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eBay Bitcoin: Man Conned Out of Bitcoins Through Hacked PayPal Acct.
eBay Bitcoin Scam
An eBay user was conned out of his bitcoins worth £5,300. eBayer Will Phillips fell victim to a scam which involved hacked PayPal accounts and bitcoins. Phillips says he is being chased for the money he owes.
Last fall, Phillips became attracted to bitcoin, as the value of each digital coin seemed sure to increase. He purchased them for £800 each. Soon after that, Phillips decided to profit off of his bitcoins by selling them on eBay. Phillips, a visual effects artist said:
“The price was increasing and increasing, and a lot of articles were being written. I didn’t want to miss out, so I started buying a few. Then I started trading with smaller cryptocurrencies, and had some success.”
Once the proud owner of 4.8 bitcoins, Phillips lost his lot of bitcoins and PayPal is now threatening to send in debt collectors.
Over the course of one night, hackers made their way into a legitimate PayPal account and posed as the real account holder of the hijacked account. They purchased Phillips bitcoins and vanished.
The scam is commonly used and PayPal usually sides with and refunds the individual whose account was hacked. Unfortunately for Phillips, PayPal insists that he owes them more than £1,300.
Phillip’s eBay Experiences
Concerned over bitcoin’s volatility, Phillips felt his bitcoins were valuable enough to start selling them on eBay. One man from Hounslow, Middlesex bought half a bitcoin for £520. The transaction was a success, as Phillips saw his bitcoins get transferred to the man’s digital wallet through the BlockChain.
On the night of the scam, a buyer bought 2 bitcoins valued at a little over £2,000 from him. Phillips was confident as the buyer’s eBay feedback rating was positive, and that the previous transaction went smoothly. Once he received payment, Phillips sent the bitcoin’s to the seller’s digital wallet. The buyer sent Phillips an email saying that she was interested in buying more bitcoins.
The next morning, Phillips found out that the money had been put ‘on hold’ by PayPal. Funds were withheld as PayPal assumed there was an attack on the buyer’s account. Phillips emailed the buyer to try and fasten the transaction, but he was replied with an obscenity. Phillips told the Guardian:
“panicking a bit – something was very wrong and I realised I may have lost my bitcoins and the money”. These people quickly had their money refunded by PayPal, and I lost all mine. Neither eBay nor PayPal has provided me with any sort of explanation or even leniency, instead focusing on chasing me for money I now owe them.”
Phillips believes that a single person or small group is responsible for the fraud, and hopes PayPal will give him some slack as he was effected from their site being hacked. But PayPal says they are not responsible for lost digital goods, as they feel they can’t prove if the coins were ever delivered or not.
Even with Phillips’ proof, PayPal has yet to budge. He says:
“Why should I be liable for eBay and PayPal accounts being hacked to fraudulently buy from me? Under their terms and conditions I am not offered any seller protection – I was unaware of this at the time – but as a consumer, surely I must have some rights?”
A Paypal spokesperson told the Guardian that: “Bitcoin transactions aren’t covered by our seller protection programme because they are regarded as intangible goods.”
William Phillips fell victim to a fraudulent incident, but more importantly was gipped out of PayPal’s protection. In no form was he responsible for the scam. PayPal’s lack of responsibility can be viewed as setback for bitcoin. The digital currency is not seen seriously enough by the company to be consider it a valuable commodity worth securing.
For more bitcoin news, stay tuned to Coinreport.net.
William Phillips Photo.
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Right. So he bought BTC at a stupidly high price of £800 / $1340 (which is way higher that bitcoins highest peak) and then tried selling them on…on ebay (of all places) to make “profit” at £1000 / $1675.80…f him for being greedy! and for not researching about selling btc on ebay. He obviously didn’t give a toss about Bitcoin, he was just in it for the money.
No, if you look at the original Guardian story. It says this “Within weeks, the bitcoins Phillips had bought for around £800 were worth many times that, so he decided to sell them on eBay. But now he has lost the lot, and says PayPal is threatening to send in debt collectors.” NOT £800 a bitcoin. http://www.theguardian.com/money/2014/mar/01/paypal-bitcoin-scam-ebay
Most likely the paypal account was not hacked, it is well known that paypal users claim their account was hacked in order to get a refund and make an easy profit by having the FIAT refunded and getting to keep the Bitcoins, paypal does not investigate, and they fail to acknowledge that the blockchain exists. As far as ebay goes, the scamers are allowed to change their ebay ID, and they are able to wipe the negative feedback, if in doubt go to http://www.bitcointalk.org and do a search for paypal fraud.
To minimize the risk some users sell the bitcoins with a physical item such as a penny or a paper wallet and then provide the tracking number information, this practice is still very risky, but less risky than shipping the bitcoin alone.
My advice do not sell any digital currencies on ebay or paypal, that is the only reason Bitcoins are a lot more expensive on ebay it is due to the risk factor which is huge.
Lessons to be leards do not rely on Ebay feedback it is corrupt, they changed their feedback system about 5 or more years ago, their logic was that by allowing good feedbacks only it would increase sales, but their system makes no sense since by allowing true feedback like in its earlier days it would reduce fraud and it would be better for them in the long run.
I know since a lot of the negative feedback I have left to scamers on ebay has been removed.
In the long run I am very greatfull to paypal, since I got burned by paypal in the very early Bitcoins days, I then created a site that only took Bitcoins my sales when way down, but on the other had never again had a problem with fraud and bitcoind have appreciated from below $1 to the current price of $550, so that by itself and the lack of problems compensated for the loss of sales.
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