter of the customer asking for a refund. It's a matter of the customer lying to PayPal and saying he didn't use his account to submit.

Buyer Complaint Process Requirements

In order for a transaction to be eligible for Buyer Complaint Process review:

* You must have used PayPal to pay for your purchase.
* You must not have received the item that you purchased.
* You must file a claim within 30 days of payment.
* Your purchase must be a tangible item. Services and intangible items, such as emailed recipes and e-books, are not covered.

According to that, a person who submits to BlueFind isn't even eligible to complain to PayPal about it. It isn't a tangible item.

And, if a dork wanted a refund they could just ask me to refund them and remove the listing. I've refunded payments on many occasions when the submitter wanted to be listed in a category that wasn't suitable for the site.

Apparently this is from his directory submissions where one charming individual keeps deciding that he didnt really make those submissions..


Validating Charges

I think this is the problem with using third party payment processors (e.g., PayPal) instead of a merchant account via VISA or MasterCard -- while real merchant accounts can be fairly stringent, at least you have some credit card data upon which to base your transactions.

Of course, validating the credit card data is an interesting endeavor. Even if you receive validation through your bank/merchant account, if it turns out that the charge was fraudulent, you get stuck with everything -- making the validation worth ... what?

Though this is a bit OT, I've been receiving notifications from for some time; most interesting.

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