Can you touch the stuff you bought with Paypal? If not, you've got no buyer protection

26 October 2011

We all know that Paypal is brilliant, right? *dodges hail of bricks* No, really, it is – because you get buyer paypal protection and can put in a claim if the stuff you’ve paid for doesn’t turn up or is a bit crap. Wahey!

Not true. As has been pointed out to us by avid Bitterwallet reader Adam Jeffrey. He says...

"Did you know that if you use Paypal to purchase anything that they consider to be 'non-tangible' - you have absolutely no protection as a buyer?

Perhaps I am just behind the curve (and I must admit I did not read through to clause 13.3 of the T&C's as I have now been told I should have done by the lovely Angela at Paypal CS) - but I had not realised this and weighed in to purchase some iPhone-unlocking software for my wife's 3GS running 4.3.5 (I know I should have known better) from a week or so ago.

Having now looked at the site more closely (and it's non working contact details and live service) I realise my mistake. Having paid my £21 I received an automated link to a page of tools which are totally incapable of unlocking the 4.3.5 IOS and are of course the very same free tools that don't unlock 4.3.5 available elsewhere gratis.

Unsurprisingly the site's money-back guarantee wasn't worth the pixels it is printed on and so I raised a claim through Paypal - and have now had it closed with the information that they cannot find in my favour (aka help me in any way).... the reason being that if you use the service to purchase anything online (including through ebay) that is not 'tangible' (ie software or services) you have no protection whatsoever.

Just thought I would send this as a heads-up - was news to me, so perhaps is to others."

So there you go. Don’t make the mistake of assuming that Paypal will always be covering your back. Because, and you probably knew this anyway, they won’t. Also, it might be an idea to avoid while you're about it.

TOPICS:   Banking


  • Chris
    1 word....chargeback :-)
  • Amin
    As far as I know, you can not chargeback when you paid via Paypal. Banks will just refer you to Paypal to resolve your issue
  • Ceri
    I had this problem when I bought some tickets to the HC Final that didn’t turn up. I argued until I was blue in the face that tickets are a physical items and I will keep my stub after the game… They were having none of it. I think I was still protected by ebay though so got my money back in the end.
  • Erica
    PayPal trades off of the level of 'protection' it supposedly provides you ("PayPal Buyer Protection"). By having the PayPal logo on that dodgy website, shouldn't PayPal actually be providing the PayPal Buyer Protection service they trade off of? It should not be available as a buying option if you don't get the protection, or it should only be an option if you know you won't get your £ back if you use it for that transaction. Had Adam used his credit card he'd have been able to get his money back after dealing with a dodgy copany that "took payment" (stole his money). It is crazy PayPal won't even be involved, though they're the mechanism of allowing the payment/stealing to happen! I am surprised tickets aren't covered - those ARE physical - I've just looked at clause 13.3 of their 24,000 word T&C’s and there are a fair amount of things they won't cover. That's crazy! I wonder how many people have been stung by this?
  • Dick
    It has been like this for years. If you use a credit card, a chargeback might work under section 75, although for that amount it's at their discretion. Again, it is also strictly for goods, but if you say it is for software, they might be willing. It depends on the company.
  • Richard
    from When you make a purchase though Paypal you are not covered by section 75 of the Consumer Credit Act and therefore you cannot claim your money back from your credit card provider. However, Paypal transactions are covered by the Visa Debit Chargeback scheme. When you make a Paypal purchase the corresponding amount is taken from your primary payment card or current account associated with the Paypal account. This makes it straightforward to determine whether a Visa Debit Card was used for a particular transaction or not. It can be more difficult to make this link it you already had money in your Paypal account. This might be the case if you sell items on Ebay, take payments by Paypal and don’t regularly withdraw your money. However, it is still worth putting in a claim, especially if you have missed the deadline for using the Paypal dispute process or were not happy with the outcome. It is important to remember that you have 120 days to make a claim to the bank that issued the card.
  • Noghar
    In my experience you get feck-all protection from Paypal for any transaction, whether the item you are buying is tangible, intangible, or tangerine.
  • TimB
    My first argument would be "I bought software. Software is provided on a disk. I haven't received a disk. Refund me please"
  • Tim
    I only ever use PayPal if there's no alternative and only if I can use my credit card to pay. If I use my PayPal account I deliberately reject the default of paying from my bank and use my credit card instead. PayPal aren't a legit bank / credit company and don't come under the usual credit & consumer protections. They also use their off-shore status to bypass UK laws. If you have funds in your account they can walk off with the money with little protection also as they're not a proper bank. Use them for ebay and one side can just quibble without proof and PayPal automatically side with them and chargeback, then you're in a world of crap trying to sort it out.
  • moldE
    wow. thanks for the warning.
  • B
    I always pay via credit card on Paypal so that if anything goes wrong I can do a chargeback, I have had to do this a couple of times as Paypal only want to know if the transaction is within 45 days or less, which for some items bought in advance such a sat navv hire, event tickets etc, is not long enough, when Paypal won't help you, which is most of the time in my experiance, your card comapny will!

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