Found this on a message board at work this morning, and figured that since it
was one of the favorite off topic topics, I'd pass it along:
> From: Moore,Jack
> Posted At: Friday, May 04, 2001 4:23 PM
> Posted To: Discussion & Response
> Subject: Ebay & Paypal.com- The Good and the Bad
>
> I have both bought and sold items on Ebay before, and as once stated by
> someone else, you need to check the rating and feedback on the seller before
> putting your money down. I have purchased items over $3,000.00 from ebay
> before, but the seller had the highest premium rating they give out with 373
> positive comments, almost all from different buyers, and ZERO negative or
> neutral comments. They had also sold many expensive items before and had
> very satisfied buyers. I too, was pleased with his quick response in
> getting me my purchased items. To pay him I used a Paypal account.
>
> While Paypal.com is a nice service, the one thing I DON'T like about Paypal
> is their policy on use of credit cards and the verification of them. A few
> months ago I had over $500 in charges show up on a credit card that had been
> locked in a fire safe at home for over 6 months. Among porn material and
> computer items ordered, the person used MY credit card to send themselves
> $250 through Paypal.com. After immediately closing my account on my VISA
> Platinum I attempted to figure out how someone did this. I wondered if
> someone stole my number from making credit card payments on line, or how
> this happened. Problem is they need to know your billing address, which is
> entered on Paypal to send a payment. Paypal does verify that it's the
> correct billing address, and then assumes that it's the card owner sending
> the payment. No other verifications are done unless the payment is over
> $250.
>
> Then I got another statement in the mail from my MasterCard. That ALSO had
> a $250 charge from Paypal. Again, I shut my credit card down and disputed
> the charges. How could this happen to TWO credit cards, both in the same
> month with the transactions being within hours of each other?? Especially
> since I don't even have internet capabilities for accessing or paying on my
> MasterCard on line. This time, the stealer made a mistake by also using
> this card. My MasterCard was a BRAND NEW card and I'd only ever used it
> ONCE to purchase one item, from one place. The same place I'd purchased
> items from over the phone months earlier with my Visa card. These items
> were also shipped to my house, giving this one person both credit card
> numbers, and my billing address, allowing them to send themselves 2 $250
> payments via Paypal.
>
> When I questioned Paypal about this, they said that it is their policy to
> allow up to that amount per transaction without any verification (such as
> mothers maiden name, name of your dog, etc) other than billing address. I
> told them if I'm supposedly the one who sent the money to someone, I wanted
> to know who it went to. They asked me to verify the email address that the
> Paypal account had that was used to send the money with that card. As the
> person stealing the money opened the account, I didn't have this email
> address, so, they would not tell me where the money was sent to. I
> explained that it was MY cards and that I could verify card numbers,
> expiration dates, and private information on the cards. They would ONLY
> take the email address of the Paypal account used to send the money. I then
> explained to them that they had a security problem as someone stole my
> credit card numbers, AND knew my billing/shipping address, AND opened an
> account on Paypal with their own email address, then used MY credit cards to
> send themselves money.
>
> Needless to say with the evidence of only making one single purchase ever
> with my MasterCard, and that being the same place I'd purchased things with
> my Visa card, and the fact that they had my billing address, the credit card
> companies launched their own investigation to recover their losses and
> arrested this person. Fact is though that Paypal let them steal the money
> very easily. In fact BOTH credit card companies said that they have pending
> "discussions" with Paypal as that web site and service had become one of the
> number ONE ways for people to steal money from credit card companies. All
> someone has to do is take your statement out of your mail box just once and
> they've got your credit card number, expiration date, billing address and
> everything needed to go out to Paypal and send multiple $250.00
> transactions. When I told the Visa company that someone had stole my credit
> card number and charged stuff to my card, the service rep said "Let me
> guess....someone charged $250 to it from Paypal.com right???" She said that
> was the fourth card account she had closed in two days with same issue and
> that her department had logged 13 account closings due to Paypal fraud
> transactions in the past 5 days. Imagine that.
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