How Pay Pal accounts function.

[offshore]

In response to a number of recent issues that members have had in attempting to recover funds when deals have turned sour, I felt it may be appropriate to qualify how Pay Pal accounts operate ( as I understand it)

When you set up your account with Pay Pal, you are asked to link it to a bank account.

At that time you authorise Pay Pal to have access to this bank account.

If someone issues a complaint against you, Pay Pal will 1st freeze any funds in the Pay Pal account.

If there are no funds in it, they will attempt to remove funds from your bank account to cover the claim. Remember you have authorised them to have access to your bank account.

If both these accounts are empty, Pay Pal have no further ability to get funds, unless more are subsequently paid into either account.

The best chance anyone has of obtaining reimbursement in the case of a deal gone wrong, is to have funded the initial payment via a credit (or debit) card.

When you set up your Pay Pal account, you are also asked for CC details.

So each time you make a purchase using Pay Pal, you should ALWAYS fund the purchase from your CC.( you have this option at the time of making payment), you then have recourse to a claim via your CC company (This is one reason you pay the exhorbitant CC rates!)

I have set up my own accounts as follows-

My primary bank account ( A ) is where my funds are held. I then have a linked account ( B ) which I term my Pay Pal account. It also has a debit card attached to it. This account ( B ) is the one which Pay Pal have access to.

Then there is the actual Pay Pal account (at Pay Pal) which I will call ( C )

Now, as soon as I receive a payment into my Pay Pal account ( C ) I transfer it to my bank account ( B )This takes 2-3 days to process.

As soon as it shows in my account ( B ) I move all monies into my primary account (A), thus keeping my Pay Pal accounts (B & C ) at zero balances. (or close to)

When I need to make a payment, I move money from (A) to ( B )at the exact amount required to pay for the item (or maybe a $ or 2 more)

I then choose to fund the payment via my DEBIT CARD. (Not from the bank account) Although it is essentially the same thing, once the funding is through the Credit/Debit card, I have an avenue for recourse if the purchase goes tits up)

You must remember to always choose CC as your funding option for payments.

This is a strategy I have arrived at over some years of trading both at ebay and at other commercial levels.

Thus far (touch wood) I have not had to make a claim against my card, nor have I had a dispute opened against my Pay Pal account, however I do rest easier knowing that Pay Pal cannot access my money (after the 2-3 day transfer completes), and that if a buying deal goes sour I have some recourse via my CC company.

This, of course should not preclude anyone from lodging a Pay Pal clam as a matter initial complaint....(Of course this should only be done after all avenues to obtain satisfaction from the seller have been exhausted)

However should a satisfactory resolution not be able to be obtained, at least the CC company is there as a fall back option.

Hope this is clear for those who have been a little hazy as to how all this works, however ask any questions if anything isn't understood.

Of course we strongly disapprove of anyone launching a Pay Pal complaint until all other options and avenues are finished.

We have had a number of dealers and members who have had accounts closed or locked, due to someone with an itchy trigger finger.

Offshore

[P4GTR]

very interesting. Do you just have two checking accounts with the same bank essentially?

[offshore]

Yes, same bank and linked, so I can easily transfer (immediately via internet) between them.

O/S

[Ronin]

Excellent information.

Remember always BUY THE SELLER before you BUY ANYTHING.

[valerian]

Excellent post. Sticky sticky!

Thanks very much for doing this.

Val.

[KB]

What offshore says here is excellent info for sellers as Paypal is far more concerned with protecting buyers.

I have a very similar set up and also keep accounts C and B as empty as possible.

Unfortunately though there are times when it comes down to timing and I have been hit for $2600 in two separate scams.

Ken

[plaifender]

Great info offshore!