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| Is PayPal Safe to Use For Travel? |
After a fraudulent charge of over $900 was charged to my PayPal Account, I spent 2 weeks and several hours on the phone with PayPal trying to get my money back. I learned a lot about how PayPal operates and I thought I would share some of what I learned to help protect others from Fraud. Here are 5 reasons you shouldn’t use PayPal in 2022 when you travel.
PayPal handles disputes using Foreign Call Centers. The call center employees at PayPal don’t have the authority to resolve fraud. If you ask for a manager on the phone, they often just hang up. In several instances, they offered me a callback from a manager that never came. When deciding whether or not to reimburse you, PayPal uses an automated fraud detection system which is extremely limited and inaccurate. In my case, the $900 charge originated from an obviously fake website with broken links. The fraudulent website had the founders name listed as Jane Doe, a fake phone, and an email address that they did not answer. They didn’t even put a tracking number or product description on the order.
PayPal resolution time for a fraudulent charge can take a month. When I would dispute the charge as “fraudulent” on PayPal’s website, PayPal would immediately dismiss the claim and close it. After many phone calls and at least 8 hours of work, I was able to get a manager on the phone from PayPal who changed my initial claim from a “fraudulent” charge to a claim of “item not received”. The problem is that listing the claim as item not received can take a month to resolve. PayPal gives the seller 2 weeks to respond, then another business week for them to review the seller’s info, and then they tacked on another few days just for good measure. For a claim filed on August 13th, PayPal gave me an estimated resolution date of September 2nd. Notice they said “estimated”. This is not a guarantee of a date. In many cases, it may take longer. Imagine that you’re on vacation waiting for 2 weeks for a reimbursement for a fraudulent charge. This would ruin your vacation and might leave you stranded.
PayPal can take money
directly from your checking account. If you link a debit card or a checking
account routing number to your PayPal account, you want to make absolutely sure
that your checking account offers “Zero Liability Fraud Protection”. In the
event of a fraudulent charge, you should make a claim as soon as possible with
your bank so that they can issue a Chargeback. PNC offered me a chargeback
which posted back to my account within 48 hours.
After my chargeback through PNC, I removed my bank information from PayPal as a
payment option. And here was where the
real trouble started. After my chargeback, PayPal charged my account a second
time for the full amount. PNC was powerless to offer a second chargeback until
the second payment cleared. In my case the payment didn’t post for 2 days and
it took an additional 2 days to get to the second chargeback. That’s 4 days
where my account was sitting with a negative balance. I was ok, but what if
this was your rent money or your food money. A negative balance could leave you stranded in
a foreign country or in an airport. This is where having a PayPal could be very
dangerous.
Using the “friends and family” payment option waives your buyer protection. Never pay anyone using friends and family for any type of good or service. If you pay for something by selecting the option for “friend and family”, you are waiving most of the fraud protection offered by PayPal and you have little to no recourse for recouping your money through PayPal. PayPal acts like a bank, but they aren’t regulated like a bank. The friends and family option is a real recipe for disaster.
In conclusion, I firmly believe that the illusion of convenience that PayPal offers is not worth the risk of fraud. After dealing with PayPal these last 2 weeks, I’ve decided to close my PayPal account. There are far more legal protections offered with a standard credit card. In the past, when dealing with an instance of credit card fraud, I was able to clear up the issue with a single 15-minute phone call. With PayPal, I’ve spent at least 8 hours in a 2-week period and I was never able to get PayPal to refund my money. I spent a lot of time and research fighting back against a fraudulent charge and I still got screwed by PayPal, twice.
In the end, I had to go through my bank
at PNC for a second Charge back, but I was lucky, not all banks offer Zero
Liability Fraud Protection. And this type of chargeback has a very limited time
frame. If you don’t catch it immediately, you will be on the hook for the
fraudulent charge.
