Why the scammer wanted to pay by paypal

I recently put my very first guitar up for sale on the local free-ads site. The free-ads site in question provides an e-mail the seller box and I received a simple request to find out if the guitar was still for sale:

From: Noreply@trade-it.co.uk
Subject: Epiphone SG Special Electric Guitar
Date: Wed, 06 Jul 2011 13:49:32 +0100

Message from bernard.xxxxxxxx90s@gmail.com, sent using "Email
advertiser" form on trade-it site
Ad url: http://www.trade-it.co.uk/musical-guitars-electric/
region-w-uk-bristol-south-west-avon-bristol/
EpiphoneSGSpecialElectricGuitar-14356228.html

Hello there,pls i will like to know if the above listed item is
still available for sale ??? 

God Bless!!!!

The “God Bless” is an unusual sign off and whist I admire the sentiment I did, as a result, make up my mind to read any follow up carefully. However since I sometimes e-mail sellers to ask if things are still for sale I knocked out a quick reply:

To: bernard.xxxxxxxx90s@gmail.com
Subject: Re: Epiphone SG Special Electric Guitar
Date: Thu, 7 Jul 2011 7:40:00 +0100

Yes. He's still for sale. You could come and see him in Bradley
Stoke most evenings.

Thanks.

When the reply came back there was little doubt in my mind that someone was trying to steal my guitar:

From: Bernard XXXXXXXX <bernard.xxxxxxxx90s@gmail.com>
Subject: Re: Epiphone SG Special Electric Guitar
Date: Thu, 7 Jul 2011 09:01:30 +0100

Thanks for mailing back,i am an Oceanographer and i am buying
this for Dad, i am at sea right now, I can only pay through PayPal
at the moment as i don't have access to my bank account online,
but i have it attached to my PayPal account, and this is why i
insisted on using PayPal to pay,all i will need is your PayPal
email address to make the payments,and if you don't have a
paypal account yet,its pretty easy to set one up at
www.paypal.co.uk, iwill be expecting your email.I have a pick up
agent that will come for the pick up after payments.I will like
to have communicate and discuss this via Phone but i am 95% Deaf
and i do use hearing piece so that was why i have prefer to
communicate more through Mail ...So kindly get back to asap...i
need to see more photos also and i will like to know the last
asking price.

God Blessed.

I sincerely hope I have not been cruel to this poor deaf oceanographer in concluding this was a scam. What do you think?

However the bit that really puzzled me is how he intended to scam me. I assumed the key to the scam must that I was paid by paypal. On that basis I went off to read the Paypal Terms and Conditions.

I believe the answer is pretty clearly explained in the terms and conditions. However as a party to those terms and conditions I have to be careful “not to mischaracterise or disparage PayPal as a payment method”. On that basis I shall do my best effort to explain what I have learnt but I encourage you to read the terms and conditions above and decide for yourself!

The scam hinges on payment reversals. Payment reversals can arise from disputes between a buyer and seller and of course a dispute can be legitimate or illegitimate. Likewise if a fraudster pays from someone else’s account the dispute is legitimate but the transaction is fraudulent.

Anyhow, in disputes between a buyer and seller then the payment may be reversed leaving the seller liable for the money to paypal and no longer owning the goods.

Paypal do offer a seller protection program that would cause them to become liable for the money instead. The seller protection programme only applies to transactions carried out by a delivery service. To claim it you require proof of posting and for the delivery service to offer a tracking service that can show the parcel was delivered (transactions < £150) or actual signed proof of delivery (transactions > £150).

As you can see Bernard has tried to arrange personal collection by his “agent”. This scheme to avoid a delivery service would have left me without any seller’s protection and probably have cost me my guitar.

That’s why the scammer wanted to pay by paypal! He hoped I had never heard of payment reversals.

My advice?

  1. Paypal is a payment method suitable for remote transactions only.
  2. Always select a delivery service that provides enough information for you to qualify for the seller protection program.
  3. Never use Paypal for a face to face transaction. If you are required, by third party terms and conditions, to accept paypal (I think this might apply if you list both paypal and “collection in person” as options in an eBay auction) then insist on seeing photo ID and recent utility bill during collection.

For me there was a happy ending though. A straight swap with a very agreeable gentleman named Bob means that my Epiphone has morphed into this:

Count the strings…

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