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Providers 180 Days PayPal risk of refund request from clients. How to protect against it ?
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Providers 180 Days PayPal risk of refund request from clients. How to protect against it ?

anthony1anthony1 Member
edited January 2016 in General

Hello,

I have recently received $600 order from one single client. He made the paypal payment and I start working to provide the servers. It took me 2 days to fully provide the order. 5 days later he placed another identical order and made another $600 payment. Minutes later PayPal blocked both first and last $600 payments (total $1200) for this reason:

"You have received a payment that we believe may not have been authorized by
the PayPal account holder. Here are the details of the transaction we are
investigating(...)"

I have looked over the client details and paypal account and they are totally different (name,address,email,etc). The client told me that paypal account belongs to his sister and he got his account limited due to some dispute and the problem will be solved in a few days. Later on the client asked me to refund the 2 x $600 payments because he rather use different payment method which I didn't because I need to see what paypal have to say. I have tried to contact the paypal account owner using the paypal email used for the payment but its not responding.

I have provided all the details asked by paypal. Now I'm waiting for PayPal response.

I need to know how VPS providers are protected against such situations or in general against 180 Days PayPal Dispute Filing Window. As I know intangible goods and services PayPal disputes are the most high risk products and they rarely in the favor of VPS providers. I wonder how big providers protect themselves against similar situations ? I should not provide any services to the clients that paypal / client area details didn't match ? Should I ask for proof of ID ? If so, all this will actually really help and PayPal will indeed close the case in my favor ? All I know is that when I initially ordered one dedicated server on my provider he didn't provide the server until I send them my scanned ID and paypal email/name to match the their website registered email/name. More then this when I have used another paypal account to make a payment they didn't accept the payment and I had to call them to explain them what's with the new paypal account payment. The question is all this really help as proofs to win the paypal dispute ?

Thanked by 1rokok
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Comments

  • Are you using Maxmind or any fraud prevention in WHMCS?

  • AFAIK,there's no way

  • Shouldn't have believed that weak sister excuse

    Thanked by 1ATHK
  • @HostingSpecialists said:
    Are you using Maxmind or any fraud prevention in WHMCS?

    Yes I do but its set very high as I never though will ever help.

  • Providers protect themselves by not processing such order until you have ran checks, most providers will usually ask for proof of ID if details don't add up, that's something you should of done and checked before processing those orders.

  • @classy said:
    Shouldn't have believed that weak sister excuse

    Are you saying that the client is using stolen paypal account ? With 5 days consecutive payments never seen by the paypal account owner ?

  • "You have received a payment that we believe may not have been authorized by the PayPal account holder. Here are the details of the transaction we are investigating(...)"

    Perhaps proxy detection can help? That way it'll show they're making the payment via their home ISP.

    Thanked by 1linuxthefish
  • AnthonySmithAnthonySmith Member, Patron Provider

    You need to employ multiple factors, never trust what maxmind tells you in isolation, apply common sense, if something feels wrong it probably is.

    Even then you cant protect yourself 100%, it is just not possible, when you do get a charge back PLEASE make the first thing you do calling paypal and talking to someone.

    Thanked by 1mpkossen
  • anthony1anthony1 Member
    edited January 2016

    @WSCallum said:
    Providers protect themselves by not processing such order until you have ran checks, most providers will usually ask for proof of ID if details don't add up, that's something you should of done and checked before processing those orders.

    This client already made a smaller($300) card payment order few days ago and it passed the card processor fraud checks. He used the same name/surname for CC as the one used for paypal payment.

  • @AnthonySmith said:
    You need to employ multiple factors, never trust what maxmind tells you in isolation, apply common sense, if something feels wrong it probably is.

    Even then you cant protect yourself 100%, it is just not possible, when you do get a charge back PLEASE make the first thing you do calling paypal and talking to someone.

    Yes, talking to PayPal via the phone increases your chances a lot. Don't really understand why but I've won several fake unauthorised chargebacks by calling them.

  • anthony1anthony1 Member
    edited January 2016

    @HostingSpecialists said:
    Yes, talking to PayPal via the phone increases your chances a lot. Don't really understand why but I've won several fake unauthorised chargebacks by calling them.

    With what arguments, I think its difficult for intangible goods/ services. What have you said to them ? I need some tips to use it when I call them tomorrow. Things like "I already provide the servers to the client" with server deploy email screenshoots proofs, etc ?

  • @anthony1 said:
    With what arguments, I think its difficult for intangible goods/ services. What have you said to them ? I need some tips to use it when I call them tomorrow. Things like "I already provide the servers to the client" with server deploy email screenshoots proofs, etc ?

    Yeah, well generally calling them and explaining the story helps a lot. I guess they will take your side more often if you physically talk to them on the phone instead of via email. It has more of an authentic feel.

    On the phone, offer to send them email screenshots, include the timestamp that the "New dedicated server information" was sent etc.

    Explain to the person that if PayPal refunds the buyer, you've lost X amount of money because theres no way to get the money back etc.

    Some of this may do nothing to change their mind but it's worth a shot.

    Thanked by 1Mridul
  • WHTWHT Member

    You could not be 100% protected. Everyone can make a chargeback from his bank and paypal will take your money. This is not fair but there is "still" not a good alternative of paypal.

    On the end of all the provider will louse and not the asshole who have typed his password to a hacker.

  • raindog308raindog308 Administrator, Veteran

    Not surprising providers like bitcoin...

    Thanked by 2linuxthefish Mathias
  • Follow this next time when you process order >500$:

    1. Check manually the entered address, look up in map or possible land mark. If this doesnt exist avoid at all cost.

    2. Check the host ip . Check for residential ip.

    3. Send the invoice manually. If the name to the sender doesnt matches. Cancel it.

    4. Do a Phone verification. Call them not SMS. Search the phone no. on directory for possible detection of buy-to-use no.'s.

  • KuJoeKuJoe Member, Host Rep
    edited January 2016

    For high dollar orders like that a lot of providers request a copy of the credit card (front and back) along with photo ID. If they will not or cannot provide those things than refund their payments and move on. If they do a chargeback on the credit card, you will most likely lose unless you have a copy of the credit card or a signature (which they signed in person).

  • KuJoe said: For high dollar orders like that a lot of providers request a copy of the credit card

    As long as the WHMCS attachments folder isn't open to the public like GVH!

    Thanked by 1raindog308
  • Don't get too hung up on it, some orders will just turn out to be fraud and will have to be refunded or will get disputed. You can always use the IP address and node space for another client, so try not to concentrate too much on how much PayPal's policies suck, as hard as it is.

    FraudRecord, @black's proxy detection and checking all the details manually after each order will cut out 99% of this crap. Try not to accept orders that you know are not good, for it seems as soon as you accept one order that "might not be 100% legit", all the fraudsters friend soon sign up as they know they can get away with it!

    I always requested proof of address and scan of the CC for orders my CC processor accepted but I thought were fraudulent, deleting it after the 2nd successful payment. Maybe I should have kept this information for longer considering @KuJoe's advice, and that most disputes happened like 4 or 5 months later - I guess people don't check their card statements.

  • adxnadxn Member, Host Rep

    Stolen pp accounts for sure! I would have refunded the whole amount and reported him to Fraudrecord and move on with my life because paypal is a cunt!

  • Best one I've had with PP is the EU money laundering law. Lock my account at €2500. I can pay bills get chargebacks and they wonder why. Hmmmmm cleaver

  • VirMachVirMach Member, Patron Provider

    First off, this isn't a PayPal thing. A lot of times PayPal will actually end up preventing a chargeback from happening by facilitating good communication through disputes and cases and they handle it before it reaches an unauthorized claim.

    There's honestly no way in certain situations for virtual goods. You just have to trust in your customers to not be assholes. There's even certain situations where it's definitely not fraud, but you'll lose anyway.

    I had a customer once that we did some design work for - a few thousand dollars worth. Also did hosting for him, etc. Then exact 6 months later a few days before the last day to chargeback, he had filed a dispute for all the payments. He used multiple cards, so he had different companies and such. He did travel a lot as well so it definitely didn't look good on our end. However, American Express decided in our favor for the largest $1000 payment. Visa and Mastercard completely ignored all the details, I assume, since we lost a bunch of the smaller payments on those. We had the same amount of evidence on all the payments. Maybe they pay more attention to larger payments?

    Moral of the story is to just build the chargeback costs into your business model, and if you can't afford to lose it, don't accept it through PayPal/CC when it's a large portion of your income from one person.

    Thanked by 1Mridul
  • Have any orders over $100 require picture ID.

    Works pretty damn well.

    Thanked by 1doughmanes
  • anthony1anthony1 Member
    edited January 2016

    Try not to accept orders that you know are not good, for it seems as soon as you accept one order that "might not be 100% legit", all the fraudsters friend soon sign up as they know they can get away with it!

    I just checked the last months bulk order payments and they all come from Bangladesh clients using totally different US paypal account to pay their invoices. I have around 4-5 clients like this with total invoice values over 5K. Maybe I just need to withdraw everything and close the paypal account because dark days may come..

  • anthony1 said: Maybe I just need to withdraw everything and close the paypal account because dark days may come..

    lol this is not a solution , finnaly you will be with a negative balance and verry difficult to have in the future a new account with paypal (not imposible)

  • @cociu said:
    finnaly you will be with a negative balance and verry difficult to have in the future a new account with paypal

    I have paid alot of $$ for dedicated servers/IPs to make those VPSs. Datacenters will never refund my payments. It would be a financial disaster, I will not have the amount to cover the big loses.

  • cociucociu Member
    edited January 2016

    anthony1 said: I have paid alot of $$ for dedicated servers/IPs to make those VPSs. Datacenters will never refund my payments. It would be a financial disaster, I will not have the amount to cover the big loses.

    really understand your situation , BUT way you have not thinck in this when you have started to sell to all idiots ? All we like $$$$ but somethimes is better to sleap !

    Finnaly you will have a negative balance , paypal will sell your acount to a bussines wich is dedicated to recuperate this credits .... and finnaly you will pay , except if you are in a exotic county (romania was 5 years agoo a exotic country regarding paypal but now ... )

  • Resell the server. Profit !

  • cociucociu Member
    edited January 2016

    I will give you a truth example , i have a client from here wich is pay arrownd 2700$ /mo (if want this client to be public his nick name i am agree ) and hi have a good reputation in LET i know him about 1 year and until now i accept only banck transfer for all his payment . so if is agree to be public hi can confirm this . And this was to avoid any problems !!!

  • cociu said: I will give you a truth example , i have a client from here wich is pay arrownd 2700$ /mo (if want this client to be public his nick name i am agree ) and hi have a good reputation in LET i know him about 1 year and until now i accept only banck transfer for all his payment . so if is agree to be public hi can confirm this . And this was to avoid any problems !!!

    Same here. We asks for Bank transfers for anything over $250 here. ($250 is a big amount in Sri Lanka)

  • It's pretty standard to make bank transfer for UK companies. Internet payment gateways like paypal makes people lazy.

    Thanked by 2Nic_20TBSSD Jacob
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