PayPal Dispute Attempt - Stunned!

[Pit]

They may also put through the wire transfer even with a zero balance, which will over-draw the account.

This brings up another good point. You want to be sure that your financial instituition does NOT place overdraft protection on the account, so that any such transfer will be met with NSF.

 

[PerryM]

Which way?

Sure, they can suspend your PP account. But, the point is, they can't touch your money. I don't mind working through a dispute, but I prefer to retain control of my money.

Also, as is the subject of another recent thread, if your PP account is hacked, your money will be out of reach of the criminals. Peoples' bank accounts have been drained this way. Why not protect yourself?

Has anyone had experience here? As a landlord I have an ironclad lease that the renter agrees to so I know I will win - eventually (Never has happened to me but my assumption)

So which is better 1) Instantly move funds out of the PP account and worry about side effects or 2) Allow PP to remove the funds and you continue doing business while PP screws around looking tough only to step aside and put the money back into my account.

I'm very interested in any actual accounts of this - I don't really care about the assumptions and rules - just actual experiences.

Thanks for any input

 

[moltenlava]

Perry,

Moving the fund out of the Paypal account immediately will probably help. Paypal is not allowed to take any of your money out of your bank account, or your credit card. The only thing Paypal can do is put a hold on your Paypal credit. If you don't have any credit on your Paypal account, you have nothing to lose.

When the buyer files a disbute, Paypal will put your Paypal account on hold. Which means you can no longer move fund out of your Paypal credit. And you can no longer accept Paypal payment, or use Paypal to make payment to other people. The disputes take about a couple of weeks to come to the decision. If the seller can prove the good was sent and delivered to the buyer, then the hold is lifted and the seller is exonerated. If the seller cannot provide the shipping and delivery information, then there are further actions taken from the seller's account, such as the the charge being reversed to the buyer. If the seller can prove the service or good was delivered to the buyer, then the responsibility ends there. The hold on the seller's account will be lifted and the buyer will get nothing. That's the actual experience from using Paypal for 10+ years.

 

[PerryM]

Perry,

Moving the fund out of the Paypal account immediately will probably help. Paypal is not allowed to take any of your money out of your bank account, or your credit card. The only thing Paypal can do is put a hold on your Paypal credit. If you don't have any credit on your Paypal account, you have nothing to lose.

When the buyer files a disbute, Paypal will put your Paypal account on hold. Which means you can no longer move fund out of your Paypal credit. And you can no longer accept Paypal payment, or use Paypal to make payment to other people. The disputes take about a couple of weeks to come to the decision. If the seller can prove the good was sent and delivered to the buyer, then the hold is lifted and the seller is exonerated. If the seller cannot provide the shipping and delivery information, then there are further actions taken from the seller's account, such as the the charge being reversed to the buyer. If the seller can prove the service or good was delivered to the buyer, then the responsibility ends there. The hold on the seller's account will be lifted and the buyer will get nothing. That's the actual experience from using Paypal for 10+ years.

I've never had any dispute with my PayPal account so I don't really know what's in store if one occurs.

Those Power Sellers on eBay, the ones with 100,000+ transactions, must get disputes all the time - hard to believe that PayPal suspends their account while they investigate a dispute on a Pez Dispenser that our government controlled mail system lost.

(On vacation now so I don't/can't have time to look up the rules)

If they do suspend PayPal accounts like that then alternative methods of payment must be used while the account is suspended. Makes no sense to me.

Thanks

 

[bluehende]

personal experience

Sure, they can suspend your PP account. But, the point is, they can't touch your money. I don't mind working through a dispute, but I prefer to retain control of my money.

Also, as is the subject of another recent thread, if your PP account is hacked, your money will be out of reach of the criminals. Peoples' bank accounts have been drained this way. Why not protect yourself?

This has been stated a few time here, but you may want to check. My daughter in law was anticipating a dispute probem. She moved the money outof paypal. Paypal charged her CC as a cash advance with enourmous fees. When she contacted her credit card company they denied the dispute . They claimed she had given paypal authorization to charge it. I was flabbergasted. I thought you actually had to authorize a payment not just give them a number.

 

[Amy]

This has been stated a few time here, but you may want to check. My daughter in law was anticipating a dispute probem. She moved the money outof paypal. Paypal charged her CC as a cash advance with enourmous fees. When she contacted her credit card company they denied the dispute . They claimed she had given paypal authorization to charge it. I was flabbergasted. I thought you actually had to authorize a payment not just give them a number.

Sorry I don't feel up to searching the Paypal website terms right now but I thought that one of the agreements you give PP is that they can charge your CC card as backup if you don't have a PP balance or insufficient funds in your bank account, and that includes situations when they do a chargeback [whether it be a chargeback that PP initiates or a chargeback that the renter's cc company initiates]. So withdrawing all the money from the PP fund wouldn't help and could actually cost more in terms of penalties, whether as NSF from bank or interest from CC company.

Also, under general landlord tenant law (which of course may vary from state to state), as one prior poster mentioned, I think it is generally the case that the owner/landlord remains on the hook if a unit should fail to be "habitable" (which is subject to different interpretations but generally indicates some pretty bad condition). Sure the landlord can go after the management company later, but it still probably means the landlord can be, at a minimum, subject to charge back if tenant has proof of inhabitable conditions.

Further, in many timeshare resort policies the HOA will ultimately hold the owner liable if, say, the renter's cc card ends up being invalid or damage is left in renter's wake. I'm not positive but I seem to recall someone on the DIS boards post about this years ago re DVC charging the owner for something as a result of a bad tenant, even though DVC is one of the resorts that take a cc card imprint upon checkin. (I don't recall how that disputed ended.) You may want to go over the timeshares' governing policies, covenants, etc. to double check.

I basically treat timeshare rental as one that comes with some risks, even if I have a so called iron clad contract and the renter has checked in/out.

 

[Pit]

Sorry I don't feel up to searching the Paypal website terms right now but I thought that one of the agreements you give PP is that they can charge your CC card as backup if you don't have a PP balance or insufficient funds in your bank account, and that includes situations when they do a chargeback [whether it be a chargeback that PP initiates or a chargeback that the renter's cc company initiates]. So withdrawing all the money from the PP fund wouldn't help and could actually cost more in terms of penalties, whether as NSF from bank or interest from CC company.

I don't think this is correct. Following is a link to the PP user agreement, if anyone else cares to read it. Here's what I was able to dig up, under Section 10. Says nothing about cash advances to fund your account.

10.3 Reimbursement for Your Liability. In the event that you are liable for any amounts owed to PayPal, PayPal may immediately remove such amounts from your Balance. If you do not have a Balance that is sufficient to cover your liability, your Account will have a negative Balance and you will be required to immediately add funds to your Balance to eliminate the negative Balance. If you do not do so, PayPal may engage in collection efforts to recover such amounts from you.

https://cms.paypal.com/cms_content/US/en_US/files/ua/ua.pdf

 

[Amy]

Hum, I guess I was thinking of something like this provision in the terms you attached:

4.4 Risk of Reversals, Chargebacks and Claims. When you receive a payment, you are liable to PayPal for the full amount of the payment plus any Fees if the payment is later invalidated for any reason. This means that, in addition to any other liability, you will be responsible for the amount of the payment, plus the applicable Fees listed in section 8 of this Agreement if you lose a Claim or a Chargeback, or if there is a Reversal of the payment. You agree to allow PayPal to recover any amounts due to PayPal by debiting your Balance. If there are insufficient funds in your Balance to cover your liability, you agree to reimburse PayPal through other means. If a sender of a payment files a Chargeback, the credit card issuer, not PayPal, will determine who wins the Chargeback.

(Emphasis added).

Since 4.4 specifically refers to cc charge backs and the later 10.3 is a more general backup/default "what could happen if you owe us money," I'd think 4.4 would apply in a cc charge back situation and 10.3 would apply in any other situation where you owe PP money due to a dispute. That 4.4 language re what PP can do to recover a chargeback (any "other means") is pretty broad.

But of course which provision may apply can be disputed by you. If you don't have sufficient funds in your PP account and also your linked bank account, the risk of PP charging the amount via your attached CC card remains so long as that 4.4 might apply (even if you were to succeed later in a lawsuit). And the cc card may treat that charge as a cash advance depending on its policy.

Bottom line, don't count on renting being risk free when using Paypal + good contract, AND I personally wouldn't have insufficient funds in Paypal or bank account as long as I have a rental where a dispute might arise after checkout.

I have in the past emailed the renter after checkout to confirm everything was fine. I've always received a reply (so far anyway), and then I stop worrying when I have a written confirmation of a successful rental.

 

[e.bram]

I guess AMY is on the ball!!!
Eh Perry

 

[Pit]

Yes, section 4.4 is clearly refering to your liability after losing a dispute. I'm assuming that the seller (renter) will win a dispute in a case such as the OP. Even so, I don't think that "you agree to reimburse PayPal" gives them discretion to take a cash advance against your CC.

I agree that renting is not risk free, and its important to CYA with rental agreements and emails. PP has a less than stellar reputation, in both customer service and online security. So, I do not trust them with my money. They are not a bank and are not regulated as one.

 

[DeniseM]

If I was the OP, I would play dumb, and send the renter a friendly email asking them how their stay was!

 

[PerryM]

Ok; so what's the correct answer to the following rental:

March 1 to March 8 for $1,000 and today is March 9.

No dispute so far from the renter - how long do I hold my breath?

My rental agreements limits any renter's actions up until the day of check-out then binding arbitration in my home town for a period of 5 days. I have up to 30 days to file complaints and the renters agrees to bla bla bla....

Thanks...

 

[e.bram]

Yeah Perry:
But residential rental are covered by statute in the locality of the premises.. They can sue and serve you at TS address. You can't contract your way out of a law. In NJ rentals are covered by local rent control laws(if they exist) and consumer fraud laws on the state level.

 

[PerryM]

Yeah Perry:
But residential rental are covered by statute in the locality of the premises.. They can sue and serve you at TS address. You can't contract your way out of a law. In NJ rentals are covered by local rent control laws(if they exist) and consumer fraud laws on the state level.

and the correct answer is????

How long does a renter get to play games with a rental? Each state is different so how long do you hold your breath?

I'm starting to guess that there is no correct answer that applies - typical legal mumbo-jumbo.

So what's the tactic with the CC companies and PayPal - do they haul in lawyers to figure out each case?

P.S.
If there is no real answer can you tell the renter that you will refund $X.XX and if they accept the money they agree to drop all further claims? Does even something like this work? I've used this tactic before with other schmucks who want to gum up the works with lawyers. I state the fact right on the back of the check that they endorse.

 

[Pit]

I don't know if this answers your question Perry, but a CC dispute has to be filed within 60 days after the date of the statement on which the charge appears. Given that it could take up to a month for a CC charge to be billed to the card holder (e.g. if the charge was placed the day after statement closing), I think you can safely exhale 90 days after the transaction date. The actual occupancy dates are irrelevant for a chargeback or PP dispute. So, rent your units well in advance of check-in date.

 

[PerryM]

I don't know if this answers your question Perry, but a CC dispute has to be filed within 60 days after the date of the statement on which the charge appears. Given that it could take up to a month for a CC charge to be billed to the card holder (e.g. if the charge was placed the day after statement closing), I think you can safely exhale 90 days after the transaction date. The actual occupancy dates are irrelevant for a chargeback or PP dispute. So, rent your units well in advance of check-in date.

This is good news I guess - Most of my rentals happen 3 months before check-in.

But I'd bet that the renter would have no problems waiting a month after a great rental and disputing the charge on the CC and with PP.

Are we saying that rental agreements are worthless? Why bother if nothing means anything in the legal world?

(I've always had a suspicion that my lawyer has given me a lease that really means nothing in the long run - but a hefty legal bill)

 

[chriskre]

I've never had any dispute with my PayPal account so I don't really know what's in store if one occurs.

Those Power Sellers on eBay, the ones with 100,000+ transactions, must get disputes all the time - hard to believe that PayPal suspends their account while they investigate a dispute on a Pez Dispenser that our government controlled mail system lost.

(On vacation now so I don't/can't have time to look up the rules)

If they do suspend PayPal accounts like that then alternative methods of payment must be used while the account is suspended. Makes no sense to me.

Thanks

Paypal doesn't suspend your account as a seller. I sell on ebay all the time. What they do is suspend your access to the money in dispute until they investigate further.

Usually as a seller if you used paypal to ship the item which obviously you can't do with a rental, or maybe you could ship the contract to them as proof, then you'd have a tracking number, I dunno.

Anyways, paypal does side with the buyers if you don't use tracking so maybe I'd send them something in writing that shows you sent them something. Then you have your other documentation.

It's always a risk when dealing with credit cards because some consumers think it's so easy to scam people and think nothing of doing it also. :annoyed: Fortunately, most people are fairly honest and there is nothing to worry about with most people.

 

[Pit]

This is good news I guess - Most of my rentals happen 3 months before check-in.

But I'd bet that the renter would have no problems waiting a month after a great rental and disputing the charge on the CC and with PP.

Are we saying that rental agreements are worthless? Why bother if nothing means anything in the legal world?

(I've always had a suspicion that my lawyer has given me a lease that really means nothing in the long run - but a hefty legal bill)

If the renter is within the 60 day period, they can dispute the charge, if for no other reason than to delay paying their CC bill.

Your rental agreement should provide the documentation needed to win the dispute.

A PP dispute has to be filed within 45 days, and if the buyer also makes a CC dispute, PP will step aside -- leaving it up to CC company to decide the outcome.

 

[Pit]

Paypal doesn't suspend your account as a seller. I sell on ebay all the time. What they do is suspend your access to the money in dispute until they investigate further.

Read some of the stories on www.paypalwarning.com and www.paypalsucks.com/newforums/. I imagine that some of these stories are, well, exaggerated. But, I have hard time believing that all of them are.

 

[chriskre]

Read some of the stories on www.paypalwarning.com and www.paypalsucks.com/newforums/. I imagine that some of these stories are, well, exaggerated. But, I have hard time believing that all of them are.

Well luckily for me in my 4 years of selling on ebay it has not been my experience. I hope I am not jinxing myself on this here. :ignore:

 

[PerryM]

This is exactly where this topic always ends up - in the Twilight Zone.

I'm going to continue doing what I've done for 10 years and some day I'll rent to a turkey and send him/her a payoff check with my little blurb on the back about this ends the dispute and they won't bother me any more. I have no idea if the renter then cashes the check if a binding agreement has been reached but there is no clear cut answer to all of this.