Monday, September 14, 2015

Reading the small print is often tedious but extremely important

Know that in fraud, you are often alone.  Scam warnings cannot warn against new types of scams evolving every day so it pays to be careful and reading the small print can often save you.
Think about known websites, such as Gumtree, eBay and PayPal.  Everyone has one of these at some point in their life, and we often associate credibility with known brands, companies and names.  But how safe are you when using these sites? 

Let’s start with Gumtree.  Just as any other free advertising site, it is full of scammers advertising for potential victims.  Fake jobs, fake items and so on.  But although Gumtree’s terms of use stipulate that ‘you shall not violate any laws’, they are more than aware that people often do and clearly state;
we do not have any obligation to monitor the information transmitted or stored on our sites, services, applications and tools and we do not accept any liability for unauthorized or unlawful content on Gumtree or use of Gumtree by users.’

What this means is that, once scammed on their website, Gumtree has no responsibility to help you because you accepted their terms of use.
If someone told you this before looking for items, would this make a difference?

PayPal is another company that is seen as highly credible. It provides a safe way of paying that covers the buyer in case of scams. But how safe is it?
It is pretty safe if you read and understand terms of use but it is not foolproof.  Who reads all the small print?  And even when you do, often written in the legal language, it is difficult to understand.  PayPal doesn’t help themselves by listing bullet-pointed T&Cs that only highlight the good parts of their guarantee and many people only read those without considering the whole agreement.

I am listing some things that would invalidate your PayPal protection, as explained in their full terms of use, that you may not know about:

    1.   Some items are listed as not covered by PayPal – do you know which? This includes vehicles, property, gift vouchers etc.  Scammers know this and will send you an email purporting to be from PayPal (and it will be very convincing) explaining that, due to the large amount, PayPal is requesting you to pay via bank transfer.  PayPal does not cover any bank transfer.

    2.   Did you send payments in instalments? You will not be covered if so.

    3.   If the item is not as described and you need to return in, you have to post tracked to be able to claim money back and this could be costly and you will not get your postage costs back.

    4.  If the person selling you something sends an empty envelope with a tracking number, you will have a very hard time proving that you did not receive your item – scammers exploit this.

    5.  Once you cancel the complaint you raised against a seller, the matter will be closed and you will no longer be able to re-open it.

The list is not exhaustive, there are lengthy legal points to consider when shopping with PayPal.  Both, sellers and buyers are supposedly covered but some of the legal points contradict themselves and scammers exploit this.
For example, seller often only needs to send a tracking number as only proof of sending an item.  Often they will send a letter to a different address and provide a tracking and you will never receive anything but seller would have satisfied the conditions of sale and your money is lost.
Equally, you could do the same as a buyer sending something back and the seller will be out of pocket for that item.

So are you really covered for fraud in either case?  Only up to a point but is that enough?  Scammers are now extremely skilled at exploiting legal loopholes.  Another loophole is that once you raise the claim against a seller for goods you paid for but have not received, scammers often write to apologise profusely about not sending an item and promise to send it, asking you to cancel the complaint.  Once you do, PayPal is no longer liable to help you.  PayPal has made things better slightly by extending the period to raise a claim from 45 days to 180 days after purchase.  Often scammers would claim things are on the way and taking slightly longer to arrive.  If you have a bank account linked to PayPal and this happens, you have no other way of getting your money back as banks also cover themselves with legal terms and conditions that avoid liability.  Sending someone money from your bank account is considered to be a willing payment.  However, if you have a credit card registered with PayPal instead, you will probably get help from your credit card fraud department if you get defrauded.

So how do you know if a seller on eBay or Gumtree is a scammer?   There is no easy way, of course, but it pays to flick through their feedback (please see my post on faking eBay feedback) and read all the comments and also see what else they are selling.  Use your intuition – if something feels not right (too good to be true, seller says viewing is difficult as he/she is abroad, seller rushing you to make a decision etc.) don’t buy it.  But also know where you stand with fraud protection. 

It pays to know all terms and conditions and not just what the companies want you to take in, which is usually just the good points.  The summary of terms and conditions will not mention exclusions and disclaimers, which may be crucial for you. But I agree, reading the small print can be extremely tedious, however, it may save you from scams.