A warning about using PayPal for your LocalBitcoins transactions
I got the response from PayPal today.
They closed the case - and NOT in my favor!
The buyer is trying to rob me of $1456 and I'm pretty upset about it.
You see, I was looking for a quick turnaround for my bitcoin to USD because I was trying to rent a house for one son's Marine Corps bootcamp graduation. Houses and hotels book up months in advance and I wanted to make sure we had a landing spot.
image source
I wrote about the dispute in my post Push came to shove - why I am powering down.
I sent PayPal the following information asserting that there was communication and I sent these three screenshots:
1.
2.
3.
The buyer informed PayPal that this was an unauthorized transaction on May 24, 2017.
I am not going down without a fight!
Nothing puts a burr up my ass more than cheating, lying, and theft. It's wrong. I don't like when it happens to you and I especially don't like it when it happens to me. So I just got off the phone with PayPal and appealed their decision.
> The case is officially reopened <
I am following up with all of the transactions, emails, screenshots, and even the genesis of how I scrimped and saved for EVERY BTC to make this transaction happen with a strongly worded letter. If the would-be thief gets away with this atrocity, I will out him. Right now, you've got his LocalBitcoins name. Stay far, far away from him.
In conclusion
This is not a message to vilify PayPal or LocalBitcoins. This is a tale of caution.
There is a reason why a high risk banner warns traders about PayPal. It's because of the kind of crap I'm going through.
I had 10 previous transactions that went smoothly. I made sure I checked their confirmed trades, feedback, if they were verified and how much time they'd been on LocalBitcoins. As a consumer/trader, I think I did everything right in vetting the person I was dealing with short of a personal meet up.
So here we go again. We're going another round and I'm determined.
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I feel for you. That being said, I've never tried to sell bitcoins for paypal unless it was from a legit site like coinbase. Everywhere I've read has recommended not to sell your bitcoins for paypal to normal people, because of how easy it is to reverse the transaction.
Indeed, @zenchess - I do take partial responsibility. I knew there was a high risk but at the same time, I had found 6 truthworthy traders and 10 successful transactions in the past year using this method. I check their history, whether their email, phone and address was validated, feedback score, and time on the platform. I plan to close PayPal within the next year anyway - exciting things in crypto and fintech are coming down the pipe to be financially tied down with their shenanigans. :)
I traded BTC for Paypal for a while too, it was easy to take 15 to 20% profit per trade. After a while they closed my account too after a chargeback. I did only small amounts per trade, so I was still on profit. They closed my account, even though I immediately accepted the chargeback without making trouble.
(my account was more important than a few Euro) I made a new account and stopped trading, because I need it for affiliate commissions too. Localbitcoins closed the account of the scammer when I send them screenshots. It sucks that one single scammer can make so much trouble for a few Euro and Paypal takers their side. Probably they are against BTC anyway
I'm so sorry to hear of your woes... whereas this kind of stuff is generally not PayPal's fault, the service is used extensively to run a variety of scams... especially through craigslist.
If I were you. I'd escalate with PayPal by calling their fraud department and going step by step. Usually you get a whole different kind of treatment when you upgrade a "problem" to "fraud," at least that has been my experience.
I've never used LTBC-- always seemed to high risk and open to scammy possibilities-- but you seem to have had success with it. My typical cashout route is Steemit ►Bittrex ► Coinbase ► PayPal... usually goes from Steem/SBD to USD in my PayPal account in less than 2 hours... never had an issue (touching wood).
People inside PayPal support frequently sell PayPal user's information to thieves like this. PayPal knows this and does nothing because it's no loss for them.
Most likely this was a stolen paypal account and you will lose because they will claim they don't know what a bitcoin is.
Just stop using PayPal for this stuff.
Instead use cash to bank, or cash face to face.
Soon viva.cash :D
@williambanks - once this is settled however the decision lands, I'm closing PayPal. With the way VIVA is coming along and the other options out there, you can believe the door will not be hitting me in the ass as I wave bye-bye to them.
I like what @denmarkguy said and bump this to a fraud case if my appeal doesn't work. I'm not letting this go. I've put too much time and effort into earning this to be cheated.
@williambanks is 100% right. If you go to certain dark places on the web, you can actually buy hacked paypal accounts, which is terrible. Paypal themselves should be purchasing these accounts, locking them down, and finding out why and how they were hacked in the first place.
I don't think Paypal takes care of its users of the system very good at all.
I don't use Paypal for anything anymore...I had a dispute with them awhile back, went through a lot of what you're dealing with until eventually the cost of continuing the battle outweighed the reward I would've received had I won the fight...good luck!
Next time you sell on LBTC for Paypal, make sure you request a selfie from the buyer with ID/Passport in front of the screen with the transaction. Also, add to notes something like this transaction is authorized by this and this for x bitcoins and received it successfully.
There's still a chance to go with unauthorized or chargeback by the bank, but technically you can't lose it.
I would also recommend calling Paypal with the issue because they are much more helpful over the phone and it's way easier to explain the whole situation. If you need help with the case or advise just let me know.
I was on hold for the bulk of my phone time but I was able to get the dispute reopened. I'll keep using LocalBitcoins but my last two transactions have been cash deposits and I don't release the BTC until I confirm with my bank and get a selfie with the cash deposit slip. So far so good. I will keep you in mind if I hit another snag. Thank you!
Almost forgot, if you want to accept Paypal in the future make sure the payment is from Paypal balance. If it's from Paypal balance, they can't chargeback it with the bank.
With this selfie thingy, always check if the has real name verification on the profile and if they ever used that payment method before.
Also, check for verifications on the account and the creation date.
Good luck with the case.
Ps: Did you contact LBTC about it? BTC is probably gone from his LBTC balance, but they can freeze the account and provide information to your Paypal case.
This is good for people who are using stolen credit cards to fund Paypal (or even legitimate credit cards to fund Paypal and then abusing the credit card chargeback system)
However, I don't know if is 100% correct to say that Paypal can't reverse a charge if its from a Paypal balance, because they can... and will, whenever they feel like doing it.
Paypal enjoys ruining crypto transactions and causing a stink and a mess because they don't like crypto transactions since it is a competitor to their business in my opinion.
Wow that is ridiculous how they can do that to you with all the proof you have. I dont use paypal that much but it definitely makes me second guess using it in the future. I truly hope this gets fixed for you. I am learning so much from following you I cant thank you enough. Now off to google coinbase, bitpay and kraken. And that was just from the comments lol. Thanks again @merej99 good luck.
Hi @levelfourtyseven
You know that saying, where there's a will there's a way. I'm not going down without a fight. I'm putting together a letter, more screenshots, a history of the transactions and communications from PayPal and LocalBitcoins. I am also going to demand a copy of the other party's "proof" that this was an unauthorized transaction. I want to see the genesis of when they were supposedly hacked and what steps they took to secure their accounts. I delivered my product. I have proof of that. And if I have to mention the word FRAUD a few times, so be it. I do not like when people are taken advantage of. If it happened to me then it will happen to anyone.
The truth is that this is incredible, that you have to be fighting for your money, this causes me a lot of anger, a heartfelt desire that is resolved favorably
Many luck dear friend @ merej99,
I wish you a great day
@jlufer - I wish life was a little easier. This is not stress I need in my life but I am so thankful for the community. Had this problem happened even 3 months ago, I would probably be collecting cans for grocery money again. My gratefulness has no limits when it comes to Steemit.
Good luck, @merej99. Those scammers are always waiting for an opportunity to steal money... You are right - we have to be cautious. I don't like this c2c localbitcoin stuff so I transfer my BTC to dollars via Kraken and send it to my bank account. Worked like a charm so far.
I just got my BitPay visa card in the mail. I'll be loading it and test driving that sucker ASAP. If I can skip the banks altogether I will be a very happy lady. A review will come when that happens. :) I've heard of Kraken but haven't really looked into it. After doing reading on Coinbase I didn't want to look anything else -- figured it was the same ol' same ol' crap. :P
Will be looking forward your experience with BitPay. I might make myself a card as well!
Read the fine print. A lot of those cards say if they notice strange transactions, your funds can be frozen. Proof of identity will be required and/OR your account can be frozen and closed.
These cards are good for small transactions only, with not a lot of funds stored on the card.
I would probably only use the BitPay card for smaller bills or groceries and I've already submitted Proof of Identity and added 2fa security. The majority of any accumulated BTC are going to be stored in my wallet as I look into cold storage options. Then I'll feed the card as I need funds. For me it's a lot better than PayPal and the centralized banks!
Good luck!! 100% upvoted from me @chanthasam
Thank you much @chathasam