PayPal Accused Of Favoring Buyers In Class-Action Lawsuit


#1

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LOS ANGELES (CBSLA.com) — After using her vintage Louis Vuitton bag for a few years, Joanna Santiago decided it was time to try to make her money back.

“It’s money sitting in a closet. So, why not be an adult and sell it?” Santiago asked.

She listed it on several online sites and eventually found a buyer who asked for a discounted price of $800, and she agreed.

“I could tell that she wanted it, just the same way I wanted it a few years ago,” Santiago added.

Santiago shipped the bag. Two days later, she got a confirmation from the post office that it was delivered.

But the next business day, she was surprised to find an email from PayPal saying there was a dispute because the buyer claims she never got the bag.

Santiago said she emailed PayPal the tracking information. But the online payment company still sided with the buyer.

“I’m left now with a missing bag and PayPal withholding the money from me,” she said.

Santiago’s complaint is common among sellers. One wrote: “They will always side with the buyer.” Another posted: “Sellers beware! PayPal focuses on buyers.”

Anthony Ferrigno is a California lawyer who filed a class-action lawsuit claiming PayPal and its former parent company, Ebay, did not give sellers a fair shake in their dispute resolution.

That is in spite of the fact that PayPal’s website promises world-class security for sellers. “They have a policy, we think, the buyer’s almost always right, and the buyer almost always wins,” Ferrigno said.

“When Ebay and PayPal promise that they are going to do what they can to protect the sellers and keep their money safe, they have a duty to do that in our view under the law,” the attorney said.

Paypal disagrees. A company spokesperson told CBS2/KCAL9’s Jeff Vaughn: “We’ve carefully reviewed the complaint and do not believe there is any merit to this lawsuit. We plan to vigorously defend ourselves.”

Whatever the courts decide, Santiago said if she needs to sell something, she will find another way. “I’m done with PayPal,” she said.

There are other options to sell items online. Facebook and Apple have rolled out payment systems.

PayPal did nothing wrong in this situation because there is no proof the customer received the package. It is also a higher value than they will fund for INRs. The seller didn’t do their due diligence.

This is a case where PayPal followed the law and the seller didn’t understand what their requirements were. For all they know, the mail carrier stole it or it was left on a doorstep and stolen. No matter, the recipient claimed they never received it and there is no proof otherwise.

This case is at least two years old although the article seems to be from yesterday.

Edited by: GlennS@SellerSupport on Mar 29, 2016 12:25 PM
Edited to remove offsite web address. Please do not post website links outside Amazon as this is prohibited by Amazon Forum Guidelines.


#2

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You may want to re-read and understand their terms yourself, since it hasn’t been that threshold for a while now.

It is: $750.


#3

Who in their right mind would send something that valuable w/o signature confirmation??

I guess Paypal doesn’t roll over and play dead either. Hesaid/shesaid with no concrete evidence, buyer will win every time.


#4

As a buyer on an eBay item that was returned, (They had seriously misrepresented the condition of the machine) anyone shipping something expensive needs to pay for a signed receipt upon delivery. The seller had actually stolen the machine off of his own porch and claimed we never sent it back. (~$3000 machine) PayPal helped us give him a shakedown and he finally admitted he had the machine.

The lesson learned is get a signed delivery receipt. That way the carrier is liable to prove it was delivered and the receiver is caught before they can even begin the lie.

Do this even if you trust the recipient as you have no control over who the delivery people are in between.


#5

You can just raise your prices accordingly to offset the signature cost if you want. I would prefer not charging an additional cost to a customer which I feel unnecessary.

I believe you have that requirement not quite right. The price might be higher but I’m unsure. However, a signature is not a requirement for items over a certain value; you are just not protected with eBay’s self funded refunds over that threshold.

If you have an INR on eBay, they don’t side with the seller but instead, fund the claim up to a certain value. This is their way of following mail order law and avoiding expensive credit card chargebacks which will result in a refund. In contrast, Amazon just charges the seller in the same way the credit card company would if there was a chargeback.


#6

Believe it or not, the idea of signature confirmation never conceived for me before I sell on Amazon. I suspect an average sellers who sell on items from their closets are not aware of this either. Scammer buyers knew this and take advantage of the system.


#7

Paypal’s thresh hold before signature is required = $250.00

Any item over $250.00 must be signed for. Just another case of a seller that did not read or understand their terms of agreement.

I do wish though that all of the sites would have a second shipping option, that the buyer could choose signature confirmation for lower dollar items, making them responsible for their shipping choice. Under $50.00 buyers choice, over $50.00 sellers responsibility.

Doing such as suggested would eliminate many of the frivolous to include fraudulent INR cases that we read on this forum daily. This would make both parties more responsible to their shipping choices.

I sell in many of the online market places, Amazon is the only one that more than 1% of the transactions that I process are INR. Accountability goes a long way to solving fraud.


#8

I have just confirmed that what you are saying is correct, In this case I stand corrected, thanks.


#9

It completely matters what the threshold are…and as multi-platform merchant you (that refers to a group at large, not you in particular) need to be well-versed in the finer details of each.

Signature confirmation on +this+ platform is quite important due to the disproportionately large number of INR claims when shown: “Delivered”.

This is not usually the same when dealing with the other site in discussion.

In either case, if someone is trying to “scam” they are just going to easily change it over to “not as described/empty box” regardless of any signature or not…so at least over there…one needs to weigh the pro’s and con’s of SC for what tangible benefits it will bring.


#10

It doesn’t matter what their threshold is. Signatures protect sellers. If you are shipping a several hundred dollar item and don’t require a sig, then you are one idiot of a seller (that refers to the group-at-large you, not you in particular). Sellers shouldn’t be told when they have to protect themselves, they should know–that’s their j-o-b.


#11

This scenario is even worse with First Class international shipments where all you can provide is the customs tracking #. Once it leaves the US territory you’re screwed. Even if you pay extra for tracking, the post office even states they can’t guarantee delivery status accuracy overseas.


#12

If shipping to the UK and you are using either First class mail or Flat Rate First Class Mail the LK or LJ designation will show as delivered in most cases, occasionally they miss a scan. I have won every case showing delivered to the UK.

If shipping to AU, then in order to be protected you must purchase the Standard First Class Mail as AU follows the IMM (International Mail Manual to the T) I shipped an item to AU using First class flat rate designation of LJ. Internal scans show as delivered but since I did not purchase the Standard First Class they don’t upload delivery status. I use LJ designation for 99% of my international orders (watch band clasp extenders weigh under 1 oz). If the order is valued above my self insure mark I use u-pic shipping insurance.

The price difference is substantial (1 oz package = $2.38) through stamps.com as opposed to $10.71 eBay rate. Package can not be over 3/4" thick with more than a 1/2" variance.

I ship hundreds of these packages international every month with only 3 INR in the past year. The two to the UK I won as it showed as delivered. The one to AU I refunded.


#13

You posted this WHOLE block of text just to essentially call the seller mentioned in the article an idiot basically for not using signature confirmation?

Moreover, who says they didn’t? For some people tracking is a general term that means either regular delivery confirmation and/or signature confirmation.

Either way the only winner should this case be settled by Paypal before it goes to a trial is the LAWYERS.


#14

How did they manage to file a class-action lawsuit? PayPal’s User Agreement requires arbitration.


#15

As much as I dislike PayPal, they are correct in this story.

Over the last several years I have dealt with a variety of situations selling online and learned a lot. Last week due to a change in plans my son wanted to sell his Wrestlemania tickets - $700 tickets - and listed on CL in Dallas. One woman that wanted them wanted to know how he would send them to her. When my response was that the only way they will be mailed is Fedex overnight / signature required, she changed her mind. At any rate, he changed his plans and is now going, so it worked out.

But who would have a problem signing for something that expensive? Scammers.


#16

I don’t think that would prevent the lawsuit from being filed, though it would be the reason for an early dismissal/ruling. The arbitration also might not be relevant for all complaints against the company.


#17

Well, that’s an overly simplistic view.

For one thing, it’s a heck of a lot less convenient to get your package from UPS or FedEx if you miss the carrier than USPS.

Some UPS/Fed Ex carriers have a habit of just leaving the “Sorry we missed you” notice without even attempting delivery. My friends’ usual Fed Ex carrier is like that. Even when it’s obvious that someone’s home, they don’t knock–just stick the notice to the door and leave.

On the flip side, others just ignore those requirements and leave the package on the porch (again, without knocking). I’ve come home to find wine orders on my porch that, by law, required the driver to check ID and get a signature. “Check ID” is even part of the box.

You can’t tell someone that you’ll only mail something FedEx Overnight Signature Required & then assume they backed out because of the last two words rather than the first two.

I’d have declined too, as, like I said, I don’t trust my carrier to not just leave it.


#18

I sold a iHome iDL46 Lightning Dock Clock Radio and USB Charge/Play for iPad/iPod and iPhone 5/5S and 6/6Plus iPad Air /iPad Mini (Gray)

The buyer asked for a refund which the system did NOT tell me about their inquiry until after they were given their money back and, they still haven’t returned the item.

My site clearing stated I don’t offer refunds.

Amazon keeps giving me the run around so seller beware. Amazon will give your merchandise away and not protect your rights.

Try OfferUp instead.

Edited by: PeachState Computer on May 8, 2016 7:15 AM


#19

Try reading the User Agreement that you agreed to when you signed up instead.

Tide.


#20

$750 is true for PayPal nowadays. It is amazing that how many cases get opened on PayPal for unauthorized transactions relative to Amazon. But never a INR. $750 helps as we have never used SC on eBay orders and things never get lost. The only time we got screwed was when Amazon used the Amazon logistics and we lost the chargeback case. Other than that PayPal follows its policy pretty well

Having said the above, PayPal still sucks big time. Their website is freakishly slow and they start those cases where you can just refund and get done if u haven’t shipped. For those case I still don’t get it: half the times the option comes up to refund and the other half you have to either call in or refund through anther transction. You can’t cancel on eBay since PayPal has a hold. Since refund is done on PayPal side, you are out the eBay fee for which you have to call in and I have seen skme of those cases count against you in your top rated seller calc!! I just find thjs to be a complete mess since eBay and PayPal are not talking to each other. Any transaction refunded in PayPal shud qualify for final value fee credit but it doesn’t. Last week I had an expensive $400 chargeback case reopened that was already refunded in the first place. I really feel that PayPal hasn’t really learned its lessons well from the last class action and are setting up for one another once enough sellers Come forward to see this through. For now i just call it a nuisance and move on since it is a secondary channel