Using Paypal: A cautionary tale

Executive summary:

1) Paypal is a convenient way of transferring money to people who are not set up to receive credit card payments (eg eBay sellers).

2) Paypal purports to be “safer than using your credit card, but this is highly misleading. For payments over £100 you are protected if you use your credit card by something called “Section 75”. You lose this protection if you pay using Paypal – even if your Paypal account draws from your credit card account. (Paypal does offer some protection on purchases within ebay however).

3) Paypal have poor customer service, are not interested in discussing questions about whether their sellers may be engaged in fraudulent activity, and may unilaterally close a dispute thereby preventing further buyer communication with Paypal or the seller complained about.

4) Paypal state that they do not “tolerate fraud or illegal activities”. Judging by my experience, this claim would appear to be untrue.

Our story:

My wife and daughter bought two pairs (a pair each) of “UGG” boots from http://www.australia-ugg-boots.com/ and paid using Paypal. The domain “australia-ugg-boots.com” is registered in Australia:

Whois Record
Jackie Beament
PO Box 3950
Joondalup, Western Australia 6027

Created on: 28-Feb-09
Expires on: 28-Feb-10
Last Updated on: 01-Mar-09

Administrative Contact:
Beament, Jackie
PO Box 3950
Joondalup, Western Australia 6027
894048411 Fax --

Technical Contact:
Beament, Jackie
PO Box 3950
Joondalup, Western Australia 6027
894048411 Fax --

Domain servers in listed order:

And the site makes the following claim:

Australia-Ugg-Boots.com is a family business manufacturing ugg boots here in our home town Melbourne, Australia since 2007. We manufacture high quality sheepskin footwear made from first grade double faced Australian Sheepskin. Australia-Ugg-Boots.com has been successfully wholesaling and retailing to many satisfied customers within Australia and Overseas. Our website was established in 2007 successfully providing customers all over the world with our great product, cheap prices and fast, reliable, friendly customer service.

A complication here (it should perhaps be noted) is that "UGG" is not a protected trade mark in Australia, but it is in the UK and other countries outside Australia.

When we received the boots (we did receive them) the parcel came not from Melbourne but from Shanghai. The boots were perfectly well made, but clearly counterfeit (with counterfeited "UGG" "trademarks" all over them) and lined with synthetic fur rather than sheepskin. The main problem, however, was that both pairs were each a couple of sizes smaller than ordered and than stated on the sewn in labels. Apparently this is one of the features of counterfeit UGG boots – quite why these firms can fake the boots so expertly and yet fail to size them correctly is, to say the least, puzzling. As we have real UGG boots at home we are able to compare like with not-like.

So we raised a dispute on Paypal.

AUSTRALIA-UGG-BOOTS (of China) got straight back and said we could return the boots and get a full refund. Trouble is that this costs rather a lot of money and they take no responsibility if goods are "lost in the post". The Royal Mail will only cover you up to £39 – unless you pay them shed-loads of money first.
Forgive my cynicism and scepticism, but I do not have a great deal of confidence that, if I sent these boots back to Shanghai, I would ever see my boots or my £130 again.

On to Paypal, the "safer" alternative to using your credit card.

It would by an understatement to say that Paypal have been unhelpful. They simply refused to help and then closed the case without consulting me further. This means that I can no longer communicate with them or the seller about this case. More worryingly, Paypal are (it would appear) continuing to trade with this company (which would certainly seem to be committing offences under UK law) and refusing to warn other potential buyers about the pitfalls of buying from the website in question.

As our experience illustrates, the fact that Paypal accepts a seller onto its books is no guarantee (or even indication) that that company is "kosher". In fact, the fact that a company only accepts Paypal and does not accept direct credit card payments may well be an indication that further scrutiny of that company is required before buying from it.

If you make payments over £100 using your credit card– even to companies in China – you enjoy buyer protection. If you use Paypal you lose that protection – it is not "safer" at all.

I shall, in future, use Paypal (if at all) only as a means of last resort to pay for goods and services and I suggest anyone reading this does the same.


  1. An interesting account and a warning to everyone - thanks!

  2. Interesting story and I'm sure it's not unique.

    Understand that PayPal doesn't do any kind of checking at all on any company that uses it. They make no guarantees of any sort that the company you pay is an honest, legal entity that will sell you the goods you ordered.

    Here in the U.S., it is generally safer to use a credit card -- no matter what PayPal claims. In this instance, if you'd bought the boots with your Visa card (for example) you could likely initiate a chargeback to the company you bought from. It would be their burden to make good on the deal.

    This isn't to say I don't use PayPal. I use it to buy and sell quite often. The one time I received an item (from Hong Kong) that was not what I expected, I was very fortunate in that the seller took the item back and gave me a full refund immediately. He didn't even wait until he received the item. I was lucky, too, because the item was very small and only cost $1 to ship back via Air Mail. So I was out $1 on the transaction -- I call that the expense of learning.

    It seems here that your beef should be more with the seller than PayPal. I do agree, however, that PayPal's customer service absolutely sucks. I avoid them when I can.

  3. We need protection from Ebay & PayPal, they are in it for their own interest only and all the protection they offer is worthless when they look for the most trivial technical out!.

    I am off the road for 2 months after buying an expensive sub standard part and am waiting a refund!


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