I’ve experienced the chargeback scam before. For those who arn’t familiar, the chargeback scam is where the buyer purchases something from you by using their credit card on Paypal. Once you send them the items, they wait (Up to 3 months later!) and then tell their credit card company that the charge was not authorized- that they never made the purchase. Paypal then take the money out of your account (If you do not have enough in your account they will send your debt to a debt collector). The credit card company decides if the buyer’s claim is legitimate. When they side with their customer, there is nothing you can do.

Paypal give you the chance to submit evidence- but as you will see in this case, even very strong evidence doesn’t count for much unfortunately.

I sold a website for a little under $1000. I started the Escrow service, which the buyer agreed too, but for whatever reason decided against it and made a payment to my Paypal account. I promptly sent them the website, domain name and files etc and helped them set it up and make changes that they wanted.

I noticed on the buyer’s profile that he proceeded to make about $20k of purchases on Flippa over the next few days… Strange, and I knew it was a red flag.

Due to the fact that I am aware of the chargeback scam, I screen record myself transferring the domain name to the buyer, so I have total proof that I sent it.

Everything went fine with the transaction, until a month and a half later when I received the dreaded email from Paypal- “A chargeback had been filed for an unauthorized charge.”

I contacted everyone I needed to – the buyer (no response), Flippa and Paypal.

By this time, the buyer was already banned from Flippa and his transaction count had gone down from 20k to 6k, and he had “3 disputes lost”. Just an out-and-out scammer, apparently.

Paypal asked me to submit evidence: I send them the video of me transferring the domain name to the buyer, I showed them that the Public Whois information now showed that it was the buyer who owned the website. I showed them correspondence between myself and the buyer showing that he acknowledged that he had received everything. I showed them that the buyer had now been banned off Flippa. I showed them that I had years and years of positive transactions on Flippa with 100% positive feedback.

I was confident that I would win the chargeback case- in fact I had won one before with much less evidence.

No such luck this time. The buyer’s credit card company sided with the buyer, and now I have lost the website which I had put many, many hours and hard work into, the domain name and on top of it I owe Paypal about $1000 (There are also fees you have to pay when someone files a chargeback against you).

I asked Paypal to charge the buyer instead, who is clearly the scammer here and who is taking advantage of Paypal and one of Paypal’s long time members- I’ve had my Paypal account for many years and been active on it that whole time, but it seems that won’t happen.

In the the end I know it’s not Paypal’s fault- the only person truly in the wrong here is the scammer himself. I also made the mistake of just letting the Paypal payment go through. I should never have allowed Paypal to be a payment option (I didn’t realize the website would sell for so much- I expected only a couple of hundred dollars but the buyer unexpectedly bought it for the BIN price- which makes sense now of course: he never intended to actually pay the money, he knew he could get it all back via chargeback and get the website for free.). I should have been more insistent on using Escrow.com, who are the best solution for this sort of thing because you are protected from chargebacks.

The lesson here is this: Use Escrow.com or accept the possibility that the buyer will take your items for free

 

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Do you ever get an email from a friend’s old email address, only to open it and see that it is spam?

Hotmail have a large security vulnerability, one which Google has taken good steps to avoid.

When you create an email address with Hotmail or Yahoo, you use it for all sorts of things.

You might use it to sign up for different services that are important to you.

If someone got access to your email, they can then access all your accounts on other websites that you signed up to with that email address.

For example, if you sign up to a shopping website with your credit card card info stored on that site, someone who takes control of your inbox could reset your password on the shopping site and then use your inbox to make a new password and gain access to all your info on the shopping site.

With Hotmail, if you do not sign into your email account within a certain amount of months, Microsoft simply deletes the whole account, meaning ANYONE can sign up using your exact email.

Once they have signed up with your old address, they have full access to your inbox and you have been shut out. All your old emails will be deleted, HOWEVER the inbox will still receive regular emails/newsletters from all the websites that you signed up for in the past. This will give the new owner of the inbox a list of services that you used. All they have to do is go onto those websites, hit “Reset my password” and they will have access to your account.

This is a huge security vulnerability which basically means you are bonded to your Hotmail accounts for life- you have to remember to sign in on any accounts you have once every 9 months or risk someone else taking control of the account.

Google have taken steps to prevent this: Though they reserve the the right to delete accounts for inactivity, once an account has been deleted, that exact email addres can NEVER be used again. This means that a random person can’t take control of your old email address and therefore all the other accounts that were associated with that.

I hope Hotmail institute a similar policy and stop allowing people to sign up using other people’s old email addresses.

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Review of Flippa’s Front Page Listing upgrade

May 27, 2014

Recently I tried putting one of my auctions onto the front page of Flippa. Usually I don’t do this as I can’t spare the $49 price tag, but I figured I would give it a shot as the auction was for a 10 site bundle. Before I share the results- a quick update on my […]

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Selling 10 sites on Flippa.. Another Flippa experiment

May 26, 2014

I noticed on my Flippa profile that over 80% of my listings were sold. That seemed higher than it felt so I decided to do a little experiment by listing 10 websites and seeing how many of them sell. I already sold one for its BIN price of $99. Another has met its reserve and […]

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Expiring domain ideas: May 21st, 2014

May 21, 2014

I’ve had a lot of time to work on different projects lately, and loving it. Working on a fun new game that I tried completing about a year ago but never had the time to finish it. If you are interested in having a game made, let me know ( admin@aussiedomainer.com )! I am happy […]

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And now for something new- Domain Name Dropping ideas for 15th May 2014

May 15, 2014

I’ve decided to start a new, regular series on this blog called “Domain name dropping ideas”. I know a lot of bloggers post lists of domain names that are dropping over the next 24 hours, but I’ve decided to add a little something and give my thoughts on what the name could be developed into. […]

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Finally got my first 4 figure sale (technically!)

May 12, 2014

I’ve been interested in domaining for a while, maybe about 4 years on a semi-serious level. I have had a few good moments but mostly I’ve just been learning the ropes. I’ve had a simple process- 1) Register a domain name 2) Sometime over the next year, realize the name was a poor buy and […]

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Only a laser aim will lead to profit for the new extensions

February 5, 2014

I’ve wrote a few posts over the last year or so talking about why buying into the new extensions are a bad idea. I’ve said that I think there are profits to be made there but it’s just a harder version of making profit in .com. If you are going to attempt to buy some […]

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Aussie Domainer’s Latest Flippa Experiment

January 28, 2014

I’m always experimenting with ways to make money online. I’m always game to try a new idea. So far, I’ve tried making sites and selling them on Flippa, selling on the warrior forum, doing services on Fiverr and running a web design site. They were mostly successful except warrior forum where I didn’t get any […]

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My first Warrior Forum experience

November 4, 2013

Next year, I’m moving overseas – I’m really excited, but it’s going to be pretty expensive. So lately I’ve been trying to liquidate my websites to raise money for the move. I’m up for trying any marketplace. So far, I’ve been selling on Flippa and Godaddy auctions but there was another website I’ve been wanting […]

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