1GH/s, 20w, $500 — Butterflylabs, is it a scam?

[DeathAndTaxes]

When I get around the 40 day marker, I will be contacting BFL to ask that they send a new invoice, which I then pay, after which they cancel the old one so that I regain the 45 day period to start a dispute within. If they're legit, they have nothing to lose doing this, as far as I can see. So if they decline I will be filing a claim to get my money back.

That is a good tactic.  Technically they do have something to lose.  They still pay Paypal fees on canceled orders so each "re-order" costs them ~3%.

[DeathAndTaxes]

Do you really think if this is a scam, that they would accept paypal? They would have to be insane. A scammer will accept bitcoin, Western Union, cash, even bank transfers - anything but Paypal. PP will freeze your account and even associated bank account for a million far less valid reasons. There is no way anyone with a brain is going to invest at least $10K on an incredibly elaborate hoax that will only make them a few times their investment when it all depends on being able to run away with Paypal funds.

What makes you think there is/will be any money in Paypal account to freeze by the time it becomes apparent that a scam exists.

Accept orders -> transfer money out
Accept orders -> transfer money out
Accept order -> transfer money out
.... 4 to 8 weeks later
Accept order -> transfer money out
SCAM SCAM SCAM. People contact Paypal request chargebacks.
Paypal freezes the account which contains a tiny fraction of the money taken.

Honestly you don't think anyone has ever pulled off a scam using Paypal.  That acceptance of Paypal by any entity anywhere on the planet is a guarantee of legitimacy.  Really?  Paypal/Ebay in their annual report indicates losses due to fraud in excess of $153M to $180M per year (for past 3 years).  Now that isn't total fraud that is just the fraud they didn't catch and they personally took the loss on (as opposed to even more fraud where consumers took the loss instead).  How much fraud Paypal lays at the feet on the victim we don't know as Paypal doesn't report that but obviously total fraud is >$180M per year.

In related news Paypal in the past was investigated and sued for indicating that Consumers have same rights using paypal as credit cards (in reality Paypal chargeback policies are more restrictive)
http://www.msnbc.msn.com/id/4479880/ns/technology_and_science-tech_and_gadgets/t/paypal-antifraud-process-scrutinized/#.TtOZF2P1JlM

[runeks]

That is a good tactic.  Technically they do have something to lose.  They still pay Paypal fees on canceled orders so each "re-order" costs them ~3%.

If that is the case I will gladly pay the fee. They can include it in the new invoice.

Do you really think if this is a scam, that they would accept paypal?

I have no idea whether they would accept PayPal if they were scammers. I am, however, certain that I am not willing to risk $587 (including shipping to Europe) on them not being scammers.

[btc_artist]

What if Paypal doesn't side with you?  After all, when you ordered it stated X time period, which hasn't passed yet.

[runeks]

Then, if they are scammers, I will have lost $587
I have asked PayPal regarding their refund policies on pre-orders, but I haven't received a response.

[worldinacoin]

I won't say they are scam, but I won't be buying, prefer to let others try first.

[DeathAndTaxes]

Then, if they are scammers, I will have lost $587
I have asked PayPal regarding their refund policies on pre-orders, but I haven't received a response.

My guess is that as long as you chargeback the order prior to 45 day mark and indicating it hasn't shipped you should be ok.   Say something like "I haven't been able to get firm answer from the company and now believe the product will never ship, they won't cancel the order".  Paypal is pretty evil but they have a brand to protect.  I can't imagine them siding w/ seller and then making you eat the potential loss if it happens a month later.     Paypal may not give you the funds until the 8 week window has passed (freezing the funds and allowing seller to make an attempt to ship) but worst case scenario you just need to wait for the funds or get the product.

Then again Paypal is somewhat unpredictable so it is only a guess.

[BFL]

Then, if they are scammers, I will have lost $587
I have asked PayPal regarding their refund policies on pre-orders, but I haven't received a response.

My guess is that as long as you chargeback the order prior to 45 day mark and indicating it hasn't shipped you should be ok.   Say something like "I haven't been able to get firm answer from the company and now believe the product will never ship, they won't cancel the order".  Paypal is pretty evil but they have a brand to protect.  I can't imagine them siding w/ seller and then making you eat the potential loss if it happens a month later.     Paypal may not give you the funds until the 8 week window has passed (freezing the funds and allowing seller to make an attempt to ship) but worst case scenario you just need to wait for the funds or get the product.

Then again Paypal is somewhat unpredictable so it is only a guess.

I would suggest that if you were a customer that you might want to start with the company you had ordered from relative to any of these questions.  Most reasonable people would follow this path and I think if you were to speak to any of our customers, they will tell you they are being accommodated.

BFL

[DeathAndTaxes]

Paypal contacts the seller, seller gives paypal a tracking number and says product is inside...  ?

I don't think that is an issue.  Having a tracking # is no guarantee for a seller that they won't be chargedback.  In cases like that Paypal tends to look at the seller overall.  If 1 out of 1000 orders is claiming fraud they may side w/ the seller.  If 999 out of 1000 orders are claiming fraud they are unlikely to do so.

Which is why if you want to scam w/ Paypal you make sure the orders never ship until after the chargeback window (45 days) and by the time anyone reports fraud the money is long gone.

[runeks]

My guess is that as long as you chargeback the order prior to 45 day mark and indicating it hasn't shipped you should be ok.   Say something like "I haven't been able to get firm answer from the company and now believe the product will never ship, they won't cancel the order".  Paypal is pretty evil but they have a brand to protect.  I can't imagine them siding w/ seller and then making you eat the potential loss if it happens a month later.     Paypal may not give you the funds until the 8 week window has passed (freezing the funds and allowing seller to make an attempt to ship) but worst case scenario you just need to wait for the funds or get the product.

Then again Paypal is somewhat unpredictable so it is only a guess.

That seems like a fair response to me. If this is not how PayPal handles chargebacks for pre-orders, then a seller stating a delivery date past the 45 day marker would effectively be an annulment of the right to file a dispute. Unless the buyer actually receives the goods before the 45 day marker and can file a dispute based on anything missing or defective here.

My guess is they all ship you something with tracking and have it registered. It will be months and months and months before you even find out who gets the money. Who is to say what they shipped you is not what they said it was? lol...

Try getting paypal to take Inabas word.

Which is exactly why I don't want to lose my right to file a dispute.

Based on the correspondence I have had with BFL, I have no reason to expect them to deny this request. If they do, I will get suspicious.

[DeathAndTaxes]

Paypal contacts the seller, seller gives paypal a tracking number and says product is inside...  ?

I don't think that is an issue.  Having a tracking # is no guarantee for a seller that they won't be chargedback.  In cases like that Paypal tends to look at the seller overall.  If 1 out of 1000 orders is claiming fraud they may side w/ the seller.  If 999 out of 1000 orders are claiming fraud they are unlikely to do so.

Which is why if you want to scam w/ Paypal you make sure the orders never ship until after the chargeback window (45 days).

My question is about how much can BFL take out of their paypal account? I asked this before but no answer. Will paypal just eat 100k or more because they cant get it back?  I do not deal with paypal so I do not know... But if you can register a business in Wy over the internet what else can you do?

Paypal is legally obligated to eat any losses that comply with their chargeback policy. 

So if you make a chargeback and Paypal can't recover the funds they eat the loss.  It is a cost of doing business.  They took about $180M in losses due to fraud last year (that isn't total fraud that is fraud they didn't catch and couldn't pawn off on the consumer).

However if your chargeback doesn't comply with their policies (most likely because it is >45 days since order) then they don't eat the loss, the consumer/victim does.

So if Paypal can get the money isn't material unless you are a Ebay shareholder.   What matters is does your chargeback comply with their policies.

[P4man]

What makes you think there is/will be any money in Paypal account to freeze by the time it becomes apparent that a scam exists.

Open a new paypal account. Receive $10K. Try withdrawing it to your bank. See what happens.

Honestly you don't think anyone has ever pulled off a scam using Paypal.

I didnt say that. I havent seen anyone invest this much technical knowhow, money and effort in a barely worthwhile scam that depended on paypal not freezing your account.

[DeathAndTaxes]

I do not use paypal because I know some legit people who have been fucked over for a lot of money  by fine print in the paypal policy.  How many pages is it? How often do they change it? lol

https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=ua/UserAgreement_full&locale.x=en_US

13. Protection for Buyers.
13.1 Types of Problems Covered. PayPal Purchase Protection (also known as PayPal Buyer Protection) helps you if you encounter either of these problems:

You did not receive the item you paid for with PayPal – “Item Not Received” (INR), or

You received an item you paid for with PayPal but it is “Significantly Not as Described” (SNAD) (as described below)

If your problem is a transaction that you did not authorize, please report the unauthorized transaction through the Security and Protection page.

An item is “Significantly Not as Described” if it is materially different from what the Seller described in the item listing. Here are some examples:

You received a completely different item. For example, you purchased a book and received a DVD or an empty box.
The condition of the item was misrepresented. For example, the description when you bought the item said “new” and the item was used.
The item was advertised as authentic but is not authentic.
The item is missing major parts or features which were not disclosed in its description when you bought the item.
You purchased three items from a Seller but only received two.
The item was damaged during shipment.
An item is not Significantly Not as Described if it is materially similar to the Seller’s item listing description. Here are some examples:
The defect in the item was correctly described by the Seller.
The item was properly described but you didn't want it after you received it.
The item was properly described but did not meet your expectations.
The item has minor scratches and was listed as used condition.

13.2 Eligibility Requirements.

To be eligible for PayPal Purchase Protection you must meet all of the following requirements:

Pay for the eligible item from your Account.

Pay for the full amount of the item with one payment. Items purchased with multiple payments – like a deposit followed by a final payment – are not eligible.

Send the payment to the Seller through:

the eBay “Pay Now” button or the eBay invoice; or

the “Send Money” button of your Account by selecting “eBay Item” and entering your eBay User ID and the eBay item number for purchases on eBay website; or

the Send Money tab on the PayPal website, by clicking the “Purchase” tab, or by selecting the “Checkout with PayPal” button or otherwise selecting PayPal as part of a Seller’s checkout flow.

Open a Dispute within 45 Days of the date you sent the payment, then follow the online dispute resolution process described below under Dispute Resolution. For Pay After Delivery transactions you must open your Dispute within 45 Days of the date of your transaction.

Have an Account in good standing.

and

13.5 Dispute Resolution. If you are unable to resolve a problem directly with a Seller, you can go to the Resolution Center and follow this process:

Open a Dispute. Open a Dispute within 45 Days of the date you made the payment (or the date of the transaction if using Pay After Delivery) for the item you would like to dispute to negotiate with the Seller for resolution of the Dispute. We will place a hold on all funds related to the transaction in the Seller's Account until the Dispute is resolved or closed.
Escalate the Dispute to a Claim. If you and the Seller are unable to come to an agreement, you can escalate the Dispute to a Claim within 20 Days after opening the Dispute.

You must wait at least 7 Days from the date of payment to escalate a Dispute for an Item Not Received (INR), unless the Dispute is for the equivalent of $2,500 U.S. Dollars or more (or currency equivalent). If you do not escalate the Dispute to a Claim within 20 Days, PayPal will close the Dispute.
Respond to PayPal’s requests for information in a timely manner. During the Claim process, PayPal may require you to provide documentation to support your position. You may be asked to provide receipts, third party evaluations, police reports, or anything else that PayPal specifies.
Comply with PayPal’s shipping requests in a timely manner. For Significantly Not as Described (SNAD) Claims, PayPal may require you, at your expense, to ship the item back to the Seller, or to PayPal, or to a third party and to provide proof of delivery.

For transactions that total less than $250, proof of delivery is confirmation that can be viewed online and includes the delivery address showing at least city/state or zip, delivery date, and the URL to the shipping company’s website if you’ve selected “Other” in the shipping drop down menu. For transactions that total $250 or more, you must get signature confirmation of delivery.

Claim Resolution Process. Once a Dispute has been escalated to a Claim, PayPal will make a final decision in favor of the buyer or the Seller. You may be asked to provide receipts, third party evaluations, police reports, or anything else that PayPal specifies. PayPal retains full discretion to make a final decision in favor of the buyer or the Seller based on any criteria PayPal deems appropriate. In the event that PayPal makes a final decision in favor of the buyer or Seller, each party must comply with PayPal’s decision. PayPal will generally require the buyer to ship an item that the buyer claims is SNAD back to the Seller (at the buyer’s expense), and PayPal will generally require a Seller to accept the item back and refund the buyer the full purchase price plus original shipping costs. In the event a Seller loses a Claim, the Seller will not receive a refund on his or her PayPal or eBay fees associated with the transaction. If you lose a SNAD Claim because the item you sold is counterfeit, you will be required to provide a full refund to the buyer and you will not receive the item back (it will be destroyed).

[P4man]

I understand why you wont double down on our bet. But "technical know how" lol Even I know what they are trying to do is not realistic and I don't know shit.

Indeed you dont know shit. But sure, if it makes you happy Ill double the bet on the same terms. Post the address as I dont feel like wading through this thread and Ill send another 10BTC against 20 for you.

[DeathAndTaxes]

Wow action on this bet has heated up:
http://betsofbitco.in/item?id=141

[fred0]

Wow action on this bet has heated up:
http://betsofbitco.in/item?id=141

Certainly the edge is on the agree side of the bet--especially due to delay in demo.  It is so easy to be late on a project. 

Interesting numbers.

[sadpandatech]

Wow action on this bet has heated up:
http://betsofbitco.in/item?id=141

  that bet is crap imho. There is no spread at all, atleast in the text, for those that think it is legit...

" live up to the performance claims,"
"The performance claims are as follows: 1.05 GH/s with 19.8 W maximum power draw."
"proven to meet or exceed these performance claims"

  So if the thing draws 19.9 W, you lose even if you win if they wanna be technical about it.

[DeathAndTaxes]

Wow action on this bet has heated up:
http://betsofbitco.in/item?id=141

  that bet is crap imho. There is no spread at all, atleast in the text, for those that think it is legit...

" live up to the performance claims,"
"The performance claims are as follows: 1.05 GH/s with 19.8 W maximum power draw."
"proven to meet or exceed these performance claims"

Funny I would say it is crap for the naysayers.  There is no deadline for bets so people can bet as late as 11:59 on DEC 31st against it, or they can bet even after it is a confirmed scam.  Sad that this rather interesting bet was so poorly constructed.

I would have given 10% spread and put a deadline on bets for 1 DEC. 

[sadpandatech]

Wow action on this bet has heated up:
http://betsofbitco.in/item?id=141

  that bet is crap imho. There is no spread at all, atleast in the text, for those that think it is legit...

" live up to the performance claims,"
"The performance claims are as follows: 1.05 GH/s with 19.8 W maximum power draw."
"proven to meet or exceed these performance claims"

Funny I would say it is crap for the naysayers.  There is no deadline for bets so people can bet as late as 11:59 on DEC 31st against it, or they can bet even after it is a confirmed scam.  Sad that this rather interesting bet was so poorly constructed.

I would have given 10% spread and put a deadline on bets for 1 DEC.  

  Agreed, not well listed for both parties..  Edit; though, atleast on new bets they get their bet weighted less and less as it approaches the end date..

[P4man]

Funny I would say it is crap for the naysayers.  There is no deadline for bets so people can bet as late as 11:59 on DEC 31st against it, or they can bet even after it is a confirmed scam.

Agreed they should close the bets now. But it does go both ways. If inaba publishes its findings and announces the first units are being shipped, anyone can still bet a few 100 BTC against the statement diluting my bet completely even though I was one of the first to bet against it when odds where 4-1 of this being a scam.

  Sad that this rather interesting bet was so poorly constructed.

Yep.