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offshore

How a Pay Pal account works.

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offshore

Had a couple of members here ask me to cross post a recent post of mine at RWGforum.

 

In response to a number of recent issues that members have had in attempting to recover funds when deals have turned sour, I felt it may be appropriate to qualify how Pay Pal accounts operate (as I understand it)

When you set up your account with Pay Pal, you are asked to link it to a bank account.

At that time you authorise Pay Pal to have access to this bank account.

If someone issues a complaint against you, Pay Pal will 1st freeze any funds in the Pay Pal account.

If there are no funds in it, they will attempt to remove funds from your bank account to cover the claim. Remember you have authorised them to have access to your bank account.

If both these accounts are empty, Pay Pal have no further ability to get funds, unless more are subsequently paid into either account.

 

The best chance anyone has of obtaining reimbursement in the case of a deal gone wrong, is to have funded the initial payment via a credit (or debit) card.

 

When you set up your Pay Pal account, you are also asked for CC details.

So each time you make a purchase using Pay Pal, you should ALWAYS fund the purchase from your CC.( you have this option at the time of making payment), you then have recourse to a claim via your CC company (This is one reason you pay the exhorbitant CC rates!)

 

I have set up my own accounts as follows-

My primary bank account ( A ) is where my funds are held. I then have a linked account ( B ) which I term my Pay Pal account. It also has a debit card attached to it. This account ( B ) is the one which Pay Pal have access to.

Then there is the actual Pay Pal account (at Pay Pal) which I will call ( C )

Now, as soon as I receive a payment into my Pay Pal account ( C ) I transfer it to my bank account ( B )This takes 2-3 days to process.

As soon as it shows in my account ( B ) I move all monies into my primary account (A), thus keeping my Pay Pal accounts (B & C ) at zero balances. (or close to)

When I need to make a payment, I move money from (A) to ( B )at the exact amount required to pay for the item (or maybe a $ or 2 more)

I then choose to fund the payment via my DEBIT CARD. (Not from the bank account) Although it is essentially the same thing, once the funding is through the Credit/Debit card, I have an avenue for recourse if the purchase goes tits up)

You must remember to always choose CC as your funding option for payments.

 

This is a strategy I have arrived at over some years of trading both on ebay and at other commercial levels.

Thus far (touch wood) I have not had to make a claim against my card, nor have I had a dispute opened against my Pay Pal account, however I do rest easier knowing that Pay Pal cannot access my money (after the 2-3 day transfer completes), and that if a buying deal goes sour I have some recourse via my CC company.

This, of course should not preclude anyone from lodging a Pay Pal clam as a matter initial complaint....(Of course this should only be done after all avenues to obtain satisfaction from the seller have been exhausted)

However should a satisfactory resolution not be able to be obtained, at least the CC company is there as a fall back option.

 

Hope this is clear for those who have been a little hazy as to how all this works, however ask any questions if anything isn't understood.

 

Of course we strongly disapprove of anyone launching a Pay Pal complaint until all other options and avenues are finished.

We have had a number of dealers and members who have had accounts closed or locked, due to someone with an itchy trigger finger.

 

Offshore

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greg_r

Great post and likely to be useful to a lot of folks. Thanks! Stickied.

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KeNnY

great post ! :Whistle: I have personally have started dispute only once, and that seller was some korean guy, with really broken english, and he sent me completely different item, and not even responded to my emails. SO I started dispute, and after 10 minutes, he sent me my requested refund :blush: I was buying reduction to one power supply for 20 USD, and he sent me an AC cable for 2 USD (I have even sent him 20 pictures, what I want, and he said he understood, so I think he did this on purpose. The items were COMPLETELY different).

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Avant

Last Monday I sold an item to someone (a Gen watch as it happens) and I am in the Uk and he is n the US. I said i would post it on the Wednesday (which I did) but because i could not send him the trackingf number until I got home Wednesday night AND he says because I did not send him an email TELLING him I was going to the Post Office (?) he has opened a Paypal Dispute AND he says we agreed a next day delivery. Which is bull*hit cos how am I going to get a next day delivery from the UK to the US???

I have sent the watch by the way and by airsure so I can track it. And it is on it's way to the US. Some people are a real pain to deal with!

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dingle
Last Monday I sold an item to someone (a Gen watch as it happens) and I am in the Uk and he is n the US. I said i would post it on the Wednesday (which I did) but because i could not send him the trackingf number until I got home Wednesday night AND he says because I did not send him an email TELLING him I was going to the Post Office (?) he has opened a Paypal Dispute AND he says we agreed a next day delivery. Which is bull*hit cos how am I going to get a next day delivery from the UK to the US???

I have sent the watch by the way and by airsure so I can track it. And it is on it's way to the US. Some people are a real pain to deal with!

 

pain in the ass for sure. is this someone a member here? PM one of the staff with the details and lets see if we can help.

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Member X
I then choose to fund the payment via my DEBIT CARD. (Not from the bank account) Although it is essentially the same thing, once the funding is through the Credit/Debit card, I have an avenue for recourse if the purchase goes tits up)

You must remember to always choose CC as your funding option for payments.

 

I do rest easier knowing that Pay Pal cannot access my money (after the 2-3 day transfer completes), and that if a buying deal goes sour I have some recourse via my CC company.

I'm not 100% on this but I'm not sure that debit cards in the UK qualify for the same level of protection as credit cards - it may be worth checking with your bank/card provider as if a debit card gives you no recourse if a purchase goes wrong, you will have to use a credit card to be protected...

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Luthier

I have option "Bank account". Can I change it to CC option, and if YES, can PP still access my bank account?

Thanks!

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Member X

Yes and Yes, I believe.

 

I have both - it defaults to bank account so you have to change it to CC every time.

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Luthier
Yes and Yes, I believe.

 

I have both - it defaults to bank account so you have to change it to CC every time.

So, then no point to change.

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Akira
Yes and Yes, I believe.

 

I have both - it defaults to bank account so you have to change it to CC every time.

So, then no point to change.

 

what do you mean with access?

even if there is a dispute filed against you, pp never access your bankaccount.

they just can take money of your pp account, which you have to load up.

pp does not have the legal right to take money from you without permisson...

how do i know?

i was fraud for more than $500 by a seller via ioffer 2 years ago, i filed a disput, paypal admited i was correct.

nothing happened because the guy didnt have any money on his pp account and legaly

there is no right transaction between his bank and pp.

same with cc company...

 

:picard2: hope thats what you wanted to know

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offshore

Well I don't know how it works in other countries, but certainly in Australia, PP have access to your bank account.

If you make a payment to someone, and your PP account has insufficient funds, they automatically debit your connected bank account, and if that has insufficient funds, they will attempt to claim the money from connected your CC!!

Go to your account and set up to make a payment to someone, in excess of what is in your PP account, and see what notifications you get!

And you have agreed to all this when you sign up!!

So don't kid yourself that they will not debit your account or CC if they are attempting to gain monies for a lodged complaint!

As said above, each member should check the fineprint for their specific area/country, however I am lead to believe this arrangement is pretty universal.

Would love to be proven wrong on this, however experience tells me this is the case.

Offshore

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Akira
Well I don't know how it works in other countries, but certainly in Australia, PP have access to your bank account.

If you make a payment to someone, and your PP account has insufficient funds, they automatically debit your connected bank account, and if that has insufficient funds, they will attempt to claim the money from connected your CC!!

Go to your account and set up to make a payment to someone, in excess of what is in your PP account, and see what notifications you get!

And you have agreed to all this when you sign up!!

So don't kid yourself that they will not debit your account or CC if they are attempting to gain monies for a lodged complaint!

As said above, each member should check the fineprint for their specific area/country, however I am lead to believe this arrangement is pretty universal.

Would love to be proven wrong on this, however experience tells me this is the case.

Offshore

 

please read what i just said

 

pp does not have the legal right to take money from you without permisson...

 

if you make a payment you have the options to choose whether to charge your bankaccount or CC

so you gave your permission for this transaction.

all i said was, no matter if you have cc or bankaccount option pp never access anything without permission.

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Avant
I'm not 100% on this but I'm not sure that debit cards in the UK qualify for the same level of protection as credit cards - it may be worth checking with your bank/card provider as if a debit card gives you no recourse if a purchase goes wrong, you will have to use a credit card to be protected...

 

 

If your Debit card shows the Visa or Mastercard Logo you are covered under the Credit Card Guarantee - IF the transaction is more than £100 IN TOTAL - that means if the goods were £95 and the postage for instance was £10 then IN TOTAL the transaction is £105 and you are covered. A simple Maestro Card is NOT covered - UNLESS the transaction was fraudulent, then you are covered no matter what.

 

In my experience Paypl are a law unto themselves and I have never had a good experience with them. It pains me to see the fees they charge. Surely they must have long overtook Google as to being the wealthiest online company?

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offshore
Well I don't know how it works in other countries, but certainly in Australia, PP have access to your bank account.

If you make a payment to someone, and your PP account has insufficient funds, they automatically debit your connected bank account, and if that has insufficient funds, they will attempt to claim the money from connected your CC!!

Go to your account and set up to make a payment to someone, in excess of what is in your PP account, and see what notifications you get!

And you have agreed to all this when you sign up!!

So don't kid yourself that they will not debit your account or CC if they are attempting to gain monies for a lodged complaint!

As said above, each member should check the fineprint for their specific area/country, however I am lead to believe this arrangement is pretty universal.

Would love to be proven wrong on this, however experience tells me this is the case.

Offshore

 

please read what i just said

 

pp does not have the legal right to take money from you without permisson...

 

if you make a payment you have the options to choose whether to charge your bankaccount or CC

so you gave your permission for this transaction.

all i said was, no matter if you have cc or bankaccount option pp never access anything without permission.

 

But my friend, I also said-(In caps and underlined)

And you have agreed to all this when you sign up!!

That is why they can, and do, have access to your account...ask me, I know, as it has happened to me! When I complained, my bank explained that I had given authority, just like a direct debit...when I signed up for Pay Pal!

Its all in the small print.

Offshore

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Doubled

PayPal and chargeback

Watch out if you use your credit or debit card to load money into your PayPal, or other online payment account as it is the loading of the money that is considered to be the card transaction.

If anything goes wrong with the loading of your account, you could use the chargeback rules. However, if the money that you load into your account is then subsequently used to buy goods and services, that transaction is not classed as a card transaction and is unlikely to be covered by chargeback.

If you want to ensure that chargeback will apply to a PayPal transaction, it's best to empty your PayPal account regularly so there is no credit balance. That way, when you make a purchase using PayPal the same amount will be debited from your bank account or credit card at the same moment you pay, making it easier for your bank or credit card provider to match the purchase with the debit.

This may help

 

("information is power and I don't want to die from the lack of shooting back")

 

 

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powderfreak

That's what I do :)

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billshields

In the United Kingdom, under section 75 of the Consumer Credit Act, credit card issuers (but not debit card ones) must refund any transaction between £100 and £30,000 if it is fraudulent, not delivered or not as ordered. HOWEVER, where a payment is made via Pay Pal (or any other intermediary, like Amazon Marketplace) the direct link between the card issuer and the merchant is broken. In this case, card issuers are not liable; they have paid PayPal, and as far as the law is concerned they have discharged their responsibility. What happens thereafter is between PayPal and the PayPal client. So in the UK, if you have to pay by PayPal, you cannot expect any help from your credit card issuer if things go wrong, even if PayPal directly debits the card. So if you are paying more than £100 and have the choice, pay by credit card, and preferably Visa, who have slightly better chargeback terms.

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wat44

Offshore is correct

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jeffw69

??? Interesting 1st post.

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offshore

In the United Kingdom, under section 75 of the Consumer Credit Act, credit card issuers (but not debit card ones) must refund any transaction between £100 and £30,000 if it is fraudulent, not delivered or not as ordered. HOWEVER, where a payment is made via Pay Pal (or any other intermediary, like Amazon Marketplace) the direct link between the card issuer and the merchant is broken. In this case, card issuers are not liable; they have paid PayPal, and as far as the law is concerned they have discharged their responsibility. What happens thereafter is between PayPal and the PayPal client. So in the UK, if you have to pay by PayPal, you cannot expect any help from your credit card issuer if things go wrong, even if PayPal directly debits the card. So if you are paying more than £100 and have the choice, pay by credit card, and preferably Visa, who have slightly better chargeback terms.

 

That may well be the case.

However, the point I made with regards to making a payment was-

When I need to make a payment, I move money from (A) to ( B )at the exact amount required to pay for the item (or maybe a $ or 2 more)

I then choose to fund the payment via my DEBIT CARD. (Not from the bank account) Although it is essentially the same thing, once the funding is through the Credit/Debit card, I have an avenue for recourse if the purchase goes tits up)

You must remember to always choose CC as your funding option for payments.

The important words here are "fund the payment via my debit card". Whenever possible the purchase is made as a credit purchase.( Whether it be above or below =GBP100)

Now if we are talking solely about Ebay, that is a different proposition. Where Ebay force me to use Pay Pal to make a payment, I still use my debit or credit card to fund the purchase by lodging the funds into the Pay Pal account via a card transaction. Now if that doesn't buy me a level of protection, which is what you are saying UK law prescribes, I am sure at least here, that a quick phone call to the banking ombudsman would have the CC supplier rethinking their options.

I believe this may be on a country by country basis, but its not something I would be concerned about whilst our banking ombudsman exists!

Offshore

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Wiz

It may also depend on local regulations.

 

For example, if my bank account is linked to my paypal account, and paypal tries to get some money back by withdrawing it from my bank account after someone started a dispute, and I haven't autorized that transaction in particular (even if I've allowed them to access my bank account), I can go to the police to have some paper delivered to me and then bring it to my bank, who then has the obligation to refund my money within 30 days.

 

 

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bufflarn

I've used paypal for a few years and as soon as you load your account up with money its really easy to use!

Edited by bufflarn

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balkso

GOT IT! Thanks!!

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Electron17

Paypal are the worst, absolutely hate using them. Much perfer Moneygram and Western Union.

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305vtec

Hello there. I'm glad you asked

http://www.rwg.bz/bo...php?showforum=6

Everything that says pinned next to it must get read. Also, for extra credit and for your own sake, read the links within the links. After that, you should be slightly up to speed :)

 

Also, reminding you, there's a search bar in the top right hand side. Use it like google, it picks up keywords. (Chances are, a question you have has already been asked)

 

Welcome aboard. Soon you'd have wished you never came here,

 

Jon

Hello and welcome to RWG, yes read lots and learn as much as you can.

Yeah, like you, need to ask a lot of questions and do your research b4 parting with the cash, - but enjoy the ride.

theres plenty to read, it will save you oooodles of cash in the long run!

 

welcome buddy!!

 

 

great info!!!! im on it

 

Hello there. I'm glad you asked

http://www.rwg.bz/bo...php?showforum=6

Everything that says pinned next to it must get read. Also, for extra credit and for your own sake, read the links within the links. After that, you should be slightly up to speed :)

 

Also, reminding you, there's a search bar in the top right hand side. Use it like google, it picks up keywords. (Chances are, a question you have has already been asked)

 

Welcome aboard. Soon you'd have wished you never came here,

 

Jon

Hello and welcome to RWG, yes read lots and learn as much as you can.

Yeah, like you, need to ask a lot of questions and do your research b4 parting with the cash, - but enjoy the ride.

theres plenty to read, it will save you oooodles of cash in the long run!

 

welcome buddy!!

 

 

great info!!!! im on it

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