PAYPAL BUYER PROTECTION: Beware of section 13.13 excuse

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On 19th June 2008, I won an auction on eBay, (hosted by scammer 99mushroom999). I paid immediately with PayPal. I had bid on the item with confidence that it was covered under PayPal's buyer protection policy to £150, so should anything go wrong, PayPal would refund my money in full.

A day afterwards, eBay and PayPal sent me a message that the seller had closed his account and that the listing was thus null and void and PayPal instigated an automatic "buyer complaint".

Unfortunately, A BUYER COMPLAINT is not the same thing as a dispute opened under BUYER PROTECTION.

In their terms and conditions, a buyer complaint is what is made for an eBay express item and DOES NOT GUARANTEE A REFUND if you receive no goods and the seller has no money in their account, unlike buyer protection which they claim WILL refund you to the limit of £150 or £500, (depending on what the auction listing states), no matter what the seller's account status. However, PayPal currently prevent the buyer from "upgrading" the complaint to a protection dispute, thus depriving buyers of the right to be refunded if the seller has no money in their PayPal account.

So, just a quick note to warn you that if you are a buyer who didn't receive items that you have paid for with PayPal, and the seller has withdrawn all the money in their account, you MAY have been turned down by PayPal for a full refund. PayPal may have written to you and informed you that they could not pay out as it's a buyer complaint. THIS IS THE SECTION 13.13 EXCUSE, and if it's been used on you, please fight your corner.

If you are refused a claim, there may be certain ways to fight this refusal by PayPal. In particular, make a counter-claim using the "section 13.1.b argument". They will usually guide you to section 13.13 of their agreement (hence the term "section 13.13 excuse") which covers "buyer complaint policy", but this is actually related to eBay Express items and you should write back to them and tell them that you're claiming under point "b" of section 13.1, which is "buyer protection policy" and therefore linked in turn to section 13.14. State your case under PayPal complaint in European Union link.

Also, if you feel that PayPal have made it easy for a fraudster to rip you off, then ask for evidence that they did actually initially verify the identity of a seller. If they cannot provide this, then this is probably a sign that they didn't undertake the FSA-required procedures to establish identity of the seller, thus rendering them open to charges of negligence.

All "money-handlers" must "know their client"; this means that, as you'll be familiar with, they have to verify the personal and bank account details of their clients - that's a European requirement and PayPal are not special or exempt. If they persist in refusing to give you the information that you may need to mount a CIVIL case against a seller, (as against a criminal case, which should initially be referred to the police to allow them to run around and do their job - and don't be discouraged by them saying that it's not their problem or job - it is), then this seems to me to qualify as aiding and abetting a criminal to benefit from their crime and the proceeds of their crime and you should take the matter further with the financial ombudsman and, of course, report PayPal to the relevant police authorities as an accessory to the initial crime.

SMALL UPDATE: A mere **2 hours** after this guide hit the streets, PayPal wrote to me to say that there is a technical problem within their system which currently causes PayPal to automatically send a section 13.13 excuse, advising buyers that they won't receive a refund if there is no money in the seller's account, BUT that if your claim is under 13.1.b, (which is therefore linked to 13.14), then PayPal buyer protection DOES apply. HOWEVER, unless, like me, you write and complain about the initial judgement, it's highly likely that Paypal will rely on injured buyers to shrug and not follow the claim further. PLEASE, PLEASE, PLEASE, if you are a buyer who has lost money after using PayPal to fund an eBay purchase, DO NOT ALLOW PayPal to fob you off with a "tough luck" message in the form of a section 13.13 excuse. If you want a template to send to them in such a case, please vote "YES" for this guide and then contact me to ask for one.

IN THE INTERESTS OF BALANCE, if PayPal do refund me the amount that was stolen from me through non-delivery of an item bought on 19th June, I shall announce that fact in this guide.

FINAL UPDATE No. 2: SUCCESS! Less than 24 hours after filing a complaint against PayPal's use of the section 13.13 excuse, they have now written to me to advise that there remains a technical "issue" in the automated systems which led to the excuse being communicated to me, but that that excuse message should not have been sent for the following reason: "Buyers paying by Paypal for an eBay listed item ARE protected under rule 3.1.b and section 13.14; this means that if there is a problem which necessitates a refund, then PayPal will make that refund, (up to the relevant limit of £150 or £500 - check the listing), even if the seller has closed down and the account has no money in it."

WORRYINGLY: I have been advised that this technical "issue" is now in process of being resolved, (following my complaint on 30th June), which means that potentially, PayPal have retained an awful lot of clients' monies which should have been refunded.

DID YOU SUFFER A FINANCIAL LOSS under the impression that your purchase was protected? Did you receive a section 13.13 excuse? Did you abide by their terms and conditions? If so, contact PayPal and demand them to reconsider the case.

Thank you for reading this far, please vote "YES" for this guide.

(Quick message for 99mushroom999: "I'll be in Canada within the next few months. I'm looking forward to it.")
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