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PayPal and a Friends and Family Payment Claim
 

Recently did a deal where I received 1,000 pounds exactly as friends and family from another UK verified paypal account in return for some digital items.

These were sent by email to this person after they sent be the money as friends and family.

It was my first dealing with this person hence getting money like this as I know there isn't a comeback for the sender, but in this case I was wrong. About a week later paypal emailed me stating a claim was open for the payment as the 'buyer' did not receive any goods/items. I rang paypal and told them it was a friends and family payment and nothing was exchanged and the agent agreed and didn't know how this person managed to open a claim on a friends and family payment. He closed the case in my favour. About 5 days later I looked at the account and noticed the money was back to being disputed. I rang again and explained all the above and the person this time said they'd have to escalate it. They obviously did this and the a few days later I got an email stating paypal decided in the 'buyers' favour as no item was received. I rang them again stating no item was actually sent, again they said they've opened an appeal but again a few days later paypal stated they denied the appeal and again stated the 'buyer' had not received any items.

Then a day later they permanently limited my paypal and I'm stuck with a negative balance now of 600 quid.

Thoughts? The paypal account I'm using here is a fully verified account and has a linked bank account, is 10 months old and probably has about 5-6k worth of sales from ebay through it over those 10 months. It's a stealth paypal. Never had any returns or chargebacks on it.

Re: PayPal and a Friends and Family Payment Claim
 

PayPal are no stranger to people abusing the system, both to avoid fees and to sell items "off the grid" as it were, since part of their compliance system checks the type of items being sold, whereas this cannot be done on such a transaction.

The buyer has most likely provided them with evidence of you conducting it for the purposes of a sale, whether it be a chat transcript; screenshots or anything else that can support their case against you. Despite the dispute system being designed for commercial transactions (sale of goods), it can be stretched to other transaction types in cases such as this.

As you admitted this was an off-the-grid sale using Family and Friends, the above scenario is the most likely and have won their case against you.

Use of PayPal in this manner is against their User Agreement and thereby taken action against your account, aside from reimbursing the buyer. The fact that a User Agreement breach on your side was involved most likely formed part of their decision to take the buyer's side.

In terms of the limitation, it will most likely remain in place. If there is no appeal for it, they will not usually remove it. You can attempt to call them up; email executive escalations etc. but almost certainly they will refuse to lift it.

In terms of the negative balance, your appeal has been refused, so their decision on this will not change. You are responsible for the balance. If the account is using a false name and address, then you could leave it like that, but if it is in your or someone else's name and address, then you should take action to avoid collection efforts commencing.

The fact that you are fully verified etc. is irrelevant to this case. When you breach the User Agreement, your credibility on the site are not of much use to you.

I am afraid you'll have to take this on the chin and move on. Conduct future transactions using Goods & Services and if needs must, ask the buyer not to leave any notes. Using the correct transfer option also puts you in more of a position to argue your case across upon dispute.