Charge-back scam

[ATC777]

We're being hit with a charge-back scam through eBay/Paypal. So far it's only two relatively small charges, but we fear more might rear their heads. The same scammer(s) have hit other eBay/Paypal merchants. We've all gotten in touch over Skype and the phone to try to piece together the puzzle. We've also submitted all the transaction information to Paypal and showed proof we delivered the Bitcoin. My theory is that someone is hi-jacking legitimate eBay accounts and then somehow linking Paypal accounts to them. They're probably using stolen credit card info as the funding source for the Paypal accounts.

Warning to any "Bitcoiners" doing business through eBay:

*Do not sell to "bhill995"

If we receive charge-backs from any other eBay or Paypal accounts we will post the account names to prevent them from scamming anyone else. I hope we don't get charged-back for any more than this < $30 amount. But now we watch our Paypal balance with butterflies in our stomachs...

I will post updates on this and any subsequent revelations about who's behind the scam. My suggestion is everyone stop selling over eBay until something is done about these scammers. Some other merchants have been hit for much bigger amounts. Please be careful!

If anyone has any advice for how we (and other merchants) might fight against this problem I'd love to hear it...

Regards,

--ATC--

[1713302362]

1713302362

[1713302362]

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[ashleyconnor]

You break Paypal and eBay's terms by selling Bitcoin on there so be prepared to lose your money.

[mccorvic]

My suggestion is everyone stop selling over eBay FULL STOP

FTFY

I'm still utterly shocked than anyone with BTC would accept ebay/paypal anything at this point.

[repentance]

After all of the threads on here regarding the dangers of using eBay/PayPal for trading Bitcoin, why on earth did you ignore those dangers?

You're violating eBay/PayPal's ToS and the scammers know that - they know that you're going to lose in any dispute related to BTC (and that your accounts may well be frozen into the bargain).

Stop trying to game the eBay/PayPal system in the first place and you're not going to have to worry about scammers who intentionally target people violating eBay/PayPal rules.

[Stephen Gornick]

My suggestion is everyone stop selling over eBay

+1

If anyone has any advice for how we (and other merchants) might fight against this problem I'd love to hear it...

This person sold four under a unique approach.  I don't see further sales, so I'm presuming it didn't end well:
 - http://www.ebay.com/itm/320981224642

[DeathAndTaxes]

Sticky in the currency exchange forum (not sure what this post has to do with trading)

Money sent through PayPal and any other money transfer service that accepts credit cards can be easily reversed by the sender, even after several weeks. Therefore, you should only accept PayPal in trades with people you trust very highly.

This is why newbies are not likely to sell their PayPal USD for bitcoins successfully.

Some other services that are not totally safe:
- Most gift cards.
- Moneypak
- AlertPay
- Paysafecards
- Dwolla
- Western Union (they reportedly will sue the recipient to recover money in some cases)

https://bitcointalk.org/index.php?topic=14632.0

The OP post seems to come from a naive belief that this is some unique or rare situation.  It is very easy to reverse these types of payments and thus you will attract scammers.  The roi of this type of theft is insanely high.  The idea that they will all be caught and then it will be safe to use ebay/PayPal is just naive.  There are thousands and thousands of scammers, if they were all busted there would be thousands more to take their places.  Some scam with their own accounts, some hack accounts, some just buy stolen/hacked PayPal accounts by the hundreds for negligible cost.

[itsgoldbaby]

My suggestion is everyone stop selling over eBay

+1

If anyone has any advice for how we (and other merchants) might fight against this problem I'd love to hear it...

This person sold four under a unique approach.  I don't see further sales, so I'm presuming it didn't end well:
 - http://www.ebay.com/itm/320981224642

Both the guys that bought 2 of those bitcoin notes did fraud attempts. You can see one of the guys here that bought 2. It is in his positive comments that has been edited to Fraud attempt. PayPal reversal. DO NOT SELL TO THIS BUYER. LOL. http://feedback.ebay.com/ws/eBayISAPI.dll?ViewFeedback2&userid=royalcourtcwebb&ftab=AllFeedback&rt=nc

[ATC777]

I knew there were risks, but I didn't realize the problem was this big. Maybe I'll accept Paypal again in the future, but only if buyers submit valid ID and the account they pay from matches their ID. Otherwise, screw this... 

[ATC777]

I don't understand why people keep doing this. You CANNOT accept PayPal for bitcoins, hundreds of people have tried, using various different methods (ebay, private key via mail, id verification) and EVERY SINGLE ONE has failed (by having a bunch of chargebacks from legit buyers & hacked accounts and having PayPal freeze their funds for ToS breach).

I keep saying this to people yet they keep doing it and then come back to the forum crying a few months later.

Maybe I'll accept Paypal again in the future, but only if buyers submit valid ID and the account they pay from matches their ID. Otherwise, screw this...  

Its been done by many different people & never worked out, if I was you I'd definitely cut my losses and say screw it.

Agreed. I just went ahead and took my money out of Paypal before any more gets stolen from me...  

It's not the end of the world and not a huge amount of money, but it's still bullshit...

[creativex]

It's not just BTC that paypal buyers do this with. This is an ongoing scam buyers use paypal for all the time. "Item significantly different than seller described" = chargeback and the buyer keeps the item, because paypal helps them steal from you. The solution is really very simple.

DON'T USE PAYPAL

[Justin00]

that guys feedback is interesting.
looks like his account got hacked or something maybe ?
He's got like perfect feedback for ~90 transactions for a couple of years ending jan 2011.. then dec 2012 starts buying btc and doing chargeback on all of them.

[ATC777]

that guys feedback is interesting.
looks like his account got hacked or something maybe ?
He's got like perfect feedback for ~90 transactions for a couple of years ending jan 2011.. then dec 2012 starts buying btc and doing chargeback on all of them.

That's what we're thinking. And I suspect that all these scammer accounts on eBay/Paypal belong to only a few people; meaning they have a lot of them. I've figured out that they get those feedback scores by buying cheap "trinkets" like cell-phone cases, key chains, ash trays, et cetera from eBay "Power-sellers". They'll buy several hundred of these little cheap items over time and the items get shipped to their fake addresses -- the high-volume sellers never think to question it, and they of course get positive feedback from the seller. And this also tricks eBay and Paypal into thinking the address is "confirmed" or "verified". They use this tactic to build their repute for their many fake accounts and then suddenly pop up trying to buy large volumes of Bitcoin. When I started putting this all together and realizing there were probably more demand from scammers than legit buyers I simply had to say "NO MORE". Never know when you're going to get hit... 

"DONT USE PAYPAL" is the best advice ever. Not saying you can't use it with people you know personally and trust, and if you're an established business with registered/verified customers you can probably afford the risk. But for most of us, including my own fledgling enterprise, the risk is simply far too great. You're gonna get screwed. If anyone has been selling Bitcoin for Paypal to strangers I suggest you quit now, even if you haven't had a charge-back or dispute, because it can hit you at any time...up to 180 days, as CBC pointed out to me. Just a bad idea...

[Monster Tent]

Its fuckwits like you that are the problem.

[ColdHardMetal]

This person sold four under a unique approach.  I don't see further sales, so I'm presuming it didn't end well:
 - http://www.ebay.com/itm/320981224642

Taking a look through the feedback that seller has left for the buyers I'd say you're exactly right.

[ATC777]

After everything I've learned about this, I will never use eBay or Paypal ever again for any purposes. I've been communicating with them about all of this and many merchants who've been royally screwed by this scam and come to the conclusion that eBay/Paypal is simply an unethical (borderline criminal) company that shouldn't be trusted for anything. I wouldn't sell chewed bubblegum for a penny over the eBay/Paypal system.

I was naive/stupid for ever dealing with them in the first place, but I'm a fast learner lol... lesson learned... Thank God I wised up after a few days and got out. BUT... there will soon be a viable alternative to all of this.

Its fuckwits like you that are the problem.

Spoken like a true scammer... "It's ok to screw people because they're 'dumb' enough to trust me and/or Paypal"... Your attitude and ethics are the problem, my friend. 

[panda1]

Yeah ebay is not for you.

[ruggedman_dan]

Scammers are about 75% of the equation. You are missing the other 25%.

The missing 25% is PayPal itself. Even when a scam artist makes a seemingly successful payment that is not charged back quickly, PayPal is an inherently suspicious entity. When they see funds coming into your account by means that they cannot immediately identify, it throws up a red flag. They will beat the scammer to it and just freeze your funds themselves. Then there are the patterns. If they notice patterns they don't like they'll limit your account. Of course they want all type of documents, but their reasoning is always some generic security risk bs.

Then there's the final "We classify you as a money services business and therefore cannot do business with you anymore because you did not let us know up front." This exists. Basically, they are telling you that they are going to do whatever they want with your money for 6 months. Probably buy gourmet pizzas for their staff and shit.

Moral of the story is you are not just playing vs. scammers when dealing with paypal. You are playing against Paypal TOO.

It's like a 2 on 1 basketball game. You may be able to keep up for a while. If you are really good, you may even be able to take the lead for a while. But most of the time the numbers catch up to you. The scammers know they can always pass the ball to paypal and paypal will dunk on your ass.

bang bang.

[2weiX]

anyone using neteller, then?