Tuesday, May 30, 2017

Why can't we believe that old people can be scammers?

Couple of days ago I came across an interesting Facebook post (link here).  Sorry it is not in English, the story is actually from Croatia but here it goes.
A nice lady saw an old grandma begging in front of the supermarket and was so taken by that harrowing image that she gave her some money and asked the old woman how she found herself in such a situation. 
The old woman told her she has no family, as her daughter died from cancer recently, and only receives a minuscule pension.  The nice lady could not leave it at that, touched by the fact that this elderly lady has been reduced to begging in order to survive and she took some covert photographs of her and made a Facebook appeal asking people to help.  The post is full of emotion and it is obvious by the comments below it that people are good and kind and that this has touched them deeply as many have started to share the post and enquire if anyone knows the old lady and how they could get involved to send money and food.  Some even offered their home in case the old lady had nowhere to go.  People were keen to find out who and where she is in order to help.  Many blamed the government for her demise and soon the daily paper published the story too. 

But with the shares and comments, different reports emerged.  Many people reported they saw the same lady in their areas too (some quite a distance apart) and stories of others having similar encounters with the same old grandma surfaced.  People had conflicting stories told by the old woman, about where she lives.  Some even tried to find her and went to addresses she gave them, only to find out that she lied.  At this point few people started to wonder if the grandma is genuine, some pointed out this could be a scam but were torn apart by others who could not believe that someone 'this old' would ever put themselves through such an undignified ordeal, if they were not truly in need.  This is where things get interesting as people debate the facts in the thread.  At this point, these are the facts; it is clear that the old woman is at different locations daily and at each location, she tells people she is living locally and that she is ill, which turns out to be a lie.  This should be enough to arouse suspicion that this is a scam but people in the thread are having a very hard time believing that someone 'old' would stoop so low, at the end of their life.  That they would have the stamina to sit on a small bucket all day and beg.  Those that are clearly suspicious are accused of not respecting the elderly.  The crowd now gets an idea that if the old woman is actually committing fraud, there must be a reason behind it.  People suggest that she's a victim of human trafficking, that there is a gang behind this and she is being used for begging.  Those who have given her the money are now glad that they have because the gang would surely harm her if she does not earn the usual amount.  Concern is still there, people are now angry and many discuss reporting this to social services and the police, in order to save the old grandma from the life of hardship at the hand of a criminal gang that is forcing an elderly person to beg all day.  There are many comments shooting back and forth and only a very few sceptics who still believe this is a good business and people have been taken in by a good story.

Finally the same daily paper publishes a message from the police (here).  The woman is not as old as she says she is (late forties and not seventy) and she is a professional scammer, known to the police and arrested several times.  The scam is perpetrated by her and her partner, who takes her from supermarket to supermarket to beg and it is clear she is purposely making herself look like a simple, old woman in order to deceive the public and elicits sympathy.

Interesting story of deception so far but what I found interesting were the comments as the story unfolded.  So what makes this scam so believable, that people cannot entertain the idea that it could be a scam despite clear warning signs?  First of all, the fact that many people associate elderly people with trustworthiness and wholesome values of yesteryears.  They remind us of our grandparents, even when realistically, they may not even be that similar to our grandparents, we often just feel more sympathy towards elderly people.  Second factor is the vulnerability (i.e. physical disability or illness) and dignity.  Seeing someone vulnerable in an undignified situation makes us uncomfortable and more likely to help.  Overriding this seems impossible, even when we are faced with evidence of the contrary.   This was also evident in the comments, with many people arguing they are glad they offered help as they could not live with themselves if it turned out the story was genuine and they did nothing to help. But it is clear that scammers are using this against us.  This is nothing new.  In fact, a great example comes from the story of Pinocchio.  In an original story from 1800s , which is somewhat darker than the Disney version, there are scammers that do just that, pretend to be blind and lame in order to deceive and Pinocchio takes pity on them despite being scammed by them already.  

We are wired to feel sympathy and often believe that people experiencing real hardship would not lie to us.   The kindness we feel, the empathy for others, this is precisely what scammers are targeting and it is good to be aware of just how far they can take that deception. 

Wednesday, February 8, 2017

How protected are you as a seller by PayPal and eBay these days?

I don't know about you but I stared hating eBay.  So much to be wary of these days with scammers jumping at you at every corner yet it feels as if there is not much help out there for sellers if a buyer is a scammer.  Here is my story, reflected against some research I have done on PayPal and eBay policies, which I will explain in some detail and point out some loopholes that serve scammers very well.  You will see that in most cases, as a seller, you are paying a fee to PayPal (and eBay) but there is little protection out there.  It does go on but it is valuable to know. 

It all started with a dodgy buyer

Recently I refused to send an item to someone who had a PayPal account with a different name to their eBay account and the buyer did not reply to my email I sent to their PayPal registered email as a check.  They then bid with another account, paying by e cheque through PayPal but their address was not verified and PayPal warned me I would not be covered with their seller protection, if I sent the item so I refunded the money again and they promptly gave me a negative feedback.  As a buyer, they can do that, as a seller, I can no longer give negative feedback.  I spoke to both, eBay and PayPal about both accounts, pointing out they were advertising the same item and had discrepancies in registered names and both advised me it looked dodgy.  But what will be done about it, is the question.  I was selling relatively expensive item and did not want to risk it and PayPal will warn you not to send items to unverified PayPal addresses but yet eBay will hold you responsible for not sending the item to the unverified address as you had an agreement with a buyer and the buyer can give you bad feedback.  Just a thought here - should eBay then not 'insist' all buyers verify their PayPal accounts so innocent sellers are not penalised for not wanting to send to unverified addresses which are not covered by PayPal agreement?  One would hope so, but they don't. 

Verifications, e-cheques and chargebacks

An address is verified by adding a credit card registered at your address to the PayPal account.  Your credit card billing address becomes a verified address to send purchases to.  So far so good, right?
If a buyer has an address that is verified by the credit card, they will probably issue payments through PayPal that are backed by their credit card.  If they do so and decide to scam you, they can just report to their bank that the transaction is fraudulent (e.g. someone hacked into my eBay account), even months after they left you wonderful feedback and you left them great feedback too, and their bank will request PayPal chargeback.  Chargeback is when they refund the buyer the money they paid - buyer keeps your item and gets your money too.  PayPal says, in their video on chargebacks, that they will mediate between the bank and the seller and that once you submit the evidence (i.e. tracking number, emails etc.), the bank will make a decision, which is out of their hands.  Their forums say otherwise - many bitter sellers saying this is a frequent thing and PayPal does nothing to help.  In my case, I asked PayPal to see if the address has been changed or updated recently on the buyer's account but was advised they cannot do that, they can't check for fraud on the spot when reported.  
So let's entertain this idea for a second.  My buyer could have a cloned credit card (or a stolen one) registered at their address, thus verifying their PayPal.  They go on a shopping spree and then report fraud to the credit card, resulting in chargebacks.  PayPal's hands are tied despite you, as a seller, proving you did everything you have to do to qualify for their protection.  So if you really are at the mercy of the (dishonest) buyer's credit card, why are you paying PayPal a fee for protection only to be told you are not protected?  In the olden days, when brothers Kray took their protection money, I hope you could at least count they have your back when you need it.  PayPal will cite it is the law and fair enough, but if the terms of protection you have as a seller have so drastically changed and crossed boundaries with other avenues of paying (i.e. credit cards), should PayPal not offer reduction in their fees at least?  I distinctly remember PayPal forcing me to adopt a business PayPal account that accepts credit cards and charges you money years back but was the old PayPal safer?  The one where a person would transfer funds into PayPal and use those funds without help of credit cards or 

What is an e-cheque?  If a seller hasn't got a credit card 
linked to PayPal account, they can issue you an e cheque 
through PayPal.  You have to accept them, it is funds from
 their bank account.  Apart from taking a century to clear, 
they can also be charged back if a customer reports it as 
a fraudulent transaction even months later.  
So technically you are only, maybe, covered if a buyer 
has paid you with the PayPal balance and you can 
prove you posted the item.  Even still, a scammer will 
say you sent an empty package and PayPal will probably 
side with them.  

The illusion of protection for sellers

The fraud protection offered to victims is great but it is being used by scammers to defraud and turning a blind eye to loopholes just makes people mistrust others and companies they use for this 'so called protection'.  When PayPal first started it may have offered some protection but now it charges quite a lot of money for very little choice in the matter.  It forces you to accept credit cards, without them you have no protection as they don't cover unverified addresses, but with them you are in the same boat, at the mercy of your buyer and their moral compass.  Same for e cheques.   This means you are actually not trading through PayPal but through banks, in which case you might as well ask for a bank transfer and forget the protection all together.  At least when someone sends you a bank transfer, it is final but then the buyer is vulnerable and I am sure sellers would turn into predators (and they often do). 

Does the fraud buck stop with you or eBay when you sell on their site?

OK, i thought to myself, I will turn detective and do bit of my own digging on my buyer, to see what kind of purchases they are making and what they are selling and this can be a nice tool in fraud detection.  However, eBay has made this difficult in two ways. 
Firstly, users can hide their feedback comments.  You can still see their feedback score, eBay recently proudly told me, but being extremely slow to remove fraudulent users, feedback can be faked and this is how.  You register an account and in the same day or two you purchase 200 items at auctions.  You pay for none of them.  Sellers are angry and leave you positive feedback (as they cannot leave you a negative one, not even if you are a regular non payer) but with a negative comment, kinda like this.  

Potential sellers can see this and I always check the written feedback and also feedback left for others, as it can tell you a lot about the user. 
However, if you just see the feedback score for this person, it says 100% positive feedback.  Thanks eBay, your feedback score really gives me that peace of mind. 

Second thing that puts me off using eBay is the ability to remain private as a buyer.  This encourages slightly dishonest sellers to create multiple accounts and shill bid on their own items and you cannot see what is being bought and sold as you cannot view the auction items.  It also allows scammers some anonymity and anonymity means low detection rate. 

What about PayPal? 

Is PayPal any better at making it hard for scammers?  Afraid not.  First thing PayPal told me when I rang them reporting suspicious fact that my eBay buyer had an eastern European sounding name whilst the PayPal verified name was of an Asian origin, was that it is not against the rules to use someone else's PayPal to pay for things.  So, as a seller, it is on me to guess if this person's PayPal account is just a friend or they stole someone's identity and I will get a chargeback when this is discovered.  The responsibility is on me to detect this but no realistic way of finding out and oh, wait for it, when you decide not to risk it and refund the transaction because it just does not sound kosher, eBay reminds you that the buyer is within his/her right to leave you a negative feedback because 'you' broke the contract.  They take no notice, when pointed out to them, that the same buyer is also advertising the same items with the same pictures etc., through two different eBay accounts, their stand is that I broke the rules and deserve the wrath.  Same if I refuse to send to an unverified address.  PayPal says no and eBay says you have to.  Guys, aren't you a team?

What am I then paying for in PayPal fees?

But if I am paying for protection through eBay and PayPal, I would expect them to be top of their game and take some flack, otherwise their fees are just another scam.  To have robust mechanisms in place to discourage scammers, not make it easy for them to thrive using their platforms.  Maybe offer some fraud protection?  Scammers are businessmen too and if something is hard, they tend to move onto an easier thing.  Fraud keeps happening more and more because it is easy to execute and there are very few consequences.  Despite the rhetoric, when it comes to eBay and PayPal and if you are a seller, it seems that you are on your own if things go wrong in any way.  It would be simpler if someone just told you this, without this illusion that there are steps you can take by paying a third party to protect you when you sell online.  But PayPal and eBay could do more for sellers and buyers.  They could be more transparent about fraud, remove privacy on feedbacks, allowing customers to see the real picture, be more strict on buyers and sellers who are reported as suspicious, not allowing someone else to use the registered account etc.  So why aren't they?