Journey of a Serial Entrepreneur

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PayPal Account Hacked

“Are you kidding me!” Usman Sheikh

This is going to sound ironic…this week’s series was to be about trust and its importance in life and in the world of business. Trust is hard to gain, by the same token it is extremely easy to lose. After today’s incident, PayPal has lost all credibility and trust with me it may have gained over the last couple of years that I have been using their service. This afternoon my mailbox was suddenly flooded with authorizations for payments from multiple individuals whom I had never heard of. My first reaction was that it was one of those fraudulent emails which wants to swipe your information etc. However, once I checked the sender and saw it was PayPal themselves, my heart jumped a couple of beats. There were multiple payments in excess of a couple of thousand dollars.

I first placed a block on all transactions with my bank account and PayPal. Next I tried to figure out the maze of forms which need to be filled, to alert them of unauthorized transactions. Finally, I got a rep on the phone. The first one I spoke to was helpful and managed to calm me down substantially. We got a lot of the paperwork out of the way and she was quick to assure me that they would do all that was possible to get the money back. Midway, the call dropped, I got reconnected to another person at the call center. This was awful, she must have had a bad day or something, and instead of calming me down, was totally inconsiderate and wanted to put down the phone as soon as possible. This is not an attitude a distraught customer wants to be facing. Anyhow, finally got everything submitted and now it is “under review”.

I will keep everyone updated about the progress and have posted this to alert all PayPal users who read this blog to go and check their accounts, and request for the Verisign security key to safeguard your account from similar activity. This is not an isolated case, I found this article which goes to show that there is obviously a significant loop hole somewhere in the system, and it is being exploited. Please be very careful, and if you are not using your PayPal, unlink it from your financial sources. In the end, it is incidences such as these, which totally decimate any shred of trust and credibility with a service provider.  Negative feedback tends to spread a lot faster, and it could result in a mass exodus of customers, if such service providers do not take appropriate measures and actions to stop and help customers when such incidents occur.

Updates:

– September 17th: Was on the phone with around 3 customer service representatives and have lodged an unauthorized transaction report.

– September 19th: Paypal sends a survey requesting information regarding their phone support service. At-least they are showing initiative to making their customer service better, which by the way needs a lot of work.

– September 22nd: Received partial refunds for some of the unauthorized transactions. However my account has been locked and I am told by their customer support that my money is going to be withheld for 180 days! I understand Paypals point of view to control the level of risk, but I don’t think this should be a rule applied across the board and should be handled on a case by case basis.

– September 24th: One of the fraud claims has been refunded to my account. 4 more to go.

– September 29th: The remaining four claims have been refunded. I have to say that I am impressed how fast Paypal managed to resolve these claims. I may return to using their services sooner than expected.

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Filed under: Customer Service, Trust, , , , , , , , , , ,

One Response

  1. Mark says:

    Hi,
    Just to reasure you are not the only one who got hit as I recieved this mail from paypal:
    Amount: £300.00 GBP
    Transaction Date: 12 Nov. 2008
    Transaction ID:
    Subject: You’ve got funds.
    I obviosly called my bank who put the card payment on hold thru their fraud team and cancelled my debit card
    then I put the claim thru paypal and removed my cards off their site changed my password, security details
    then decided to call their lovely helpline which is the worlds most unfriendly automated system in the world!! I thought I was speaking to fonejacker at one point so gave up and hoped it would sort itself out.
    Paypal mailed the other party several times with no responce so declared my claim as valid.
    Anyhow as for the pace in recovery of monies my bank refunded me before paypal and paypal are now happy I had been the victim of fraud the trouble is now I am wondering if I will get twice the amount back :-)

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