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This is a new form of scam buying through Pay Pal:
Seller beware: a cautionary tale
I put my motorcycle up for sale (if you’re interested click HERE) and listed it on a number of sites to help get the word out. Those included paid ads as well as enthusiast sites.
Within 24 hours, I got a response. Beauty, I thought, and what’s better he didn’t haggle. He offered to pay me the advertised cost. Too good to be true? Yep.
Here’s the scam: he could only pay me by PayPal. Supposedly he’s an oceanographer at sea at the moment, with no access to his bank account but did have access to his PayPal account, which was linked to his bank account. He could transfer money into my PayPal account and then organize an ‘agent’ to collect the bike when the money had hit.
Sounds foolproof, right? The money goes in, he sends his guy around, collects the bike and we’re all happy.
As a former journalist (ex-crime rounds), all of this sounded fishy in the extreme. His story sounded lame (’if he can access PayPal over the Internet, why not his bank account?’; ‘what’s with the flimsy oceanographer at sea line?’, etc.) and I did some homework as to how PayPal works and doesn’t work.
Essentially the scam works because PayPal allows buyers to dispute a transaction and if done with a credit card, the issuer can ask for a ‘chargeback’ if the buyer disputes the sale. This means that after the money has gone in, even if you have transferred it to your account, the buyer’s issuing bank can order a ‘chargeback’ on the money you were paid, which means you have to pay it back one way or another. Meanwhile, your goods have been delivered or picked up and you have no way of recovering them because the phony buyer has disappeared.
This asymmetry in the buyer/seller dynamic means the seller can be caught short — big time.
I emailed my erstwhile oceanographer with a hanking to buy a motorbike for his favourite cousin in Perth saying I would only take cash (on pick-up was was fine), a cashier’s cheque (with goods to be picked up AFTER the cheque cleared) or a direct deposit (bank-to-bank, with 24-48 hour pick-up after the transaction cleared). I never heard back from him, which was not much of a surprise.
Also, one more word of caution: it’s not just PayPal, it’s also Western Union that you can have problems with, so beware folks, there’s some serious shonks out there that are waiting to take advantage of you if you don’t have your wits about you.
Seller beware: a cautionary tale
I put my motorcycle up for sale (if you’re interested click HERE) and listed it on a number of sites to help get the word out. Those included paid ads as well as enthusiast sites.
Within 24 hours, I got a response. Beauty, I thought, and what’s better he didn’t haggle. He offered to pay me the advertised cost. Too good to be true? Yep.
Here’s the scam: he could only pay me by PayPal. Supposedly he’s an oceanographer at sea at the moment, with no access to his bank account but did have access to his PayPal account, which was linked to his bank account. He could transfer money into my PayPal account and then organize an ‘agent’ to collect the bike when the money had hit.
Sounds foolproof, right? The money goes in, he sends his guy around, collects the bike and we’re all happy.
As a former journalist (ex-crime rounds), all of this sounded fishy in the extreme. His story sounded lame (’if he can access PayPal over the Internet, why not his bank account?’; ‘what’s with the flimsy oceanographer at sea line?’, etc.) and I did some homework as to how PayPal works and doesn’t work.
Essentially the scam works because PayPal allows buyers to dispute a transaction and if done with a credit card, the issuer can ask for a ‘chargeback’ if the buyer disputes the sale. This means that after the money has gone in, even if you have transferred it to your account, the buyer’s issuing bank can order a ‘chargeback’ on the money you were paid, which means you have to pay it back one way or another. Meanwhile, your goods have been delivered or picked up and you have no way of recovering them because the phony buyer has disappeared.
This asymmetry in the buyer/seller dynamic means the seller can be caught short — big time.
I emailed my erstwhile oceanographer with a hanking to buy a motorbike for his favourite cousin in Perth saying I would only take cash (on pick-up was was fine), a cashier’s cheque (with goods to be picked up AFTER the cheque cleared) or a direct deposit (bank-to-bank, with 24-48 hour pick-up after the transaction cleared). I never heard back from him, which was not much of a surprise.
Also, one more word of caution: it’s not just PayPal, it’s also Western Union that you can have problems with, so beware folks, there’s some serious shonks out there that are waiting to take advantage of you if you don’t have your wits about you.
. From a buyers perspective it's more secure than direct transfer.
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