By Christopher Elliott
Guest Columnist

PayPal won’t refund an unauthorized charge on John Boham-Cook’s account, even though it reversed two others by the same fraudster. How can he get the company to see things his way?

Christopher Elliott

I had three unauthorized transactions on my PayPal account recently. PayPal blocked one of them and issued a refund. A short while later, PayPal refunded the second fraudulent transaction. But the third transaction, for $2,600, is still in my account.

All of these transactions were made by the same fraudster at the same time from Dortmund, Germany. It looks like the scammer somehow got my password. But I have never published my credentials and they are not held on my computer — only on an encrypted USB stick accessed when I need the info. Also, I always use PayPal from the same IP address.

I have contacted PayPal by phone numerous times and appealed. PayPal has refused to acknowledge the fraudulent transaction.

In the meantime, I have changed my password and set up two-step verification. I blocked my bank from sending any money to PayPal, but I would like to settle this dispute and wondered if you could help. — John Boham-Cook, Augsburg, Germany

PayPal should have blocked all three transactions. But its fraud-detection systems aren’t perfect, so here’s what probably happened. One transaction went through without any red flags. PayPal flagged the second one from the same IP address and blocked the third one. In other words, its systems were reasonably confident the third transaction was incorrect, so it stopped it. PayPal reversed the second one eventually. But it wasn’t quite sure about the first one.

It appears its systems were not sophisticated enough to tie them all to the same fraudster. I don’t want to go any further because it would only give future fraudsters a roadmap to defraud PayPal users.

Here’s what really concerns me. You said you were using a Password USB Key to access PayPal.

That means the only person who can access your account is someone with the physical key. How did a criminal manage to get into your account without the key? That is a serious problem, and unfortunately, there’s no evidence PayPal has done anything to address it.

You could have contacted one of the PayPal executives I publish on my consumer advocacy site. A brief, polite email to one of them might have gotten your case escalated. I also publish a free guide on how to reverse an unauthorized charge on PayPal. I’ll give you the Reader’s Digest version: Keep a meticulous paper trail and, when necessary, appeal to one of the PayPal executives.

I contacted PayPal on your behalf. You also reached out to one of the executives. And that worked.

“They have finally refunded the money,” you reported. “I will never understand how PayPal works, and I’m not sure I want to continue to use PayPal.”

Christopher Elliott is the founder of Elliott Advocacy, a nonprofit organization that helps consumers solve their problems. Email him at [email protected] or get help by contacting him.