PayPal Liability in Chargeback | Legal Aid

Questioner

Dear lawyer, We are an international web design and development agency and we operate from the Netherlands. A client from the US placed an order in April 2015 for the construction of an e-commerce website. The customer accepted our offer and paid $5000,- via PayPal. During the development of the website, the customer suddenly makes a chargeback via the credit card company (July 3, 2015) and indicates that he has not received the product. The customer has not informed us about this, and has not responded to our correspondence regarding this action. PayPal then withdraws the amount from our PayPal account and asks us for evidence to dispute this chargeback (waiting period 75 days). We have provided all evidence, but receive no further information because PayPal does not say who the credit card company is (for privacy reasons). PayPal does say that they have disputed the chargeback, but we have no evidence of this. On September 7, 2015, PayPal sends a message stating that the customer now claims to have received the product but that the item was defective or not as described, and asking us to provide new additional evidence. We then provide the response from the Police Ecrime team, in which they assess that this is a criminal offence. We have filed an official report at our location and a file has now been created at the Dutch Police. PayPal informs us on September 8, 2015 that the credit card company unknown to us agrees with the customer and refers us to the customer. We have lost the deposit of $5000. PayPal is aware that this is not about the purchase of a product, but about a web development project (a website) that was still in full development. PayPal dismisses it with the reason that we do not have sales protection. But the customer also has no purchase protection when purchasing virtual goods. The customer most likely specified a "product" when paying via PayPal and not a "virtual good". We want to hold PayPal liable, as PayPal has received all the evidence that this is an 'ongoing project' and not a pair of shoes that were delivered in the wrong color, and the fact that they completely ignore the report to the Police (who have assessed that this is a criminal offense). PayPal also completely ignores the collateral damage and consequential damage, even if you have been a business customer of PayPal for years. The consequential damage that we experience as a result exceeds the amount of $ 5000 many times over. PayPal has known for a long time that internet companies are being duped for millions in this way via credit card fraud, but treats these companies as a bunch of idiots who are stupid enough to go into business with a scammer. We cannot and will not accept this and hold PayPal liable. Thank you in advance for your response, Entrepreneur affected by Credit Card/PayPal fraud

Lawyer

It is possible to make a case of this and try to recover the claim from paypal since it ignores the burden of proof. I do advise you to hire a good lawyer who can assist you in this. Whether the judge will ultimately grant the claim to you is never predictable. If you would like further help and/or advice, please feel free to contact me.