If you’re an eBay seller and a local buyer asks to pick-up an item at your house, should you let them? The answer is no and Steven Sanderson can tell you exactly why. An elaborate scam involving eBay and Paypal led an iPad thief directly to his front door. The brazen predator came disguised as a friendly customer willing to purchase the digital device from Sanderson for top dollar. But it was weeks before the fraudulent nature of this transaction became clear.
Now Sanderson’s iPad is gone and so is the money he made by “selling” it on eBay. He blames PayPal for this fiasco and wants our help getting his $650 back. But who really is responsible here? (Reprint)
Sanderson’s troubling story has many lessons for anyone who buys or sells items on eBay using PayPal. Both eBay and PayPal have a variety of built-in protections to ensure safe transactions for buyers and sellers. However, it’s critical to follow all the fraud deterrent guidelines that the companies have outlined. If you don’t, you might find yourself on the outside of those safety nets.
An iPad thief goes hunting on eBay
Just before Christmas, Sanderson listed the iPad on eBay for $650. Very quickly he received an inquiry about the device.
“Because of the proximity to the holidays, the buyer chose local pick-up for the iPad,” Sanderson recalled. “He sent the payment through PayPal right away, and then we arranged for him to come over to my house to get it.”
The “local pick-up” for this transaction was Sanderson’s home. Within hours of listing the iPad for sale on eBay, “the buyer” was standing at Sanderson’s front door.
A cordial Sanderson invited his prompt eBay customer into his home to inspect the product. The friendly man told Sanderson the device looked great, thanked him and quickly left.
As Sanderson closed the door, he was pleased with the ease of the entire transaction from start to finish. And his focus returned to the upcoming holidays. It wasn’t until after the new year that an entirely new light was shone on the person who had appeared on his doorstep that cold December evening.
It turns out, the fellow who came to his house wasn’t an eBay buyer at all. In fact, he was a thief who had walked right into Sanderson’s own home and stole the iPad.
PayPal breaks the news of the scam
Several weeks into the new year, PayPal alerted Sanderson to the scam.
On Jan 20, I received a possible fraud notification from PayPal. The buyer said he did not authorize the purchase of the iPad. I responded immediately with all of the information about the transaction. But all the funds from the sale were deducted from my account.
PayPal representatives told Sanderson that the owner of the PayPal account had disputed the charge. That person’s credit card company reversed the transaction pending an investigation.
The turn of events stunned Sanderson. He had proof that he had sold his iPad on eBay to a person who had paid him with that PayPal account — indisputable proof. (We’ll get to that surprising proof in a moment.)
Confident that he could prove to PayPal that the guy on the other side of this transaction was the scammer, Sanderson gathered his evidence.
This eBay buyer came to my house for pickup!
Sanderson patiently explained to multiple PayPal customer service representatives that the buyer had paid for the iPad on eBay but picked it up at his house. He repeatedly told anyone who would listen that he had proof that he had personally handed the customer the iPad.
When no one at the customer service level at PayPal was able to help, Sanderson says he then turned his focus upwards in the company.
Following the advice our publisher, Christopher Elliott, offers in his important article about fixing your own problem, Sanderson began working his way through the PayPal executive chain. Using the PayPal executive company contacts that our research department has listed on our site, he methodically contacted each person with his disturbing tale.
Eventually, Sanderson reached the CEO. At each level, he received a negative response to his request for the return of his $650. In fact, he didn’t find any sympathy, anywhere in the company. PayPal representatives explained that the “victim” of this scam was the user who reported this as an unauthorized transaction. That person claimed that he was not the buyer of Sanderson’s iPad and never went to his house to pick up anything purchased on eBay.
Why won’t Paypal protect me from this scammer?
Sanderson says the turn of events bewildered him. He never imagined that selling an iPad on eBay would end up bringing a thief right to his front door.
“PayPal is effectively penalizing me because this PayPal user did not do an adequate job of protecting their online account,” Sanderson complained. “And PayPal, eBay and their financial institution did not do an adequate job of noticing suspicious account activity and preventing the scam from occurring in the first place.”
Things went further south when PayPal also assessed various penalty fees on Sanderson’s account. When he refused to pay those fees, Paypal sent his account to collections. And soon a collections company was sending demand letters to Sanderson to pay the $68 penalty.
Now Sanderson realized his credit rating was in jeopardy. That simple eBay transaction had spiraled into a financial headache with repercussions he never saw coming.
Can the Elliott Advocacy team help unravel this scam?
Sanderson’s next plan of action was to contact the Elliott Advocacy team. Having read some of our PayPal success stories, he hoped that we could convince the company that he was a victim of a scam perpetrated from their platform.
Unfortunately, there were problems with his plea for help.
As a nonprofit consumer advocacy organization, we mediate cases between consumers and companies. Selling products for profit is a business transaction. And we aren’t able to direct our limited resources to resolving these types of issues. We also can’t investigate crimes and track down an iPad thief.
However, Sanderson’s case had aspects to it that I thought warranted a second look by our friends at PayPal. The company protects sellers and buyers against outright fraud. So I wasn’t sure why Sanderson had not qualified for that protection, especially after he sent me the smoking gun in this case. It turns out Sanderson had a crystal clear video of the smiling iPad thief posing as an Ebay buyer standing on the doorstep of his house. There was a recording of the entire transaction.
Proof: Here’s the guy pretending to be an eBay buyer at my house
When this criminal and his friend sauntered up to Sanderson’s front door, they had no idea that a Nest security video was recording their words and actions. In the four-minute video, these two are first shown nervously milling around outside Sanderson’s brownstone. Then one of them comes up the steps. He tells his friend to go around the corner out of view. And then the thief sticks his face right up against the camera, smiles and rings the doorbell.
An unsuspecting Sanderson then opens the door and invites the perpetrator inside. A few minutes later, a second video shows the primary thief reunited with his friend. The last we see of the two, they are walking away with the iPad in a bag Sanderson packed for them.
Reporting this iPad theft to the police
After I watched both videos, I asked Sanderson if he had filed a police report. I thought the videos along with a police report should help him to convince PayPal that he also was a victim of fraud. But Sanderson says the police rejected his request to file a report.
The view of the police department is that the eBay buyer is the only one that could file a report since it was the buyer’s account that was compromised. In their view, I willingly gave the iPad away. They wouldn’t take the report.
I encouraged Sanderson to go back to his local precinct and take the videos along with his paper trail with this iPad thief. If he could get a police report, I would forward it to PayPal and that could bolster his claim.
A few days later, Sanderson returned to the police department and this time an officer took his report. The report identifies this crime as a case of petit larceny.
PayPal: “The Seller Protection does not protect items that are picked up locally or in-person.”
After Sanderson sent me the police report, I forwarded it and the two videos to our executive contact at Paypal. I thought that, at the very least, PayPal might want to take a closer look at how Sanderson fell victim to this scam.
Our executive contact promised to have her team take a look at this case and see if they could do anything for Sanderson.
Soon the PayPal executive resolution team had some good and bad news for Sanderson.
Thanks again for reaching out. Our dedicated Customer Service team has looked into the matter and will reach out to Mr. Sanderson to provide him with education about his case. On background and for further clarification, PayPal Seller Protection does not protect items that are picked up locally or in-person as an online proof of delivery cannot be provided.
Additionally, in this case, the credit card issuer and not PayPal made the final determination regarding the chargeback claim. As Mr. Sanderson is an established account holder, we’re able to reverse the chargeback fee and offer him a courtesy credit to positively resolve his account, but per company policy, I’m unable to provide additional information. (PayPal executive team to Michelle)
An expensive Ebay lesson: Local pick-up should never be your home
And so, in the end, this transaction is an expensive lesson for Sanderson. By allowing the “buyer” to pick-up the iPad at his home, he had violated the basic requirements of the Seller Protection program. While a seller can conduct such transactions, they are risking a total loss should the transaction prove to be fraudulent. If a seller does not follow each and every guideline listed in the PayPal user agreement, the deal will not have any protection.
In this case, because of Sanderson’s good standing with PayPal before this problem, the company removed the fees that put his account in collections. But his iPad and the money he thought he made by selling it on eBay are gone forever because he invited this thief pretending to be a legitimate buyer to his house.
Sanderson says he isn’t willing to give up just yet and is exploring if there are any other possible avenues. One possibility is that his homeowner’s policy might cover this theft.
Do not invite an eBay buyer or seller to your house and other ways to avoid a scam
Whether you are a buyer or a seller who uses PayPal to send or receive payments, the PayPal User agreement is your friend. It’s a lengthy document, but to make sure that you conduct all of your PayPal transactions in the safest possible way, it’s imperative to familiarize yourself with it.
- Read and understand PayPal’s Purchase Protection Plan
If you’re a buyer, you’ll want to pay close attention to the page that explains the criteria for PayPal’s Purchase Protection.
- Familiarize yourself with PayPal’s Seller Protection Plan
If you are also selling items, then make sure you understand all the criteria for transactions to be covered under PayPal’s Seller Protection.
- Don’t invite a eBay buyer or seller to your house if they are a stanger
Of course, it’s never a good idea to invite people you don’t know to your house. That is especially true when you’re conducting transactions that involve money. The results can be much more disastrous than losing a few hundred dollars.
- Don’t let a buyer or seller’s sense of urgency cloud your judgment
Criminals — online and in real life — depend on catching their victims off-guard. They do so by forcing these fraudulent transactions to take place as quickly as possible. Unfortunately, in this case, Sanderson went against his better judgment and allowed a stranger to come to his house. That was a costly mistake and one he won’t ever make again.