Friday, August 22, 2008

I Can't Get No Satisfaction (from PayPal)

With apologies to the Rolling Stones!

A Brief History & Timeline:

April 2008
ebusiness_supplies (EBS) eBay Australia's 7th largest PowerSeller, dealing in dirt bikes, quads, home gymnasiums etc places an announcement on their website stating that the company is now under new management. EBS business method was to pre-sell items on eBay at very low prices with high delivery charge mark-ups, then order and import them direct to Australia from China. Their stated delivery time was 30 days which was a violation of the PayPal 20 day delivery on pre-sale items policy in Australia at the time and invalidated any PayPal Protection right off the bat. The eBay pre-sale policy is 30 days.

May 2008
Buyers express concern over 'late' delivery.

June 2008
EBS fails to pay its eBay bill for May, but is permitted to continue listing and making sales. Buyers who have not received items bought in May are reassured by EBS that deliveries are imminent. eBay is running a heavy advertising campaign stating that buyers who pay with PayPal are 'protected' by the Buyer Protection Policy, it is the only safe way to pay. Concerned buyers who did not use PayPal are referred to the Vehicle Protection Policy.

July 2008
EBS fails to pay its eBay bill, again, now owing for May and June, but is permitted to continue listing and making sales. Buyers email eBay with concerns and receive bot driven rubbish in reply, some start leaving negative feedback. July 28th EBS goes into receivership. EBS still has active listings on eBay when eBay shuts them down. Within 24 hours all listings are removed. PayPal protection advertisement campaign ends, quietly.

August 2008
4000 eBay buyers are estimated to be out of pocket. Queensland Police receive complaints and begin a fraud investigation. eBay expresses unhappiness that EBS owes them $184,000 in unpaid fees for May, June and July "eBay is owed just as much as buyers"

Lots of media attention for a few days as buyers discover that PayPal Buyer Protection has more holes than a sieve, in fact, the holes in the scheme are big enough to ride a dirt bike through, but they do a great job of protecting PayPal. Announcement is made on eBay about a special fund.

"The PayPal fund will be available to buyers who have made recent purchases from this seller on eBay”

Note: The announcement does NOT say refunds will be made, it says the fund is 'available'. This is called BaySpeak, we did not say what you thought you heard us say.

The Reality

14th August an email from a buyer to PayPal

Could you please advise what is happening regarding the “special fund” that was to be set up for customers who lost their money with EBS? I understand that Mr Pipolo stated that all who paid by PayPal would receive refunds. Please advise. Many Thanks.

Same day reply from PayPal:

Thank you for contacting PayPal, my name is Ray and I am happy to assist you today.

I do understand that you need clarification regarding the refund EBS promised you.

After carefully checking the details of the transaction, it shows that you made the payment on the 14th of May. What you can do is to come to an amicable agreement with EBS to send you back the money you paid them.

It is my pleasure to assist you. Thank you for choosing PayPal.

Sincerely, Ray
PayPal, an eBay Company

Polite but firm response from buyer:
Thank you for your response. The careful checking mentioned did not identify that this organisation (EBS) is no longer a registered user on Ebay. Additionally, it has gone into receivership. I'll ask the question again....

The Managing Director of PayPal has publicly stated that all PayPal paying customers will be covered for their loss by PayPal. I am able to provide the source of this quotation if required - hence, when will access be provided to the 'special fund' as described?

Later that day PayPal says to the buyer:

Thank you for contacting PayPal with your concern, my name is Nathan and I am happy to assist you today! I understand that you would like some further clarification regarding the ebusiness_supplies situation.

It is true that unfortunately, ebusiness_supplies on / recently became unable to fulfill certain purchases made by customers. The seller is no longer operative and is now in the hands of liquidators. I am truly sorry to hear that you were affected by this unfortunate incident. PayPal will be refunding buyers who made a purchase from this seller within the last few weeks as discretionary payment, which is a credit initiated as a courtesy and not compelled by legal right.

This situation is a unique event involving a merchant going into liquidation and is not a common occurrence. Please be assured, PayPal offers buyers industry leading protection. Buyers enjoy the security offered by PayPal. By using PayPal, you never surrender sensitive personal financial information to an unknown seller. We are very sorry this unfortunate incident has transpired.

Thank you for your patience and for being a valuable member of the PayPal community.

Sincerely, Nathan
PayPal, an eBay Company

August 21st
An announcement from PayPal on the boards

Customers who have been directly impacted by eBusiness’ collapse have now all been credited by PayPal to either their PayPal account or Credit Card.

Judging from current traffic on the AU Discussion Boards this is untrue.
Dear xxxxx xxxxx,

We have concluded our investigation into your Buyer Claim.

Seller's Name: EBS International Pty Ltd
Seller's Email:
Seller’s Transaction ID: 3BY14625XB903053W

Transaction Date: 7 Jun 2008
Transaction Amount: -$342.50 AUD
Your Transaction ID: 5LD50651CR229911F
Case Number: PP-508-829-798

Buyer's Transaction ID: 5LD50651CR229911F

You have received a refund via PayPal in the amount of $0.00 AUD.

Yours sincerely,

Protection Services Department

Now What?

To my limited knowledge there is not much that can be done. I hope I am going to get information from Australia soon.

Meanwhile it could not hurt to contact the ACCC and make an email complaint citing Part IVA — unconscionable conduct in commercial and consumer transactions and/or Part V — unfair practices, misleading and deceptive conduct. The ACCC consumer complaint information page is here You can also telephone them 1300 302 502

You should also contact your State or Territory Office of Fair Trading.

Bookmark this blog and come back soon for more information!

Y'all come back!

1.Sydney Morning Herald
“Those who paid using PayPal .... would be entitled to refunds .... (and) would be contacted in the next few days” Andrew Pipolo, Managing Director PayPal Australia. 29th July

2. The Sheet
"We are talking to the liquidator but the fund will compensate buyers who have purchased from EBS in recent times who have not received an item or a refund." Kelley Stevens, PayPal Spokesperson. 30th July

3. The Age
PayPal managing director Andrew Pipolo set up a special PayPal fund to deal with this incident and said everyone who paid for items using PayPal would be entitled to refunds. July 30th

4. ZDNet Business News
"Given the unique nature of this, and the size .... we're looking after our customers," the spokesperson said.

There wouldn't be a limit on the amount of money which the company would pay out, they continued, but added that the criteria for refund still needed to be worked out. "We don't know if everybody is due for a refund."

When the company has a better handle on the situation, customers will be contacted via message boards. At the moment, the spokesperson said, "it's all a bit fluid".

5. Angus Kidman at apcmag
"PayPal will be refunding buyers who made a purchase from this seller within the last few weeks as discretionary payment, which is a credit initiated as a courtesy and not compelled by legal right,"



ECBeauty said...

By using PayPal, you never surrender sensitive personal financial information to an unknown seller.

I think this is what their secure ad mean to them. They do mislead and deceive and should be charged for it!

Anonymous said...

Wow! just wow!

"You have received a refund via PayPal in the amount of $0.00 AUD"

Thanks for nothing, painpal!!!!

Can I get high Frerk-Malte on that, brothers & sisters?

OMG unbelievable. So much so so as to be only able to laugh, to keep myself from crying

Anonymous said...

To eBay: LOLOL...well eBay, so much for your PayPal only because it is the safest way to pay bull crap. I don't think eBay will ever have the BALLS to aplly to the ACC again for a dispensation.

To all the Australians who have been affected by this: I am so sorry you have had to go through this. I am sorry that you had to be the proof that eBay lies. I have lost but with another organization and know the frustration and anger that you feel. I would not wish it on my worst enemy but I would wish it on eBay/PayPal, its management and the people who go along with them. Although I know it is not any comfort to you, at least the veil has been pulled and eBay/PayPal have been exposed for the frauds/liars that they are.

Anony Mouse

Kevin_T said...

Thank you for the succinct summary and chronology Henrietta. The entire episode would be farcical if so many weren't hurt by it, particularly when the chronolgy is tied in with the campaign to make Ebay Australia a PayPal only site because it was the only responsible way to protect buyers. The two events overlapped for two months. The invitation to amicably ask a company in liquidation to refund you and the spelling out of how much was lost while refunding $0.00 both just add insult to injury.... The rapid deletion of all affected auctions from the site just removes the ability of anyone to review the facts, see whether PayPal protection was applicable or alluded to, and undermines any confidence that anyone has that Ebay remains a safe company to do business with.

Bah, Kevin (looking in from a friend's computer while in Sydney)