Yahoo Finance PayPal accused of 'failing fraud victims'
Consumer group Which? said it is calling for PayPal (PYPL) customers to be covered by the same consumer protections as other forms of payment, after highlighting that the payment platform is “failing scam victims.”
It has also called for the government to use the end of the Brexit transition period as an opportunity to tighten protections for online payments and the victims of fraud.
While PayPal holds a banking licence and is signed up to the Financial Ombudsman Service, users do not have the same protections offered by other financial products, Which? said.
PayPal offers its own Buyer Protection policy that promises to safeguard users against breaches of contract, including missing deliveries, or when items turn out to be fake or faulty.
However, “it is not part of the voluntary code for authorised push payments, which commits banks to reimbursing customers who have been tricked into parting with their money,” the consumer group said.
PayPal told Yahoo Finance it “recognises that authorised push payment fraud is a serious issue. We take all incidents of fraud very seriously and will carefully consider Which?’s proposals.”
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Some PayPal users told Which? they have struggled to get their money back when they have been conned into sending money to fraudsters or targeted by hackers who have taken control of their account.
One customer told Which? they found it difficult to get reimbursed when making an authorised payment that turned out to be fraudulent.
They were booking an Italian holiday home for which they paid £800 ($1,068) through PayPal.
But after sending the money, the hosts disappeared and according to them, PayPal said “it only covers unauthorised transactions. I tried to make a claim with my bank, but they said that because I authorised the payment using PayPal, that they couldn’t help.”
PayPal has said it will will not refund the user under it’s Buyer Protection scheme as they authorised payment using the ‘friend or family member’ option.
Most high street banks have now signed up to the voluntary code for authorised push payments. If the customer had paid directly from his bank account, Which? says they would have benefited from this protection.
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