Do not use Paypal if your business is service oriented. Because you are not dealing with tangible goods you can get scammed so easy. Paypal will not protect you if you are not dealing with an actual product and cannot provide proof of delivery. As a service based company, I have had 4 charge back claims in a year all due to Paypals lack of security and checking who's credit cards are being used. Here is how the scam works. I send an invoice for a service that I provide to an individual who hires me. They even have an confirmed Paypal account. This person then uses a friends credit card to pay for my transaction. I receive the payment showing that it came from the person that I billed it to however, I have no way of knowing which credit card was used. Now the friend who's credit card was used, calls their credit company and says they never authorized it. Paypal immediately reverses the charges because the credit card did not match the invoices name and address. Meanwhile they were the ones who accepted it!! When I called them they told me that there is nothing they can do about it and because it is a service...TOO BAD. I asked them why they did not check to make sure the name and addess matched the credit card and was told that they just don't. Here is the best, I was told by the Paypal customer service agent that perhaps I should stop accepting credit cards because they could not protect me. I should find another service provider who can!! Imagine that.
I am currently dealing with a charge back from a person who did hire me and did use his own credit card but is disputing it because he did not receive the goods. His name is Humaid Sharif. Hired me 3 times and he has disputed all 3. Unfortunately I find out 4 month later so I could not stop providing the service to him. He is telling Paypal that he did not receive his goods so he is disputing it. How do you receive delivery on a service? You can't therefore he can easily dispute it. I forwarded to Paypal a copy of the invoice and power of attorney he signed hiring me and authorizing me to perform the service. I am waiting to see how they rule on this one. I will update this and let everyone know.
One of my charge backs was over $1,000.00 which hurts a small business like me.
Please do not use Paypal if you are a small business that provides a service. You too will get scammed. It is better to go with a credit card company where you can actually receive the credit card number and key in the name and address yourself so you can make sure a fraudulent card is not being used. On top of all that, they charge a ridiculous charge back on their own error. You would think a big company like that would make sure the name and address on the credit card actually matches the account holder.
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