New Paypal Scam to watch for

[avionsunantiques]

After selling on Ebay for many years, I thought I'd experienced every buyer scam via Paypal that existed.

I was wrong, there is a new one, which I was just hit with.

It was used on my two items 290560893673 (US $2850) and 380336207148 (US$1525).

The buyer was in China.

The buyer wins the auction as usual.  The buyer then asks for a lower combined shipping total.   As the items are high value, and fragile porcelain vases, I think its safest to ship individually, but I agree to charge a lower combined mail shipping price.  ie, I pay about $150 of the shipping cost myself.

I send the buyer two individual invocies.   The buyer pays with one Paypal Payment.

The buyer asks me to declare for just $10, and states that the package will not be accepted if it is declared for more (does this via Ebay's message system).

I reply that the insured value can not exceed the declared value.

I think about it for a while, then decide there is no way I can ship $4375 worth of vases with just $10 each in insurance.

The items were sent by Canadapost Express post to be sure they will be tracked, and signed for on delivery.  The maximum available insurance per package is $1000, so I insure each package for that amount.

The buyer asks me to ship to an address which is a bit different than the address provided by Paypal.

I contact the buyer and tell her that I must ship to the address provided by Paypal - she accepts this, saying that the address difference is just home vs work.

I ship to the address provided by Paypal, by online trackable mail, with a signature on receipt - as per Paypal's seller protection rules.  I figure I'm covered by paypal - I've followed their rules to the letter.

The two packages go out on May 17.

On May 27, I get an item not received complaint from Paypal.

At first, I assume the buyer is just wondering where there packages are.   So I track the packages, and find the following (last 3 entries).

[avionsunantiques]

Continued as Ebay's message sytem froze!

2011/05/2711:00264000,China Item refused by recipient. Item being returned to sender

2011/05/2509:23International item released from Customs to Foreign Postal Administration

2011/05/2420:14 Item has been sent to customs in the destination country

Same message for each of the two packages.

Apparently, the buyer didn't like the idea of having to pay whatever duty was required at their end, or alternatively, the buyer is sending back empty boxes.

In either case, I've done everything by the book - followed every Paypal rule, and refused to under state the delcared value.

I could understand if the buyer accepted the packages, and then filed a bogus item not as described complaint - thats a different buyer scam via Paypal.

However this one is new because the item was delivered by the post office to the address provided by Paypal, with tracking and a signature.  The buyer then refused to accept delivery.

And then Paypal filed an item not recieved against me and put my paypal account in a negative position of minus C$4497.25!

If I'm lucky, and my items are coming back on one piece to me, I will get another $400 return mail bill (or whatever the return mail cost is from China) upon delivery.  Plus I'll be out the $400 ish it cost me to mail the items as per Paypals rules in the first place.   Of course, if I'm getting empty boxes back, then I'm out the items and I will have had to pay the return shipping too!

ps, on the Paypal payment page, it states the buyer is Non-U.S. - Verified!.

So there it is, you ship following all of paypal's rules to a paypal verified buyer.  The post office delivers to the buyer - ie, you should be covered by paypal's seller protection policy - and you still get an item not recieved complaint via Paypal, and have the payment amount removed from your account by Paypal!

Now that is a new Paypal Scam!

[pjcdn2005]

I'm really sorry that you are going through all of this. I hope that you get your items back in the shape that they were sent out.

I've heard of this happening fairly often. A buyer doesn't want to pay the duty/taxes owed so they refuse the package. In a situation like that I doubt that they have any access to the packages before they got sent back although they may do things differently in China.

You should phone Paypal. There is a thread about somewhat similar situations on the Canada Paypal forum and the rep said that each situation is different and that there is no automatic win for the buyer.

You really should have a disclaimer in your listings that buyers are responsible for all duties taxes etc. Ebay has a suggested way of writing it..perhaps someone else has a link. If the disclaimer is posted in your listing in the top half and someone leaves you negative feedback and mentions customs fees, ebay will remove the neg.

I'm curious as to why you sent the items after the buyer said they would not be accepted if they were valued for more than $10.  That was defininately a red flag.  Did they know that you were going to value them for more?

[avionsunantiques]

Thanks for your thoughts. I will phone Paypal when they open, and see what they have to say.

My position right now is I should be protected by Paypal seller protection - given that the Paypal stated the buyer was non-us verified, and I shipped following Paypal's buyer protection rules - tracked online, signature on delivery.

I also suspect that the buyer should not be able to open a package and remove the contents and then refuse delivery! And to do it with two different packages would be even more unlikely.   Clearly I don't know how things are done in China, but thats how it would be in Canada, and its likely the same everywhere.

The buyer had already sent payment, and then followed it by a request that I declare for just $10 or they would not accept delivery.   I've had Chinese buyers make a similar request in the past - ie declare a high value item for $10 or they won't accept delivery.   In each case its been a bluff, and they have accepted delivery.

I know for a fact that its not a matter of China refusing to deliver any item delcared for more than $10 - its purly the decision of the buyer.

Afterall, they've paid for the item, its been delivered to them, all they have to is pay the customs duty their Country requires.  If its a sincere buyer, they will pay the customs duty - they might not like it, but they know this is likely when they bid.

Yes its a red flag when the buyer asks you to understate the declared value, but it happens so often, that I don't think its a sign of impending theft.   Moreover, as I'd followed Paypal's seller protection policy to the letter, I figured I was protected.

Lastly, can you imagine bidding for something you wanted on ebay.  Winning the auction.  Then paying for it.  Then asking the seller to understate the declared value to lower your customs duties by stating that you would refuse delivery if the multi thousand dollar item was not declared for $10!

It just doesn't make sense that the buyer would actually refuse delivery!

My position is that the item was delivered - and so an item not delivered claim can not be successful.

If the buyer chose to refuse delivery, that is an act of buyer remorse - and not subject to any kind of buyer protection. What the buyer chooses to do with an item after it has been paid for and delivered, is up to the buyer.   My responsibility ends at safe delivery.

If Paypal chooses to interfer in this transaction, and enforce a clearly false item not recieved complaint, then I'll be writing to the minister of finanace again (I'm not sure if Paypal removed from this forum the content of my prior paypal complaint to the minister of finance, and his reply).

Moreover I've been dieing to file a small claims law suit agianst Paypal - I've been close in the past, but Paypal has come around in the end, or alternatively the amount was not worth the hassel.  In this case, the amount is $4000 plus, so I'm very willing to small claims Paypal for that amount.   I'd love to get them into court, and get a written decision on the record against them.

I live in Court, so I'm just the person to do it.

All Paypal's bogus claims that law suits can only be filed in NovaScotia won't work against me - I know those statements are of no legal force or effect.   My law suit will be filed at the Victoria BC court house, pursuant to BC law.

One of the hardest things I already achieved when I was getting ready to file last time - and that is the legal addres of Paypal Canada - it looks like a one room (or one file) location in the middle of knowwhere in Nova Scotia! (apparently a closely guarded Paypal secret!).

On a different matter, I know about the business of including a statement about buyers having to pay customs duty, and if you put that statement in your listing, ebay will remove any negative feedback that states the buyer had to pay customs duty.   The fact is however, the buyer who is upset at having to pay customs duty, never states that in their negative feedback - they say something completely false - like the buyer stole his money and didnt' ship the item.   Or the buyer sent a differnet item, or the item was broken, or fake etc.   Those kind of crooked buyers who leave false negative feedback, never actaully give accurate negative feedback - because accurate feedback wouldn't be negative!   SO at the end of the day, all that statement amounts to, is extra text that gets in the way of viewers finding my pictures (as I don't pay for ebay to list my pictures at the top of the listing, I add them at the end of my text for free using http).

[zarzuella]

I'm sorry that this is happening to you;  however, there were warning flags which you decided to ignore. There is no scam here, just a buyer who lacks ethics and refuses to pay duty.

I don't believe you have a case; there is no traceable signature on receipt because the packages were refused, not delivered.  I do not know if Paypal will make an allowance for the shipping (they should), but I doubt it. In fairness, the buyer should have shipping costs both ways deducted from the refund.

I do hope you get the items back safely.

Ann

[pierrelebel]

"as I'd followed Paypal's seller protection policy to the letter, I figured I was protected."  

You have followed every step required by PayPal to be eligible to the Seller Protection Program.   However, the reality is that there is no online signature showing delivery.  The policy requires a signature available online at time of delivery.  You requested it BUT did not obtain it.  

The buyer was wrong not to accept the parcel upon presentation (and request for payment of taxes) but this is not something covered by PayPal.  

If the parcel is lost, Canada Post insurance would cover the loss up to the insured value upon presentation of the claim. Evidence of value may be required.  

If the items are in fact returned to you, you will be out the outgoing shipping costs and possibly the returning shipping cost (generally the same amount).  However, I have personally seen many instances where the return shipping is not charged by Canada Post.  

If the items are not returned to you (empty boxes), then you are looking at a case of postal fraud.  

I suggest you do not reach a conclusion until the parcels have in fact been returned to you. 

[avionsunantiques]

Thank you for your thoughts.

In my view, this is a scam.

At best its a scam that causes my auctions to be hijacked, and have my items sent around the world and back at my expense.

Alternatively its a scam used by someone who has buyer remorse after paying for the item, and after the item is shipped - which allows the buyer to get his money back, and have the seller pay shipping both ways.

At worst its a scam in which the buyer gets to keep the items and return empty boxes to the seller, and make the seller pay for returned shipping.

All three are scams.

The reason I'm discussing it here, is its a scam that allows the buyer to circumvent the seller-protection features in Paypal.ie, if you follow Paypal's seller protection policy to the letter - you are not protected from this item not received paypal complaint.

I have just finished talking to Paypal, and Paypal has confirmed that the buyer will get his full payment returned to him, including the $300-400 I paid on the buyer's behalf to ship the package, and the expected $300-400 I will be charged (if) the package is returned to me.

Ps, the canadapost form clearly asks if the item is not delivered, should it be sent back to the sender at the senders expense, or just abandoned.   Naturally, I always tick the send it back box.    Of course, if I ever misaddressed the package, I would like it back.   I was not expecting this kind of scam.   I didn't know about this scam until now.

[zarzuella]

All three are scams

Not by any dictionary definition I have read.  A scam is intended to provide a benefit the perpetrator, usually by defrauding a naive 'mark' out of his money.  Your buyer does not benefit financially.

This is, unfortunately, a cost of doing business. It could have happened exactly the same way with any online payment method you accepted, including an escrow service.  Next time, require Western Union or bank transfer?

Still, I don't blame you for being angry.

[pjcdn2005]

Yes its a red flag when the buyer asks you to understate the declared value, but it happens so often, that I don't think its a sign of impending theft.

The red flag wasn't that they asked you to understate the value. The red flag was that they TOLD you to do it or else they wouldn't accept delivery. That was a cue to say that yes, you will do it or no, you won't do it but that you can refund their money.

I can understand why paypal would refund the purchase in this situation otherwise the seller would have both the merchandise (if all goes well) and the money. But I do think that in a situation like this they should consider not refunding the buyer's shipping fees.

I've seen comments in feedback about duty fees so I do think that statement would be useful. Also, some buyers may not realize that they may have to pay duty or tax especially if they have never purchased from a seller in another country.

[femmefan1946]

Apparently, the buyer didn't like the idea of having to pay whatever duty was required at their end, or alternatively, the buyer is sending back empty boxes.

It is my understanding that a Customs Office will not turn a shipment over to the addressee until the duty (and sales taxes) are paid. So you are unlikely to get an empty box.

Unless the customs officer is the buyer's cousin, which is another, entirely different scam.

The scenarios you picture later are not, as pointed out, scams or criminal actions. Nasty, dumb and unprincipled, but since the buyer is not enriched by them they cannot be called scams.

Here is the eBay boilerplate about customs. Whether or not it is useful against bad feedback, it is a good explanation to buyers who have not imported before.

Import duties, taxes and charges are not included in the item price or shipping charges. These charges are the buyer's responsibility. Please check with your country's customs office to determine what these additional costs will be prior to bidding/buying.

As a seller of high value products, your US customers may be shocked from time to time that they are required to pay duty on their Canadian purchases.

[avionsunantiques]

FYI, the buyer has benefited financially by not having to pay the customs duty and or taxes charged by his Country.   He has achived this finanial benefit at my direct financial expense.  That makes it a scam.

Listening to you people trying to explain why a clear scam is not really a scam, is like listening to a lawyer try to argue that black is white.   Your replies are the sort I'd expect from Ebay or Paypal as they they to convince the world that their web sites are not used for any crooked activity!

ps, Even Buyer Remorse is a scam - or bidding and winning an auction that you don't pay for is a scam - they all allow the perpertrator to forgo a financial outlay at the direct expense of the victim.

ps 2, if right now, I bought every one of your ebay listings, then paid via paypal, and refused delivery of each one - filing a paypal item not received complaint in each case -  and each item was returned by the post office - causing you to get your item back after paying the return shipping - causing you to be out the cost of 2 way shipping - and giving you enough paypal opened cases to make sure you get the lowest possible ebay seller rating.   Then I think you might have a better understanding of the word Scam!   Or would you still believe you'd not been scamed?   Because from where I sit, I'd definately feel like I'd scamed you!   I would have caused you significant economic loss (financail, the time), and I would have derived some sick twisted pleasure at having "hacked" you Ebay business - all at your expense.

To add insult to Injury, Paypal would back me 100%!

I like to think that Ebay would recognize such scam, and block me from doing in to you every single day!

There was one other question, which is a good one - does the Chinese post office (delivering Canadapost Xpresspost EMS items) allow the recipient to open the package before signing for it.    We definately can't do that in Canada.   If I get anything back in the mail, I'll report what I see - I clear tape every exteral inch of my packages so it will be easy to see if the package has been opened.

[cadillactech2000]

"Listening to you people trying to explain why a clear scam is not really a scam, is like listening to a lawyer try to argue that black is white.   Your replies are the sort I'd expect from Ebay or Paypal as they they to convince the world that their web sites are not used for any crooked activity!" 

By definition, a scam would benefit the perpetrator financially, so that at the end of the day they would be in a better position than when they started. You obviously have a bad buyer on your hands, but this is not a scam because the buyer is in the same position financially as before the transaction took place. 

These same posters have helped me many times with problems that I've had with Ebay or Paypal and it appears to me that if you're insulted by their replies, that the uncommon denominator is you. I suggest that you take this opportunity to apologize to these kind people that have helped so many of us out in the past. This forum is a great resource for many of us that use it. Please do not be the "bad apple".

[avionsunantiques]

Let me repeat myself since you don't seem to understand.

The buyer chose not to pay X$ in Chinese import taxes - ie he saved himself X$.

He did so by causing me a financial loss of Y$

Do you understand this yet?   Scamer gains X$ by causing victim loss of Y$

And yes, its a scam!

ps, and here's an additional scam that I've just discovered.

If a buyer opens a case against a seller in Paypal, and the result is that the buyer's payment is refunded - either willingly by the seller, or by Paypal - then get this!   Ebay does not automatically refund you the Ebay selling fees they charged.  The seller has to specifically request a refund of the selling fees from Ebay.

[pierrelebel]

"Ebay does not automatically refund you the Ebay selling fees they charged.  The seller has to specifically request a refund of the selling fees from Ebay."

That is correct.  The rules have been the same since the beginning of times. You need to ask eBay to cancel the transaction. Check carefully how the process works.

"Scamer gains X$"

In fact, your buyer has NOT gained anything.  He does not have the product he purchased but got his original money back.  He is right back where he was. No gain, no loss.

You, on the other hand, have specific losses concerning the outgoing shipping and possibly the return shipping.

A bad buyer?  Yes, most definitely.

A scammer?  Definitely not since there is no gain to the buyer; none.

[avionsunantiques]

Are you seriously saying that if a buyer bought and paid for all the items you have listed on ebay, then refused delivery, and got a full refund from Paypal - that you would not have been scamed?

FYI, here is the definition of Scam (not the absence of any required financial gain by the perpetrator)

Noun scam - a fraudulent business scheme, to deprive somebody of something by deceit.

The subject buyer fraudulently agreed to purchase from me, and to reinburse me to ship the subject item to his address.  That makes it a scam.

I must say, I can't believe how hard it is for you people to acknowledge the existance of a scam!

Now back to the scam itself - I've now reported this matter to Paypal - and been advised that I will not be allowed to keep the payment and my items (should they be returned) - thats fine with me - I'm not trying to profit here - I just don't want to be defrauded out of $700-800 in two way shipping (best case senario).

If this were an inperson auction house - take one we all know, like Sotheby's for example, they would deal with this by reselling the goods (if they are returned), then deducting all associated expenses from the proceeds, and sending whatever is left over, back to the buyer.

The simple fact is that when you purchase from an auction house - be it Ebay or Sotheby's or any other, you enter into a contract whereby you agree to purchase for the amount you have bid, and to reinburse any delivery charges paid by the auction hosue on your behalf.  If you fail to do so, you are in breach of contract.   The auction house then has the right to hold you legally responsible for any losses your breach of contact causes.

Here on Ebay, we have the same contract between buyer and seller.   The trouble is we are essentially forced to use Paypal, and Paypal has its own contract between itself, and the credit card companies it receives payments from.

Rather than enforce or apply the contract between buyer and seller (the one Ebay metions when it tells buyers that a bid is a contractual legal agreement to purchase) - Paypal focuses on protecting itself from a Credit card chargeback or dispute filed against it by the buyer.   For those reasons, Paypal would rather ignore the buyer/seller contract, and interfere with the contract, when it has no right to do so.

The buyer has breached the legal contract between the buyer and seller.  Paypal has no legal right to interfere in this matter, and refund the buyer in full.

[art-in-the-making]

The transaction doesn't appear to make sense based on the information given. In all likelihood, more information would be needed to say scam or not.

The sense that you would say it's not a scam is - why would you spend all that time and run some risk of losing your money - all for nothing? Not a scam and doesn't make sense.

But thinking outside the box, I could suggest several scenarios in which it could have been a scam all along - just not typical.

The whole reason why it sounds fishy is because otherwise who would spend their time putzing around with some lengthy headache, all for nothing?

[zarzuella]

This buyer apparently made it plain from the outset that he/she would not pay duties/taxes, and asked you to falsify the documentation to that end.

You declined to do so ...  yet went ahead anyway and shipped an expensive package to a foreign country.

The package arrived with duties and taxes payable, and the buyer declined to accept it.  Why are you surprised?

This was a poor business decision on your part, and now you are paying for it.  Not sure why you are blaming Paypal.

[simplytclub]

I was scrolling for updates on the strike and found this post.....

This is my 2 cents worth.  As a buyer - I've always asked to lower the value - most 99% of the sellers always accomodate as duties in Canada can sometimes be outrageous.  I've once paid about $32 Duty on $25 tea cup because the seller insured it upto $200.  Paid it.  Just part of business expense.

As a seller - many from UK or Australia ask the same - I always mark them under $20 - most I send by small packet air - even if the item is over $250 - I've yet to have a problem as I find most buyers very honest.  For some buyers who have little feedback - I send by xpresspost international which usually runs about $70 overseas for one cup and saucer - but I charge them $19 flat small packet rate - this has been my regular practice.  I also consider this as part of my business expense.

I don't understand the insurance part of it - as Canada Post DOES NOT cover damage for glass & china - so why even bother pay for extra insurance?   I've yet to lose a small packet air, expedited or xpresspost to date - very reliable service...sometimes slow but always gets there.

In your case if a flag went up - I would have just cancelled the transaction - especially if it was going to china.

Last year, I had a buyer in Australia who bought about $2500 worth of tea cups from me - I charged her flat rate of $50 - I paid the difference to send by xpresspost.  About 2 months later - I've received the package back and had to pay $170 in return shipping.  Apparently the buyer was on vacation and did not receive notice.  So after 4th attempt and 2 months later - the post returned the package to me.  I contacted the buyer - she was more than willing to pay $170 plus the RE SHIPPING for another $170 to have it redelivered and was very apologetic.  Now, mind you I only insured it upto $100 which is standard - and marked the items as "USED DISHES - $20" - so that the buyer did not have to pay extra.

I know what it feels like to pay for something that is returned - not good.  However, in this business we always take chances everyday and have to trust our buyers and our instincts.  If I had your buyer, I would have cancelled and blocked right away.

This is my 2 cents worth.

[pierrelebel]

"I find most buyers very honest."

That blows my mind.

How can one call buyers "honest" when they ask to defraud their respective government of duty and/or import taxes?  I find it impossible to qualify such buyer as "honest".  I do not falsify Customs Declaration and if I lose the occasional sale because of it, so be it.

"If I had your buyer, I would have cancelled and blocked right away."

We do agree on that point.

[simplytclub]

Most of the items I sell are all used and vintage.  My personal opinion about paying taxes on a USED item which was taxed and paid when it was NEW.  That is my personal opinion and I understand why buyers would not want to pay more.

2ndly when a "made in England" - goes back to UK - why would they have to pay taxes on items that originated from that country?