What is an unauthorised account activity claim?

[charmony]

I sold a small item to a buyer, who paid with Paypal, and I posted the item today. Later today I got an "unauthorised account activity claim" from Paypal. My only multi-choice option for resolving this appears to be providing evidence that I shipped the item (which I don't have, as it was sent regular mail). Failing that it seems I will lose the money, despite the buyer receiving the item in a couple of days' time.

Is there anything I can do about this?

[charmony]

The Paypal notifications do give the same addresses for both this order and the previous one (from a week ago).

I received two notifications from Paypal in quick succession. The first was a "Temporary Hold Pending Investigation" and said:

"Recently, PayPal received a notification from a user regarding unauthorised access to his PayPal account. As a result, one of the payments credited to your PayPal account has been placed in a temporary hold while we investigate the claim."

with transaction number, and the following options "if you have already sent the goods":

1) Tracking Number of Delivery
2) Delivery Company Used
3) Postage Compensation Information (if used)

none of which I can provide. (It was an order for $3.25 incl postage!)

The second email was titled "We're investigating a payment reversal" and said:

"An unauthorised account activity claim was recently filed against the following transaction .....

We need additional information from you within the next seven days."

with instructions to log onto Paypal and go to the Resolution Centre. I went there, where it says: "You can be covered if you provide adequate proof that you shipped the item to the address on the payment's transaction details page." (ha ha)

And I have to choose between three options in order to resolve the case: 

x I can provide proof that the item was shipped to the buyer's address listed above.

x I have not shipped the item and I will refund the payment.

x I have refunded the payment for this transaction.

There is no option for "Something fishy is going on here!"

Anyway, I'll wait to see if the buyer responds to my email but I'm not hopeful. I suppose my other option is to contact Paypal and point out the addresses were the same in both cases, so it doesn't look unauthorized to me, but the fact is I can't prove I shipped the second order, at least not until the buyer receives it (and confirms so).

[digital*ghost]

Ok, as I suspected, it's not a credit card chargeback, so I agree that the best course of action is to call PayPal directly and explain the situation thoroughly.

Because there is no credit card involved, there's no unknown information about the owner of the account used to pay for the purchase, so once you point out that you have been involved in previous transactions with the same buyer with full matching details which have not been contested, they should - hopefully - see reason and logic... (although it might take a little persistence and insistence on speaking to someone  who can see and understand what you're trying to explain).

If PayPal do rule in the buyer's favour, you can always take it to the BFSO. I certainly wouldn't just refund even for an amount <$4, as a matter of principle, and if nothing else it could flag the buyer's account as suspicious and make it harder for them to pull the same stunt on another seller (if indeed they are knowingly attempting to commit fraud, at this stage it's not certain but the evidence surely isn't favourable to them). 

[jensmanchester-australia]

This sounds like when Paypal tried to withdraw the funds from the buyers bank account the bank has notified Paypal that there may be a problem so Paypal have then put a hold on the funds.

Quite often the buyer is totally unaware that Paypal have even placed a hold on the funds and despite the wording in the email from Paypal it is usually Paypal and not the buyer who has instigated the investigation.

These situations usually happen when the buyer has insufficient funds in their account and if they have a back up credit card on file there is some problem with that.

They originally advise the seller that it is safe to post and usually within 24 hours, which is once the bank has notified them of a problem, they put the funds on hold.

I would wait to hear back from the buyer and see what they have to say.

Just slightly off topic - this week I have had several buyers phone me at my shop asking for longer to pay as the bank has cancelled their credit cards due to unauthorised use. I am not sure if maybe the banks are tightening up on their procedures but it has been an abnormally high number of people who have had this problem this last week.

[lyndal1838]

Jen, I recently contacted my bank about an unauthorised withdrawal from my Debit card.  My bank's reaction was to cancel the card to stop any chance of further withdrawals from the same source and to issue a new card as well as claiming the payment back.

The card was cancelled on the Friday and the new card was in my possession the following Tuesday, but if I had been waiting on the card to make any payments I would have been in the same position as your customers.  Luckily I had another card attached to paypal, but I did have to contact several businesses about direct debits from that account.

This is the first time I have had my card cancelled due to initiating a chargeback, so maybe all banks are reacting in the same way now.

[leader-of-the-band]

Apparently if it's unauthorised card use then Paypal won't cover you.

I know the OP has clarified the reason for their problem, but has anyone else noticed the following passage that now appears on a PayPal payment notification?

Reversals:

Please be aware that your payment can still be reversed (e.g. if it is subject to a chargeback), even after you have shipped the item to your buyer. Complying with PayPal’s Seller Protection program and following the guidelines in our Safety Advice pages helps to protect you from things like chargebacks.

I had a payment midweek and it is the first time I have seen this on a payment advice.

[2106greencat]

I actually think paypal should be responsible for charge backs. The simple reason being, it is Paypal who have the system in place where by as a  seller we have no way of knowing if a paypal payment has been funded by a credit card or not. So, even if we wanted to protect ourselves against chargeback and refuse card payments how can we? 

[lyndal1838]

Greencat, sellers are not allowed to refuse CC funded payments.  Some sites allow/allowed it but the Australian site has never allowed it.

[beautbots01]

leader of the band.  I started seeing that notice about Paypal reversals/chargebacks a week ago (16th).

[*sparklz*]

I think that is GC's point Lyndal.

As we are not allowed to pick and choose how the PP payment is funded the seller should be protected anyway as we ONLY post after told it is safe to do so.

[lyndal1838]

Sparklz, my point is that even if the seller wants to protect themselves, and knows the funding source, they cannot refuse that payment because the Australian site does not allow it.  Some other sites can refuse CC payments, or at least could in the past. I am not sure what the rules are now as I have not had a payment refused for some years now.