8 On Your Side: PayPal loophole

By Michelle Mortensen | mmortensen@8newsnow.com

Published 11/18 2015 10:39PM

Updated 11/19 2015 08:28AM

A local woman called 8 On Your Side Consumer Advocate Michelle Mortensen for help after she sold a boat on EBay through PayPal in May of 2015.

Months after the sale the buyer filed a chargeback on his credit card for various reasons. The buyer cited it was a lemon and that services were not rendered.

This after the woman, Toni Ristow Lloyd, says the buyer came to her home in Las Vegas to inspect the boat, purchase the boat and take it home to Arizona to be used all summer.

Once the chargeback was filed, PayPal came to her saying she owed them the $8500 earned in the sale. The problem was, that money had already been spent.

Unable to get anyone at PayPal to talk to her, she turned to Michelle. 

Michelle gathered evidence from Toni, the buyer, EBay, PayPal and the buyer's credit card company.  She worked every angle of the case for nearly 4 months, but in the end PayPal's user agreement overruled any evidence she uncovered.

PayPal's seller agreement clearly outlines its policy on chargebacks and the seller's responsibility if one occurs.

A chargeback can be filled weeks, or even months, after a purchase in some cases. 

The take away for you is simple. If you sell on EBay and use PayPal you may be responsible for any and all chargebacks filed in the transaction. 

Be sure to review the policy careful before you engage in your next transaction. 

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