There’s a new kind of scam being operated by Chinese companies. It’s designed to make the PayPal “Buyer Protection” worthless. But PayPal don’t seem to care.
How the scam works
The scammers advertise their products on Facebook. The goods look great, are well-priced, and are offered with free shipping. The only payment method they take is PayPal, but the vendor offers “100% money back” and, hey, you’re also covered by the PayPal Buyer Protection, right? Nothing to lose. What’s not to like?
But what arrives is a pale imitation of what you were promised. Shoddy goods nothing like the description and not fit for purpose. All very disappointing, so it’s time to contact the seller to get your “100% money back”. If they bother to reply, they’ll first try putting you through the Labours of Hercules in an attempt to make you give up. So many pointless tasks – send them photographs of the product, write an essay on reasons for your dissatisfaction, slay the nine-headed Hydra, fight off suggestions of credit instead of refund (because you really want to buy more tat from these merchants), and so it goes on.
Eventually, if you persist in demanding your money back, you get to the clincher. They insist that you first return the goods via tracked delivery service at your own cost … to China. And there was you thinking they were based in the US or UK like the advertising implied.
This trick kills your chances of getting your money back stone dead for two reasons:
(1) The cost of a tracked shipment will far exceed what you paid in total for the goods. Only a fool is going to shell out more than they paid for the goods in the faint hope of getting a refund on the original outlay.
(2) This is the really clever bit – you cannot get PayPal to refund you because their “PayPal Buyer Protection” is worthless in these circumstances. When PayPal say this:
… what they hide in small print is “only if you return the goods at your own expense via a tracked delivery service“. Trying to get your money back under PayPal Buyer Protection is like banging your head against a brick wall. No matter how many times you patiently explain the nature of the scam, PayPal responds by rote: “you haven’t returned the goods so no refund”. They will refuse to escalate the matter to a level where staff are capable and authorised to go beyond copy-and-paste response. Presumably, that is because they will have no excuse once they can’t hide behind the “no return, no refund” line.
The scammers usually run short-duration, high-volume advertising campaigns on Facebook so as to generate lots of orders before anybody receives any product. That ensures no negative feedback is available if a wary potential customer does some research before ordering.
Of course, PayPal is well aware that these scams are in widespread operation and that they work by purposely exploiting the limitations of PayPal’s own terms and conditions. But it seems that PayPal doesn’t care about its own customers being out of pocket or about the damage to its own reputation. After all, they are taking commission on every one of these sales.
This dilution of trustworthiness for consumers is one of the many reasons why we now recommend to clients that they steer clear of PayPal and go instead with better and more modern payment processors such as Stripe.
PayPal’s own customer forum is full of complaints about the Chinese scam. They can’t claim they don’t know about it.
How can buyers get refunds?
PayPal Disputes Process
The first thing to say is that you will be wasting your time with the PayPal Disputes process. It’s a very rigid, largely automated, system. You’ll have to spend time providing all the information, but won’t get any refund unless you spend more than the purchase price on returning the goods to China. Feel free to knock yourself out messaging PayPal to ask them to apply commonsense. But you’ll be dealing with low-paid staff from developing countries with neither the authority nor the mindset to go off-script. Here’s one person’s description of their experience:
I put a lot of time and effort into sending PayPal detailed explanations of the scam, precise information on how the goods supplied differed from what had been promised, evidence showing that lots of other people were having the exact same experience, copies of correspondence with the supplier, and quotations showing how the cost of return shipping would be twice the original purchase price.
Each time, I got a boilerplate response from a PayPal drone ignoring my evidence and the obvious facts of the case but claiming that they ‘completely understand’ and ‘It is my pleasure to assist you. Thank you for choosing PayPal’. They would always refuse to escalate the case for review by somebody with more time/latitude/interest.
But it got worse! Early in the process, they ‘found in my favor’ and set a deadline for receipt of my proof of return postage (despite my having been clear that this was not going to happen for all the obvious reasons). One of their subsequent messages advised me to submit any further evidence or comments via the Dispute system. When I did that, their poxy automated Dispute system treated that as my notification of return postage which, as it contained no tracking number (!), triggered a reversal of their original decision in my favour. Even though I still had another week to provide the return evidence, they u-turned, rejected the case, and closed it. Because I had done exactly what they told me to do! No amount of further messaging could get them to acknowledge that this was a process flaw. It looks like PayPal’s customer service processes have been designed by the Borg. ‘Resistance is futile. We are the PayPal. You will be ripped-off ‘.
Credit Card chargeback
If you funded the PayPal transaction with a credit card you may still have a small chance of getting your money back. Because of the way credit card transactions are regulated, issuers have a duty to be fair and reasonable. Some take this more seriously than others, so you may be able to get them to agree a chargeback.
Debit cards are trickier
Even debit card issuers sometimes cooperate. But they are under less regulatory pressure than credit card providers to do so and may well choose to be obstructive and to play dumb like PayPal to avoid facing up to their responsibilities. Here’s an example of that from Nat West Bank.
Despite being presented with all the same evidence that was sent to PayPal, NatWest showed no interest in that or in resolving the matter. Their response here refers to completely the wrong transaction, gets the facts about the transaction wrong, and pretends that they have no legal duty to deal with fraud. This insulting response resulted in them losing a customer of 10 years and cost them significantly more in lost fees over the the next 3 months alone than if they had just refunded the money and taken the loss. But the truth is that the banks and companies like PayPal just care about getting their cut from fraud unless regulation forces them to be fair. The adage “buyer beware” is especially apt in this age of global online business.
Prevention is better than cure
Always start from a position of scepticism with a Facebook advert from an unknown business. If the product or price sounds too good to be true … it almost certainly is. If the website contains no verifiable contact details for the business, then you’d be crazy sending them your money. If the advertiser is soothing your concerns with promises of easy refunds, check how the refund process (allegedly) works.
Many online security products nowadays aim, to block suspicious websites. But they’re usually not very good at picking up on this kind of scam, so you still need to exercise diligence and judgement.
There are resources that can help in identifying scam websites and their operations. These include the impressive Fake Website Buster run by James Greening.
26 thoughts on “PayPal knowingly making money by helping Chinese scammers”
Thanks I completely agree. PayPal seem to be working for these scammers. Made me pay postage costs to return counterfeit good to China. I supplied tracking and it’s now at Chinese customs very conveniently and they’ve denied my refund saying I didn’t supply tracking ! The whole thing smacks of corruption. There are over 500 complaints against the company that scammed me and PayPal find in their favour!! The mind boggles. I’m done with PayPal!
So sorry to hear that Frances. I don’t suppose you paid PayPal by credit card? If so, it is definitely worth pursuing a chargeback claim through the credit card issuer because they are more tightly regulated. Even debit card issuers sometimes cooperate, although mine (NatWest) refused to when I was conned. That lost them a customer of more than a decade’s standing and has already cost them many times more in lost fees than they would have lost from just giving me back my money. But banks, like PayPal, don’t care that much about individual customers being defrauded unless they are required to by regulation.
Yes too
Same thing happen to me and when I kept pressuring paypal they limit access to my account
where do you suggest we go next? I bought through Paypal on my credit card as method of payment. Maybe it’s time to get VISA involved?
Absolutely right, Margaret. Credit card issuers tend to be better at dealing with this kind of fraud, not least because they are more heavily regulated than cowboy outfits like PayPal. Let us know how you get on!
Exactly what I’m going through. I have spent so many hours back and forth with the PayPal bots. I’ve tried to call only to be directed back to the process that involves the bots. What a waste of time. I may leave PayPal.
Sorry to hear of your bad experience with PayPal’s fraud-supporting processes, Dorothy. Everyone here nowadays tries to pay by credit card rather than PayPal wherever possible. If you have no option and need to use PayPal, ensure that you fund the transaction with a credit card (not a debit card), and never pay using a positive balance on your PayPal account. You have a better chance of getting your money back from a credit card issuer.
I have been ripped off by a slightly different Chinese scam for a garden shed.
It did not arrive so I opened a case for item not received.Paypal contacted the scammer who then posted a soap dish out to me and provided paypal with the tracking number.
I received the package not knowing it was my “shed”.PayPal rejected my claim for item not received as according to them I had received it.I could not then open another case for item significantly not as described since you can only open 1 case per item.
I sent them evidence of the size of the envelope 6 inches by 6 inches which was supposed to contain a 5 foot by 4 foot shed!Also the customs declaration clearly said I had been sent a soap dish which was not what I had ordered and paid for.
I appealed the closed dispute with my documentary evidence which proved beyond doubt that that tracking number was NOT a shed and got a response saying that due to Covid 19 they couldn’t deal with my claim and I have NOT received a refund making a mockery if their buyer protection.
I would not recommend paypal to anyone.
They are nothing but robbers and their buyer protwction is a big fat lie.
That’s shocking, Sharon. But sadly it’s a common variation on the scam. As you’ve found out the hard way, these scammers often don’t even bother sending a shoddy pale imitation of the product actually advertised. Instead they send an empty package or – as in your case – a small worthless item just to be able to show ‘evidence’ of having posted something. It’s unimaginable how an ostensibly reputable payment processor that promotes itself as a safe and trusted partner can deliberately pretend to believe that your shed was delivered in a 6 inch square envelope just in order to keep hold of their commission for facilitating a criminally fraudulent sale! As you rightly say, PayPal’s Buyer protection is indeed a big fat lie.
The only advice we can offer is to try a chargeback through your card issuer if you paid PayPal by credit card. Credit card issuers tend to be slightly more reasonable in this kind of case where the evidence clearly demonstrates fraud. If you are successful, watch out for Paypal trying to claw back the money without notice after the credit card company takes it away from them – don’t keep a positive balance in your PayPal account.
I found that filing a complaint with BBB against Paypal gets me my refund. I also will not use them unless it is a reputable company and they with a credit card going forward. Paypal is getting rich on this scam. Class action suit would be good and I would certainly join it.
I am currently going through this exact issue with PayPal right now, and similarly they are insisting I send back a worthless, damage and incorrect item (different to what I ordered) at a cost of about £30 just to send back an item of about £15 !
It’s madness, and PayPal so far don’t seem to be on my side !
Since my paypal was funded thru a credit card (a Bank of America, VISA), after being rejected by Paypal, the bank cheerfully refunded my money in whole right away. no questions asked.
Glad that worked out for you, Ed. As the article says, claiming through the credit card issuer is usually the best option. You still have to ensure that the Paypal transaction is fully funded by the credit card, not from Paypal balance. And you have to watch out for Paypal taking the payment from your card again after they see the chargeback.
What is BBB?
“Better Business Bureau”. Useful if you are in North America. https://www.bbb.org/
I spent 5 months obtaining a refund. I did not purchase my substandard home made hand sewn fake leather boots on facebook. However I was informing others how to obtain a refund and it was not the resolution service center of PayPal. I had a copy and paste paragraph of the PayPal CEO, mail fraud, state attorney general, online fraud and even china’s embassy. I had a following. Then I was hacked by the only way I can describe by the Chinese mafia on my Facebook. They stole my password and my name, first they put 300 pictures of Chinese people, children, China, menus, animals in my account and then the opened too many accounts to count with some version of my name and instead of my picture they started out with Chinese people, then they put Chinese children and babies and then it went down hill. I reported to Facebook they did nothing and I reported at least 40 times especially when I was being threatened. They knew I was trying to close their fake accounts and report them so they wrote in them they beat me and they would alway win then they started posting big men, guns, nude woman, strange things. I gave up. My friends think it is still my account. I have told them it is not me.
That’s a shocking story, Ellen. Gangster capitalism from China and careful looking-the-other-way from Western companies like Facebook and PayPal who profit from it.
I was scammed by a Chinese sell, dispute following PayPal’s procedures to the letter providing images on the website of the advertised product and the very fake product that arrived Paypal continued to extend the deadline on the case for no apparent reason other that stalling & hoping I’d go away! After 3 months! Yes! 3 months of stalling I finally spoke to my bank Natwest, because it was my debit card registered on Paypal my bank issued me with the refund and charged the cost back to Paypal.
Glad you got a resolution, David. With a debit card, getting a refund is very much hit-and-miss. Depends on which institution and which member of staff handles the claim. We certainly got no joy from Nat West when we were scammed, despite providing them with full information.
I have also recently been scammed by PayPal and their CHINESE CRONIES. Here’s my take on how to deal with it. Since we can’t afford to send it back to China, MAIL THE WORTHLESS SHIT TO PAYPAL HEADQUARTERS.
PayPal is located at 2211 N. First St., San Jose, CA 95131.
Nice idea, Brian!
I know this is old but it’s still happening! This exact scenario happened to me only they also sent me one non functional fake item in my order of which I had ordered two on top of sending complete junk nothing like what I had ordered. Unfortunately, part of the money I paid was already in my PayPal account so I am going to try and file both a bank card fraud complaint as well as change my dispute to “incorrect amount” to try and retrieve at least the cost of the item they never sent! Wish me luck 😂
Good luck! Let us know how you get on.
To the T. They got me. I’ll never be using paypal again.
I’m going to mail an empty envelope with tracking to the return address. (If they give me one. I’ve asked 5 times).
UK address, sent from USA. Arrived with no international postage and they want me to return to china. I’ll see what happens